U HOTELS FINANCIAL POLICY MANUAL R

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May 2019 | CEO

U HOTELS

&

RESORTS FINANCIAL POLICY MANUAL

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TABLE OF CONTENTS

SECTION 1 ADMINISTRATION

ADM – 100 CHANGES, ADDITIONS AND MODIFICATIONS ............................................................. 9

ADM – 101 ROLE AND RESPONSIBILITY .............................................................................................. 11

ADM – 102 ACCOUNTING PRINCIPLES ............................................................................................... 15

ADM – 103 INTERNAL CONTROLS........................................................................................................ 17

ADM – 104 CODE OF ETHICS ................................................................................................................. 18

ADM – 105 CRITICAL DATE LIST ........................................................................................................... 20

ADM – 106 GUEST SAFETY DEPOSIT BOXES ...................................................................................... 21

ADM – 107 MASTER KEYS ........................................................................................................................ 22

ADM – 108 MOBILE PHONE AND PAGER CONTROL ....................................................................... 29

ADM – 109 LICENSE AND PERMITS ...................................................................................................... 32

ADM – 110 CONTRACTS .......................................................................................................................... 33

ADM – 111 LITIGATION AND OTHER CONTINGENCIES ............................................................... 35

ADM – 112 HOTEL OPERATING AGREEMENT ADMINISTRATION .............................................. 36

ADM – 113 LAW ENFORCEMENT AUTHORITIES .............................................................................. 37

ADM – 114 ADMINISTRATION PHONE USAGE ................................................................................. 38

ADM – 115 STAFF INCENTIVE PROGRAMS ......................................................................................... 39

ADM – 116 CONTROL OF BANK CHEQUES ........................................................................................ 42

ADM – 117 FINANCIAL CONTROLLER HANDOVER ........................................................................ 44

ADM – 118 RECORDS RETENTION ....................................................................................................... 49

ADM – 119 ACCESS TO RECORDS ......................................................................................................... 50

ADM – 120 INTELLECTUAL PROPERTY ............................................................................................... 52

ADM – 121 CONTINGENCY PLANS ....................................................................................................... 53

ADM – 122 FRAUD AND THEFT ............................................................................................................. 54

SECTION 2 ACCOUNT RECEIVABLE

A/R – 100 CREDIT APPROVALS ............................................................................................................ 56

A/R – 101 CREDIT MEETINGS .............................................................................................................. 58

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A/R – 102 CREDIT – FRONT OFFICE ................................................................................................... 59

A/R – 103 DIRECT BILLING ................................................................................................................... 63

SECTION 2 ACCOUNT RECEIVABLE

A/R – 104 CREDIT CARD PROCEDURES ........................................................................................... 64

A/R – 105 COLLECTIONS ....................................................................................................................... 65

A/R – 106 USE OF COLLECTION AGENCIES .................................................................................... 66

A/R – 107 COLLECTION LETTERS ....................................................................................................... 67

A/R – 108 RETURNED ITEM – CHEQUES AND CREDIT CARDS ................................................. 68

A/R – 109 ACCOUNTS RECEIVABLE BALANCING ......................................................................... 70

A/R – 110 ACCOUNTS BALANCE VERIFICATION .......................................................................... 71

A/R – 111 PAYMENTS / POSTING TO CITY LEDGER ...................................................................... 72

A/R – 112 RESERVE FOR DOUBTFUL DEBTS ................................................................................... 73

A/R – 113 WRITE OFF BAD DEBTS ...................................................................................................... 74

SECTION 3 REVENUE CONTROL

REV – 100 PRICING POLICY ................................................................................................................... 76

REV – 101 ROOMS REVENUE ................................................................................................................ 77

REV – 102 FOOD & BEVERAGE REVENUE ........................................................................................ 79

REV – 103 OTHER REVENUE ................................................................................................................. 81

REV – 104 GROUP CONTRACTS........................................................................................................... 83

REV – 105 BANQUET POSTING REVIEW ............................................................................................ 84

REV – 106 ALLOWANCES AND REBATES........................................................................................... 86

REV – 107 BARTER AGREEMENTS ....................................................................................................... 87

REV – 108 OUTBOOKINGS ..................................................................................................................... 89

REV – 109 NIGHT AUDIT / INCOME AUDIT PROCEDURES ......................................................... 90

REV – 110 BREAKFAST INCLUDED AND PACKAGE PROGRAMS ................................................ 97

REV – 111 GUEST CHARGES AFTER DEPARTURE .......................................................................... 99

REV – 112 NO-SHOW, CANCELLATION AND GUARANTEED BOOKINGS .............................. 100

REV – 113 GIFT CERIFICATES ............................................................................................................. 101

REV – 114 COMPLIMENTARY ROOMS .............................................................................................. 103

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REV – 115 ADVANCE DEPOSIT REFUNDS ....................................................................................... 104

REV – 116 PROMOTIONAL CHARGES .............................................................................................. 105

REV – 117 INTERCOMPANY CHARGES ............................................................................................ 107

SECTION 4 CASH

CSH – 100 ESTABLISHING / CLOSING BANK ACCOUNTS .......................................................... 109

CSH – 101 BANK ACCOUNT RECONCILIATIONS.......................................................................... 110

CSH – 102 CASHIER FUNDS / FLOATS / HOUSE BANKS ............................................................. 113

CSH – 103 DAILY CASHIER DEPOSITS .............................................................................................. 117

CSH – 104 CASHIER OVER / SHORT REPORTING ......................................................................... 119

CSH – 105 BANK DEPOSITS .................................................................................................................. 120

CSH – 106 DAILY DEPOSIT WITNESS LOGS ..................................................................................... 121

CSH – 107 CASHIER DUE BACKS ........................................................................................................ 122

CSH – 108 TRAVELLERS CHEQUES ................................................................................................... 123

CSH – 109 GUEST PAID OUTS ............................................................................................................. 124

CSH – 110 PETTY CASH ......................................................................................................................... 125

CSH – 111 PAYMENTS RECEIVED BY MAIL ...................................................................................... 126

CSH – 112 FLOAT INCREASES ............................................................................................................. 127

CSH – 113 DEBT ...................................................................................................................................... 129

CSH – 114 CASH MANAGEMENT ........................................................................................................ 130

SECTION 5 INVENTORY

INV – 100 RECEIVING PROCEDURES............................................................................................... 132

INV – 101 INVENTORY STOREROOMS ............................................................................................ 134

INV – 102 REQUISITIONS .................................................................................................................... 136

INV – 103 BEVERAGE CONTROL ....................................................................................................... 137

INV – 104 SMALL OPERATING EQUIPMENT .................................................................................. 139

INV – 105 STOCK CARD ....................................................................................................................... 140

INV – 106 MONTHLY AND ANNUAL STOCK - TAKE .................................................................... 141

SECTION 6 EXPENDITURE

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EXP – 100 APPROVAL LEVELS ............................................................................................................. 143

EXP – 101 PURCHASE ORDERS .......................................................................................................... 144

EXP – 102 VENDOR CREDIT APPLICATIONS.................................................................................. 147

EXP – 103 PAYMENTS ............................................................................................................................ 148

SECTION 6 EXPENDITURE

EXP – 104 TRAVEL AND EXPENSE REIMBURSEMENT ................................................................. 150

EXP – 105 PREPAID EXPENSES ............................................................................................................ 156

EXP – 106 RECEIVING ........................................................................................................................... 157

EXP – 107 IN-HOUSE FUNCTIONS ..................................................................................................... 158

EXP – 108 ACCRUALS ........................................................................................................................... 159

EXP – 109 DEFERRED EXPENSES........................................................................................................ 161

EXP – 110 TRAVEL AGENT COMMISSIONS ..................................................................................... 162

EXP – 111 SEGREGATION OF DUTIES .............................................................................................. 163

EXP – 112 STAFF LOANS AND ADVANCES ...................................................................................... 164

EXP – 113 EXTERNAL CONSULTANT AND SERVICE ................................................................... 165

SECTION 7 INTERNAL CONTROL OVER FINANCIAL REPORTING

REP – 100 FINANCIAL REPORTING STANDARDS ......................................................................... 167

REP – 101 JOURNAL ENTRY STANDARDS ....................................................................................... 168

REP – 102 FOOD AND BEVERAGE INTRA – DEPARTMENT ALLOCATION ............................ 169

REP – 103 ALLOCATION OF SHARED EXPENSES .......................................................................... 170

REP – 104 LAUNDRY DEAPTMENT ACCOUNTING ...................................................................... 171

REP – 105 STATEMENT OF FINANCIAL POSITION RECONCILIATIONS ................................. 172

REP – 106 FINANCIAL STATEMENTS ANALYSIS ............................................................................ 174

REP – 107 INTERCAOMPANY BILLINGS ........................................................................................... 176

REP – 108 GENERAL LEDGER ACCOUNT APPROVAL ................................................................. 177

REP – 109 FC MONTHLY CHECKLIST ............................................................................................... 178

REP – 110 INTERNAL CONTROL CHECKLIST ................................................................................ 180

REP – 111 STATEMENT OF FINANCIAL POSITION REVIEWS..................................................... 181

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REP – 112 INTERNAL AUDIT ............................................................................................................... 182

REP – 113 EXTERNAL AUDIT REPORTS ........................................................................................... 183

SECTION 8 CAPITAL EXPENDITURE

CAP – 100 DEFINITION OF CAPITAL EXPENDITURE .................................................................... 185

CAP – 101 ANNUAL CAPEX BUDGET ................................................................................................ 187

SECTION 8 CAPITAL EXPENDITURE

CAP – 102 MONTHLY REPORT ............................................................................................................ 188

CAP – 103 CAPITAL EXPENDITURE AUTHORITY .......................................................................... 189

CAP – 104 ASSET DISPOSAL ................................................................................................................. 192

CAP – 105 LEASES ................................................................................................................................... 193

CAP – 106 DEPRECIATION AND AMORTIZATION ........................................................................ 194

CAP – 107 FIXED ASSET REGISTER .................................................................................................... 197

CAP – 108 SMALL OPERATING EQUIPMENT .................................................................................. 199

SECTION 9 BEST PRACTICE

BEP – 100 REVENUE CONTROL ......................................................................................................... 202

BEP – 101 PROCUREMENT, ACCOUNTS PAYABLE, TRAVEL EXPENSES ................................ 206

BEP – 102 ACCOUNTS RECEIVABLE ................................................................................................ 210

BEP – 103 INVENTORY ......................................................................................................................... 213

BEP – 104 PAYROLL ............................................................................................................................... 216

SECTION 10 INFORMATION TECHNOLOGY GENERAL CONTROL

ITGC – 100 INFORMATION SYSTEMS SECURITY POLICY ............................................................. 222

ITGC – 101 IT ORGANIZATION ............................................................................................................. 223

ITGC – 102 SOFTWARE DEVELOPMENT,ACQUISITION AND MAINTENANCE ...................... 224

ITGC – 103 LOGICAL SCCESS TO PROGRAM AND DATA ............................................................. 225

ITGC – 104 BACK-UP RECOVERY AND CONTIGENCY PLAN ....................................................... 227

SECTION 11 BUSINESS PLAN/BUDGET GUIDELAINES

BP – 100 BUSINESS PLAN SUBMISSION ......................................................................................... 230

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BP – 101 BUSINESS PLAN SENSITIVITY .......................................................................................... 231

BP – 102 MARKET SEGMENT STATICITICS .................................................................................. 232

BP – 103 ROOM DIVISION ................................................................................................................. 233

BP – 104 FOOD AND BEVERAGE DIVISION ................................................................................. 236

BP – 105 TELEPHONE DEPARTMENT ............................................................................................. 240

BP – 106 BUSINESS CENTER DEPARTMENT ................................................................................ 242

BP – 107 FITNESS CENTER DEPARTMENT .................................................................................... 243

BP – 108 GUEST LAUNDRY DEPARTMENT................................................................................... 245

SECTION 11 BUSINESS PLAN/BUDGET GUIDELAINES

BP – 109 LOBBY SHOP DEPARTMENT ............................................................................................ 247

BP – 110 GARAGE/CARPARK DEPARTMENT ............................................................................... 249

BP – 111 OTHER INCOME AND RENTALS .................................................................................... 250

BP – 112 ADMINISTRATION AND GENERAL DIVISION ............................................................ 252

BP – 113 HUMAN RESOURCE DIVISION ....................................................................................... 254

BP – 114 EMPLOYEE RESTAURANT DEPARTMENT .................................................................... 255

BP – 115 SALE AND MARKETING DIVISION ................................................................................. 256

BP – 116 PROPERTY OPERATIONS AND MAINTENANCE DIVISION ..................................... 258

BP – 117 PAYROLL AND RELATED EXPENSES ............................................................................. 261

BP – 118 PROVISION FOR REPLACEMENT OF OPERATING EQUIPMENT ........................... 264

BP – 119 FIXED CHARGES AND OTHER DEDUCTIONS ............................................................ 265

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SECTION 1

ADMINISTRATION

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Finance Policy and Procedure

Subject: Changes, Additions and Modifications Department: Finance Reference # ADM 100 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 100 CHANGES, ADDITIONS AND MODIFICATIONS POLICY Any suggested changes, variations, additions or modifications to this Finance Policy and Procedure Manual must be reviewed and approved by the CEO before implementation. All Financials Controllers must ensure that manuals assigned to their area of responsibility are updated when required and that any revised policies and procedures are distributed and implemented within the periods indicated. Deviation to policy will be considered where the specific policy is not applicable, would be detrimental to operations, or otherwise impose undue hardship to the Hotel. PROCEDURE 1. Financial Controllers are responsible for full compliance with the accounting policies and procedures within the

manual. 2. CEO will approve changes, additions or modifications to the manual, which will be done via written

memorandum. This will include and necessary revised index and dates which the revisions become effective and also when the revision must be implemented.

3. Financial Controllers must ensure that all manuals assigned to their hotel contain the most recent policies and procedures.

4. Any suggested changes, additions or modifications to the manual are invited and should be forwarded to the Regional Managing Director, Regional Finance leader and Corporate Finance leader for consideration who will liaise with the CEO on possible incorporate or adjustment to existing policies.

5. If, for any reason, a given policy or procedure cannot be implemented at a hotel, it is the Financial Controllers’ responsibility to advise the Regional Managing Director and Regional Finance leader as well as Corporate Finance. An Approval Exception Form must be completed with details of the relevant Standard Operating Procedure (SOP) to be considered for exemption, stating why the exemption is justified and submitting an alternative policy or procedure which meets the relevant control within the operating environment of the hotel.

6. Any approved exemptions must be filed in the Policy Manual attached to the relevant SOP.

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Reference: Changes/Addition/Exception Request Form

U Hotels & Resort

Finance Policy - Change / Addition / Exception Request

No:

Hotel: Date:

Policy Manual

Section:

Subject:

Code:

Issued Date:

Proposed Hotel Policy/Procedure

Reason for Change / Exception

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Attach recommended procedure (must be typed)

Signatures

General Manager: Date:

Financial Controller: Date:

Regional Managing Director: Date:

Regional/Corporate Finance: Date:


Subject: Role and Responsibility Department: Finance Reference # ADM 101 Page: 1/4 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 101 ROLE AND RESPONSIBILITY POLICY All hotel Financial Controllers have a dual relationship. First, on a functional basis the Financial Controller will report to the Regional Finance Leader. Second being the Hotel Management Team. Primary responsibility of the Financial Controller is to provide support to the General Manager in achieving the established business goals and targets. It is essential that a spirit of teamwork to be maintained with operations management at each level within the organization. At no time will any violation of the Company’s policies or accepted practices be tolerated, nor may the independent reporting of such incidences in any way be overridden, except within the Financial Controller’s organizational structure or where policy so directs. The Financial Controller should provide sound business and financial management support; management of internal control, and timely accurate management reporting and analysis in order to ensure objectives are achieved or

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exceeded. The Financial Controller must use broad business approaches in decision-making, communicating these effectively and providing support where necessary. The Financial Controller and General Manager are jointly responsible for compliance with the contractual and legal obligations of the hotel. In addition, they are also responsible in ensuring that the hotel is compliant with the Finance Standard Operating Procedures, Management Contract and any other corporate policies. Any deviations from these documents must be authorized in writing by the appropriate level of authority The Financial Controller must review and discuss the financial results of the hotel on a timely basis and ensure any risks are addressed. The Financial Controller must ensure that the General Manager is aware of all reporting deadlines and that the General Manager has reviewed and approved the reports before submission to the corporate office and owners. On a day to day basis the Financial Controller is to maintain control over a Hotel’s revenue, expenditure, assets and cash flow. The Financial Controller is also responsible for providing effective budgeting documents and controls in conjunction with analysis of current financial statements. PROCEDURE Principal accountabilities include, but are not restricted to, the following: • Directs, prepares and provides financial analysis of operations for use by management. • Implements control functions ensuring that reasonable and effective internal accounting and procedural controls

are in place. • Directs the operation of the hotel’s accounting department, and ensures that a consistent review of all work is

performed accurately. • Ensures timely and accurate management and financial reporting. • Assists the General Manager in Manager in maximizing financial performance. • Serves as the highest financial executive member of his respective organization, and accordingly, represents the

Company on matters pertaining to banking, credit, contracts, legal issues, interaction with owners, lenders, etc. as required.

• Ensures strict compliance with local fiscal regulation. • Manages the IT department/requirements within the property, where appropriate. • Organizes an efficient treasury function, which provides proper management of the hotels working capital and

cash flow within U Hotels & Resorts guidelines and the requirements of the hotel’s management contract. Standards of Performance

Hotel Financial Controllers are responsible for supporting the financial goals of the Hotel Executive committee and department heads. Hotel Financial Controllers must provide the financial support that the General Managers need to meet their bottom line objectives. In addition, Hotel Financial Controllers are expected to meet with General Managers on a regular basis to assist in hotel development and guest satisfaction efforts. Hotel Financial Controllers must take a pro-active role in recommending revenue enhancement and cost reduction opportunities to the Hotel Executive Committee. They must also encourage their subordinates to raise and discuss their own ideas for revenue enhancement and cost reduction and present the forum to do so. Hotel Financial Controllers are responsible for recording and safeguarding the assets of the hotel. Hotel Financial Controllers must work to support the hotel’s service standards and accept nothing less from their subordinates. Hotel Financial Controllers may not delegate responsibility of service to department staff. Hotel Financial Controllers must take the lead in developing an environment in which all department heads take responsibility for forecasting the hotel’s operating and financial performance. The Hotel Financial Controllers must ensure all departmental heads have been advised of their contribution required to complete an accurate forecast. All heads of departments must understand that forecasting is used as an early warning system of potential future problems/ issues enabling corrective action to take place.

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Following the production of the period end accounts the Financial Controller must present clear variance analyses of the monthly performance to the General Manager and department heads. Hotel Financial Controllers must take personal responsibility for auditing Statement of Financial Position accounts. Reconciliations must be prepared and cleared on a monthly basis. Hotel Financial Controllers are responsible for the timely delivery of all reports required by Head office. Hotel Financial Controllers must actively manage cash flow with a view to maintaining working capital balances at a minimum. Float balances must be reviewed to verify that the correct amount of money is in circulation. Food and beverage inventories and accounts receivables must be maintained at minimum levels Prepaid Expenditure must be maintained at a minimum with no amount prepaid more than twelve months ahead. Non-disputed invoices and dues to government bodies must be settled on a timely basis. Travel agent commissions must be paid as soon as possible after the departure of the guest. Surplus finds must be delivered to the owner as specified in the management contract. Hotel Financial Controllers are responsible for conducting performance evaluations of all supervised staff. A copy of the appraisal must be submitted to the human resources department for their files. Hotel Financial Controllers are responsible for their self-development and are expected to participate in internal or external management and technical training programs. Hotel Financial Controllers are expected to review, train, and develop their subordinates. In conjunction with the Human Resource Department, Hotel Financial Controllers must prepare a continuity plan to determine their future staffing needs and to identify individuals with high potential in their departments. Hotel Financial Controllers must take personal responsibility for the management and maintenance of their hotels’ IT systems. In addition, they must ensure that all data is processed in a timely manner, without corruption and then department heads understand and take advantage of the systems’ full capabilities. Hotel Financial Controllers must take the full annual leave accruing to them by law or employment contract, and ensure that their staff does the same. Without prior approval of the General Manager, personnel are not permitted to carry over their annual leave to the following year. Hotel Financial Controllers must be ready to respond to ad-hoc request by owners, the hotel General Manager, colleagues, and guest on a timely basis without any significant impact on their ongoing duties.

Reporting Relationships of Hotel Controllers Hotel Financial Controllers have a dual reporting relationship. First, on a functional basis Hotel Financial Controllers report directly to the Regional Finance leader. This reporting relationship is an essential business approach and a key line of communication that must be kept open at all times. Second, and equally important, Financial Controllers are members of the hotel Executive committee and an integral part of the hotel management team. The Financial Controller’s primary responsibility as a member of the Executive Committee is to provide support to the General Manager in achieving established business goals. At all times, the Hotel Financial Controller must be responsive to the General Manager by providing sound business and financial management support; appropriate and practical management of internal control; and timely, accurate management reporting and analysis in order to ensure that bottom line objectives are achieved or exceeded.

Reporting line for the Financial Controllers

CEO Corporate Finance Leader

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RMD Regional Finance Leader GM FC

The Hotel Financial Controller must take a broad business approach in decision making. The Financial Controller should contribute as a member of the hotel management team in a co-operative and supportive manner, stressing joint decision making and effective communication. The Hotel Financial Controller should approach communication with the General Manager, other Executive Committee members, and key department heads in a constructive and positive manner. All members of the Financial Controller’s Department should understand that they too are members of the Hotel Operations team. Therefore, they also must approach their communications with other operating departments in the same manner. The Financial Controller must give the General Manager the opportunity to provide input before financial reports are forwarded to owners and Head Office. In this regard, the Hotel Financial Controller should ensure that the General Manager is familiar with all reporting deadlines and other requirements. If the Hotel Financial Controller and General Manager disagree on any Financial Controllership or financial issue for any reason, and this difference cannot be resolved at the hotel level, the matter should be raised with the Regional Managing Director, Regional Finance leader and Corporate Finance Leaders for resolution. Every attempt should be made to reconcile these differences at the hotel level. The General Manager and Hotel Financial Controller should appeal to a higher authority only in exceptional circumstances. Regional Finance leader and Corporate Finance leader in conjunction with the Regional Managing Director: • Hotel Financial Controller appointments • All aspects of the Hotel Financial Controller’s compensation (initial salary and subsequent increases, and

bonuses)

Regional Managing Director, Regional Finance leader together with the General Manager will also approve: • All holidays and other absences from the hotel by the Hotel Financial Controller • The establishment of personal and business goals The General Manager and Regional Finance leader will conduct a performance evaluation of the Hotel Financial Controller at least once a year. The General Manager, in so far as is possible, will ensure that the duties detailed in the Hotel Financial Controller’s standards of performance are being fulfilled by the Hotel Financial Controller and will seek to ensure that deficiencies are addressed. Because Hotel Financial Controllers have the ultimate responsibility for compliance with the hotel finance policies, it is important that they fully understand all aspects of the Hotel Finance Policy and Procedure Manual and that the procedures implemented to achieve the objectives set out in the manual do not hinder the efficient operation of the hotel. Hotel Financial Controllers must take responsibility for communicating these procedures to the General Manager and Operations staff so that they also fully understand the implications of failing to comply with a particular policy or procedure.

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Subject: Accounting Principles Department: Finance Reference # ADM 102 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 102 ACCOUNTING PRINCIPLES

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POLICY U Hotels & Resorts reports its financial results in accordance with Generally Accepted Accounting Practice under International Financial Reporting Standards (IFRS) and financial reporting requirements of the local regulatory institutions. Results are must also complied with the reporting requirements for local statutory purposes and reported in functional currency. Generally Accepted Accounting Principles (GAAP) form the basis for the accounting principles, procedures, and practices used in summarizing, recording, and reporting the financial results of corporate operations. While there are differences in the various accounting procedures used from country to country, the basic underlying assumptions which support GAAP and form the basis of U Hotels & Resorts’ accounting standards, which are based on Generally Accepted Accounting Practice under International Financial Reporting Standards (IFRS). PROCEDURE These assumptions are as follows: 1. Objectivity Financial accounting statements must have a confirmable (objective) basis in fact. There must be a way to verify that financial transactions actually occurred before it can be recorded in the business’s financial records. 2. Understandability

Financial accounting statements are readily understandable by users. For this assumption, users are assumed to have a reasonable knowledge of business and economics activities and accounting and a willingness to study the information with the reasonable diligence.

3. Reliability In order for financial accounting statement’s to be reliable, they must free from material error and bias and can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent.

4. Relevance Financial accounting statements must provide relevant information, which is responsive to the economic decisions of users by helping them evaluate past, present or future events of confirming, or correcting, their past evaluations.

5. Entity concept Financial accounting statements and records pertain to a specifically defined business entity separate and distinct from the owner or groups concerned with it. The entity concept directs that the account records should reflect only the activities of the business.

6. Going concern Financial accounting statements are normally prepared on the assumption that the business is a going concern and will continue in operation for the foreseeable future and that there is no intention to liquidate (sell) all of the assets of the business.

7. Unit of measurement The best common denominator in which diverse business transactions can be measured is money. Fluctuations in the value (purchasing power) of money can be ignored without any impairment of the usefulness or validity of the financial statements. The primary reporting currency is the functional currency of the hotel.

8. Matching concept Net income is best measured by a matching of costs against the revenues to which the costs have given rise. In this way, total resources used in operations are matched against total resources received from operations.

9. Accounting period The financial accounting process provides information about the economic activities of an enterprise for specified time periods that are shorter than the life of the enterprise. The shortest period is typically a month. The longest period is typically one year. U Hotels & Resorts uses fiscal months.

10. Revenue recognition Revenue should not be recognized until it has been earned and can be measure with a reasonable degree of reliability and objectivity. Revenues are effectively recognized when services have been substantially rendered taking into account with the stage of completion.

11. Historical cost

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Assets are recorded at the fair value of the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the fair value of the consideration received in exchange for incurring the obligation at the time they were incurred. Replacement cost or current value accounting should not be used.

In addition to the basic underlying assumptions mentioned above, there are also several reporting standards that must be applied to the results obtained from accounting procedures. 1. Disclosure

Accounting reports should disclose fully and fairly the information they purport to represent. Full disclosure or completeness requires that any past or even future event which could material affect the financial standing of the business and that cannot be easily discerned from reading the business’s financial accounting statements must be separated reported. These reports, prepared in the form of footnotes, must be attached to the financial statements. The information given must not only be complete; it must be undisturbed by the value judgments or outlook of the person preparing it.

2. Comparability The conduct of comparative analyses between accounting periods constitutes one of the major characteristics assumed for the audience of financial accounting. Comparability calls for like events to be reported in the same manner. Comparability also requires that changes in accounting principles be restricted to situations where the new principle is clearly preferable to the old. When a change is made, its nature, effect and justification must be explained.

3. Consistency Closely allied to comparability is consistency. The entity must select and consistently report financial information under the rules of the specific system it elects. It is imperative that accounting policies/procedures be the same from period to period for the same accounting entity so that users will be able to gain a true understanding of its actual revenue and expense during a specific period.

Finally, two time-honored traditions – materiality and conservatism – may cause accounting practice to depart from the basic theory derived from the underlying assumptions and reporting standards. 1. Materiality

The concept of materiality states that any amount or transaction that has significant (material) effect on financial statements should be recorded and reported correctly. When the difference between the theoretical treatment of an item and a more practical treatment of it is immaterial in amount or importance, the item can be recorded in the practical manner.

2. Conservatism The tradition of conservatism is an outgrowth of the uncertain environment and the tentative measurements of accounting. Historically, conservatism has been viewed and sometimes applied as a rule requiring the understatement of assets and income. In modern accounting, it calls for caution and careful assessment of risks and uncertainties when making decision on what procedures and values to select in recording transactions.


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Subject: Internal Controls Department: Finance Reference # ADM 103 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 103 INTERNAL CONTROLS POLICY Internal controls comprise the plan of organisation and all of the ordinate methods and measures adapted to: • Ensure the accuracy and reliability of accounting information and records keeping • Restrict unnecessary and potentially detrimental access to the assets of the business • Confirm, periodically, that those possible for safeguarding assets can account for them • Establish appropriate action steps for measuring and addressing variation between the expected and actual

performance.

Key controls listed below also act as an “aide memoir” to the hotel management who must ensure they have been considered each month.

PROCEDURE There are a variety approaches that can be used to view accounting information controls systems. The effective systems consist of: 1. Revenue cycle by means of income audit 2. Purchase cycle by means of authorisation of purchases and disbursements 3. Accounts receivable and collection of debts by means of credit control 4. Adequacy and security of inventory by means of inventory management 5. Adequacy of cash controls including electronic processing to ensure cash security and banking 6. Payroll controls by means of authorisation of employment and correct recording of hours and payroll records 7. Authorisation of documents, keeping of up-to-date and accurate books of account for management information,

audit and legal purposes

Both General Manager and Hotel Financial Controllers must take responsibility for developing, operating and monitoring the effectiveness of internal control and providing assurance to the corporate office that it done so. In addition to the regular review process, General Manager and Hotel Financial Controllers should: • Consider what are the significant risks and assess how they have been identified, evaluated and managed; • Assess the effectiveness of the related system of internal control in managing the significant risks, having regard,

in particular, to any significant failings or weakness the have been reported • Consider whether necessary actions are being taken promptly to remedy any significant failings or weakness; and • Consider whether the findings indicate a need for more extensive monitoring of the system of internal control.

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Subject: Code of Ethics Department: Finance Reference # ADM 104 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 104 CODE OF ETHICS POLICY The following Code of Ethics must be utilized when representing or conducting business on U Hotels & Resorts’ behalf. Failure to abide by the Code of Ethics will result in disciplinary actions up to and including termination. PROCEDURE U Hotels & Resorts’ employees are required and expected, at all times, to act in accordance with the following code of ethics: 1. Use of Company Name

There is a value in the name and reputation of U Hotels & Resorts and all subsidiaries. All employees are expected to use the company name, and other company trade names and trademarks, only in approved activities.

2. Quality and Fairness The products and services that we deliver should never be less than that which is promised or expected by our customers.

3. Assets and Funds Any employee with responsibility for the use of the company’s physical assets or funds is accountable for their proper conduct as a fiduciary in relation to the use or protection of those assets.

4. Internal Financial Reporting Accounts and records will be maintained and financial reports will be prepared in a manner which conforms to the company’s policies and procedures.

5. Communications Reasonable measures must be taken to ensure the accuracy of information that is authorized for release to outside parties.

6. Selection of Suppliers No employee may select a supplier for any reason other than its ability to fulfill the company’s needs. No employee should accept any goods, services or other forms of compensation/favors from a supplier for less than market value. This provision is not intended to apply to routine, reasonable business entertainment.

7. Relationship to Suppliers No employee may own an interest in the business of a supplier of be a creditor of a supplier.

8. Use of Suppliers No employee may utilize a supplier, consultant, subcontractor or employee of U Hotels & Resorts to work on their personal residence(s) or those of related persons without prior written approval from their Superiors.

9. Improper Payments Kickbacks, gifts, fees, commissions or any form of “bribes” intended to induce or reward favorable decisions or governmental actions are unacceptable and prohibited. No employee may, in violation of any law, pay or offer to pay or give anything of value to a customer, governmental entity or political party, to induce or reward favorable action in any business transaction or governmental matter. This provision is not intended to apply to routine, reasonable business entertainment or gifts of U Hotels & Resorts value, customary in local business relationships, provided that no law or company policy is violated and full disclosure is made.

10. Outside Activities For all business relationships with outside individuals, companies or organizations, and for all personal undertakings, employees are expected to: a) act in accordance with the law; b) consider the rights, interests and responsibilities of the outside parties; c) protect their own reputation and the interests of the company against

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actual or potential conflicting interest with outside parties and d) avoid personal transactions or situations in which their own interests conflict or might be construed to conflict with those of the company.

No employee may directly or indirectly buy, sell or lease any facility, service or equipment from or to the company, or use any such facility, service or equipment for personal benefit. Violations of this policy will result in disciplinary action, up to and including termination. If you are involved in any situations or transactions which conflict or may appear to conflict with the intent of this code of ethics, you must report it immediately to the Regional Managing Director, Regional Finance leader and Corporate Finance leader. Failure to promptly disclose involvement in any such activity may result in disciplinary actions, up to and including termination of employment with U Hotels & Resorts.

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Subject: Critical Date List Department: Finance Reference # ADM 105 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 105 CRITICAL DATE LIST POLICY To ensure that all Critical Dates pertaining to reporting requirements and/or contractual obligations are addressed in a timely manner, the Hotel Financial Controller will maintain a listing of all critical dates pertaining to his/her hotel. Such a listing must be updated no less than quarterly. Copies of the Critical Date List must be provided to the Regional Finance Leader on a quarterly basis. PROCEDURE The Critical Date List should be formatted and contain, at a minimum, information concerning the following: 1. Taxes – account numbers, payee, amounts 2. Licenses and Permits – type, payee 3. Mortgages 4. Leases 5. Utilities 6. Insurance – list all types of insurance and coverage 7. Maintenance and Service Contracts 8. Other Agreements 9. Space Rental Information – tenants 10. Loan Agreements and/or Interest Payment, Capital Projects, when required 11. Credit Card Processing Information – account numbers, merchants, card types, phone numbers and discount

rates 12. Dues & Subscriptions – department, name, reason 13. U Hotels & Resorts – Contractual issues, fees, payments 14. Phone Systems – list of lines billed

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Subject: Guest Safety Deposit Boxes Department: Finance Reference # ADM 106 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 106 GUEST SAFETY DEPOSIT BOXES POLICY New and existing hotels require assurance that all duplicate keys to the hotel safe deposit boxes have been destroyed to ensure each box has only two keys (control key and guest’s key). Periodic audits should be performed to ensure an adequate inventory of safe boxes and that no valuables have been mistakenly left by guests. PROCEDURE 1. Strict control should apply to the storage, issue and receipt of keys. 2. Only two keys (control key and guest’s key) per box should exist for each safe deposit box. The destruction of any

duplicates should be witnessed by the General Manager, and the record of the event maintained in the Financial Controller’s files.

3. Front Office management should perform on a surprise basis for monthly inventory of the available safe boxes, ensuring that either two keys or safe deposit record is available for each box. And, key for unused boxes should be kept in the Front office Cash drawer or some other locked place, not in the key holes.

4. The identity of the guests must be verified before access is granted and guests should be given privacy or a discreet distance when they are placing or removing articles from their box. And, two keys should be requiring to open any safe deposit boxes (control key and guest’s key).

5. After guests have returned for their belongings, the completed safe deposit box agreements and safe and safe deposit activity log should be forwarded to Accounting, for filing alphabetically, by month and by guest name. (Evidential records may be required in the event of a subsequent loss report, related to such valuables previously held by the hotel in safekeeping).

6. Any guest safe that must be “drilled” for any reason should be done so only with a minimum of three witnesses (one being the Front Office Manager, HOD, Financial Controller, or similar level). The contents of the safe box should be inventoried and receipted with the General Cashier for security in the house safe. The manager in charge of the inventory must make a complete written report to the General Manager for their further handling.

7. When guest(s) check-out, the Front Office Clerk should ensure safe deposit box keys are return. The guest concerned must sign on the reverse side of the Safe Deposit Box Record Card. This is the hotel’s release of liability.

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8. In the event that a guest’s box has to be opened when the guest is not present, the Director of Rooms, Financial Controller and Security Manager must be present. A detailed list of contents must prepare in quadruplicate and each person present should sign each copy. The guest, or his authorized representative, will receive the original, and one copy will be retained by each of three signatories.

9. The Front Office Clerk should under no circumstances accept possession of the guest’s safe deposit key, unless the box is being surrounded. If a key is delivered to the Front Office Clerk as having been found somewhere on the premises, or if received by mail, it should immediately be sealed under dual control and the guest notified to call for his/her key.


Subject: Master Keys Department: Finance Reference # ADM 107 Page: 1/7 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 107 MASTER KEYS POLICY To ensure guests are provided with maximum security and safety, any property keys are to be issued to the authorized persons only and with proper written authorization. Missing/lost/misplaced room or service keys are to be reported immediately for action. The Financial Controller in conjunction with the General Manager has the responsibilities and control of the property master keys and service keys. PROCEDURE 1. Allocation and Control

At the opening of the hotel, all keys should be normally divided into three levels as follows; Emergency Master Key

• Open all guest room doors, even they are double locked. • It can be used to enter a room when the guest need aids and is unable to reach or open the door.

Master Key

• Open all guest room doors that are not double locked. • May be further established as a section master, floor master, or grand master. • It can be used by housekeeping supervisor who is providing a quality check on service.

Guestroom Key

• Open a single guest room door that is not double locked.

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All of above, the Financial Controller must obtain from the supplier of the locks a full list of all master keys and service keys as ordered by the hotel. Based on these documents, a physical control of all master keys is performed by the Financial Controller in the presence of General Manager, Resident Manager, Executive Housekeeper and Loss Prevention (or at least two of these four persons) and records the identification of each key in an “Allocation Inventory and Control Register”. This Register must contain One (1) page to be used for each master key with the indication of the type of key (GMK, EMK, etc.) the reference shown on the key and the various premises for which the key is usable. Thereafter, each key is put in a sealed envelope, signed by both General Manager and Financial Controller and locked in the Financial Controller safe. Any allocation of master keys must be authorized in writing by the General Manager and this is done through the standard form “Authorization of Master Keys Allocation”. This form is completed in two copies and then transmitted to the Financial Controller. When the Financial Controller receives these two copies, he/she makes sure that the receiver of the master key has duly countersigned the form after handwriting “read, signed and accepted”. The allocation is recorded in the inventory register on the page reserved for the master key concerned and countersigned by Loss Prevention and the Receiver. Finally, the master key concerned is handed over. One of the two copies of the “Authorization of Master Keys Allocation” is transferred to Human Resources for filing in the personal file of the receiver. The following responsibilities apply; General Manager – authorization for allocation of Master Keys Financial Controller – maintenance of the master key register and holder of spare keys Loss Prevention – management, circulation and control of issued master keys

At least four times per year, the Financial Controller must make a physical inventory of all circulating master keys. For this purpose, the form “Inventory of Circulating Master Keys” is to be used. This periodical physical inventory does not exclude surprise counts which must also be taken into consideration. When a master key holder goes on vacation or is away from the property for more than 3 days, he/she must return the key (keys) which he/she has received back to the Financial Controller. Any transfer of master keys to a successor or an assistant must go through the inventory register and generate a return and then a new allocation with the required authorization by the General Manager may be issued. When a master key holder leaves his job, Human Resources must mention the surrender of the key during the exit interview. The Financial Controller must personally recover the master key before settling the final pay. When there is a new Financial Controller, the handover of the master key must be made in the presence of General Manager who countersigns the inventory register together with the new Financial Controller. 2. Replacement

Broken or worn-out master keys

A new master key cannot be cut unless the broken or worn–out key is surrendered. The replacement of broken or worn-out master keys is carried out by the Financial Controller. The Financial Controller must keep in its safe all master key blanks needed for replacement.

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The Financial Controller follows the same procedure as for the cutting of normal keys (authorization by General Manager, recorded on a special page of the inventory register for key blanks and opening of a new page for the newly cut key). Lost, Missing or misplaced master keys

It is strictly forbidden to replace a lost (EMK, GMK, RMK) master key. All losses, missing or misplaced keys must be reported immediately to Loss Prevention for investigation. Loss Prevention must sure the General Manager and Financial Controller has been immediately informed. Instructions are issued for the necessary actions to be taken (special security safeguard, police enquiry, change of locks, combinations, etc….). In case of juridical or insurance coverage on the file treatment, the Financial Controller must contact Corporate Office. Lost, missing or misplaced Guestroom Keys (RMK) represent a risk to guests occupying the room, accordingly the lock must be changed to a new master from the blanks kept with Financial Controller.

3. Utilization

Emergency Master Key (EMK)

There should be a minimum of 3 Emergency Master Keys; EMK 1 – retained by Loss Prevention in a secured locked box in a 24-hour manned area. EMK 2 – retained by Front Office Manager in a safe deposit box EMK 3 – retained by Financial Controller in the FC safe The emergency key is put in an envelope by the Financial Controller in the presence of General Manager and deposited with Loss Prevention, Front Office and Financial Controller. The envelope is sealed and countersigned by the three persons, time stamped, and identified by EMK number. A control book is opened at both Loss Prevention and the Front Office Duty Manager’s desk exclusively for the control and follow–up of this key. Each Loss Prevention and F.O. Duty Manager must countersign the control book at the beginning of his/her shift in order to certify the physical presence of the emergency key envelope. The utilization of this key is to be recorded on the control book. The General Manager establishes a list of people authorized to use this key. This list is attached to the control book. Two persons are always required for the issuing of the key and must sign jointly in order to obtain the key. After use, a new envelope is prepared in the same manner and countersigned by the two persons. A sequence number following the one shown on the previous envelope is entered on the new envelope. All used envelopes are transferred monthly to the General Cashier who files them in numerical order for one year. Grand Master Key (GMK)

Only one grand master key is in circulation at any time and will be held by Loss Prevention. The grand master key in circulation is to be joined to a welded wire ring of a 30cm diameter is permanently retained by Loss Prevention in a secured locked box in a 24-hour manned area. This key must be identified by a docket marked “GRAND MASTER. The movement of this key is controlled by records in the grand master key control book. The use of this key requires the signature of two persons (The General Manager establishes a list of authorized personnel to obtain the use of the key, and a copy of this list is attached to the control book). Section Master Key (SMK)

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These keys are those used to have access to a particular section of the hotel (e.g., One Guest Room floor) and are allocated by instruction of the General Manager to the various Department Heads. The allocation and control procedure are the same as the one defined in the section “Allocation”. These keys are allocated to the Department Heads or Supervisors concerned in accordance with the procedure of master keys allocation. The Department Heads concerned must establish a control book for each key allocated. Each master key holder must establish a control book for any sub-delegation that they have initiated. Each Department Head has the responsibility to control regularly (at least on a monthly basis) the physical presence of the master keys allocated to him or the department. The control of these master keys can equally be carried out by the General Manager or Financial Controller or any other persons who are qualified to carry out such a control. Guestroom Key (RMK)

These keys are those used to have access to a specific guest room in the hotel. Only two guestroom keys are to in circulation at any time and will be held by Front Office. The use of this key is restricted to the registered guests of the specific room. All losses, missing or misplaced keys must be reported immediately to Loss Prevention for investigation in accordance with the replacement policy above. Service area keys These keys are used to have access to service areas such as laundry, storerooms, offices, etc… Outside duty hours, these keys are kept at the Loss Prevention 24-hour manned area where responsibility to control the movement of each key is exercised by using the control book. Any use of keys, by persons other than those responsible of the given area, must obtain two signatures of which the General Manager will name these persons are authorized to obtain such keys outside normal working hours. A list of these names is attached to each control book. The access to locked areas, when the employees responsible for such areas are not present, must have an exceptional justification. Circulation of keys

All keys will be retained and secured with Loss Prevention in a 24-hour manned area. All keys will be signed out and signed in daily. Loss Prevention will check and record all keys not returned at the appointed time. Any key issued to an individual is their personal responsibility and is NOT to be loaned or passed between associates. Master Keys must never leave the property and will be audited daily by Loss Prevention. All key blanks will be retained by the Financial Controller.

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All Master Keys must be carried only by the authorized person while on property and are not to be left unattended. 4. Electronic Locks

In general, the principles of allocation and control are identical to those described above. However, if the system used implies the set-up of different procedures, copies of such procedures must be sent to Regional Managing Director and Regional Finance leader for approval.

Authorization of Master Keys Allocation

TO: DATE:

FROM:

SUBJECT : Authorization for master key allocation

1. Mr. (or Ms) Position: Here under

named “Holder” is authorized to receive after signing a master key type for access to

the following areas:

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2. The holder undertakes to use the master key allocated to him exclusively for working purposes and to return it to

the Hotel Financial Controller immediately when and if so requested.

3. In case of loss of the master key allocated to him, the holder must immediately report it to the Financial

Controller by establishing a report pointing out the circumstances of the loss.

4. The use of this master key strictly reserved for working purposes. Any fraudulent use and its loss will constitute

serious offenses which will be subsequently penalized.

5. The master key will never be taken out of the working site.

6. The holder recognizes of having been informed of the responsibility which falls on him and of the limits in the

use of the master key allocated to him.

THE HOLDER THE GENERAL MANAGER

Write: read, agreed and accepted” before signing

RECEIPT RESTITUTION

Mr/Mrs/Ms: Master key

Recognizes having Allocated to:

Received Master key No: On:

Signature of Holder: Signature of Financial Controller:

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ALLOCATION INVENTORY AND CONTROL REGISTER

(One Page per key/card) TYPE OF KEY (EMK, GMK, SMK, RMK)

FOR ACCESS TO AREAS :

KEY REFERENCE

ISSUED TO & RECEIVED BY RETURNED TO

DATE NAME POSITION SIGNATURE INITIALS-FC DATE NAME POSITION SIGNATURE INITIALS-FC

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INVENTORY OF CIRCULATING MASTER KEYS Date:

LIST OF ALL

MASTER KEYS REF. NO HOLDER PRESENT (including all blanks) Yes/No Details of any missing key/variances: Signed: Financial Controller Signed: General Manager

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Subject: Mobile Phone and Pager Control Department: Finance Reference # ADM 108 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 108 MOBILE PHONE AND PAGER CONTROL POLICY U Hotels & Resorts is committed to providing consistent communication between departments of a hotel and therefore provides mobile phones, radios and pagers to key individuals designated by the General Manager. It is the Financial Controller’s responsibility to ensure that a control mechanism is in place to account for all of these phones, radios and pagers at all times. The General Manager will designate the department responsible for the issuance and return. PROCEDURE 1. The General Manager and the Financial Controller will evaluate the need for purchasing mobile phones,

radios and pagers for the hotel. 2. The General Manager will designate the department that will handle the issuance and return of these phones,

radios and pagers. 3. A Master Mobile Phone, Radio & Pager Control Log must be initiated and maintained by the Financial

Controller listing the unit number, serial number, make and model of each. This information will be noted on an Issuance & Control Log. All units must have a separate log.

4. Before a unit is issued out, the name of the individual requesting a unit must be verified against the designated list of individuals authorized for issuance. The requesting individual must sign his/her name in the log noting his/her department, the date of issue, the time, and the expected date of return. The issuing individual will then transfer this log from the “available” section to the “in use” section of the binder.

5. Upon return of a unit, the individual returning the unit must sign off on the log and the return must be acknowledged by the receiving individual. The specific log for the unit is then transferred from the “in use” to the “available” section of the binder.

6. It is the responsibility of the designated issuing department to ensure all units are accounted for on a daily basis. If a unit is considered “missing” of unaccounted for, the immediate supervisor must be notified immediately and the unit tracked, based on the Issuance and Control Log.

7. If a unit cannot be located, a missing property report is prepared, describing the steps taken to recover the unit and signed by both the individual who discovered the loss and the immediate supervisor. A copy of the report is given to the Financial Controller.

8. Periodically, the Financial Controller must perform an audit of the units to ensure controls are in place and the total inventories are accounted for.

9. If a unit is damaged, malfunctions or inoperable, the information is noted on the specific unit log and a copy must be attached to a purchase order to replace the unit and forwarded to the Financial Controller and General Manager for approval.

10. Expenditure authority for charges of this equipment is covered in the expense policy.

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ALLOCATION MOBILE PHONE AND PAGER CONTROL REGISTER

(One Page per mobile phone/pager)

TYPE :

RESPONIBLE BY :

UNIT NO. :

SERIAL NO. :

MODEL :

RECEIVED AND ISSUED BY RETURNED AND RECEIVED BY

DATE NAME POSITION DEPT SIGNATURE RECEIVED

SIGNATURE ISSUED

DATE NAME POSITION DEPT SIGNATURE RETURNED

SIGNATURE RECEIVED

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INVENTORY OF CIRCULATING MOBILE PHONE AND PAGER CONTROL REGISTER Date:

LIST OF ALL MOBILE PHONE &

PAGER REF. NO HOLDER PRESENT (including all blanks) Yes/No Details of any missing mobile phone and pager /variances: Signed: Financial Controller Signed: General Manager

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Subject: Licenses and Permits Department: Finance Reference # ADM 109 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 109 LICENSE AND PERMITS POLICY U Hotels & Resorts will operate within all local and country required permits. It is the Financial Controller’s responsibility to be certain these permits are maintained and renewed on a timely basis. PROCEDURE 1. The Financial Controller must be aware of the proper legal entity in whose name permits are to be obtained and

maintained, as well as knowledge of the appropriate signatories for these entities. 2. License and permit expiration dates need to be monitored in accordance with the Critical Date List. 3. Most jurisdictions require licenses and permits to be displayed in a certain place or manner. The Financial

Controller must be aware of these rules and ensure the hotel is in compliance. 4. Original licenses and permits are to be maintained in a binder in the Financial Controller’s office. Copies of

licenses and permits are to be used for display where applicable. Wherever the law requires that originals must be displayed, the Financial Controller must maintain a copy the binder, along with a notation of where the original document is posted.

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Subject: Contracts Department: Finance Reference # ADM 110 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 110 CONTRACTS POLICY Contracts represent a binding financial commitment on the owner/operator of the hotel and must be carefully prepared and reviewed in order to protect management and ownership. Contracts are need to be valid, adequately documented and monitored, and comply with existing company regulations. All contracts must be reviewed by responsible persons and reasonably provide adequate provisions to protect the Company’s interest before signatory. All contracts must be approved and signed by authorized person. PROCEDURE 1. The Financial Controller is responsible for knowing the correct entity authorized to enter into contracts in

accordance with the management agreement, and ensuring that currency limit levels are not exceeded. 2. Contracts negotiated or terminated at the hotel may be approved and signed by the General Manager and the

Financial Controller if both of the following conditions are met based on those in the Hotel Operating Agreement, should no such conditions be listed in the Hotel Operating Agreement then the following should be followed: • The agreement is for one (1) year or less and cancelable with 30-60 days written notice. • The contract has a value of not more than $5,000 per month.

3. Contracts not meeting these requirements must be forwarded to the Regional Managing Director and Regional Finance leader. All contracts must be submitted with the contract summary as attached. Contracts forwarded to the Finance must note if the contract is a new one, a revision to an existing contract (vendor, term, or conditions) or a renewal to an existing contract. Contracts over the limits in Clause 2 need to get an approval from Regional Managing Director or CEO.

4. Contracts not meeting these requirements must be forwarded to the Regional Managing Director and Regional Finance leader. All contracts must be submitted with the contract summary as attached. Contracts forwarded to the Finance must note if the contract is a new one, a revision to an existing contract (vendor, term, or conditions) or a renewal to an existing contract. Contracts over the limits in Clause 2 need to get an approval from Regional Managing Director or CEO.

5. The original contract should be kept at Business Unit. 6. Financial Controller must prepare summary contract register which must be identified by Contract No. and

update a list of contracts and shall advise for the renewal in advance of expiration (60 days). This will enable adequate time for executive reviews and comments to ensure that renewal and/or new contract is able to be effective within the reasonable periods. Reference: Contract Summary Form

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U HOTELS & RESORTS

CONTRACT INTELLIGENCE MEMORANDAM

CONTRACT NO.:

HOTEL:

DATE:

CONTRACT: New Revision: Renewal:

Contractor Name: Self-explanatory. Contractor Address: Self-explanatory. Contractor Contact/Phone Number: State the name, title and phone number of principal contacts. Service: State the type of services provided (i.e. cable TV service, in-house

movies, valet parking, etc.).

Effective Date: Self-explanatory.

Expiration Date: Self-explanatory.

Renewal Provision: State the terms upon which the contract is renewable.

Termination Provision: State whether the contract can be terminated with thirty (30) days’ notice and without penalty, etc.

Contract Amount: State the payment amount.

Payment Terms: State the payment frequency (monthly, quarterly, etc.)

Budget Variance: State whether the contract is included in the budget and in accordance

with the annual plan. Describe any variances.

U Hotels & Resorts Property Approval: Signature, name, and title of U Hotels & Resorts personnel submitting the contract.

U Hotels & Resorts Corporate Approval: Signature, name, and title of U Hotels & Resorts Corporate

personnel approving the contract.

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Subject: Litigation and Other Contingencies Department: Finance Reference # ADM 111 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 111 LITIGATION AND OTHER CONTINGENCIES POLICY All lawsuits should be coordinated with the assistance of the regional/corporate office as well as the property owners in accordance with the Hotel Operating Agreement. PROCEDURE The Financial Controller or General Manager is responsible for immediately notifying the regional/corporate offices, and owning company of any claim against the hotel. Any such correspondences should be copied to the Regional Managing Director. Regional Finance leader will determine the need to inform both Chief Executive Officer and Corporate Finance leader. Any correspondence or notification relating to U Hotels & Resorts employment matters should be directed to Corporate Human Resources. Such notification will include. 1. Any communication from an attorney or legal counsel indicating there is a claim on or against the hotel,

including any insurance-related claims. 2. Incidents within the property that may give rise to future claims, such as:

• Serious injuries to guest or employee • Sizeable thefts or damage to guest or employee • Arrest of guest or employee on the premises upon request of the property • Substantial failure of equipment that may seriously affect the operations of the property, etc.

3. Receipt of any documents from any Court of Law or from any state or local agency or local agency or commission, to include but not limited to the following: direct subpoena to property (not to employees) and bankruptcy notices (not employee garnishment). Such documents should be received by the General Manager or Financial Controller.

4. The property must update Corporate monthly with any information relating to outstanding litigations.

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Subject: Hotel Operating Agreement Administration Department: Finance Reference # ADM 112 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 112 HOTEL OPERATING AGREEMENT ADMINISTRATION POLICY U Hotels & Resorts and its subsidiaries operate hotels under contractual agreements with the owners that set forth duties, responsibilities and authority of each party. It is the responsibility of the General Manager and Financial Controller to know the terms and conditions of the contract and assure compliance therewith. The Regional Managing Director and Regional Finance leader will be responsible for evaluating overall compliance and address any owner agreements or amendments that may be required after the initial contract is executed. PROCEDURE 1. Upon the execution of each hotel operating agreement, the Corporate Business Development and Legal

Department will prepare a synopsis thereof. Whilst not intended to be a replacement for the agreement itself, it provides a summary of the key terms and conditions.

2. The Regional Managing Director and Regional Finance leader are responsible for informing the CEO of the compliance status of their respective hotels. Where compliance is not indicated, a plan must be prepared to return the hotel to immediate compliance or seek contractual amendment if necessary

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Subject: Law Enforcement Authorities Department: Finance Reference # ADM 113 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 113 LAW ENFORCEMENT AUTHORITIES POLICY Each Hotel must work diligently to establish positive working relationships with law enforcement organizations having jurisdiction over the area in which the property is located. Law enforcement requests and informational releases must be handled according to the following procedures. PROCEDURE A good working relationship should be established with the law enforcement organization having jurisdiction over the area in which the property is located. 1. Requests for Property information (Guest Services).

• Information contained in Guest Service records concerning guests of the property is considered private information and its unauthorized release could result in legal action against the hotel.

• If any law enforcement representative, including a local agency, comes to the hotel to request private guest information, it is suggested that the Manager in charge request they provide the property a subpoena, which legally requires the property to provide the information. Express the desire to be fully co-operative (including providing appropriate hotel verbiage (i.e. folio) to enable the subpoena to cover the information sought), but also explain the need to obtain a subpoena to provide the appropriate protection of the guest’s privacy.

• If you receive a request for information pertinent to an immediate situation which could be potentially life threatening and where the time required to obtain a subpoena would not be practical, give your full co-operation after receiving the General Managers prior approval. Document the facts and events that constituted an emergency as part of the hotel’s incident report for the General Manager and Financial controller for reference.

2. Guest of the Hotel (Accounting) • Constitutional law and many local statutes protect the hotel guest against unwarranted disclosures of

hotel records which may be sought by various law enforcement agencies. • All information of a substantive nature can only be released with a properly served subpoena. The

existence of such information, however, can be verified without a warrant. In other words, we can advise requesting parties of the existence of records covering the nature of their inquiry, but we cannot release the documents of read information from the document without a subpoena. Under special circumstances, information may be released with appropriate communication that is legally binding.

• Any information requested by the customer may only be provided if the request is in writing, signed by the registered guest. A written request must be forwarded to Accounting and the signature verified by comparing to the guest registration card before any information is released. Response to any written inquiry must be in writing to the same address of fax number from which the request was received.

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• In cases of “hot pursuit”, where time is of the essence in apprehending a suspect or preventing a crime, hotels should co-operate fully with the law with approval in advance of the General Manager. Document the facts and events that constituted an emergency as part of the hotel’s incident report and send to General Manager and Financial controller for reference.


Subject: Administration Phone Usage Department: Finance Reference # ADM 114 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 114 ADMINISTRATION PHONE USAGE POLICY In an effort of control and evaluate the expense of administrative phone calls, the Management Call Summary Report and No-Post Call Reports must be printed from the Call Accounting System by the Night Auditor and routed to the respective Department Head and General Manager. PROCEDURE 1. The Night Auditor will forward the Management Call Summary Report and the No-Post Call Report produced

each day to the Department Head and the General Manager or financial controller for review and approval. These reports should be sign off by each department head for evidence.

2. The Department Heads and the General Manager and/or Financial Controller will review the phone reports for the following items: • Were calls made in the proper course of conducting business? • Were there call lengths of an excessive nature of outside normal business operating hours for a particular

extension? • Were calls not posted to a guest account approved proved properly? • The Financial Controller must ensure a control mechanism is in place to ensure all administrative

extensions are fully accounted for and all calls are posted properly (cost basis). Also, a collection procedure must be in place to charge and collect from an employee if a decision be made to charge such call.

3. Once the administrative phone reports have been routed and reviewed, they must be filed in date order and retained.

4. On a half yearly basis, the Financial Controller must audit, for validity, all administrative extensions. 5. Where appropriate, administration telephone should be banned outside working hours.

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Subject: Staff Incentive Programs Department: Finance Reference # ADM 115 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 115 STAFF INCENTIVE PROGRAMS POLICY Incentive programs are an effective tool for stimulating and rewarding performance that exceeds expectations. Procedures must be implemented to keep all of our incentive programs consistent, focused, time bound, auditable and within budgetary constraints. All incentive programs which include any type of remuneration directly to staff or indirectly to central fund for staff use must be authorized by the CEO and the Regional Managing Director. PROCEDURE 1. Existing Incentive Programs

Any locally administered incentive programs currently in place must be fully documented using the Incentive Approval From (copy attached). The completed forms will be signed by the appropriate Department Head and routed to the General Manager and Financial Controller for approval.

2. New Incentive Programs New incentive programs need to be fully documented using the Incentive Approval Form. The form is to be routed and approved prior to communicating any of the details of the program to any participants. All incentive programs will contain the following components: • The purpose of the program. This should be a brief narrative of the desired result of the program (i.e.

increase revenue/average check, contain cost, improve productivity, etc.). • A specific set of goals that must be achieved before payment is authorized. The key point of this component

is that the goals must be measurable and precise. The goals should include a starting point of measurement (where are you now?), as well as payout measurements (where do you want to be?). Examples would include: ➢ Five (5) perfect sell-outs in the next 30 days. ➢ Reduce the Problem Experience by 20% by the end of the third quarter. ➢ Improve the restaurant GSS score by 2% points from 90% to 92% by the end of June.

• An effective date for the start of the program as well as an ending date for the program. The ending date cannot be any longer than one year from the start date of the program. It is essential that every program have an ending date even if the intention at the time of implementing the program is to renew it. This requirement serves a two-fold purpose. First, it requires a re-evaluation of the program, its merits and goals.

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It reiterates to the employees that the program is intended to reward performance that exceeds expectations, thus preventing the conception that the incentive is a part of their normal compensation.

• The goals and payout may be progressive, but must always state a maximum achievable amount that will be paid. For example, a program may read, “The hotel will pay out $100 to each participant for each 1% reduction in overhead costs”, but also must read, “a maximum of $500 will be paid out in any one quarter”.

• A listing of the persons or positions that will participate in the incentive. • In general, an incentive will not be paid out for performance that does not meet budgeted levels in the case

of financially specific goals or that does not meet the hotel’s goals in the case of quality specific areas. • The incentive payout method may be specified in one of three methods: ➢ Currency Specific – e.g. Thb500 per person for meeting a specific performance standard. ➢ Progressive – e.g. $10 per person for each 1% increase in our GSS rating this month. ➢ Percentage – This method should calculate the payout based on exceeding the performance standard.

For example, the incentive program can specify a payout of 5% of all meeting room revenue in excess of the current forecasted amount.

• In all cases, the Incentive Approval Form must be completed, routed, signed and returned prior to implementation.

3. Audit Standards & Procedures All proposed payout participants of incentive programs must be audited by the Financial Controller. The audit must include the measurement criteria and participant eligibility as well as a recalculation of the proposed payout amount. The results of the audit are to be in writing and signed by the Financial Controller. In all cases, any participant in a payout must be an employee of U Hotels & Resorts at the time of the payout. Terminated employees, whether voluntary or involuntary, will not receive payment. In the event of a transfer to another hotel or to another department, the particular employee transferring will participate on a pro-rate basis determined by the length of time in the department covered by the incentive, or by the wages earned in the position eligible for incentive. Any such calculations will be noted in the audit performed at the time of the payout. All internal incentive programs must be paid out through the payroll.

4. Random/Informal Staff Motivational Incentives From time to time management may determine it is beneficial to motivate employees to build morale and reinforce hotel-wide objective, by monetarily rewarding them on a random basis. Prizes won in random contests, raffles, etc. may be considered to be gifts and, therefore, may be exempt from taxation (tax laws should be consulted). It is the joint responsibility of the General Manager, Financial Controller and Director of Human Resources to ensure all such gifts are conservative in value, fairly administered and contribute to the goal of enhancing motivation and overall hotel performance. It will be the responsibility of the properties’ General Manager and Financial Controller to ensure that these plans are properly administered within the guidelines of the programs as set forth. Reference: Incentive Approval Form

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Staff Incentive Approval Form HOTEL:

Incentive proposal:

Start Date:

Finished Date: Proposed by: Finance Controller approval: Authorised by General Manager:

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Regional Managing Director / Regional Finance leader Date

CEO Date

Cc: Financial Controller

Human Resources


Subject: Control of Bank Cheques Department: Finance Reference # ADM 116 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 116 CONTROL OF BANK CHEQUES POLICY In an effort to minimize the chances of fraud and to ensure that the correct account numbers, cheque numbers etc. are printed on all cheques; all property cheques stock must be properly secured by the hotel. PROCEDURE 1. Control on Circulation of Unused Cheques

As soon as the cheque books are received from the bank, the account payable supervisor is responsible for keeping them should cross all cheques in the books, and delete the words “OR BEARER”. There are good reasons for following this procedure: • Uncrossed cheques are prone to misappropriation as they are readily negotiable. • Although the Company may maintain a policy of drawing only crossed cheques, if the cheques are crossed

one by one immediately before they are to be drawn, the possibility of oversight is high. • The recommended procedure, when implemented would enable the cheque signatories to ensure that all

cheques go to the account of the stated payees, thereby reducing the chance of misappropriation or manipulation.

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If cash cheques are sometimes required by the Company for limited purposes, such as replenishment of the petty cash fund, a separate cheque book could be kept specifically for this purpose.

• All unused cheques are stored in a secured area (in the safe) under the control of the Financial Controller • The supply of unused cheques must be adequately safeguarded at all time. Cheques should be under “Lock

and Key in the safe”. • The distribution of cheques, by the Financial Controller or Assistant, is logged in the control register. • Cheques issued to the Accounts Payable Clerk, are logged in the control register and acknowledged by the

Clerk. • The Accounts Payable Clerk keeps only a minimum supply to satisfy their immediate needs.

Unless more than one packet is to be used in the same day, no more than one packet at one time shall be issued to the Accounts Payable Clerk.

• The same principle applies to payroll cheques which are issued to the paymaster. 2. Utilization of cheques

All cheques drawn by the hotel are double-checked. The following information must be included when completing a cheque: • Date • Name of payee only • Amount in figures

The remittance advice joined to the cheque contains the following information:

• Date • Hotel references (number of the payable voucher) • Invoice no. or other reference supplied by the payee

3. Control of used cheques All Cheques are administered according to strict numerical order. When a computer is used, the sequence number is controlled. When a manual system is used, the sequence number is controlled through the bank book.

4. Control of signed cheques Signed cheques must not be returned to and handled by the Accounts Payable Clerk; it should be another employee who is completely divorced from the function of drawing cheques: • Separates the original from the copy of the cheque • Cancels supporting documentation by paid stamp or perforation. • Hands over or mails the original to the payee • Hands over the copy to the Accounts Payable Clerk.

5. Voiding cheques Whenever it is necessary to void a cheque, the corner of the original reserved to the signatures, is cut off and destroyed. The rest of the original is filed together with the copy as previously described in 3.4. Across both copies “VOID” is written in ink.

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Subject: Financial Controller Handover Department: Finance Reference # ADM 117 Page: 1/5 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 117 FINANCIAL CONTROLLER HAND OVER POLICY When a change in Financial Controller occurs, the objective is to maintain clear, concise and comprehensive transition. Therefore, all Financial Controller transitions should be conducted in a manner consistent with the following procedure. PROCEDURE During the transition of Financial Controllers, there are many issues which must be conveyed. The level of detail with which each item should be reviewed may vary from property to property depending upon the nature and scope of the item in the checklist and therefore greater emphasis may need to be placed on any one item contained in this

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checklist. This checklist is meant to be used as a guide through the transition process and is not necessarily considered all-inclusive. The incumbent Financial Controller must review each of the following issues with his/her replacement. A copy of the completed Checklist should be copied to the Regional Managing Director/Regional Finance leader outlining the specific issues which were covered. All responses should be acknowledged by both Financial Controllers and copied to the General Manager. This completed form must be kept in the new Financial Controller’s personnel file. Reference: Financial Controller Handover Form

U HOTELS & RESORTS FINANCIAL CONTROLLER HANDOVER

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YES NO ACT REMARKS 1. OWNING COMPANY

• Summary of owning company operation , financial status , etc • Owner’s representative or liaison with hotel Operation • Other owner’s staff whom FC may be contacted with • Current status of relationship with owning company • Review of meeting minutes with the owning company

2. PERSONNEL & ORGANISATION • Departmental organization and chart • Hotel organization and chart • Corporate organization chart • Most recent Appraisal and next date • Ongoing training plans for certain individuals

3. BANK ACCOUNTS • Details of Bank accounts + mandates • Who has authority to sign + limits

4. STATEMENT OF FINANCIAL POSITION • Formal handover of all statement of financial position

reconciliation files

• Formal handover of year to date period end files • Review of current year FC Checklist • Any Internal/External Audit Reports

5. CITY LEDGER • Total outstanding and recent trends • Average number of days • Bad debt write-offs and provision • Overdue accounts and collection procedure • Credit card rates (AX, MC, VISA, DI) • Review of the Guest ledger per accounts

6. INVENTORIES • Listing of par stocks, max/min levels • Stocktaking procedure • List of slow moving items in stores • Inventory policy (SOE, variances etc.) • Issuing hours/days of storerooms

7. CASH • Brief description of cash controls/transfers to bank/house bank

contracts

• Petty cash banks, control procedure and limitations • Risk allowance for cashiers • How many safes • Who has safe combinations • Floats verified to nominal ledger


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YES NO ACT REMARKS

8. PAYROLL • Brief description of payroll procedure and policy • Mechanism for controlling payroll • Overtime policy – who can authorize requests • Payroll control of department heads (time sheets, etc.) • Policy on cash advances to employees and employee loans • Procedure for casual/part time labor • Policy on employee city ledger and discounts • Current incentive schemes

9. CONTRACTS, AGREEMENTS, LEASES • Details of Hotel Operating Agreement • List of outside contracts for hotel services, all depts. Concerned

(name of contractor, service provided, cost per month/year, starting and expiry date of contract)

• Contracts of shop leases • Other Contracts/Agreements • Outstanding barter agreements • Approval procedure (signature GM, FC)

10. POLICIES • U Hotels & Resorts Finance Policy Manual • Other U Hotels & Resorts Operations SOP’s • Hotel LSOP’s • Local Tax Structure and Remittance dates • Critical Date List • Current Owner Issues

11. REPORTING • Reporting calendar • Monthly report FC • Hotel audit report and ongoing action plan • Next audit • Internal control checklist • Financial statements (P&L) deadline • Budget current year • F & B cost report • History and trends in incidents of workmen’s compensation

cases; guest accident and claims; thefts

• Handover Keys


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YES NO ACT REMARKS 12. RECEIVING AND STORES

• Brief description of receiving control, procedure and storage • Quality control at receiving dock • Liquor/beverage issuing control/schedule • Meat issuing control/schedule • Description other stores (SOE) • Refrigerated storage

13. INSURANCE COVERAGE • List of insurance policies and details of coverage • Outstanding insurance claims • Relationship with insurance company

14. CAPEX • Status Capex / Special Projects • Policy substitution of Capex • Approval levels • Does the hotel maintain asset register • Frequency of Capex inventory • Is there a reporting system of losses • Asset disposal policy (Owning Company approval)

15. PURCHASING CONTROLS • Purchasing policy • Current Approval Routing

16. OTHERS • Hotel computer IT System Chart • FC’s Passwords for sign in all concerned systems • Hotel Internal Meetings Plan • List of Contacts • Excom Requirements (Duty Shift, etc) • Any advanced payments to suppliers • Any legal obligations • Pending court cases / legal disputes / inspections


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17. ANY MAJOR PROBLEMS OR CONCERNS?

18. STRONG/WEAK POINTS OF DEPARTMENT/SECTION?

19. ANY PENDING MATTERS TO BE ADDRESSED?

20. MAJOR PROJECTS PLANNED WITHIN THE NEXT 6 MONTHS?

21. PROMISES MADE TO ANY EMPLOYEE?

22. HAND OVER OF THE FINANCE MANUAL?

FINANCIAL CONTROLLER INCOMING CONTROLLER Name: ____________________ Date:_________ Name: ____________________ Date:_________ Signature: _______________________________ Signature: _______________________________

GENERAL MANAGER Name: ____________________ Date:_________ Signature: _______________________________

Note: The Finance Manual Acknowledgement Form must be completed and forwarded to the Regional Managing Director and Regional Finance leader.

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Subject: Records Retention Department: Finance Reference # ADM 118 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 118 RECORDS RETENTION POLICY The management and retention of all business records must be performed in compliance with required local laws on an efficient basis. It is the Financial Controller’s responsibility to be familiar with specific requirements mandated by local laws relative to records management (including tax rulings and audit practices). The Financial Controller should implement the requirements in conjunction with the Regional Finance leader. The Hotels must not dispose of any documents that are required for litigation or are subject to government enquiries or inspections. PROCEDURE All documentations are to be transferred into storage boxes for long-term storage, and that all similar documents should be filed together. All boxes must be clearly labeled with the following: • Serial Number • Hotel/entity name • Contents • Period of time contents cover • Disposal date (if any)

This will ensure that they can be checked for completeness (missing documents should be investigated to ensure that their absence is not indicative of fraud) and that they can be produced as evidence if requested during a tax audit. Only group together items with similar disposal dates in order to make file storage make file storage more efficient. Where different legal entities may be responsible for different records, files should be boxed by entity and labeled appropriately. The record storage area must be clean, dry and secured. Storage area contents must be organized so that information can be easily obtained. It is the responsibility of the Financial Controller to create a detailed archived retention log for each document. The Financial Controller must review annually the documents in storage to ensure compliance with the policy. The Financial Controller must maximize the usage of digital media, i.e. scanners for record retention in order to minimize storage costs.

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Subject: Access to Records Department: Finance Reference # ADM 119 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 119 ACCESS TO RECORDS POLICY All information and records require some degree of confidentiality to protect the privacy of individuals, to prevent company information and records from being utilized by unauthorized sources and to comply with local data protection laws. A system of limited access should be developed to provide adequate security from unauthorized use and convenient access for those who “need to know”. It is the Financial Controller’s responsibility to ensure this policy is enforced throughout the hotel, and the requirement to observe notional data protection laws are adhered to at all times. PROCEDURE 1. Confidential Memoranda

Internal communications marked as “Private& Confidential” will be distributed in person. Mailed correspondence should be sealed by the sender and appropriately marked as “confidential”. Email and fax transmissions containing “confidential” data or correspondence should be kept to a minimum, and then only with adequate security measures being taken (e.g. receiver stands by the fax, receives to password – controlled fax, etc.).

2. Payroll and Personnel All personnel records will be kept in a locked cabinet. Access to this cabinet will be controlled by the Human Resources Manager. Access to personnel and payroll records will be limited to the Human Resources Director, Payroll Clerk, General Manager and Department Heads within their areas of responsibility and auditors for audit purposes. Other employees are only allowed access to their own personnel files. Executive Committee records (personnel file, personnel action forms) are to be hand – delivered, not transferred by interoffice mail. Files are not to be removed from human resources at any time, without the written approval of either the General Manager or Financial Controller.

3. Hotel Operating Agreement/Ownership Documents Access to these documents must be restricted to the Financial Controller and General Manager.

4. Financial Statements • Release of hotel revenue statistics, such as rate and occupancy, to area hotel/hotel associations should be

approved by the Regional Managing Director. • Hotel profit information, audited financial statements, partnership reports, comparative information of

other U Hotels & Resorts Hotels, etc. will be tightly restricted and not released to outside entities without approval from Regional Managing Director.

• Participation in any national data (e.g. trends) will be coordinated through the corporate office. 5. Daily Financial Reports

Will be maintained in the Accounting office and only distributed to those individuals approved by the General Manager or Financial Controller. The Financial Controller will be responsible for maintaining records security.

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6. Computer information & Hotel Data The Hotel recognizes that from time to time employees will have to access guest or employee information resident in the hotel’s computer systems. This information includes, but is not limited to, credit card information, addresses, status, salary and the like. It is the General Manager and Financial Controller’s responsibility to ensure that all guest and employee information is kept confidential. • All hotel data, information data directories, and program files are to be kept under complete physical

security and treated as the property of U Hotels & Resorts/owners. • All such information must be treated with strict confidentiality and accessed only when necessary to

conduct official hotel business. • Security Standard – all data base information, files, and records contained in the hotel systems are to be

guarded as much as possible against improper disclosure, access, alteration or deletion. • Access Standards – employees will access hotel data files and records only for the express purpose of

performing their assigned duties. • Access to, and safeguarding of, confidential and sensitive information is a very serious matter and any

violation of these policies and procedures will result in disciplinary action up to and including termination and/or civil litigation.

• Acknowledgement on these policies and procedures must be communicated in writing to respective employees, and a signed copy of the acknowledgement must be kept in the employee’s human resources file.

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Subject: Intellectual Property Department: Finance Reference # ADM 120 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 120 INTELLECTUAL PROPERTY OVERVIEW It is U Hotels & Resorts policy to protect its intellectual property which includes patents, propriety technical information, trademarks, service marks, trade names, copyrights and software. The objective is to ensure that U Hotels & Resorts and the hotels it manages are in compliance with all trademark patent and copyright laws. POLICY Computer Program Copyright Under the laws of most countries computer program whether it relates to hardware or software is protected by copyright. It is U Hotels & Resorts policy to respect such copyrights. U Hotels & Resorts employees shall not make copies of any part of computer programs obtained from third parties, and also not load such programs on the hotel server or clients. All software used should be licensed to the hotel and records should be kept up-to-date in case of any inspection.

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Subject: Contingency Plans Department: Finance Reference # ADM 121 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 121 CONTINGENCY PLANS OVERVIEW Hotel computer facilities may be disabled by emergencies such as fires, floods, prolonged equipment failure, explosions, labor strikes, civil disturbances or other events. To facilitate the operation of the hotel during computer failure, contingency plans must be prepared that specify the procedures for operating the hotel without the use of computer systems and the procedures to restore the computer system to full operation. POLICY All U Hotels & Resorts with computer facilities must prepare contingency plans stating the actions to be taken in the event of an unscheduled computer failure. The Hotel Financial Controller in conjunction with the IT department is responsible for developing, maintaining and testing the plan. The disaster recovery plan (DRP) should facilitate daily back up of all computer programs and data files stored in a fire proof safe and also kept off side in a secured location. The initial plan and major revisions must be reviewed and approved by:

The General Manager The Hotel Financial Controller The Hotel Security Director The Hotel Information Systems Manager Revisions must be made as necessary based on an annual review. The plan must reflect all current computer systems at the hotel, including but not limited to, personal computers, telephone systems, property management systems and back office accounting systems. For emergency access, a copy of the contingency plan must be retained outside of the computer and Hotel Financial Controller’s area.

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Subject: Fraud and Theft Department: Finance Reference # ADM 122 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents ADM – 122 FRAUD AND THEFT POLICY Incidents of fraud, theft, misappropriation, illicit commissions, kickbacks in purchasing products or services, and willful damage to hotel property must be promptly investigated, reported and, where appropriate, prosecuted. To provide guidelines for hotels to report instances of fraud and theft. Reporting The General Manager and The Hotel Financial Controller are responsible for issuing a report immediately and then a detailed report within two days of discovery to the Regional Managing Director. A reportable incident is defined as:

• Any fraud or theft in the hotel, which includes any incidents or cash shortages etc. • Fraud/incident report should be prepared and sent to corporate office the next day

Hotel management should maintain adequate records of all fraud and theft incidents.

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SECTION 2

ACCOUNT RECEIVABLE

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Subject: Credit Approvals Department: Finance Reference # A/R 100 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Group Finance Director Updated date: May 2019 Approved by: CEO Approved date: May 2019

Back to Table of Contents A/R – 100 CREDIT APPROVALS

POLICY

Credit applications will be required for any extensions of credit. Information obtained from clients must be independently verified and evaluated by Credit manager and Financial Controller. Credit will only be extended by authorized persons within the limits set in this policy. Do not assume that if credit has been given previously that it should automatically be given again without being reassessed.

PROCEDURE

Requests for Credit Facilities will generally be received within one of these 3 categories

• Corporate Accounts • Wholesaler / Tour Operators/ Travel Agent / OTA • Banquets and Functions

The procedure to determine approval for credit facilities will be the same for every request.

Wherever possible, prepayment or partial advance payment should be sought from the customer.

Any request for Credit Facilities must be initiated by completing a “Credit Application Form”.

Once a “Credit Application Form” is completed by Sales or Revenue Departments including supporting the following information for reviewing by Credit Manager;

General Information about the company Examples of key information required:

o The type of business of the company and the industry in which it operates o The type of company e.g. Head office, subsidiary, representative office, etc o The company’s relationship with other well-known companies (if any) o The relative size of the company compared to other similar players in the industry o Number of employees o Company needs to be established for > 1 year o Company needs to have registered capital of > USD$25,000

o Company must have good credit rating o The Company Registration Details are accurate o Web site URL and Email address

For credit reference and payment history , The Credit Manager must review the following; o Audited Financial Statements for current year and prior year o Reference from at least 3 other similar rated hotels with similar spending o Bank Reference o Other Trade Creditor References o Credit Reference Agency and Hotel Credit Manager Association o Prior history with U Hotels & Resorts company o The company current policy on invoice receipt and payment

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o Whether the company needs a PO for the bookings o Signing officers and accounts payable contacts o Site visitation or reference from websites or other hotel industry forums

The Credit Manager will comment as above for determining if a request is suitable for granting credit.

After completing comments, Credit manager signs credit approval (or non-approval) and pass on to Financial Controller and General Manager for approval.

Credit manager must give comments on the particular company based on the information obtained. The key information needed in the “comment” section is:

• Whether or not other hotels are giving this company credit and known payment behaviors • Company’s instruction and payment procedures e.g. payment only made every Friday • Suggested credit limits and terms of payment

Approval for Credit Limits will be subject to the following schedule; CREDIT AMOUNT APPROVED BY UP TO US$3,000 CREDIT MANAGER US$3,000 – US$20,000 CREDIT MANAGER AND FINANCIAL CONTROLLER US$20,000 – US$100,000 CREDIT MANAGER AND FINANCIAL CONTROLLER AND GENERAL

MANAGER OVER US$100,000 REGIONAL OPERATION LEADER/REGIONAL FINANCE LEADER Guidelines for Determining Credit Limits

• For existing wholesales/ travel agents/OTA customers – Calculate the credit limits based the customers’ past

performance by taking the total number of rooms nights during 2 peak period months, multiply by the average room rate

• For new wholesales/ travel agents customers – Calculate the credit limits based the customers’ expected room nights to be submitted during 2 peak period months, multiply by the average room rate

• For corporate customers – Calculate the credit limits based on the expected payment amount

Credit Manager sends letter to inform the company/ organization regarding the credit approval

General Managers may set lower limits at their discretion.

Once a credit application has been processed and approved, a copy of the completed credit application should be distributed to the following departments:

• Credit Manager, which is maintained in the Collection file • Sales • Food & Beverage/Catering (if applicable) • Meeting/Convention Services (if applicable)

If you become aware of a significant change in a company’s financial status then a fresh credit application must be required.

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Subject: Credit Meetings Department: Finance Reference # A/R 101 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Group Finance Director Updated date: May 2019 Approved by: CEO Approved date: May 2019

Back to Table of Contents A/R – 101 CREDIT MEETINGS POLICY Credit meetings must be held monthly and minutes must be maintained, at a minimum, with key people involved with developing and enforcing credit decisions in order to maximize the focus on collections and procedures. PROCEDURE The Financial Controller will ensure a credit meeting is conducted monthly. The Credit Manager is responsible for preparing all accounts and the necessary schedules (listed below) for review. A review of all accounts older than sixty (60) days, or suspected to be of a problem nature, must be covered and appropriate action taken during the meeting. Furthermore, suspicious outstanding amounts or overdue more than 90 days and above should be reported to Regional Operations/Finance and Sales/Revenue leaders in a separate email with full follow- up supporting documents/emails. The hotel’s performance in generating/handling credit card charge backs must be reviewed. Upcoming groups/functions must be reviewed to ensure proper credit has been arranged, and/or procedures are in place to ensure prepayment. Also, the hotel’s accounts receivable related performance should be reviewed compared to the prior year’s performance. Attendees 1. General Manager 2. Resident Manager / Hotel Manager if relevant 3. Financial Controller 4. Credit Manager 5. Head of Department Sales & Marketing if relevant 6. Front Office Manager / Reservation Manager 7. Event Manager / Banquet Manager if relevant

Agenda of Monthly Credit Meeting 1. Accounts Receivable Aging Analysis – City Ledger, Guest Ledger, Deposit Ledger, PM Folios. 2. Long Overdue or suspicious accounts, the reasons for non-settlement and details on the actions taken to ensure

collection. 3. Information on customers regarding changes on status of credit worthiness 4. Matters outstanding from prior meeting 5. Returned Cheques and Credit Card Chargeback Summaries 6. Credit Trace on Future bookings and advance deposit\prepayment requirements 7. Area of improvement required from hotel personnel (e.g. follow up on vouchers, etc) and request for actions 8. Action points per department for follow-up 9. Any bad debt write-off should be informed to the other hotels in case the customer has a facility with other

hotels managed by U Hotels & Resorts.

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Documenting the Meeting Minutes must be taken at each credit meeting and be signed by General Manager. Review of general issues of discussion (e.g. revisions in the property’s internal procedures, steps to be taken to address a particular issue with an upcoming group/function, etc.) should be put in memo format and attached to the final package as the cover sheet. Copies of these minutes should be distributed to all individuals listed as mandatory meeting attendees, whether or not they were in attendance, in addition to all Sales, Meeting Services and catering, Banquet, Revenue and Guest Service Managers. A copy of the monthly minutes must be kept on file for audit purposes by the Financial Controller.

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Subject: Credit – Front Office Department: Finance Reference # A/R 102 Page: 1/4 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 102 CREDIT – FRONT OFFICE POLICY Credit decisions are an integral part of every guest transaction and must be monitored with great care and diligence. All credit decisions must be made after an investigation of credit history or establishment of the validity of a credit card or other means of securing payment in accordance with the procedures set forth herein. PROCEDURE Guidelines 1. General

Credit is a privilege granted to hotel guests when it is in the hotel’s best interest to do so. A good credit policy achieves the following goals: • Accommodate the guest’s requests. • Protect the hotel’s cash flow and accounts receivable position. • Minimize the hotel’s potential “bad debt” losses.

2. Responsibilities The ultimate responsibility for compliance with credit policy lies with the General Manager and Financial Controller. The Financial Controller is specifically responsible for: • Ensuring that each hotel department has access to the necessary policies governing credit • Reviews the compliance and execution of credit policies.

Critical to the success of hotel credit policy are the involvement of the General Manager, Hotel Manager, Director of Rooms, Credit Manager, Front Office Manager, and Food & Beverage Director. Additionally, for a credit policy to be effective, total involvement is required by all members of the hotel staff. All supervisory personnel who deal directly with guests must be familiar with the hotel’s credit policies and procedures.

Registration 1. Registration Card

• Each registering guest must be requested to sign a registration card and verify name, address and room rate data. In most cases, the hotel computer system will generate reservation cards from reservation data. If that data is not provided, the Guest Service Agent must request the guest to fill out the registration card. The Guest Service Agent is responsible for ensuring that the name and address data is complete and legible. If illegible, the Guest Service Agent is responsible for clarifying and printing the data for the registration card.

• Group Registration Where reservation data results from input from a rooming list that does not include individual address data, the Guest Service Agent is required to secure that data from the registering guest, and modify the address filed in the system to reflect the guest’s home or business address. The requirement for individual, signed registration cards may be waived for groups in those instances where there is a rooming list with addresses and where the sponsoring organization provides a written guarantee that all individual incidental charges not included on the master account, and not paid by the individual at check-out, will be billed to and paid by the organization.

• Tour Groups Where a block of rooms has been reserved by a Travel Agent or Tour Operator, and the entire group arrives together, the requirement for individual registration and signature may be waived. In these instances, the

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tour operator must guarantee collection of group members’ incidental charges that are not included in the tour package.

• The requirement for signature of VIP’s may be waived by the General Manager or his designated representative. The reservation must reflect this waiver. Other than the General Manager’s waiver, any uncollected account that results will be the responsibility of the authorizer. In the absence of such a guarantee, the normal guest registration may not be waived.

• The Guest Service Agent is responsible for determining and recording the method of account settlement if the guest has not completed that section of the registration card. This requirement may be waived for VIP’s by the General Manager of his designated representative.

2. Identification • Each registering guest will be requested to present identification. In cases where account settlement is by

credit card presented and imprinted, the credit card meets the identification requirement. Where the indicated method of account settlement at check-out is cash, the identification presented must be compared with the written information on the registration card and the type and number (if any) recorded on the registration cards.

• Identification is primarily to ensure collection if a registering guest fails to settle his account at check-out in the indicated manner. Its greatest significance, therefore, relates to settlement options.

• Each Financial Controller is responsible for determining acceptable identification documents for that hotel and for instruction of Guest Service personnel.

3. Settlement Options General methods of payment for hotels services are as follows: • Credit Cards • Cash • Prepayment • Direct Billing • Credit Cards

Where a guest identifies a credit, card accepted by U Hotels & Resorts managed hotels as a method of settlement, the guest has satisfied the requirement to present identification. U Hotels & Resorts managed hotels have $0 floor limit (due to connectivity with credit card merchant) and it is the Financial Controller’s responsibility to ensure that floor limits on all credit cards are communicated, understood, and implemented throughout the hotel.

• Examine the card carefully; ensure that the card is valid. • Swipe the credit card through EDC machine for approval and charging. • If no EDC machine or connection is unavailable, approval number for all charge from bank/ credit card

company needs to be obtained • Ask the cardholder to sign the guest account and verify this signature against the signature shown on the card.

=> This is extremely important as most of our loss due to fraud result from failure to verify signatures. • In cases where there appears to be a discrepancy in signatures, additional identification should be requested. • If credit card is rejected from EDC machine, GSA should contact bank immediately. Do not split

the charge in order to get approval code from bank. • In order to provide the most efficient service to our guest, we have to accept payment by credit card through e-

mail or fax with below condition: ➢ Written authorization from the guest ➢ Guest has to fill up the format for Credit Card Authorization form.

In case that the credit card owner, whether or not he/she is the hotel guest, would like to pay for multiple rooms (not necessary under his/ her name). He/ she needs to sign on all folios and sign the credit card in front of the cashier. If the card owner is not presence, he/she must email or fax in Credit Card authorization form.

All credit cards must be pre-approved. The amount of approval shall be set at the amount of room and taxes plus an estimated amount per night for incidentals. The Financial Controller is responsible for determining the most suitable level of pre-authorization and has this distributed in writing as an LSOP per property.

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4. Cash Customers If the guest wishes to pay in cash, payment procedure must be mentioned in folio upon arrival. • For regular (long-stay) guest, inform him/her that the bill should be settled weekly or as soon as the credit

ceiling amount is hit the guest should be requested to settle the amount. • If guest has no reservation or is a walk-in customer, ask the guest for full pre-payment upon check-in by using

the calculation of the total expenses It is the responsibility of the Front Office Manager to check and sign the “credit check report” on a daily basis, if there is anything urgent or credit limit has been exceeded, it should be dealt with immediately and the actions taken should be noted on the report. 5. Prepayment

In case where any customer (including travel agents) is not granted credit terms, they need to prepay before the guest arrives. GSA must ensure that full payment has been received before guest is allowed to check-in. Reservations Department needs to state clearly in the client booking that prepayment is required. Company or personal cheques are NOT ACCEPTED for both prepayment and Cash on Arrival. Therefore, GSA must ensure that the hotel has received full payment in its account by checking with the Accounting Department (preferably Credit Manager) otherwise, he/she will be held responsible for the loss incurred and necessary action will also be taken.

6. Direct Billing • Travel Agency Voucher

Vouchers of travel agents that have been approved for acceptance is acceptable for settlement of specific folio Charges (generally room, service charges and taxes). The Guest Service Agent is responsible for the following: ➢ Secure the voucher from the registering guest. (If voucher is not automatically presented, and

if reservation identifies a travel agency, the Guest Service Agent must ask for the voucher). ➢ Examine the voucher to determine what the voucher covers and verify the details. ➢ Secure a credit card or cash from the guest for settlement of charges not covered by the voucher. ➢ Record the travel agent identification and voucher number on the room folio and registration card. ➢ Securely staple the voucher to the registration card to avoid loss. Drop the voucher the same as credit

cards at the time of guest check-out, for direct billing by Accounting. ➢ In the absence of the voucher it must be noted in the PMS (Fidelio) comment field, and the

Front Office/Assistant Front Office Manager notified immediately and follows up Voucher before guest’s check in.

➢ A written confirmation, showing which charges will be accepted by the Agent, must be obtained. This confirmation must be received before the guest’s departure, or an alternative method of payment must be obtained from the guest.

• Other direct billing is permitted only under the following conditions: ➢ The reservation reflects that direct billing has been approved by the General Manager or Financial

Controller. Other than the General Manager’s, Credit Manager’s or Financial Controller’s approval, such uncollected accounts become the responsibility of the authorizer.

➢ Where there is a written agreement, which includes payment terms, with local companies and organizations booking business with the hotel on an ongoing basis and this approval is recorded in the customer booking.

Monitoring Guest Ledger Balances Notwithstanding the protection afforded by carefully executed registration procedures, all hotels are required to monitor Guest Ledger balances on a daily basis by Front Office Manager and Income auditor. This procedure protects against over-limit charges on credit cards and abnormal charge activity. The Financial Controller must ensure this procedure is undertaken daily.

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Over Credit Limit Report 1. An over credit amount indicates that the guest’s balance has exceeded the credit that has been secured for the

room. 2. The Night Audit function is responsible for preparation of the over credit limit list reflecting;

• Guest Name • Room Number • Credit Limit • Account Balance • Payment Type (AMEX, Advance Deposit, Cash Only, etc.) • Remarks or Supplementary Information

3. The Front Office Manager is responsible (in conjunction with the Credit Manager or Financial Controller) for resolving all unsecured guest accounts immediately.

4. A copy of the report with explanation of action taken should be distributed daily to: • General Manager • Rooms Director • Financial Controller • Credit Manager • File

5. For guests staying for an extended period of time (more than 7 days) and whose charges are being paid for by a company, the company should be contacted to see if an early bill can be sent and a final bill sent when the guest checks out. The guest should be informed that it is part of the hotel credit policy to settle balances every 7 days and to start over with a new folio. The same policy applies to guests who are paying by credit cards. The guest is contacted first before the charges are processed.

Walk Out 1. When a guest has walked out on a room folio balance and the guest does not have a credit card on file, the

following steps need to take place: • The Front Office Manager should try to contact the guest on the same day that the skip has occurred. This

information can be taken from the registration card or original reservation in the system. • If contact is made, the Front Office Manager should inform the guest that he/she left the hotel with

a balance due. If the guest would like to pay the balance with a credit card, the Front Office Manager should ask the guest to send an authorization letter so that a charge can be processed. The credit card will be charged immediately when the authorization letter is received; it will be filed with the credit card voucher as back up. Ask the guest when payment will be received at the hotel or when the guest is planning to come by the hotel in person. It is the responsibility of the Front Office manager to follow up on the account through collection.

• If contact is not made, the Front Office Manager should try to contact the travel agent or person who made the reservation to ask for help in collecting the outstanding amount. The credit card on the reservation should not be charged unless it is the credit card of the skipped guest or the person guaranteeing the room has sent written authorization to use the card. If the previous conditions are met, the credit card on the reservation should be charged immediately.

2. If the amount was over $100 and a resolution was not found during the day of the skip, the balance should be transferred to the city ledger. A new city ledger account will have to be set up by the Credit Manager. Copies of all the folios and notes should be copied for the Credit Manager to place in the A/R file.

3. The Front Office Manager should detail all of the conversations and activity that has taken place on an Accounts Receivable Follow Up Form. The Front Office Manager should also list all future efforts on this form. The Front Office Manager should review the Hotel Credit Policies with the Guest Service Agents to see what circumstances led to the walk out. The Front Office Manager needs to summarize this conversation in a memo to the Credit Manager.

4. If all avenues have been exhausted and no payment has been received within 30 days, Front Office Manager must responsible for settlement these balances after the final judgment by the General Manager.

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Subject: Direct Billing Department: Finance Reference # A/R 103 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 103 DIRECT BILLING POLICY Accounts Receivable items represent uncollected revenues. Therefore, it is essential that the billing cycle is performed daily in order to maximize cash flow and minimize write-offs. PROCEDURE Guest Ledger accounts must be reviewed on a daily basis by the Front Office and Credit Manager to ensure that accounts are maintained in a current status. Whenever possible, master group accounts should be reviewed with the Group/Function coordinator prior to departure. Preferably, the conference coordinator should meet daily with the group’s function coordinator and go over the previous day’s charges. All accounts must be transferred to the City Ledger from the Guest Ledger the day following check-out or at the end of the non-room function. Billing is to occur immediately after Accounting reviews the bill. Transfer of Guest Ledger accounts should always be to the City Ledger The Financial Controller must ensure that all accounts being transferred to the City Ledger are accurate and fully documented. Financial Controller must ensure that regular direct billings are to be sent the customer within three (3) working days after departure. Subsequent statements are to be processed and mailed at least monthly and on an ageing basis for slow payees.

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Subject: Credit Card Procedures Department: Finance Reference # A/R 104 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 104 CREDIT CARD PROCEDURES POLICY The Financial Controller is responsible for developing a system to ensure that the adequate credit card processing procedures are in place. All credit card refunds must be documented and a file to support all refunds must be maintained by the Financial Controller PROCEDURE

Credit card receipts are transmitted daily and are logged appropriately to include the types of credit cards, the amounts, and the time. Credit card receipts are organized chronologically by type and by outlet for easy retrieval whenever the processor needs copies or other documentation. That detailed reports for all the credit cards processed are maintained. The confirming fax from the credit card processor summarizing the amounts received are matched to the detailed reports and filed according to date. All credit transmissions must be documented and must be investigated and validated for authenticity. Requests for information and documentation from the credit card processor are sent immediately, not to exceed two business days. The chargeback’s listed on the confirming fax are transferred to City Ledger, under Chargeback’s, and researched and resolved. Payments are received by the banks promptly in accordance with contract. Refunds 1. Credit card refunds must be processed using a Supervisor’s card. Refunds should be processed to the same card

where the original charge was made. 2. The Financial Controller must ensure that all supervisor cards are logged to the person who receives them and

must know how many cards are in circulation in the hotel. 3. If a card is handed from shift to shift it must be incorporated into the closing shift procedures. 4. On a daily basis all backup to support credit card refunds must be forward to accounts as part of the Daily

Income Audit with the relevant audit trail attached.

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Subject: Collections Department: Finance Reference # A/R 105 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 105 COLLECTIONS POLICY Effective management of our receivables is critical to our business success. Timeliness of billings, accuracy of the data and effective methods of follow-up are key components of our strategy. PROCEDURE Reminders Local Companies: After the statement has been sent to a company and no payment has been received within the agreed terms of payment, the Credit Manager should contact the company within 3 days in order to make sure that the company received invoice. Airlines: The payment should be settled within 30 days after receiving the statement. Late payment should be informed Financial Controller & GM immediately for further action. Local Travel Agents: • 1st reminder should be made when over the due date. • 2nd reminder should be made 7 days after the first reminder, if there are no responses from customer • 3rd reminder should be made at intervals of 7 days. If payment is not received after second reminder, Credit

Manager should inform Financial Controller, Director of Sales and General Manager. Foreign Travel Agents: • 1st reminder should be made when over the due date. • 2nd reminder should be made 15 days after the first reminder, if there are no responses from customer • 3rd reminder should be made at intervals of 15 days. If payment is not received after second reminder, Credit

Manager should inform Financial Controller, Director of Sales and General Manager

A written record of collection efforts will be maintained on an accounts receivable follow-up report or through the PMS system, if applicable. This report should always be updated with the following information: 1. Date and time the call was made. 2. Name of the person spoken with. 3. Any response from the person spoken with (e.g., when payment will be received, action plan for payment, who

to contact next, etc.). 4. If message is left on voicemail, then it must be noted in diary to call again the following day.

This report may be kept manually or within the PMS if the system allows this option. If PMS is utilized, the final log must be printed and filed with the direct bill documentation following payment or at write-off. All efforts must be made to resolve billing questions or discrepancies with the guest as quickly as possible. Partial payment of undisputed items should always be encouraged. Get back to quests when promised to resolve any discrepancies.

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Subject: Use of Collection Agencies Department: Finance Reference # A/R 106 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 106 USE OF COLLECTION AGENCIES POLICY All accounts receivable accounts over ninety (90) days past due should be reviewed during the monthly credit meeting. At that time, a determination should be made as to whether third party assistance is needed to collect the debt. If it is so determined that assistance is required, the following procedure should be followed. PROCEDURE All accounts less than $10,000 that requires third party collection assistance should be handled through a recognized and corporate-approved collection agency. For those accounts over $10,000 that may require outside assistance, the Financial Controller should first contact the General Manager to discuss the costs-versus-benefit of pursuing each account. Services of outside attorneys should only be considered after this discussion has occurred and with the written approval of the Regional Managing Director.

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Subject: Collection Letters Department: Finance Reference # A/R 107 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 107 COLLECTION LETTERS POLICY U Hotels & Resorts managed hotels shall maintain a highly professional business image through consistent written collection efforts. These efforts will enhance the hotel cash flow, minimize the accounts receivable aging and maintain customer loyalty. PROCEDURE The following credit and collection letters have been prepared as guidelines in implementing our collection processes. Property specific modifications, additions or deletions of information that is incorporated in the documents should be reviewed and approved by the Financial Controller prior to using the forms for collection purposes. Each document corresponds to the document number in the attached index and should be used in the various cycles of collection. Where applicable, set these letters in the PMS for ease of reference. Index of collection form letters Request for Credit Card Authorization Letter of Intent to Pay Reminder Letters

1st Reminder 2nd Reminder 3rd Reminder Final Reminder Credit Suspended Travel Agent Unpaid Cheques Letters

Insufficient Funds Cheque Returned Account Closed Cheque Returned Payment Stopped Cheque Returned Second Request Cheque Returned Passing to Agency for Collection

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Subject: Returned Item – Cheques and Credit Cards Department: Finance Reference # A/R 108 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 108 RETURNED ITEM – CHEQUES AND CREDIT CARDS POLICY Even though proper approval and identification requirements are followed, cheque or credit card payments may still be returned for various reasons. Collection of these items depends on quick response and diligent follow through. Collection practices shall be conducted in accordance with the following procedures. PROCEDURE Returned items consist of cheques which have been returned as unpaid to the hotel’s bank and guest charges, which are settled at the hotel by credit card, that are subsequently returned as “unpaid” by the credit card company (chargeback). Returned Cheques The procedures to be followed when a cheque has been returned as uncollectible are: 1. The Credit Manager will automatically log the cheque on a Returned Cheque log. 2. If the cheque cannot be re-deposited, the Credit Manager will match the original returned cheque with the

applicable folio and registration card. 3. If a credit card imprint exists on the back of the registration card, process accordingly, within the laws of the

country. The Financial Controller shall be responsible for verifying whether the law permits the billing of a credit card to recover monies owed due to returned cheques. Financial Controller will be responsible for monitoring the law and to be aware of any changes.

4. If an imprint does not exist, or if the law prohibits billing, a City Ledger account should be established for each person or company with returned cheques.

5. A debit should be posted to the city ledger account using the returned cheque posting code with the corresponding credit to be posted to the bank account.

6. The collection process should begin as though the item were over thirty (30) days old. 7. Fill out the Monthly Return Cheque Log summarizing the disposition of the returned cheque. All return

cheques should be listed on the log.

Credit Card Chargebacks 1. Most chargebacks can be prevented by responding immediately to the credit card company’s notice of pending

chargeback. This notice will ask for a response to a customer’s refusal to accept a particular charge. The credit card company will ask for a copy of the paperwork which documents the reason for the charge. A satisfactory answer will result in the customer having to pay the charge. If it is decided to issue the customer a credit in lieu of receiving a chargeback, all credits must be processed through the Property Management System, as well as through the approved electronic credit card capture system. In order to avoid chargebacks, it is imperative that notices of this type be responded to within the time frames established by the credit card companies.

2. Once a chargeback has occurred, determine the reason for the chargeback. 3. All front house staff must be trained on how to accept a credit card and the implications of overriding the

electronic machine by keying in the card numbers. 4. If the chargeback is a result of a no-show billing, it should be processed by the following method.

• The chargeback will be deducted from payments sent in by the credit card companies. In this case, the net payment should be posted to the applicable balance leaving the amount of the chargeback as an open balance in the applicable credit card city ledger account.

• If the Front office Manager determines that the no-show chargeback is valid, the balance should be adjusted off the City Ledger by debiting no-show revenue and tax (if applicable).

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• If the no-show charge is valid, then the balance should be transferred to the appropriate city ledger chargeback account for additional collection efforts.

5. If the chargeback is for any other reason such as using another guest’s credit card number, the Credit Manager will match the original chargeback with the applicable folio and registration card.

6. If a clear imprint of the correct credit card number exists on the back of the registration card, reprocess accordingly through the electronic credit card capture system.

7. If a clear imprint does not exist, the chargeback should be adjusted off and coded to “Provision for Chargebacks”. This procedure will keep the credit card accounts on the City Ledger clean and free of any “hanging balances” from previous months. The collection process should begin as if the item were over thirty (30) days old.

8. Fill out the Monthly Credit Card Chargeback Log summarizing the disposition of the chargeback. All chargebacks should be listed on the log and this log should be forwarded to the Financial Controller for review and evaluation of existing control procedures.

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Subject: Accounts Receivable Balancing Department: Finance Reference # A/R 109 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 109 ACCOUNTS RECEIVABLE BALANCING POLICY Accuracy of records is crucial in maintaining Accounts Receivable. Billing errors can slow the collection process, cause loss of revenue, and create frustration for our clients. To keep these things from happening, it is essential that receivables be balanced on a regular basis. PROCEDURE 1. The Financial Controller will make sure that the filing of statements and account backup has been completed. A

detailed Accounts Receivable/City Ledger Aged Trial Balance is run to start the process. 2. The Financial Controller or designate must verify on a daily basis that the total balance is found on the detailed

Accounts Receivable/City Ledger Aged Trial Balance agrees to the control totals found on the daily night audit reports.

3. The Financial Controller or designate will then verify account by account that all invoices and backup listed on the A/R Trial Balance are present in the active Accounts Receivable file. Where backup is missing, replacement copies must be made by retrieving the source documents from either the night audit packs or from the end of day reports.

4. The Financial Controller or designate will highlight items on the detailed ageing as their backup documentation is found. Missing items will be circled (not highlighted) and researched.

5. The Financial Controller or designate will move any backup for receivables which have already been collected to the “paid” file.

6. Only after all backup has been located, including but not limited to folios, banquet cheques, restaurant cheques, miscellaneous charge vouchers, etc., will the receivables be considered to be “in balance”.

7. In order to avoid accumulation of such clerical errors, Financial Controller must prepare the guest ledger and city ledger reconciliation by provide a breakdown of outstanding invoices for each separate customer and agreed to the control account balances in general ledger to ensure that the any subsidiary ledgers of each individual customer are accuracy and reliability.

8. To help ensure that any errors or irregularities are promptly noticed and investigated, Financial Controller should establish a procedure for monthly statements of account to be prepared and mailed to customers as well as procedure to summarize statements of accounts sent/replies/disagreed/replies and also the work done and results of the investigation of statements of account which are returned unopened or of which the address is misstated.

9. The Financial Controller must ensure that the function is performed regularly and must notify the General Manager immediately if there is material variance in the balancing. In the event that the variance is material, Financial Controller must investigate the possible reasons for the imbalance and correct the imbalances to put A/R Ageing back in balance. Any material variances must be reported to the immediately to the Regional Managing Director and Regional Finance leader.

10. The guest ledger balance in PMS should include ONLY in-house guests. Upon checkout any unsettled guest balances should be transferred to the City Ledger for collection.

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Subject: Accounts Balance Verification Department: Finance Reference # A/R 110 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 110 ACCOUNTS BALANCE VERIFICATION POLICY Occasionally, companies or guests will request that the property confirms their account balance. These requests occur more frequently before year-end or shortly thereafter. Payment confirmation of any account can only be issued by the Financial Controller or the General Manager in the absence of the Financial Controller. Written confirmations should be detailed and used for the specific property only. Under no circumstances should written confirmations state that payment verification applies to all U Hotels & Resorts managed hotels or all accounts. PROCEDURE Once a payment confirmation is requested by a company or guest, the information is forwarded to the Financial Controller. The Financial Controller Must ensure the account is fully researched there are no outstanding balance, disputed, or “open issues”. Front office PM Accounts must also be checked. If any of these items exists, the company or the guest should be notified that a written confirmation cannot be sent at this time until the outstanding issue is resolved and full payment of any balance has been satisfied. The Financial Controller will issue a written confirmation or a payment verification using the property’s stationery that is specific and detailed and refers to specific accounts and invoices. Generalities such as “your account with U Hotels & Resorts managed hotels are paid in full” are strictly prohibited from use, or any other form of response that may be misconstrued that the company or guest has paid their account in full with all U Hotels & Resorts managed hotels. Confirmations must be signed by Financial Controller only, after reviewing all information provided to the requesting entity. In the absence of the Financial Controller, the General Manager will issue the written confirmation and provide a copy to the Financial Controller.

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Subject: Payments/Posting to City Ledger Department: Finance Reference # A/R 111 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents A/R – 111 PAYMENTS / POSTING TO CITY LEDGER POLICY A posting to any receivable account in the City Ledger is the responsibility of the Credit Manager. Signed approval of the Financial Controller is needed for any adjustment posted to the City Ledger. If adjustment postings are initiated in departments other than Accounting, signed approval by the appropriate Executive Committee member is required as well as the Financial Controller’s approval. The General Manager should sign for all adjustments to the City Ledger. PROCEDURE On daily basis, Financial Controller or designate must checked Daily Cheque received register as follows; 1. Check Daily Cashier Audit must agree to all postings and issued receipts. 2. Check the sequential number of issued receipt to ensure that all receipts are completely accounted for, and to

facilitate cross-referencing. 3. Check the collection report item-by-item against bank pay-in slips. This will help ensure that all collections are

banked promptly and intact. 4. Check all sources of information regarding collection (such as the salespeople’s collection statements, the go

down’s collection statements, and mailed remittances) be matched with the “A/R transaction control report”

Payments will be posted the same business day by the accounts Receivable Clerk/Credit Manager upon receipt of the Daily Cheque received register from the General Cashier. As each payment is posted, the number of the account being posted to must be recorded on the Daily Cheque received register. Any documentation pertinent to the payment to the payment will be attached to this Record. Adjustments will be posted only from a properly filled out and approved Adjustment or Miscellaneous Charge Voucher. Document supporting the voucher will be attached for review and sign by the Financial Controller for further reference (or if required, the General Manager). A properly filled out voucher would include the following: • Account name • Account number • Date • Explanation for Adjustment • Signature of person posting the adjustment • Signature of approval

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Subject: Reserve for Doubtful Debts Department: Finance Reference # A/R 112 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Group Finance Director Updated date: May 2019 Approved by: CEO Approved date: May 2019

Back to Table of Contents A/R – 112 RESERVE FOR DOUBTFUL DEBTS POLICY Each property will maintain a reserve for doubtful accounts to cover anticipated bad debts. The reserve is to be adjusted monthly to present an accurate valuation of uncollectible accounts. Each property is encouraged to budget in the Annual Operating Plan a minimum of 2% of the total room revenue as “Provision for doubtful Account” under A&G department. PROCEDURE The Reserve for Doubtful Accounts will be established within the following parameters: 100% of all Debtors Accounts identified as a risk account (non - collectable) 100% of Credit Card Chargeback (not guaranteed) 100% of Returned Cheques (not guaranteed) 20% of Account Balances over 90 Days less the above

Exceptions can be made when viable reasons for non-payment exist and the account is collectable. Explanation should be provided to the Regional VP Operations/Managing Director.

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Subject: Write Off Bad Debts Department: Finance Reference # A/R 113 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: May 2019 Approved by: CEO Approved date: May 2019

Back to Table of Contents A/R – 113 WRITE OFF BAD DEBTS POLICY Each account which has been billed during a complete 120-day cycle and which has been determined as unable to be collected will be presented to the General Manger and Financial Controller for review. PROCEDURE When an account balance appears uncollectible, it should be adjusted against the reserve account. This would include return cheques and credit card change backs. Justification(s) should be included with the A/R ageing comments. Collection efforts however should continue such accounts deemed material. The Financial Controller/General Manager should consult in advance with the Regional Operations/Finance Leaders on those accounts whereby legal action is being considered. Property owners should always be kept informed when it is concluded to write off a bad debt. All receivable accounts to be written off must be approved by the following persons;

Up to US$2,000 - Financial Controller and General Manager. Over US$2,000 - Regional Operations/Finance Leader

Any amount approved for Write-Off must be adjusted against the Reserve for Doubtful Accounts. Credit Department should also inform all the other Hotels within the group of such default in payment to ensure the customer is black listed. Subsequent collection of accounts previously written off will be credited to the Reserve for Doubtful Accounts.

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SECTION 3

REVENUE CONTROL

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Subject: Pricing Policy Department: Finance Reference # REV 100 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 100 PRICING POLICY POLICY The General Manager is responsible for ensuring the integrity of selling prices for all services and products provided by the hotel and must approve all room rate structures, food & beverage menu pricing, banqueting charges, telephone call rates, laundry rates, fitness & health club charges and all other significant pricing of hotel services. The General Manager and Financial Controller will countersign all approved selling prices. The Financial Controller is responsible to ensure that all revenue of the hotel is captured and recorded on a timely basis and that all sales are made at prices that are pre-approved and that any reductions or discounts to the selling prices are properly authorized. PROCEDURE 1. Room Rates

All room rates to be charged during the next season should be proposed by the Revenue Management and Sales & Marketing Departments and summarized in an Approved Rate Schedule and signed by the Director of Sales & Marketing, Financial Controller and General Manager. The room rates are to be loaded into the PMS in accordance with the signed Approved Rate Schedule. Under no circumstances are any rates to be loaded without a signed schedule. Amendments, additions or any other promotional changes to these approved rates during the course of the term of the season are to be prepared on a Rate Modification Form and approved and signed by the Director of Sales & Marketing, Financial Controller and General Manager. Standard Sales Contracts must be utilized and signed by the Director of Sales & Marketing, Financial Controller and General Manager.

2. Food & Beverage Prices All food and beverage menu pricing should be proposed by the Director of Food and Beverage and summarized in a Menu Item Request Form. The Menu Item Request Form will identify the cost of each menu item proposed and recommended selling price and signed by the Director of Food & Beverage, Financial Controller and General Manager. The food & beverage selling prices are to be loaded into the POS in accordance with the signed Approved Menu Item Request Form. Under no circumstances are any rates to be loaded without a signed schedule.

3. Prices – Other Hotel Services and Products All other pricing of any hotel service or product should be summarized in a Hotel Service/Product Pricing Form. The Hotel Service/Product Pricing Form will identify the cost of each item proposed and recommended selling price and be signed by the Financial Controller and General Manager.

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Subject: Rooms Revenue Department: Finance Reference # REV 101 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 101 ROOMS REVENUE POLICY The Financial Controller is responsible for ensuring that all rooms’ revenue of the hotel is captured and recorded on a timely basis and that all sales are made at prices that are pre-approved and that any reductions or discounts to the selling prices are properly authorized. PROCEDURE 1. Rates

All room rates must be charged in accordance with either the Approved Rate Schedule or Rate Modification Form signed by the Director of Sales & Marketing, Financial Controller and General Manager. Any room rates negotiated with tour operators/travel agents/corporations or other parties must to be summarized using a Standard Sales Contract. Standard Sales Contracts must be signed by both parties with the hotel signatories being the Director of Sales & Marketing, Financial Controller and General Manager. The contracts must clearly specify the terms and conditions, including; • general terms and conditions for delivery of services including contracted rates • terms of payment • validity of contract pricing • cancellation/deposit policies

The room rates are to be loaded into the PMS in accordance with the signed Approved Rate Schedule. Under no circumstances are any rates to be loaded without a signed schedule. All rates should be loaded with the relevant service charge and taxes properly applied. Any rates which are recognized as having more than a room rate component must be recorded in accordance with the Breakfast Included and Package Programs Policy. Any rate which is subject to commission or similar charge payable based on the room rate must not be loaded as a net rate but must be recorded as the full room rate charge and the commission charge recorded as a rooms operating department expense. Any rates which have bonus nights or complimentary nights applied, must be recorded as the average rate over the whole length of stay (e.g., a 5-night stay at $105 per night with 2 free bonus nights must be recorded as an average rate over the full length of stay, 5 x $105 divided by 7 = $75 per night and charged for 7 nights at this rate). The bonus nights are recorded as a paid occupied room night within the same market segment as the source of the original booking. Access to room rates master file data in the PMS is to be controlled with access restricted as designated and signed by the General Manager.

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2. Reservations/Front Office

Reservation information is to be entered into the PMS on receipt of booking. All relevant information related to the booking should be identified at this time including length of stay, number of guests, room rate booked and method of booking guarantee and settlement. Details in the reservation are to be verified for accuracy immediately upon check-in and any discrepancy to be reported to the front office/assistant manager. All posting of room charges to guest folios is to be generated automatically by the PMS before the End of Day Process is completed. Any manual room charge postings are to be supported with appropriate documentation to substantiate the charge. At check-out, the guest folio is to be checked to ensure that room charges have been posted for the complete period of stay.

3. Control Variance reporting is to be established to ensure that actual room rates charges are matched against the Approved Rate Schedule. This will include the following minimum reports checked on a daily basis; • Room Rates variance report • Complimentary and House Use Report • Room Upgrade Report

Out of Order Room Report Room occupancy discrepancy report Adjustment/Correction report Micros / Pos void report

Night Audit/Income Audit procedures will ensure the necessary end of shift controls is met.

4. Statistics Occupancy levels are to be recorded as being a percentage of the Number of Occupied rooms for the period divided by the Total Number of Rooms in the property for the same period. Complimentary Rooms are to be included in the occupied room’s amount House Use rooms are not to be used in the occupied room’s amount. Rooms Out of Order are not to be deducted from the Total Number of Rooms in the property (unless the rooms are closed due to a major refurbishment and approved in advance by Regional Managing Director.

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Subject: Food & Beverage Revenue Department: Finance Reference # REV 102 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 102 FOOD & BEVERAGE REVENUE POLICY The Financial Controller is responsible for ensuring that all food and beverage revenue of the hotel is captured and recorded on a timely basis and that all sales are made at prices that are pre-approved and that any reductions or discounts to the selling prices are properly authorized. PROCEDURE 1. Pricing

All food and beverage menu pricing should be charged in accordance with the approved Menu Item Request Form signed by the Director of Food & Beverage, Financial Controller and General Manager. The food & beverage selling prices are to be loaded into the POS in accordance with the signed Approved Menu Item Request Form. Under no circumstances are any rates to be loaded without a signed schedule. Any amendments, promotional programs, discount schedules or menu additions are to be approved and loaded into the POS using the same process as above.

2. Outlets To reduce the potential of revenue loss, superior controls need to be maintained as they relate to outlet guest bills. Wherever possible the automation of the guest check process should be implemented. All customer orders for food, beverage and tobacco are to be immediately processed through the POS system. Where the customer places and order at a Non-POS location, the order taker is to prepare a Captain Order, and this Captain Order is to be immediately entered into POS. This includes the number of persons being served. If an item ordered is not available in the system (daily specials, special request etc); then this can be entered as an Open Food or Beverage Item in POS by the outlet manager or supervisor on duty. Guest checks are generated by the POS on pre-printed and pre-numbered Outlets checks in duplicate. The first copy for the customer and the second copy returned with close of shift to the front office. A Guest Check must be generated for every transaction in the outlet including management and staff consumption, package elements included in room rates and all in-house complimentary and entertainment. All check of this nature must be signed by either the in-house guest or manager providing the complimentary or entertainment. Any transaction entered into the POS system which requires to be voided due to error or dispute, maybe done so but only by persons with authority approved by the General Manager.

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3. Banquets

Banqueting Sales must prepare a Banquet Event Order for every function/event booking and a copy distributed to the relevant departments. Where a computerized is not available, a manual register must be maintained. A Banquet Check is to be raised in accordance with the Event Order with customer signature to verify the charge. Banquet checks are to be raised and processed on the same day as the event and no charges raised after the event has been completed. Event cancellation should be charged in accordance with the hotel policy as F&B other income. Banquet Charges which involve using outside product or service (e.g., entertainers), only the net income earned by the hotel is to be recorded as revenue. This revenue is to be recorded as Other F&B Income.

4. Packages A Guest Check must be generated for package elements included in room rates. Any packages inclusions that are not utilized (e.g., breakfast) are not to be recorded as food or beverage revenue but must be recorded as package breakage into F&B Other Income.

5. Covers The determination of covers should be established for each outlet, whether it is a restaurant, bar or combination thereof. The intention is to establish the most appropriate reporting basis for that outlet, and it may even be necessary to determine a different basis for the various meal periods with within the outlet. The two main methods of calculating covers are: • In a primarily food outlet, by head count. This will include people served, whether consuming food and/or

beverage. The beverage revenue generated in a food outlet will be a calculation or factor of the food revenue. • In a primarily beverage outlet, by drink served. The food revenue generated in a beverage outlet will be a

calculation or factor if the beverage revenue.

Once established, the recording of covers must be consistently applied in order for it to be used as an effective and forecasting tool. A clear practical procedure should be established for both recording and reporting of cover information. It is not effective to have a cover concept without the ability or technology to track it with reasonable accuracy. The cover definition should be one that clearly assists the forecasting of business volumes in the outlet.

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Subject: Other Revenue Department: Finance Reference # REV 103 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 103 OTHER REVENUE POLICY The Financial Controller is responsible to ensure that Other Revenue of the hotel is captured and recorded on a timely basis and that all sales are made at prices that are pre-approved and that any reductions or discounts to the selling prices are properly authorized. PROCEDURE The Financial Controller must develop a manual of procedures for recording other revenue. The manual must be updated on a regular basis as the need arises. Each revenue stream must be listed in the manual specifying the type and source of revenue, the structure (how the revenue is derived), the provider(s), the contact person, the terms, and the location of equipment, the audit procedures, and other pertinent information necessary to maintain adequate control of each source. Telephone Telephone billing rates are to be reviewed at least annually by the General Manager and signed as approved by Financial Controller and General Manager. Only the approved billing rates are to be entered into the Call Accounting System (CAS). Access to the billing rates in CAS should be restricted to IT Manager. Financial Controller to ensure regular testing is performed between CAS and Guest Folios and also between CAS and Telephone Company monthly billing. Rental and Concessions (outsourced services) All concessions for operation of commercial facilities/outsourced services and other tenancies at the hotel premises are to be secured through signed concession/lease agreements. Space & Tenant Rental and Concession billing rates are to be reviewed at least annually between the General Manager and the Concessionaire and signed as approved by Financial Controller and General Manager. Standard formats for such agreements to be drafted with necessary legal advice. Contract authorization is in accordance with Contract Policy. The Financial Controller is responsible to ensure that such agreements are renewed and maintained up to date. Revenue from concession operations (limousine/HSIA, etc.) should only be recorded as the actual income share to the hotel Rentals should be invoiced and collected in advance and allocated to revenue for the correct period. Laundry Laundry billing rates are to be reviewed at least annually by the General Manager and signed as approved by Financial Controller and General Manager.

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Approved billing rates should be posted through POS System. Laundry Department to maintain a record of total items laundered by quantity/weight (both guest pieces and house use) and a monthly summary provided to ensure appropriate allocation between guest and house laundry. Fitness and Health Club Fitness Centre and Health Club Membership billing rates are to be reviewed at least annually by the General Manager and signed as approved by Financial Controller and General Manager. Approved billing rates should be posted through POS System. Membership Fees are to be recorded to revenue in equal proportion over the term of the membership. Membership cards are only to be issued once full payment has been collected. A register of members must be maintained and report of current members provided every month. Members are required to produce a valid Membership Card at club reception to gain access. Business Centre and Miscellaneous Business Centre billing rates are to be reviewed at least annually by the General Manager and signed as approved by Financial Controller and General Manager. Approved billing rates should be posted through POS System where possible or by using Pre-numbered vouchers in triplicate used for posting into the PMS. Foreign Currency rates used for the exchange of travelers’ cheques/foreign currency at the front office are to be reviewed daily and approved by the Financial Controller. The approved rates (with reasonable margin based on major commercial banking rates) must to be updated daily into the PMS. All Foreign Currency Transactions are to be processed through the PMS and system generated receipts issued for each transaction.

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Subject: Group Contracts Department: Finance Reference # REV 104 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 104 GROUP CONTRACTS POLICY A group contractual agreement represents a dual financial responsibility for the hotel and the contracting group. A group cancellation represents lost room revenues for the hotel, which may include associated food and beverage and supplemental revenues. It is U Hotels & Resorts’ policy to impose deposit requirements and cancellation fees associated with a group’s inability to perform its obligations based on the agreed terms of the signed group contract.

PROCEDURE 1. The standard group booking agreement must include a deposit clause in accordance with the credit policy

specifying the prepaid amounts to be received to confirm the booking and also, they are non-refundable. 2. The standard group booking agreement must include cancellation clauses specifying the amounts that will be

assessed on a group in the event it cancels. A sliding scale noting the amounts assessed based on specific cancellation dates must be included in each booking agreement.

3. The Financial Controller must audit the sales files periodically to ensure that cancellation clauses are included in all booking agreements. In the event the clause is not included in an agreement, the Financial Controller must notify the Director of Sales, who will then review the agreement and institute action to correct the situation.

4. On a monthly basis, specifically during the forecasting process, the Director of Sales must review and evaluate each group on the books to ensure that no potential group cancellation is imminent. If is determined a group is “at risk”, the Director of Sales, in conjunction with the General Manager, should assess the group’s financial implication on the forecast and reflect such accordingly.

5. In the event of a definite group cancellation, the Director of Sales must notify the General Manager immediately. Cancellation fees are then calculated by the Director of Sales based on the agreement and billing is arranged and recorded as per the No-Show and Cancellation Fee Policy. The bill should be reviewed by the Financial Controller/Credit Manager and then forwarded to the Director of Sales for mailing as an attachment to a letter addressed to the group contact explaining the amounts being assessed.

6. It is the Director of Sales’ responsibility to ensure all cancellation fees are monitored and payments are followed up on a consistent basis. It is the Financial Controller and Credit Manager’s responsibility to maintain a log of all cancellation fees billed out noting the date of all cancellation fees billed and due.

7. Group cancellation fees may be waived if authorized in writing by both the General Manager and the Director of Sales and acknowledged by Financial Controller.

CREDIT FACILITIES COMPANY LOCATION MINIMUM DEPOSITS

WITH CREDIT LOCAL 30% OF TOTAL EXPENSES

OVERSEAS 50% OF TOTAL EXPENSES

WITHOUT CREDIT LOCAL & OVERSEAS 50% OF TOTAL EXPENSES

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Subject: Banquet Posting Review Department: Finance Reference # REV 105 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 105 BANQUET POSTING REVIEW POLICY In order to maintain accurate and precise revenue records, banquet revenue entries will be reviewed daily. The Night Auditor, Financial Controller, Food & Beverage Director and Events/Catering Manager will be responsible for auditing the revenue posting and Banquet Event Orders (BEO’s) in accordance with the following procedures. PROCEDURE All banquet checks should be posted via the Point of Sale (POS) system by the Banquet Manager/Supervisor/Captain. If the hotel’s POS is not configured for banquet posting, all banquet checks should be posted in the Property Management System (PMS) by the Night Audit or designated cashier. 1. Events/Catering Manager

• Banquet Event Order (BEO’s) must be pre - numbered. • Banquet Event Order (BEO’s) must be completed for all banquet functions. • A separate banquet guest docket should be pre-numbered and prepared for each food and beverage

function. • All banquet dockets must be signed by the guest prior to posting unless written agreement has been

established. • Each guest docket must be individually recorded on the banquet recap sheet according to the posting

category, prior to turning over to the Banquet Manager/Supervisor/Captain or Night Audit. The banquet recap sheet provides the following detail: ➢ Docket number ➢ Function name ➢ Food revenue by category and covers ➢ Beverage revenue by category ➢ Audio visual and equipment rental ➢ Banquet miscellaneous ➢ Function room rental ➢ Banquet service charge and tax

After recording each guest docket on the banquet recap sheet, the banquet Manager/Supervisor/Captain should post the docket through the POS system or forward each docket to Night Audit (See section 3 – Night Audit below). • At the end of the day or upon completion of all banquet functions, the banquet recap sheet should be

placed in the night audit box for review by the Night Auditors. A copy should also be placed in the Events/Catering Manager’s box.

2. Guest Service representative (Hotels that manually post Banquet Revenue) • Each docket should be posted as it is received from the Banquet Manager/Supervisor. The docket should

be posted individually by category (breakfast, lunch, dinner, coffee break, package, function room rental, miscellaneous, service charges, tax, etc.) using the proper pre-established PMS posting codes.

• The posted banquet docket should be dropped with the Guest Service agent’s daily work in the night audit box.

3. Night Audit • Using the banquet recap summary, the Night Auditor should confirm that each banquet docket has been

correctly posted. Note and correct any discrepancies.

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• One copy of the banquet docket should go to Income Audit and one copy should be distributed to the Events/Catering Manager. If the function is not direct-billed, the top copy of the docket should go to the company or person paying the charges at the end of the function.

• The Night Auditor will then fold the banquet recap summary around all the Accounting copies of the banquet dockets and should place them in the daily night audit envelop.

4. Accounting • The Income Auditor should review the banquet dockets and recap sheet for accuracy. Note and correct any

discrepancies. • The Income Auditor should validate each docket with the final BEO to ensure that all negotiated items

have been properly posted. Each BEO and docket should be initialed as acknowledgement of proper posting. All un-posted items should be brought to the attention of the F&B Director and corrected with his/her direction. A standard procedure for communicating this missed revenue must be in place.

• It is essential that a nominated time is agreed for posting all changes in order to eliminate the possibilities of posting charges twice or missing posting a charge.

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Subject: Allowances and Rebates Department: Finance Reference # REV 106 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 106 ALLOWANCES AND REBATES POLICY To ensure authorization and accurate recording of all allowances and rebates posted to the property management system (PMS). PROCEDURE 1. Rooms Allowances / Rebates

The reduction of room revenue due to service problems, walkouts, guest complaints and adjustments due to overcharges and incorrect charges should be deducted directly from revenue. Corrections in market segment postings must include reclassification of revenue as well as the occupied room that accompanies the revenue. If the room is changed to complimentary, the information will be included on the complimentary rooms report. All allowances must have the appropriate amount of service charge and taxes deducted in the same method as was originally charged and processed through the PMS and NOT the general ledger.

2. Food and Beverage Allowances When food or beverage revenue is reduced due to service problems or a walkout, the amount of the allowance will be coded to the appropriate allowance account. Adjustments due to overcharge and incorrect charges should be deducted directly from revenue. When a discount is offered (e.g., promotions, discount cards, etc.) the discount and applicable service and tax should be taken directly off the Guest Check by the outlet Cashier at the time of payment. This amount will be recorded in Allowance – F&B Discount and the applicable service charge and tax account. No credit will be recorded in cost of goods. If a Guest Check is voided, the outlet Cashier will write an explanation as well as approval by the authorized person for the void on the Check and the Void Log.

3. Other Departments The reduction of other revenue due to service problems, walkouts, guest complaints and adjustments due to overcharges and incorrect charges should be deducted directly from revenue.

4. Approval for all Allowances A supervisor or manager must approve all allowances at the point of sale and clear explanations for the allowance or rebate must be provided. Income Audit will prepare a package of all allowances daily, routed to the General Manager (or his designee) and Hotel Director of Finance/Controller for their signed evidence of review. Additional levels of review may be added at the hotel discretion. The routed packages, once received back in accounting must be filed with the daily records for that day.

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Subject: Barter Agreements Department: Finance Reference # REV 107 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 107 BARTER AGREEMENTS POLICY All barter agreements, inclusive of those negotiated through sales contracts, are subject to final approval by the General Manager. PROCEDURE It is normal practice for hotels to engage in arrangements whereby the hotel provides hotel services in exchange for goods and or services from a supplier. Whenever such an agreement is proposed it should always be evidenced by a written agreement, setting forth the exact terms of exchange. A copy of standard agreement is attached for use. Barter agreements are to be recorded at full retail value. The Other Party must be able to provide documentary evidence to support use of the barter (usually in the form of an invoice). Once authorized it should be provided to the authorized representative(s) of the other party involved for signature. The book entry for recording Barter Agreements once authorized are as follows, using the amount recorded in the barter agreement: DR. Barter Agreement (Assets) - to record the benefit of the future service the hotel will utilize CR. Barter Agreements (Liability) - to record a liability for the future service the hotel must provide When either party utilizes one part of the agreement, the following entries are made; in either instance documentary evidence in the form of an invoice should be provided to validate the service provided. When Services actually provided to Other Party When Services utilized from Other Party DR. Barter Agreement (Liability) DR. Expenses CR Revenue CR. Barter Agreement (Asset) Reference: Barter Agreement

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PROPOSAL:

NAME OF THE COMPANY: _____________________ Position of Contact: _____________________ Telephone Number: _____________________ Description of Service: _________________________________________ (Offered to ___________________) _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Estimated cost of Services: _______________________ Date (period) for service to be provided: _______________________

VALIDITY Beginning Date: _______________________ Ending Date: _______________________ Description of Service: _________________________________________ (Offered by __________________) _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Estimated cost of Services: _______________________

AUTHORIZATION:

Proposed by: _________________________ Position: ____________________________

Authorized by the Financial Controller: _________________________ Date: ___________

Authorized by the General Manager: _________________________ Date: ___________

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Subject: Outbookings Department: Finance Reference # REV 108 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 108 OUTBOOKINGS POLICY When a hotel has to out book or book out to another hotel, this must be fully documented. PROCEDURE 1. The out booked hotel must be of a similar standard to that being offered by the U Hotels & Resorts property. 2. The associated costs and revenue must be fully documented on the “Out booking Form”. 3. The costs and revenue relating to the out booking must be reflected in the same period. 4. The cost of the out booking is to be recorded as an expense in Rooms Department. 5. In the situation where revenue is able to be collected despite the out booking (example, from a tour operator)

then this is to be recorded as room’s revenue and collected in the usual manner. There must be no off-setting of balances and recording the net amount.

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Subject: Night Audit/Income Audit Procedure Department: Finance Reference # REV 109 Page: 1/7 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 109 NIGHT AUDIT / INCOME AUDIT PROCEDURES POLICY The Hotel Daily Income Audit Check-list will be completed daily by the Assistant Financial Controller or the Income Auditor and approved by the Financial Controller. The checklist will enable the Financial Controller to verify revenues and taxes are posted correctly, verify the guest, city and advance deposit ledgers balance and verify all postings to the system are correctly authorized. There are no exceptions to this policy. The Night Audit/ Income Audit process is a critical step in the flow of revenue related information from source to final disposition. It is the responsibility of the Financial Controller to structure this process to achieve the joint goals of revenue maximization and internal control. This responsibility includes a periodic comprehensive review of the audit procedures for effectiveness and relevance toward these goals. PROCEDURE 1. After the Night Audit has been completed, the Assistant Financial Controller or Income Auditor will ensure all

revenues and allowances have been properly recorded according to U Hotels & Resorts’ Accounting Policy and Generally Accepted Accounting Principles (GAAP) by using the Daily Income Audit Checklist.

2. The Assistant Financial Controller or Income Auditor will note any variances or problems with the income audit on the checklist and resolve the issues with the appropriate Department Managers.

3. After the check-list has been completed, the Assistant Financial Controller or Income Auditor will forward it to the Financial Controller who will review and approve the checklist.

4. After the checklist has been approved, the Assistant Financial Controller or Income Auditor will file it in the respective audit pack that was used with the income audit.

There are three primary objectives that relate to the Income Audit Function. They are as follows: 1. To validate the complete and correct recording of revenue related transactions through daily or periodic audit

tests and procedures. Such tests will include matching of transaction source totals with General Ledger and Revenue Report totals, verification of required authorization and approval levels, and proper documentation of transactions.

2. To manage hotel systems including execution of end of day and month end routines, performing required backup and other system dedicated tasks. Consistent with this objective, the Night Audit/Income Auditor will periodically test hotel systems (PMS, POS, Call Accounting, Movies and Interfaces) for correct handling of charges originating from and processed by these systems.

3. To prepare, distribute and organize hotel reports and records consistently, accurately and in a timely manner. The Night/ Income Auditor will be principally responsible for the maintenance and storage of daily records enabling prompt retrieval and disposal at conclusion of required retention periods

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LAYOUT The layout of the Night Audit Checklist will be arranged in such a manner to review: • Revenue Sources • Statement of Financial Position items • Payment Methods • Ledger • Miscellaneous Postings

In each section, an explanation of the item will be presented along with the review tools necessary for verification and testing. In addition, there are sections regarding general information on the income audit function, report distribution, organization of the audit, and the systems co-ordination of the audit.

1. Revenue Sources a. Rooms Revenue

Rooms Revenue verification will consist of reviewing the posted room revenue and average rates by segmentation to ensure proper coding and tracking of room revenue. The budget check, rate variance, and high balance reports are to be reviewed to ensure potential problems have been identified. In addition, the Room Discrepancy report from Housekeeping should be reviewed to ensure that all variances have been resolved and that all occupied rooms have been checked into the PMS. Allowances and Adjustments Finally, all adjustments and allowances must be reviewed to verify proper backup, appropriate signatures and a full explanation of the reason for the adjustment exists.

b. Food and Beverage Revenue • Outlets

The first objective in the section is to verify that the POS totals match the PMS totals for that day and that these numbers are entered correctly on the revenue report. Compare individual server close-outs to the total system report and verify that individual revenues and payments match the overall system total. Also review a sampling of dockets on a daily basis to verify accuracy of cover counts, check open and close items, closed by meal period.

• Banquets/Catering Verify that all dockets have been accounted for and that all checks are listed on a recap or posted in the POS system. Verify that the total on the POS system or the amounts listed on the recap sheet equal the Postings on the PMS. Regarding each docket, ensure the following:

➢ All BEO’s on file for the day has instigated a charge process ➢ All items on the BEO have been charged to the docket ➢ The total charged is the amount of the guarantee or greater ➢ The proper billing instruction have been followed ➢ If hand calculated, the math of the banquet docket is calculated correctly ➢ A client signature is present on the docket

If gratuities are paid to the server, ensure that the proper amount has been posted to the liability account to offset the payroll entry.

Allowance and Adjustments

Review items voided to verify that backup exists and that a manager or supervisor has completed the voids. Also, review all allowances, house charges, and discount plan checks to ensure proper backup (coupon, signatures, explanation, club membership numbers, etc.) exist. Ensure that all in house allowances are charged to the proper expense line and recorded through the in-house allowance worksheet properly. Verify all package checks to ensure that the guest has a package and the coupon is initialed by a guest service representative.

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c. U Hotels & Resorts Operating Departments and Other Income Included with this category are Communications, In House Movies, Transportation, Rents and Other, and all other property specific categories as defined by each property. The general rule in all of these categories is the same. Ensure that the postings in the PMS equal the system reports generated by each revenue category or that the proper posting vouchers tie into the revenue reported by the PMS system. Ensure that each manual posting has an appropriate voucher and backup printout of the folio to validate the charge. Further controls for property specific revenue sources should be developed by the Financial Controller and reviewed periodically to ensure that they are pertinent to the operation and that the risk of loss or fraud is minimal. Allowances and Adjustments Review all allowances and adjustments to ensure that proper backup, signatures and explanations exist. A detailed report should be signed by the Financial Controller and General Manager daily.

2. Statement of Financial Position Items a. Taxes and /or Service Charges

For each classification of revenue, ensure that the appropriate tax rate based on the location of the location of the property is being charged. Verify that the actual total based on revenue matches to the amount posted in the PMS or POS. Take into account any exemptions or extenuating circumstances. Include these exemptions against any variance and verify that proper backup is included (tax exempt letter, guest registration card and folio, etc.). Investigate any variances by category.

b. Concessions/Outside Services This category can include any number of outlets within the hotel such as Gift Shops, Health Clubs, Parking Garages, Business Centers, etc. Ensure that any miscellaneous vendor charges have been posted correctly to the PMS System. Verify that any monies collected and turned over to miscellaneous vendors through accounts payable have been posted correctly and not classified as revenue for the hotel. Ensure in each case that all vendor specific instructions are followed properly to include special adjustment forms, appropriate back-up, etc., so as to minimize losses and adhere to all vendor specific contracts and lease requirements.

3. Payments

Ensure that all payment categories are balanced by cashier and that an audit tape is run on each payment. Balance this total to the PMS.

a. Cash/Cheque Verify that the total cash from the PMS system and the POS system reconcile. Ensure there are no negative cash postings. Distribute a cashier’s discrepancy form for any variance to the appropriate department manager and provide follow up.

b. Paid Outs Ensure the total matches the PMS and there is a guest signature on all paid outs and a printout of the guest folio is attached to the paid-out slip.

c. Credit Card Payments Ensure that cashiers audit trails correspond to the cashiers’ total in the PMS or POS, by card-type.

Verify that all credit cards are successfully transmitted on a daily basis and ensure that the bank report ties to the amount shown on the settlement and transmittal reports. Investigate any variances, and resolve by the following business day.

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During the review of credit card settlements, the income auditor should ensure that: All credits issued to cards are issued to the card which was originally charged. All credits are supported by copies of the new and original folio. All settlement review documents are signed as approved by the Financial Controller. A refund file must be maintained by the Financial Controller for audit purposes.

d. Department Refunds Ensure that all deposit refunds have had the appropriate back-up and all information is included to process an accounts payable cheque.

e. Gift Certificates For sold certificates, a copy of a gift certificate sales sheet should be included with the number of the certificate listed. For redeemed certificates, a copy of the guest folio and the original gift certificate should be attached. Balance the totals of all sold and redeemed certification on a daily basis and enter to the gift certificate log.

4. Ledgers a. Guest Ledger

Review the guest ledger and ensure that the net change and the total equals to the PMS. Review the guest ledger. Ensure credit limits are not exceeded. Review all posting master accounts. Verify that groups have been checked out within LSOP guidelines and verify that all unapplied credits are accounted for. Guest Ledger should include the guest in-house only.

b. City Ledger Verify that the city ledger net change and total balance to the PMS if integrated. Verify proper backup is included for all postings to the city ledger. For all adjustments to the city ledger, verify that signatures are received according to LSOP standards.

c. Deposit Ledger Verify that the net change and total balances to the PMS. Ensure that all accounts within the deposit ledger are for future arrival dates.

5. Miscellaneous Postings

Throughout the month, there are entries needed that are not included in the standard income journal format. Ensure that on these postings proper backup is included, indicating the reason for the posing and a detailed explanation on the voucher. Verify that these have been included on the income journal and coded to the correct account number.

6. General Information

There are certain requirements and issues that encompass all aspects of the income audit. With regard to postings to the PMS, an appropriate posting or allowance voucher must be included, backup included and an explanation of the posting. It is also important to ensure that cashiers in both rooms and food and beverage are balancing their work correctly and have the backup to balance to their PMS or POS cashier reports.

7. Distribution of Reports

The primary report generated by the Night Audit function within the hotel is the Revenue Report. Every action should be taken to ensure the accuracy of this report and to ensure that the tools are in place to ensure timely distribution of the report. It is the responsibility of the night audit function to produce this report. The night audit function is also to produce the allowance spreadsheet. After the income audit function, the Allowances report with matching back-up and the telephone extension report should be distributed to appropriate department heads for signature before returning to the Night Audit pack.

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8. Organization of the Audit Pack The organization of the audit pack and storage of the audit pack should be arranged in such a way to ensure consistency among all hotels and to ensure that the information can be accessed readily. Within the envelope, the following information should be included. • Closing day reports for both the PMS and POS systems. • All supporting documentation not limited to but including backup and vouchers for all miscellaneous

revenue and postings. • All cashier reports for both PMS and POS systems. • All documentation related to Vendor Payables. • Room charge postings for the POS system. • After signed and completed, the Allowance Spreadsheet, House Charges and telephone report. • Income Audit Checklist.

9. Systems Co-ordination

As accounting and information processes are increasingly reliant upon automated and integrated systems, the Night/Income Auditor will perform key systems management tasks.

a. End of Day: Night Audit will verify that all end-of-day system functions have been successfully executed. Any errors encountered, will be resolved, logged and communicated to the Financial Controller.

b. Safeguarding Information:

The Night/Income Auditor function is responsible for daily and periodic save routines of shared (fileserver based) data files and applications. Specific backups will be performed when data files are saved directly to workstation hard drives. The Financial Controller will review save logs and procedures to enable recovery from system failure.

c. Security Access:

In the course or their duties, the Night/Income Auditor may allow modem access to hotel systems. They will ensure modems are disconnected and connections logged. Night/Income Auditors are generally granted a higher level of access to hotel systems due to requirements of the position. They are responsible for maintaining the confidentiality of passwords and access given to them. The Financial Controller will be made aware of any password changes and will restrict access to no more than is necessary for the duties of the position.

d. System integrity:

The Night/Income Auditor will be principally involved with periodic routines and tests of systems efficiency and integrity. Routines vary by system but can include periodic matching of transactions passed through point of sales and property management systems (i.e., verifying call accounting system calls to the phone bill). Data purges and recalculations should be run on systems where necessary to increase efficiency and reliability. The Night/Income Auditor will ensure that any periodic system routines are consistently performed.

10. Checklist

During the Night/Income audit process, a daily checklist is to be completed by the Night/Income Auditor. This checklist is to provide a means of verification of the postings within the POS and PMS. It is also provided to be a tool for the review of the cashier’s work and to be the mechanism for follow up with the cashiers and/or department managers. It also provides a level of accountability to the Night Audit and Income Audit staff who has signed off the completed work. The completed worksheet is to be provided to the Financial Controller when completed and follow up provided where necessary. A copy of the checklist is attached. The level of detail which each revenue/item should be reviewed may vary from property to property depending upon the nature and scope of the revenue/item in the checklist and therefore greater emphasis may need to be placed on any one item contained in this checklist. This checklist is meant to be used as a guide through the review daily revenue process.

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Daily Income Audit Checklist

Date: Income Auditor (print) Date: Income Auditor (sign)

The following is a list of the primary control points of the Night/Income Audit Function. This list provides a verification of the work throughout the day and a review of the Income Audit Process. Please initial each item listed as completed. At the end of the document, space is provided for any comments to any of the line listings. This could include variances, missing information, etc… Indicate the line number and the comment. Following review of the completed checklist, it must be stored with the day’s audit pack. Please turn in the completed form to the Financial Controller upon completion. Rooms 1) Verify posted room revenue and average rate by segmentation. 2) Verify log file reports which are generated from PMS to detect unauthorized change Room rate and Opened dummy room. 3) Review the rate variance and high balance report for accuracy. 4) Review the room discrepancy report from housekeeping and ensure all variances have been resolved and that all occupied rooms have been checked out. 5) Review all room allowances and adjustments. Verify correct signatures and a full explanation. Food and Beverage 6) Verify the POS totals match the PMS totals for the day. 7) Verify log file reports which are generated from POS to detect unauthorized activities e.g. F&B price list and Opened Food or Beverage Item. 8) Review a sampling of the F&B checks verifying the accuracy of cover counts, check open and close times and items and gratuities listed. 9) Verify all banquet checks are accounted for and all checks listed on the recap are posted in the POS system. 10) Verify totals listed in the POS or the amounts on the recap equal the postings in the PMS. 11) On each banquet check, ensure the following:

• All items on the BEO have been charged and calculated correctly. • Total charged is the amount of the guarantee or greater • Proper billing instructions followed • A client signature is present on the check

12) If applicable, ensure the proper amount of the gratuities have been posted to offset the payroll entry. 13) Review all F&B voids – verify a manager or supervisor has completed the voids. 14) Ensure proper backup exists for all allowances and charges are expensed to correct department. 15) Verify all package checks to ensure the guest has a package and the coupon is initialed by a guest service representative. Operating Departments and Other Income 16) Verify communications revenue and rate to the phone system reports. 17) Verify in house movie revenue and rate to the system reports. 18) Verify transportation revenue and rate to the posting vouchers. 19) All other forms of revenue are balanced to the system reports or to vouchers posted to the PMS

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20) All allowances of miscellaneous revenue contain the correct signature and a full explanation. Taxes and Concessions 21) Verify the taxes posted for the day balance to the actual taxes based on revenue for the day. 22) All postings to vendors have the appropriate voucher backup and the totals for each vendor balances to the PMS totals. Payments 23) Verify cash postings balance with the Daily Deposit Log and that no negative cash postings have been done. 24) A cashier discrepancy report has been distributed for any variance to the appropriate department manager. 25) A guest signature is on all paid outs and the guest folio is attached. Ensure the total equals the PMS. 26) The settlement totals of the credit card settlement program equal totals in both the POS and PMS. Verify a successful settlement. 27) All deposit refunds have the appropriate backup and all information is included to process an A/P check. 28) Balance the totals of all sold and redeemed certificates and enter into the gift certificate log. Ledgers 29) Guest ledger balances to the PMS. Posting masters have been checked out and credit limits have not been exceeded. 30) The city ledger total balances to the PMS. 31) The deposit ledger total balances to the PMS. All accounts listed have future arrival dates. Reports 32) The Daily Revenue Report is completed, reviewed for accuracy and distributed. 33) The house charge worksheet is completed and all restaurant checks included. 34) The allowance worksheet is completed and all backup included. 35) The telephone extension report has been generated and distributed. Systems 36) All end of day functions has been successfully completed. 37) All daily saves and backups have been completed and properly secured. 38) All modems have been disconnected and connections have been logged. 39) Security violation log reports have been reviewed. e.g., invalid sign on attempts including remote access when a problem occurred.

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Others 40) Complete classification account code and balances for each item on daily revenue voucher. 41) Complete organization and information of the audit pack for daily revenue checklist. Pleased list below any discrepancies from the above items Item# Comments

Reviewed by Financial controller Date

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Subject: Breakfast Included and Package Programs Department: Finance Reference # REV 110 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 110 BREAKFAST INCLUDED AND PACKAGE PROGRAMS POLICY From time to time, various programs which will include “bundled” services. These services may consist of a room, food & beverage, telephone calls, transportation, etc. These programs will be marketed at an all-inclusive rate. Programs of this nature will be recorded in accordance with the following procedures: Definitions: 1. Inclusive Package” – An inclusive package shall be defined as those programs which consist of bundled services

and are marketed for an indefinite period of time. These programs may include meals or some other service, etc. Inclusive packages will be recorded on a retail basis.

2. “Inclusive Promotion” – An inclusive promotion is a program which is developed to enhance or “spur” business for a specific period of time. These types of programs will be recorded at retail in the primary profit centre with the promotional piece (service or item) recorded at cost. These additional services or pieces which enhance awareness or business volume will be charged back to Sales & Marketing as an ordinary operating expense.

3. Breakfast Inclusive Package Rate A room rate where the only additional component included is breakfast.

PROCEDURE 1. “Inclusive Packages” • Calculating the discount:

The hotel is going to offer a room package inclusive of Sunday brunch. The room rate is $80 and the value of one Sunday brunch is $20. These have a combined retail value of $100.00. The hotel has decided to market the package at $75. By offering the package at $75, the hotel has effectively discounted the $100 total value by 25%. Discounting the $80 room rate by 25% yields a new room rate of $60. Discounting the brunch rate of $20 by the 25% yields a new brunch rate of $ 15. The total package may now be sold and recorded at $75 with Rooms Revenue allocation of $60 and Sunday Brunch allocation of $15.

• Recording the package: The new room rate should be recorded in the property management system at $60. The brunch portion should be recorded at $15. Because both of these amounts are recorded at retail, it will not be necessary for any cost-based adjustments to be made. If the hotel decides to offer attraction tickets or other out sourced products or services in conjunction with an “Inclusive package”, then the cost of those services should be recorded in Rooms operating expenses under Guest Entertainment.

• Service Charge and Taxes: Appropriate taxes must be calculated on all package programs according to local laws. Consideration should be given to the individual components such that the room’s portion is taxable at the occupancy tax rate and the food or other service is taxed at the applicable sales tax rate. Examples: F&B Inclusive Package $75 Advertised Rate $80 Retail Room Rate $60 Discounted Room Rate $20 Retail brunch $15 Discounted brunch

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$100 $75 Advertised Rate Limousine Transfer Inclusive Package $140 Advertised Rate $100 Rooms Revenue and $40 Limousine Service The full cost of the outside service should be credited against Rooms Revenue from the advertised rate should be recorded in the property management system as the net amount.

2. “Promotional Packages” • Calculating the package:

The hotel needs to enhance slow business period and has decided to offer a complimentary cocktail in their Lobby Bar to each room night generated by a certain wholesaler. This is a short-term decision to enhance business; therefore, the contract room rate of $100 will prevail.

• Recording the package: The package should be recorded at the retail rate of $100. The complimentary cocktail should be rung up at retail in the outlet and allowanced to “Marketing”. The product cost (beverage only) of the cocktail should be calculated and recorded as a cost credit to food and beverage and expensed to Sales & Promotion along with the applicable use taxes and any inclusive gratuity. Under no circumstances should any labor or other related expenses be allocated to another profit or cost centre. If the hotel decides to offer any other outsourced products or services in conjunction with a “promotional Package”, then the cost of those services should be recorded as an expense to Sales & Marketing along with all applicable taxes and procurement fees.

• Taxes: Appropriate taxes must be calculated on all package programs according to local laws.

3. “Breakfast Inclusive Packages Rates” Breakfast inclusive packages can either be controlled with coupons or through the PMS system.

PMS system 1. The Front Office needs to set up a rate code, breakfast inclusive. 2. When the guest makes a relevant reservation, the code will be applied. 3. An in-house list will be printed at the end of the day showing the applicable package for the guest for breakfast. 4. The guest should be asked for their room number while being seated and checked to the in-house guest list. 5. A guest docket should be prepared and signed by the guest and the guest advised that this will not event in an

additional charge.

Coupons 1. Printed Breakfast coupons must contain the Hotel name, pre-printed control numbers and a blank line for date. 2. Coupons will be issued to each Guest Service Representative by the General Cashier and recorded on a control

log, indicating the Guest Service Representative’s name, date and numerical tickets issued. 3. Coupons will be provided to each adult occupant paying the “qualified”. 4. Each coupon is redeemable for one full breakfast, or any portion thereof (i.e., coffee and a Danish, cereal, etc.).

The server/cashier will ring up each sale using existing procedures. A breakfast buffet should be recorded as such; coffee and Danish would be rung up and settled as such, etc. It is the server’s responsibility to confirm each coupon contains a valid date.

5. Each valid coupon will be accepted as payment and tendered through the POS. All coupons must be voided by drawing a line across, or stamping, each one at time of use. The coupons should be stapled to the appropriate guest check.

6. Each night, the auditors will schedule and allowance the F&B revenues and taxes associated with this program. 7. Periodically, Accounting should audit the program to ensure coupons are only provided to qualifying customers,

only non-expired coupons are being accepted in the restaurant.

Allocation Rate (for breakfast) 1. Breakfast internal allocation rate for Room including breakfast (ABF package) needs to be set at the following

rates unless there is an agreed exception

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2. Recommended allocation rate will be calculated as 50% of the retail price of the breakfast buffet price. 3. The rate for each hotel must be reviewed/agreed upon on a yearly basis and implemented accordingly. 4. All breakfast inclusions, whether contractual or as special offers (tactical promotions, advance purchase, early

bird programs, etc.…), will be deducted from the room rate even though as promoted as free, allocation for breakfast is to be as mentioned/set.

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Subject: Guest Charges After Departure Department: Finance Reference # REV 111 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 111 GUEST CHARGES AFTER DEPARTURE POLICY To ensure that any guest unsettled balances at guest check out or charges for guest accounts which occur or are posted after guest check are properly processed for collection PROCEDURE 1. Credit Cards:

It is the front office’s responsibility to process after departure charged daily in accordance with the credit card merchant agreement. The Front Office will mail a copy of the folio, voucher, and other information to the guest within 1 business day after their departure.

2. Cash Balances: If no credit card is on file, the Front Office Manager will be responsible for obtaining a valid mailing address. If no address exists, the amount will be adjusted in accordance with the Allowances Policy.

3. Direct Billing Accounts: All other accounts will be transferred individually to city ledger and may be billed by the Accounts Receivable Clerk.

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Subject: No show, Cancellation and Guaranteed Bookings

Department: Finance

Reference # REV 112 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 112 NO-SHOW, CANCELLATION AND GUARANTEED BOOKINGS POLICY That all income generated from No-Show, Cancellation or Guaranteed bookings will be recognized as Revenue ONLY when cleared funds have been received, and this Revenue will be recorded in the correct segment of the Statement of Comprehensive Income (revenue recognized as “Other Income” and NOT as rooms revenue). PROCEDURE 1. Guaranteed Reservation

A guaranteed reservation is one for which the guest may be charged in the event they do not arrive or occupy the room. Reservations may be guaranteed in one of the following ways: • A cash deposit is received which is subject to forfeiture. • The guaranteed reservations procedure in the credit card merchant agreement is followed. • For special corporate clients, a letter allowing the client to make guaranteed reservations for which the client

will be billed is received.

The reservations department is responsible to follow up on GNS, and complete the guaranteed no show (GNS) revenue cycle and for all research and adjustment if any is required. Revenue for billed GNS will be posted to the Deferred Income No-Show general ledger account (Statement of Financial Position) until payment is received (this will be carried out and monitored by the accounts department). Payment received for GNS will be recorded as a credit to the No-Show general ledger account in the Rent and Other Income Department and a debit to the Deferred Income No Show general ledger account. GNS posted to an authorized credit card will be considered paid when the credit card is processed. Successfully disputed credit card GNS charges will be posted to the No Show revenue general ledger account and not to Deferred Income No Show liability general ledger account. No room night statistic will be included for GNS rooms.

2. Banquet/Catering Cancellation Fees If a banquet or catering function is subject to cancellation fees, the banquet department will be responsible for posting the transactions necessary to complete the cancellation fee revenue cycle. If the fee is to be billed, the information necessary for billing must be provided to Accounts Receivable, along with a copy of the contract that must include the provision for billing. Accounting will utilize the Deferred Income No Show liability general ledger account to record the transaction. Revenue will not be recognized until payment is received. Banquet/Catering cancellation fees will be recorded in the Rent and Other Income Department in the appropriate cancellation/attrition general ledger account.

3. Group Room Cancellation and Attrition If group contract guarantees a specific number of room nights and those do not actualize (attrition) or rooms are cancelled outside the specific advance notice period (cancellation fee), the attrition\cancellation fee should be billed to the customer. It is the responsibility of the Events office to ensure that the transactions necessary to complete the revenue cycle are posted prior at the group’s departure. Group room attrition will be recorded in the Rents and Other Income Department in the appropriate cancellation/attrition general ledger account. No room night statistics will be recorded.

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Subject: Gift Certificates Department: Finance Reference # REV 113 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 113 GIFT CERIFICATES POLICY Gift Certificates sold for a value are a contracted liability on the part of the hotel to deliver future services to a client. They are to be safeguarded, as if they were cash, from un authorized issuance, use or redemption. The following procedure provides a framework for the transactional requirement of gift certificate security. PROCEDURE 1. Set Up/General Information

• Gifts Certificates should be assigned pre-numbered and contained at least the following details. ➢ No. of Gift Certificates ➢ Recipient’s name. ➢ Indicate what the certificate is for. ➢ Purchase date ➢ Service period and Expiration date. The expiration date must be no more than 12 months from the date

of purchase ➢ Authorized signature ➢ Terms & Conditions. For example, Gift Certificates are non-refundable and not redeemable for cash

• In order to establish internal control over settlements made by Gift Certificates, ➢ The General Manager of his/her designated employee must maintain the gift certificates in a safe or

secure place, accessible only to those authorized to prepare certificates. ➢ The General Manager and Financial Controller must be the only authorized signatory for the gift

certificate. A blank certificate must never be signed by an unauthorized signatory. ➢ The Financial Controller will assign a miscellaneous Guest Ledger account to post gift certificates so that

the Night Auditor can settle the charges on a daily basis. No other transactions should be posted to this particular account.

➢ The Financial Controller will set up a posting/transaction code “Gift Certificates” on the Property Management System.

2. Purchase • Guest Services/Executive Office ➢ Retrieve the gift certificates information (if any). ➢ Select the pre-established Property Management System Guest Ledger account. ➢ Post a charge to the transaction code “Gift Certificates” and post a credit to the appropriate settlement

type (American Express, MC/Visa, Cash, etc.) When posting the charge, log the gift certificate number in the “Document # ‘’ field. Return the certificate and a printed folio to the guest as a receipt for the transaction.

➢ All gift certificates that are issued must be listed on a manual on a manual gift Certificate Log so they can be tracked and properly controlled. The Log will include the following information: gift certificate number, expiration date and the department which issued the certificate.

3. Redemption • Guest Services ➢ Collect and examine the certificate for authenticity. Deface the certificate by writing

“redeemed” across the face. ➢ Verify room and tax was posted at the appropriate rate per the certificate. If the certificate is a paid

certificate, it will have specific value. Therefore, you will have to collect all but the face value.

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➢ Close the folio by using the posting code “Gift Certificate”. Post a credit for the face value of the certificate to the room. This will bring the folio balance to zero and enable you to check out the room.

• Food and Beverage ➢ Collect and examine the certificate for authenticity. Deface the certificate by writing “redeemed” across

the face. ➢ All cash certificates must have a face value printed. However, they have no cash value. Therefore, you

will never distribute change back on a certificate. Collect any amount over the certificate value and settle the certificate out to the appropriate PMS Guest Ledger account.

➢ Certificates do not automatically allow for gratuity unless specifically stated on the face of the certificate. ➢ Drop the defaced certificate along with your other daily settlements, American Express, Master Card

Visa, etc. • Night Audit ➢ Night Audit confirms all gift certificates posted to the designated Guest Ledger account along with the

F&B guest check or folio. ➢ Once confirmed and balanced, the Night Auditor should settle the account by using the “Gift

Certificate” posting code and making an adjustment for the audited balance. This will bring the folio balance to zero and enable you to check out the room.

• Accounting ➢ Validate the certificate by cross-referencing the certificate number with the manual and computer logs. ➢ Reconcile with your computer log and adjust the difference. Redemption variances should be posted to

“Forfeited Deposits” and settled against “Gift Certificates”. All redemption variances should be recorded on the appropriate charge voucher and approved by the Hotel Financial Controller before posting.

➢ Example: A certificate is purchased for $25 toward dinner in the Café. The guest check totals $23.48 and is settled accordingly to the gift certificate room account. The following day, The Accounting Manager will confirm the actual purchase value with the gift certificate log and adjust the difference by posting a $1.52 to Other Income and settling the balance to “Gift Certificates”.

➢ The paid gift certificate worksheet file must tie to the computed General Ledger total.

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Subject: Complimentary Rooms Department: Finance Reference # REV 114 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 114 COMPLIMENTARY ROOMS POLICY All complimentary rooms, inclusive of those negotiated through sales contracts, are subject to final approval by the General Manager. PROCEDURE 1. All revenue-related complimentary sleeping rooms must be classified for statistical purposes as “Complimentary

Rooms” and entered in the Property Management System as such. This classification includes room give-away, familiarization trips, business promotions, etc. which are provided at no cost in conjunction with hotel business but are provided with the ultimate objective of generating revenue. This excludes bonus nights which are provided under Wholesale or Group contracts, in which case they will be tracked in the corresponding market segment

2. The Financial Controller should review the Daily Complimentary Rooms Report to ensure that the number of complimentary rooms negotiated through sales contracts are appropriate and do not exceed the allocated number of rooms.

3. Non-revenue related free rooms must be classified as “House Use” rooms and entered in the Property Management system as such. This classification includes rooms used by the Managers on Duty, and other in-house staff uses (staff related use).

4. All complimentary and house use rooms must appear on a Daily Operating Report summary which includes room number, guest name and explanation. The Financial Controller should review this summary of Complimentary and non-revenue House Use rooms on a daily basis, making the General Manager aware of any misuse.

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Subject: Advance Deposit Refunds Department: Finance Reference # REV 115 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 115 ADVANCE DEPOSIT REFUNDS POLICY Advance Deposit refunds will be refunded and paid by Accounting, only after the Revenue/Reservations Manager and Financial Controller have verified the deposit is on hand and payment has been confirmed. PROCEDURE 1. Reservations

• When the Revenue/Reservations Manager receives a request for an advance deposit refund, he/she must verify the deposit is listed on the most current copy of the Advance Deposit Ledger. Then the Revenue / Reservations Manager should photocopy the portion of the Advance Deposit Ledger that details the deposit in question and voucher the refund using the A/P stamp.

• The Revenue/Reservations Manager must ensure the guest’s name, address, phone number and arrival dates are included in the back-up.

• The advance deposit should be removed from the Advance Deposit Ledger and the balance posted to “DEPOSITS TO REFUND” on the Income journal.

• The Revenue/Reservations Manager should attach a computer-generated cancellation report or notice, use this as the back-up for the cheque request and forward this information to Accounting.

2. Accounting • The Assistant Financial Controller or Credit Manager should verify again the deposit is on hand and has

cleared the bank. • Then, the cheque request should be signed and coded to the appropriate account, “DEPOSITS TO

REFUND”. All of the attached documentation should be forwarded to the Financial Controller for final approval.

• The approved Refund Request and attached computer report should be forwarded to accounts Payable for payment.

• If there is more than one refund listed on the computer report, the relevant refund in three to four weeks.

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Subject: Promotional Charges Department: Finance Reference # REV 116 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 116 PROMOTIONAL CHARGES POLICY The Financial Controller is responsible to ensure that proper control exits in the administration of special food and beverage promotional items, as well as, properly expensing these items to the corresponding departments. No revenues should be created in promotional situations. The important factor in determining what department to charge with the expense associated with the special food and beverage promotion is the established reason for the promotion. The department obtaining the most direct benefit from the special promotion will incur the expense. PROCEDURE 1. Entertainment by Authorized Staff

The promotional charge will be fully documented with the following information: • Name of person(s) being entertained • Company or affiliation • Business purpose of the entertainment • Host’s name and signature

The General Manager’s expense may be either charged to Administrative & General or Marketing depending on the business purpose.

2. Corporate Staff When corporate staff are at an U Hotels & Resorts managed hotel for the purpose of business for the host property, the charges will be provided complimentary. When corporate staff are at U Hotels & Resorts managed hotel for the purpose of business that IS NOT the host property, the treatment of charges must be settled or billed directly at full selling price.

3. Complimentary Gift Certificates or Letters Guestrooms will be recorded as complimentary but food and beverage charges will be recorded at cost as a promotional item to the respective department(s).

4. Banquet Functions for Promotional Activities The Director of Sales will authorize the Banquet Event Order (BEO). The Banquet check should include food and beverage items, the service charge paid out to associates, and tax, where applicable. For items such as flowers, audiovisual, decorations, which are provided by third parties, the cost should be directly expensed to the appropriate department’s expenses. Food and beverage charges should be at cost. No credit will be given for labor charges.

5. Hotel Employee Events For scheduled associate events such as awards banquet, picnic, etc., the food and beverage are to be charged at cost. No credit will be given for labor charges.

6. Staff Meals Meals in the food and beverage outlets for other than promotion or business relations are to be recorded as an employee meal cost. Employee cafeterias are to be accounted for as a separate distributed cost center. For those hotels with an associate co-pay program, it is not intended to make the employee cafeteria an income producing operation, but rather to reduce the costs related to the operation of this function.

7. Food and Beverage Discounts

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When a discount is offered, including employee discounts, the discount should be taken directly off the Guest Check by Cashier at the time of payment and reflected as F&B Discount. Coupon media or discount card imprints must accompany the daily work for the Server or Cashier. No credit will be recorded in cost of goods. The amount of the discount should be tracked to ensure the program is functioning properly. Happy Hour Promotions (e.g., buy one, get one free) – the initial purchased item will be recorded as paid revenue, the additional offered item should NOT be recorded as revenue and the cost of providing the item must be recorded for inventory purposes but will be absorbed into the food or beverage cost for that outlet. No cost should be transferred as a Sales Promotion cost.

8. Service problems, Guest Complaints and Invalid Charges No revenue will be recorded or credit given for cost of goods for these items.

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Subject: Intercompany Charges Department: Finance Reference # REV 117 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REV – 117 INTERCOMPANY CHARGES POLICY The Financial Controller is responsible for ensuring that all revenue of the hotel related to interhotel / intercompany charges is recorded correctly and on a timely basis. This policy applies to hotels providing services and products to other hotels or companies within U Hotels & Resorts for hotel, resorts and spas business purpose only. Charging for employees’ personal use is covered within the Human Resource policies. This policy also applies to Training. Training is a critical activity for the success of our hotels and our brands. As such we work constantly to contain the cost of training to enable us to deliver as much training as economically feasible. This policy is to achieve fairness and consistency among our training teams and participating hotels. PROCEDURE 1. Room Rates

These are subject to negotiation on a case by case basis dependent upon occupancy levels of the host property. 2. F&B and Other Charges

Host hotels will extend a 50% discount off of their menu price on all food and beverage items. The training organizer will provide the number of breakfasts, lunches, dinners and receptions over the course of the training program. Host hotels will extend a 50% discount off their selling prices for telephone, guest laundry, business centre and other hotel services. Host hotels are not to charge for any meeting room rental. This includes any and all break-out rooms that are required for the event. Additional required ancillary meeting room items (i.e. flip charts, audio visual, etc.) are to be charged at cost. Any third-party charges for limousine, HSIA, guest speakers, copying of materials and meals off property should be billed at cost. Attendees should settle their conference fee at conclusion of the session/event. The host hotel should not be required to invoice another hotel for a participant’s training. Training organizers and hotel personnel must agree to the training/meeting cost prior to the meeting/event. No further review by corporate personnel will be necessary at the conclusion of the event.

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SECTION 4

CASH

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Subject: Establishing/Closing Bank Accounts Department: Finance Reference # CSH 100 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 100 ESTABLISHING / CLOSING BANK ACCOUNTS POLICY Bank Accounts shall only be established within any hotel operation controlled by U Hotels & Resorts with the knowledge and approval of the owner and General Manager and Financial Controller in alignment with the Hotel Operating Agreement. PROCEDURE For each bank account managed or controlled by U Hotels & Resorts, there will be a record of the approved Signatories kept by the Financial Controller. This file will indicate the account number, those persons whose signatures are on file with the bank, the last date of change and the amounts and number of signatures required for cheque signing and any limits that apply for co-signature. For each new account opened at a bank, the processing of Signature Cards will be accomplished by the Financial Controller and Corporate Treasury. Any subsequent changes to the account will also be noted in the bank account file. All disbursements by Cheque require two signatures. At all times, the signers must be functionally independent in accordance with the following list: Managed Properties

A B General Manager-Primary Financial Controller--Primary

Resident Manager/EAM’s Assistant Financial Controller

Hotel signatories are to ensure that the hotel complies with the bank resolution and local government regulations. Upon termination or transfer of any signatory, the bank and the owner must be informed in writing within the effective day of termination, to initiate immediate revision of the bank resolutions.

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Subject: Bank Account Reconciliations Department: Finance Reference # CSH 101 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 101 BANK ACCOUNT RECONCILIATIONS POLICY All bank accounts must be reconciled within two (2) days of the prior month end. PROCEDURE Banks where hotel accounts are located are to be notified in writing that all statements are to be cut off the last day of the calendar month. Statements should be received from the bank within first working day of statement cut-off in order to facilitate timely reconciliations. In order to avoid any delays in producing the month end Financial Statements, Bank Reconciliations should be done on a weekly basis. It is preferable that the reconciliations for the operating account be completed prior to the issuance of financial statements for that month and this is possible with the introduction of electronic banking and the interfacing with some nominal ledger systems the preparation of the bank reconciliation is automatically part of the month end process. Bank statements be received directly by a designated member of the accounting staff whose other duties are completely independent from the custody of funds or the recording of transactions in the cash book Bank account reconciliations are to be performed by the senior accounting employees who do not directly participate in the receipt or disbursement of cash affecting the account being reconciled. These responsibilities should be periodically rotated to ensure a proper segregation of duties. When reconciling the bank accounts, the following items should be included in the procedures: 1. A comparison of dates and amounts of daily deposits as shown on the bank statements with the cash receipts

journal. 2. A comparison of bank transfers to be certain that both sides of the transactions have been recorded on the

books. 3. An investigation of items rejected by the bank, i.e., returned checks or deposits. 4. A comparison of wire transfers dates received with dates sent. 5. A comparison of canceled checks with the disbursement journal as to check number, payee and amount. 6. An accounting for the sequence of checks both from month to month and within a month. 7. An examination of canceled checks for authorized signatures, irregular endorsements, and alterations. 8. A review and proper mutilation of void check. 9. Investigate and write off checks which have been outstanding for more than six months.

The reconciliations are to be prepared in the format of the attached illustration and should contain complete descriptions for each reconciling item (e.g. Dates and adequate explanations including action taken). Use of this format is mandatory. Reconciliations are to be kept in folders which include the following contents: 1. Copy of the General Ledger page showing the accounts current month balance. 2. Complete list of outstanding cheques, including dates. 3. Copy of the general Cashier's summary of daily deposits and records of all transfer. 4. Original bank statements 5. Originals of all bank statement enclosures (i.e., debit and credit memos, transfer advices, etc.). 6. Any other documentation and work papers.

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Cancelled cheques are to be stored separately from the reconciliation folders and are to be maintained in the hotel’s permanent files. The Financial Controller is to routinely review outstanding cheques lists which support operating account reconciliations. 1. Cheque lists should be reviewed for all outstanding cheques beyond current (“one month prior”) status. For

large amounts and/or older items, the documentation (e.g., vendor’s invoice, purchase order, and receiving report) supporting the issuance of the cheque should be examined. Outstanding cheques are to be segregated by age as provided for on the bank reconciliation form.

2. Unless local law is to the contrary, cheques which remain outstanding after six months should be cancelled and reversal entry to be made in the GL account. A stop payment order should be placed on all items greater than US$1,000.

The Financial Controller’s signed approval of a completed reconciliation will signify that the format, detail, and contents are complete and that all reconciling items will be properly recorded in the General Ledger in the current month. 1. For any General Ledger corrections, journal entries are to be prepared and adequately documented. 2. Bank errors or omissions are to be handled by the Financial Controller; the bank representative is not to be

contacted, except under the Financial Controller’s direction. 3. The Financial Controller must review the bank statement to ensure that hotel cash and cheques deposits are

received by the bank on a timely basis. Deposits that take longer than three (3) business days for the bank to post should be investigated immediately and resolved.

4. For hotels that have credit card direct deposits, the Financial Controller must also review the statement to ensure that credit card payments are received on a timely basis. Deposits that take longer than two (2) business days for the bank to post should be investigated immediately and resolved.

All bank reconciliations must be signed by the Financial Controller and General Manager on a monthly basis as part of the month-end check list compliance. Reference: Bank Reconciliation

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U HOTELS & RESORTS

BANK RECONCILIATION For the month ending: Property: Account Name: G/L Account No: Bank: Account No: Balance per Bank Statement Dated: Add: Deposit(s) in Transit: Date Amount

Total Deposit(s) in Transit: Less: Outstanding Cheques: (per attached listing of individual cheques) Month Amount May 200X

June 200X

July 200X

Total Outstanding Cheques:

Other Reconciling Items:

(see attached page for details) Total Debit Items Per Attached: Total Credit Items Per Attached: Reconciled General Ledger Balance Prepared By: Date: Financial Controller: Date: General Manager: Date:

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Subject: Cashier Funds/Floats/House Banks Department: Finance Reference # CSH 102 Page: 1/4 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 102 CASHIER FUNDS / FLOATS / HOUSE BANKS POLICY The Financial controller is responsible for implementing effective control for all cashier funds on the property and maintaining a record of all cashier overages and shortages for each cashier. Cash management and control procedures require that such funds be limited to the minimum amount required for operating purposes. PROCEDURE 1. Floats

• The amount of floats to be maintained by use of individuals will be approved by the Financial Controller and General Manager.

• Changes in amount of total floats, except on a very temporary basis to handle peak business needs, may not be made without the Financial Controller and General Manager's approval.

• The Financial Controller must review operating cash needs and determine appropriate, yet minimal amounts for each cashier.

2. Float Control • Prior to issuing a float, the General Cashier must receive a completed a fully authorized “Float Request

Form'' and must also ensure that the individual receiving the cash fund has received and signed off on the terms and conditions. A copy of this acknowledgement must be kept in the employee's personnel file and General Cashier File.

• A Float Contract will be completed by the General Cashier as acknowledgement of acceptance of the full amount of floats as reflected in the General Ledger. The original executed form is to be retained for safekeeping by the Hotel Financial Controller.

• The General Cashier will be responsible for obtaining a completed Float Contract from each employee to whom house funds have been issued. No floats are to be issued without the Financial Controller and General Manager's approval. The Float Contracts are to be retained by the General cashier in the safe and are to be considered the same as cash in reconciling to total House Funds, and also a copy is on each individual's personnel file.

• Float contracts must be completed in ink. Float amounts are to be protected from alteration by imprinting the amount with a check protector on the contract form or typewritten.

• If a circular float amount is authorized to be increased or decreased, a new Float Contract is to be completed. At no time are any alterations to be made to a Float Contract.

• In cases of employment termination, Float Contracts are to be marked “cancelled” when the agreement has been fulfilled in every respect. A photocopy of the cancelled contract is to be retained by the Financial Controller or General Cashier and the cancelled original returned to the terminating employee.

• A copy of each float contract should be forwarded to Human Resources for inclusion in the employee's file. 3. Physical Protection of House Funds

• Departmental cashier safe Deposit Box procedure Each employee to whom a float is issued is to be assigned a safe deposit box for its safe storage. A separate section or group of safe deposit boxes is to be assigned for this purpose and there should be only one key available for each box. Cashiers are to be informed that they are issued the only key and if for any reason the box has to be drilled because a cashier cannot locate the key assigned to him/her that cashier is responsible for paying fees associated with opening the box.

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In situations where new safety deposit boxes are purchased and second keys exist, all second keys should be destroyed with witness present. Destruction of second keys should be documented. It is the responsibility of the Financial Controller and the General Cashier to ensure that a monthly audit is performed to determine the status of all safety deposit boxes (guests and in-house). All steps must be taken to ensure that all boxes are functional and properly accounted for.

• General Cashier Security The General cashier should be provided with a properly protected enclosure containing a safe of adequate size and security for the funds in his/her custody and containing adequate working area to provide privacy in the handling of cash it is highly recommended that the General Cashier's office and/or safe is to be equipped with an alarm system to provide security during non-working hours. The alarm system should be connected to a continually monitored security station, which may be internal or external. The alarm system is to be periodically tested to ensure that it is in working order. The combination to the General Cashier's safe is to be sealed in an opaque envelope signed. Jointly over the flaps by the Financial controller and General cashier and stored in the safe deposit box used for the retention of duplicate house keys, the combination reset procedures and reset key/wrench. The safe combination is to be reset at the time of all General Cashier personnel changes. The hotel, however, must have an in-house procedure stipulating that a security guard of approved substitute will escort the General Cashier with the transfer of daily deposits from the drop safe to his/her office, if the drop safe is not near the General cashier’s office. Access to the General Cashier's office should be limited as much as possible. Any authorized access the office other than the General Cashier must be accompanied by the security Department at all times. No one is permitted access to the office unless the individual is listed on the Key Authorization Listing and verified through Security.

• Departmental Cashier security Departmental Cashiers and other personnel whose duties involve the handling of cash should be provided with adequate facilities for the protection of the funds for which they are responsible while they are on duty.

• Drop Safe Requirement The Financial Controller must ensure that a fire-proof deposit vault with a double locking feature (combination and/or key lock) is used for all daily deposit drops. This vault must be securely fastened to the floor or cinder block/concrete wall. A daily deposit witness log book must be maintained around this area listing the time of the deposit, the department, the shift, the amount of the deposit and a witness preferably other than the supervisor of the employee or another employee of the same department.

• Financial Controller Safe The Financial Controller should be provided with a safe of adequate size and security for the funds / documents in his/her custody provided with security during non-working hours. The combination to the Financial Controller safe is to be sealed in an opaque envelope signed and a copy and spare key kept with the General Manager. The safe combination is to be reset at the time of all General Cashier personnel changes.

4. Float Count Procedures • Cashiers

All Hotels should purchase cashier float envelopes that provide space for both float count and deposit detail. All cash drawers/house floats must be counted before and after every shift or on a daily basis to ensure that the balance is correct. All cashiers are to be instructed that the issued float should contain only currency, coin and hotel approved due back vouchers. All other negotiable instruments are to be deposited daily (e.g. petty cash vouchers, personal cheques, and travelers’ cheques).

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All cashiers are to be instructed that they are to surrender their banks to the General Cashier prior to going on holiday or extended leave in excess of two (2) weeks. General Cashier Duties ➢ Deposited cash envelopes must be pulled out of the safe on a daily basis. Schedules must be arranged to

plan for holidays or extended weekends deposits. ➢ The deposit safe must be opened by the General Cashier only in the presence of another accounting

representative or authorized person. Deposit envelopes must be verified against the deposit log book for that day. Information regarding the number of envelopes pulled, the amounts indicated on the deposit envelopes and signature of the witness for the pull must completed. Any variance must be reported to the Financial Controller immediately and investigated be by security. In the event of a major loss, the employee and witness who dropped the envelope should be called and be asked to provide a statement. Once determined that it is a major loss (greater than US$500), the Financial Controller must inform the General Manager and Regional Managing Director of the loss and the appropriate action taken.

➢ In the event the General Cashier goes on holiday and the responsibility is transferred to another employee, the total house fund must be verified by both individuals and the combination changed. Upon the return of the General Cashier the total bank is verified again and the combination to the safe must be changed again.

➢ The General Cashier will count his/her bank daily and forward the count to the Hotel Financial Controller or Assistant Financial Controller, who will review the count, initial the count form and keep it filed for twelve (12) months by month. The Financial Controller or Assistant Financial controller must verify the safe total on a weekly basis by counting it with the General Cashier. Documentation of this count should be retained for twelve (12) months.

• Verification of Funds ➢ All other floats should be counted on a surprise basis very month. Documentation of

this surprise count should be retained for twelve (12) months. The total amount of all floats must reconcile to the monthly General Ledger float account. No floats should be allowed to go audited two (2) months in a row.

➢ The float count is to be completed by two (2) employees designated by the Financial Controller. If the count is done in the presence of the cashier to whom the float is issued, the cashier may serve as one of these employees.

➢ If a cashier's safe deposit box has to be drilled for one reason or another, the cash must be counted by the Financial Controller or Assistant Financial Controller and an Accounting witness or the cashier's manager. The person witnessing the float count is to witness the entire procedure. Written notice of the cash count is to be signed by the two individuals and placed in the cashier's box.

➢ Any overages discovered in floats are to be immediately deposited by the individuals making the float counts. A summary report of the results of the count is to be furnished to the Financial Controller who will be responsible for investigating any shortage or overages. Keep completed individual and summary float counts on active file for twelve (12) months organized by month.

5. Rotating Floats • Rotating floats are encouraged for use to minimize liquidity needs. Use of rotating floats must be specifically

approved by the Hotel Financial Controller and General Manager. • Rotating floats must be counted and witnessed by the person leaving the current shift and the person taking

over the next shift. When both signatures are on the count sheet, it should be dropped in the safe. • The following day when the float is used again, the guest service agent must have a witness, sign out the key,

re-count the float, and sign the count sheet. The witness must remain with him/her while the float is counted. After four (4) signatures are on the count sheet, it should be dropped in the vault. FAILURE TO HAVE A WITNESS WILL MAKE THE CASHIER RESPONSIBLE FOR ANY FLOAT SHORTAGES!! REMEMBER TO ALWAYS HAVE A WITNESS.

• All floats must remain at the predetermined currency amount assigned above. If you are working out of a US$500 float, at the end of your shift count out US$500 and put it in the drawer. The remainder is your cash deposit. If you find your cash receipts are short by any amount, recount the float. If the float is correct then makes your drop and note the variance on the deposit envelope.

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• The General cashier should file daily all float count sheets and retain in active monthly files for twelve (12) months.

• Any variances noted on the float counts must be brought to the attention of the Financial Controller. Reference: Float Contract

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U HOTELS & RESORTS HOUSE FLOAT CONTRACT

I hereby acknowledge receipt from my employer in cash the amount of

( ) (hereinafter referred to as the “float”), which I am to use in performing my duties as

cashier for the Hotel (employer), and the key to safe deposit box number

.

By accepting this float and key, I do hereby agree to the following terms and conditions:

A. I fully understand this float is the property of the Hotel _________________ and is to be utilized in the performance of my duties. I understand this float or any portion thereof is not to leave the hotel property and/or be utilized for personal reasons.

B. To be responsible for the safekeeping of said float; to return it in its entirety when my employment terminates; and to make up all shortages therein.

C. To hold employer harmless from all losses occurring as a result of my failure to comply with regulations and procedures from time to time adopted by employer’s management.

D. Not to transfer or deliver said float, or part thereof, to anyone unless authorized in writing by the Financial Controller or General Manager.

E. Except when on duty, to keep said float in the aforementioned safe deposit box and to guard the key thereto carefully, and keep it in my personal possession at all times.

F. Upon termination of my employment, to return the float and safe deposit box key to employer. G. I understand that if I miss a scheduled shift, I have 24 hours to notify my employer, or my safe deposit box will

be drilled. If a safety deposit box key is lost or drilled, I agree to pay the key replacement charges.

I have read and fully understand the above policy and procedures and understand that any violation of the above will result in disciplinary action.

Cashier’s Signature: Safe Deposit Box #: Date:

Printed Name: Department:

Issued by General Cashier: Date:

Approved by Financial Controller: Date:

Approved by General Manager: Date:

Float was returned on: Cashier / Manager:

Received by: Witnessed by:

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Subject: Daily Cashier Deposits Department: Finance Reference # CSH 103 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 103 DAILY CASHIER DEPOSITS POLICY All cash must be deposited on a daily basis. Each cashier must understand the methods of settlement for each type of transaction that occurs in their area as well as the shift closing and deposit procedures. PROCEDURE Departmental cashiers, front desk, restaurant, bar and night audit are subject to the following guidelines. 1. Cash

The terminals in the outlets and front desk must record cash as a form of transaction settlement. 2. Travelers Cheques

Immediately upon acceptance of a traveler’s cheque or money order, the cashier accepting the cheque, must use the bank endorsement stamp (“For Deposit only”) on the back of the cheque, and if the hotel name has not been written on the face of the cheque, it must also be so stamped. • The restrictive endorsement stamp should contain the following language and must be stamped in the

upper 1” margin on the back of the cheque. “For Deposit only" Hotel Entity Name Bank account number

• Each cheque must indicate the folio/account number. • An endorsement stamp must be maintained at each cashier outlet.

NOTE: Foreign currency and traveler’s cheques must be identified by the cashier and exchanged at the rate established by the Financial Controller.

3. Charge settlements The hotel terminals are also designed to accept appropriate charges for services rendered. Charges are generally identified as: • Credit Cards • Room Charge • Direct Billing Accounts • House Accounts • Gift Certificate • Coupon

PREPARING THE SHIFT DEPOSIT At the end of a cashier's shift, a pre-established float amount must be counted and recorded on the Deposit Envelope by denomination, then placed in the cashier’s safe deposit box. If there is not enough cash to make up the total pre-established float amount, then the general cashier will “owe'' the cashier the balance. This is known as “due back''. Due backs must be recorded on due back slips with one copy placed in the deposit envelope and the other retained by the cashier. All remaining cash, travelers’ cheques, credit card slips, etc., will be recorded and dropped as the daily banking. All daily shift deposits must be made in standard deposit envelopes.

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All shortages or overages in cash must be reported, and must be included in the daily shift banking. At no time is a cashier to retain overages, cheques, traveler’s cheques, or credit card vouchers in the cashier’s bank. Only cash and due backs, up to the limit signed out shall be retained in the cashier’s bank in the safe float box. Proper Completions of the envelope requires the following: 1. Breakdown of coin, currency or “due back''. 2. Travelers cheques and non-cash items may be listed in total by type (i.e. Travelers, personal, etc.). 3. The total of credit card vouchers included in the deposit. 4. Complete date, printed name and signature of cashier shift and applicable outlet.

In the event of heavy late activity, the night auditor should be required to make interim shift deposits. This will reduce the hotel's exposure in case of robbery. After the cashier's deposit has been prepared, it is to be deposited in the hotel drop safe. When depositing, a witness preferably other than the supervisor of the employee or another employee in the same department, must witness the drop and sign the Deposit Witness Log. The cashier is to complete the remaining entries on the Drop safe witness Log and sign it. Deposits made without a witness signature subject the cashier to disciplinary action. All cashiers must count deposits in a locked, secured area having restricted access, in an area not visible to guests.

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Subject: Cashier Over/Short Reporting Department: Finance Reference # CSH 104 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 104 CASHIER OVER / SHORT REPORTING POLICY To monitor adherence to cash handling procedures, identify employees with cash handling problems and minimize loss. Daily monitoring of cash overages/shortages is required to assure tight control over cash funds. All cash overages/shortages must be reported, investigated and cleared promptly. PROCEDURE A Daily cashier over/short Report should by produced by the General Cashier and Income Auditor, must show, by individual cashier. All cash deposit overages/shortages on a daily basis. The Financial Controller must review and initial the report daily. At month end, the general cashier should submit to the Financial Controller a monthly, by day summary of overages/shortages by cashier. This report should also include overages/shortages resulting from bank audits. The Financial Controller will review the report, noting repeat occurrences or trends and advise the General Manager of appropriate disciplinary action. Investigation Variances are to be investigated by the appropriate department head (Front Office or F&B manager) to determine whether they are explainable (e.g. a missing guest cheque, improper settlement, etc.) or Unexplainable. Once an overage/shortage has been identified as explainable or unexplainable, the department head is to prepare the appropriate paperwork as specified by the disciplinary procedure listed herein. A copy should be sent to the Human Resources Department for tracking purposes. The department head shall review lit with the employee, have it signed, and forward a copy to the Human Resources Department, to be place in the employee’s file. Within five (5) working days of issuance, the Human Resources Department should verify that the paperwork has been received. If not, the Human Resources Department with the department head, shall then take the agreed upon action with the employee. Disciplinary Action The following disciplinary procedure is to be observed in the application of this policy. Similar information pertaining to their responsibility as cashiers should be presented to each employee at the time, they are issued their bank. They must sign this notification which is then filed with their bank contract. • Unexplained overage/shortage of $10 or more:

➢ First occurrence – Discussion with employee. ➢ Second occurrence = Removal from cash handling position If appropriate.

• Explained overage/shortage of $10 or more: ➢ First through fourth occurrences - Advice of overage/shortage. ➢ Fifth occurrence - Written communication and counseling with employee. ➢ Sixth occurrence - Removal from cash handling position if appropriate.

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Subject: Bank Deposits Department: Finance Reference # CSH 105 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 105 BANK DEPOSITS POLICY Bank deposits must be made on daily basis and reconciled to journals and the Daily deposit Log. Weekend or holiday receipts must be deposited on the next working day. All deposits must be made to the approved bank via an approved courier service. At no time are bank deposits to be made in person. Banking must only be given to the approved carrier service. PROCEDURE Daily Drop Safe Retrieval Process 1. The general Cashier will obtain the Daily Deposit Log, then, in the presence of one other person, remove all

deposit envelopes from the drop safe. 2. Deposit envelopes shall be checked off on the Deposit Log. If the counts do not match, the envelopes must be

verified against the Drop Log to determine if a drop is missing. If a drop is missing, Financial Controller must be contacted before leaving the room, and must verify that the drop is missing. If the count of envelopes matches the count on the Drop Log, then the number of envelopes retrieved is documented on the drop log, and the two people retrieving the envelopes must each sign the Drop Log.

3. The two must lock the drop safe, and walk together back to the General Cashier’s office for security purposes. The general cashier and designated accounting staff by Financial Controller will count the cash in each deposit envelope and write the actual amount on the envelope. Any discrepancies from the Daily Deposit Log should be verified by the Financial Controller and/or the Assistant Financial controller and initialed. All cheques and other negotiable instruments must be restrictively endorsed “For Deposit Only” and “Hotel Entity Name” by the accepting cashier. All cheques and other negotiable instruments must be copied and maintained with the deposit records. It is recommended that the previous days total funds received are deposited in full and all amounts are reconciled. A Daily Banking Log should be maintained into which each day’s banking is recorded, whether prepared by the General cashier or person preparing the Daily Register Log. Upon receipt of a validated banking slip, the Assistant Financial controller should mark the banking as having been made. The validated banking/pay in slip should then be maintained with other bank reconciliation materials. The Financial Controller should periodically review this list throughout the month to be certain that there is no missing pay in. Security pickup must be recorded in a log and the driver must sign verifying receipt of the deposit bag. A listing of signatures of security personnel will be kept by the Accounting Department and matched daily with the driver’s signature.

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Subject: Daily Deposit Witness Logs Department: Finance Reference # CSH 106 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 106 DAILY DEPOSIT WITNESS LOGS POLICY A deposit log will be maintained to document and control each deposit dropped or removed from the drop safe by all cashiers. PROCEDURE The Deposit Witness Log is the daily log of the individual cashiers’ deposits. The Deposit Witness Log must be utilized to record each envelope dropped in the drop safe. This includes deposits made for miscellaneous transactions (i.e. Advance Deposits, City Ledger payments, temporary banks, found or retained credit cards, etc.). All columns must be completed in ink as specified. 1. Time and date of deposit. 2. Amount of the deposit, if zero, enter zero also be sure to indicate if only a due back. 3. Full signature of the cashier making the deposit. (Initials are not acceptable) 4. Full signature of the person witnessing the deposit. 5. Full signature of the person removing envelops. 6. Full signature of witness to the removal of envelops. 7. Agreement of the number of envelops removed and the number dropped. 8. Agreement of total deposit to certified deposit slip and final reports.

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Subject: Cashier Due Backs Department: Finance Reference # CSH – 107 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 107 CASHIER DUE BACKS POLICY Situations may arise when cash must be removed from the cash safe or main safe to complete the due backs and deposits. Such activities must be fully documented by complete written support. PROCEDURE The General Cashier’s main safe will have a due back when: 1. Cash must be removed to fill due backs due to a low or negative deposit for cashiers’ audit. 2. The deposit per audit is positive; however, most of the funds deposited are traveler cheques, and due backs

exceed the actual cash dropped. Therefore, cash must be removed to fill due backs because all traveler cheques must be included in the bank deposit regardless of the amount of the deposit per audit. Example: The net deposit per audit is $50. The cash dropped consists of $l00 in cheques and a $50 due back.

The General Cashier should: 1. Deposit both cheques. 2. Remove $50 cash from the float to fill the due back. 3. Put a $50 due back for the float in the safe. 4. Record the safe $50 over on the over/short report since $100 was deposited but the deposit per audit was only

$50. 5. Withhold $50 cash from the next day’s deposit to replace the $50 due back in the float and show the safe $50

short on the over/short report. The General cashier replaces all due backs from the cash dropped or house funds (as illustrated in step ii of the example). Before due backs are released to a cashier, he/she must sign a due back slip upon receipt of the due back. The General cashier computes the remaining due backs, removes the necessary amounts from their float and completes a due back for the main safe (as illustrated in step b. iii of the example). The General Cashier attaches the Cash Count sheet and deposit slips as backup and records the amount of the due back as actual cash on the over/short report under his/her name (as illustrated in step iv of the example). The due back is placed in the safe. The extra deposit caused by depositing all of the cheques becomes an overage for the General Cashier and is recorded in the over/short column. The money to replenish the main safe due back can most likely be withheld from the next day's deposit and recorded as a shortage that day under the General cashier name (as illustrated in step v of the example). The due back is then removed from the safe.

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Subject: Travelers Cheques Department: Finance Reference # CSH 108 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 108 TRAVELLERS CHEQUES POLICY Travelers cheques are an approved method of payment for hotel charges and may also be used by guests to obtain cash. Careful handling of Travelers cheques will limit exposure to losses resulting from fraudulent practices. PROCEDURE 1. Only Registered guests may cash Travelers cheques in approved currency. 2. The guest must sign the second signature in the presence of the Guest Service Agent. 3. The Guest Service Agent must verify that the two (2) signatures match and ask to see some form of picture ID

and compare the name and signature on the ID (preferably the passport) to the signature on the cheque. Note the serial number of the ID on the back of the cheque. If there is still any doubt over the signature have the guest sign on the back of the cheque and compare.

4. If the signatures match, stamp the back of the Travelers cheque with the restrictive endorsement stamp. (“For Deposit only, Hotel Entity Name”)

5. Stamp the payee section with the hotel name stamp. 6. The Guest Service Agent will then give the guest the authorized cash from his/her bank and place the travelers'

cheque(s) in his/her bank. If a guest wishes to pay their hotel bill with Travelers cheques, payment in full at the time of registration will be required. These guests would be treated as cash-in-advance. If the guest has a valid credit card on file at the front desk, he/she would be allowed to sign charges to his/her guest room.

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Subject: Guest Paid Outs Department: Finance Reference # CSH 109 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 109 GUEST PAID OUTS POLICY To control amounts paid for guest paid outs. Credit balance refunds must be refunded in the same manner as guest charges are to be settled upon check in (i.e., cash refunds for cash payments). Cash paid outs or advances from credit cards are prohibited. PROCEDURE 1. In order for credit balances to be handled appropriately the Guest Service Agent must ensure that

the payment that the guest made upon check-in has been recorded correctly on his/her folio (i.e. cash has been recorded as cash and cheques, money orders and travelers’ cheques have been recorded as cheques).

2. The Guest Service Agent will print a folio for the guest to review at check out. 3. After the guest is satisfied with the bill, a refund will be due to the guest If there is a credit balance on the folio. 4. If the guest is due a refund, has paid in cash upon check in, then a cash refund should be given to the guest. In

the event that issuing large cash refund will deplete the Guest Service Agent’s float or funds, then the Guest Services Manager/Supervisor must handle the refund.

5. To refund cash to a guest: • Complete a Paid-Out voucher detailing the guest name, room number, amount and explanation of the paid

out (credit balance refund). The voucher must be pre-numbered. • Have the guest sign the Paid Out as acknowledgement of cash received and the Guest service Representative

must also sign to verify cash paid out. • Give the guest amount of the paid out from your cash drawer (only after 1 & 2 have been completed).

6. Post the paid out in the computer. 7. Print another folio detailing the paid out. Give the guest his/her copy and staple the other copy to the paid-out

voucher. 8. The paid out is saved and to be included with the cashier report when the cashier closes his/her shift. 9. Paid outs over US$50 must be approved by a Guest Services Manager or supervisor. 10. Cash paid outs directly from pre-approved credit card authorization are prohibited.

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Subject: Petty Cash Department: Finance Reference # CSH 110 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 110 PETTY CASH POLICY Petty cash will only be used in situations when it is not practical or feasible to use the normal Accounts Payable procedures. PROCEDURE 1. The impressed system must be used for maintenance of the petty cash fund. Under the impressed system, a petty

cash fund of a fixed amount (a “float”) is established for custody and disbursement by a general cashier. When the fund is depleted to a certain level, the fund is replenished to the size of the original float.

2. Petty cash should be limited to purchases less than US$50. The General Manager and Financial Controller should establish guidelines for reasonable usage by Department Heads.

3. All petty cash is to be issued by the General Cashier during normal business hours only upon presentation of a completed petty cash voucher approved and coded by the responsible Department Head.

4. During hours when the General Cashier is not available, petty cash issuances must be approved by the MOD and/or Division Head and issued only by the Guest Services Agent using a petty cash voucher.

5. Original receipts are required for all purchases and must be submitted within twenty-four (24) hours after petty cash issuance.

6. All petty cash vouchers issued by the Guest Services Agent must be dropped as part of the normal deposit. 7. On a weekly basis, the General Cashier will submit to the Financial Controller or Assistant Financial Controller

all petty cash vouchers issued during the preceding week using the standard “Request for Petty Cash Reimbursement”. All vouchers must have supporting receipts attached.

8. All petty cash vouchers and supporting receipts must be reviewed and approved by the Financial Controller prior to reimbursement.

9. All petty cash will be reimbursed once per week and at the end of the week/month via the Accounts Payable System. To reimburse, a cheque request accompanied with all supporting documentation is to be used. The cheque is to be made payable to “Name of Hotel_________”.

10. Following standard accounting practices, all petty cash vouchers must be perforated and / or stamped “Paid” by the Accounts Payable clerk as a safeguard against repetitive use.

11. Upon receiving reimbursement from Accounts payable, the General Cashier should deposit the reimbursement cheque no later than the following business day.

12. A surprise cash count must be made at least twice a month by a senior member of the accounting staff who is not involved with cash handling. A report on the results of the cash count should be submitted to Financial Controller for reference.

13. The petty cash must be kept completely separate from any other funds. If appropriate petty cash procedures are being followed, it should not in any case be necessary to mix funds to reduce the risk of errors, and to reduce the likelihood of intentional manipulation.

14. Employee advances are NOT to be made from petty cash. Petty cash is not to be advanced for the purpose of travel or entertainment expenses (incl. IOU’s).

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Subject: Payments Received by Mail Department: Finance Reference # CSH 111 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 111 PAYMENTS RECEIVED BY MAIL POLICY Payments received through the mail are to be properly receipted, deposited and recorded in the accounting records each business day. PROCEDURE 1. To maintain a proper segregation of duties, all mail receipts of payments will be received and initially controlled

by someone other than the Accounts Receivable personnel or General Cashier. Generally, this individual would be the hotel's Executive Secretary or a similar position having otherwise no cash handling/receivables responsibilities. Each business day, a “Daily Cheque Received Register” (DCRR) will be completed to include: • The current business dates • The signature of the employee opening the mail and listing the checks • The date each cheque was written • The maker's name and account number(s) • The currency amount of the cheque(s) received • The total of cheques received in that business day

The DCRR must be signed by the Financial Controller and General Manager.

2. All cheques, money orders, etc. must be restrictively endorsed “For Deposit Only, Hotel Entity Name”. 3. Two copies of the DCRR, the original cheques and supporting detail should be made. 4. Two acceptable deposit handling methods exist:

• General Cashier Deposit ➢ The original of the Daily Cheque Received Register and all original cheque support will be given to the

Accounts Receivable personnel for posting to the Receivables detail on the same business day received. ➢ A copy of the Daily Cheque Received Register will be given to the General Cashier along with the

original cheques for deposit the following business day. ➢ A copy of the Daily cheque Received Register, along with copies of the support, will be kept in

chronological order by the employee competing the daily cheque register. • Direct Cashier Deposit ➢ The original of the Daily Cheque Received Register and all original cheque support will be forwarded to

the accounts Receivable personnel for posting to the Receivables detail on the same business day received.

➢ The General cashier will complete the bank deposit slip. The cheques are placed into an envelope with two copies of the deposit slip, the envelope is sealed, and deposited. A copy of the DCRR should be clipped to the deposit envelope, along with a copy of the deposit slip.

➢ A copy of the Daily cheque Received Register, along with copies of the support and deposit slip, will be kept in chronological order by the General cashier.

5. Each day’s work will be audited to ensure that individual amounts received are properly posted and deposited under the prescribed procedures above. Proper documentation of such verification will include the signature of those employees involved and task completed on the original copy of the DCRR, which is subsequently filed chronologically in Accounting.

6. Cheques that may be received outside of normal business hours are to be locked in a secure place by the person opening the mail then receipted as normal the next available business day.

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Subject: Float Increases Department: Finance Reference # CSH 112 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 112 FLOAT INCREASES POLICY All permanent float increases must be authorized by the General Manager and Financial Controller in combination PROCEDURE 1. Floats kept by the hotel must be sufficient for the hotel operating needs 2. All float increases must be documented and approved by the General Manager and Financial Controller on the

form “Request for Float Increase”. 3. The monies to increase the float must come via a cheque requisition.

If a Financial Controller decides to re bank some floats this also must be fully documented and an audit trail to support re banking must be available for audit purposes. Any temporary increase in float to meet short term business demands (e.g., long public weekend) are excluded from this policy but must be recorded by the Financial Controller and returned/rebanked after the business demand period. Reference: Float Increase Request Form

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Request for Float Increase Hotel: Date: Reason why hotel float needs to be increased:

Requested by: Financial Controller

Authorized by: General Manager

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Subject: Debt Department: Finance Reference # CSH 113 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 113 DEBT OVERVIEW The Financial Controller monitors all contractual debt and maintains relationships with commercial banks to ensure non-violation of debt covenants. POLICY Contractual debt may not be incurred without the approval of owners and Regional Managing Director. Contractual debt includes: • Lines of credit • Mortgages • Loans – secured and unsecured • Leases – operating and financial

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Subject: Cash Management Department: Finance Reference # CSH 114 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CSH – 114 CASH MANAGEMENT OVERVIEW Day-to-Day Operation All funds in excess of day-to-day operation requirements must be invested in deposit accounts bearing favorable rates of interest with a reputable bank or other institution approved by the Owning Company. Forecast Cash forecasts are vital to the operation of a hotel and the effective application of cash and are used to plan funding of hotel operations, debt service and capital expenditure. POLICY The purpose of this policy is to effectively utilize all cash resources of the hotel, and to increase income while ensuring a prudent investment policy. And, Cash forecasts ensure U Hotels & Resorts is aware of any projected funding needs and also ensures adequate solvency to meet financial obligations. PROCRDURE Day-to-Day Operation Prior to effecting any such investment, obtain written guidelines approval from the Owning Company as to the following; • Authorization to invest on behalf of the hotel. • The types of instruments that the hotel is authorized to invest in (time deposits, certificates of deposit, etc.). • The band and other institutions authorized to invest with. • The currency in which to invest.

Any amendments to the authorized list must be similarly approved by the Owning Company in writing. Copies of all authorization letters are to be forwarded to the Regional Managing Director and Regional Finance leader. In the event that approval for the above cannot be obtained in writing from the Owning Company, excess cash may only be invested in Time Deposits with the bank(s) with which the hotel operating accounts(s). Forecast Financial Controllers must prepare the cash budgeting which is called “Statements of Cash Flow” and the cash forecast for next 3 months on a monthly basis to identify a variety of cash monitoring and management activities. Thus, it is critical that General Manager and Financial Controller understand how cash moves or flows through their hotel and how planning can remove some of the uncertainties about their future cash requirements in a specific accounting period and also explain any variances from forecast/budget submitted to the Regional office. Back

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SECTION 5

INVENTORIES

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Subject: Receiving Procedures Department: Finance Reference # INV 100 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 100 RECEIVING PROCEDURES POLICY The Financial Controller is responsible for ensuring that proper receiving procedures are in place and that the hotel is obtaining the quality and quantity of merchandise ordered at the quoted price. PROCEDURE Those employees responsible for receiving goods must verify proper receiving procedures are in effect by ensuring: 1. Items are checked for quality and quantity at all times. 2. For non-food items, items must have been ordered through a purchase order number and the number must be

referenced on the invoice or packing slip. 3. For larger hotels with computerized purchasing systems, food and beverage orders should also be ordered

through a purchase order number. 4. Food items or other items that are purchased by weight should be weighted and the weight should be matched

against the “catch weight” shown on the invoice. 5. For food items, the product is checked for quality and uniformity, consulting the appropriate personnel

(Executive chef, chef, etc.) if necessary. A standard specification policy set by the Executive Chef must be in place for checking the quality of food items received.

Containers are counted individually when received. All deliveries to the hotel should be documented with a receiving form which is called “goods receipt note” and stamped marked on the invoice or bill of lading. Pre-numbered goods receipt notes should be prepared for all goods received and used for recording purpose, rather than shipping documents to ensure that liabilities and goods received are all recorded and the reliability of cut-off procedure for stock-taking. The person performing each function must indicate the appropriate information on the necessary line. The stamp will include the following information. 1. Date received 2. Quantity checked 3. Quality checked 4. Purchase order number 5. Signature of receiving coordinator or department head

Receiving will immediately issue a credit memo, signed by the person delivering items, for any shortage or return of items. A copy of this credit memo is stapled to the invoice or delivery documents and forwarded to Accounting daily. In the case of shorted goods or returned goods, the receiving document/packing slip/bill of lading should be signed only after the following steps are taken: 1. Shorted goods – these are goods appearing on the invoice that are not delivered. “ITEM NOT DELIVERED”

must be written next to the item and the receiving document/packing slip should be adjusted to reflect the changes. Obtain acknowledgement from the driver.

2. Returned goods – these are goods appearing on the invoice that were not ordered or do not meet our specification. “ITEM RETURNED” must be written next to the item and receiving document/packing slip

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should be adjusted to reflect the changes. The receiving individual should tell the delivery person that we do not accept these goods and obtain acknowledgement from the driver. A receiving log sheet must be completed once a day, listing all receipts for the day (food and non-food). All receiving documentation or receipts or invoices will be attached to the receiving log sheet and forwarded to Accounts Payable on a daily basis. Accounts payable will match all documentation to the receiving log before posting. Periodically, at least every month, Receiving will verify with Accounts Payable all totals to ensure both departments agree on all items received during the week. Discrepancies must be resolved immediately. To facilitate the receiving process for non-food items, copies of approved Purchase Orders must be organized by department in Receiving. This will help ensure easy access when items are delivered, and allow for the Purchase Order to be used as a reference for verifying items or products received. At least once a week, Receiving will verify with Accounts Payable outstanding Purchase Orders to include open PO’s and partial PO’s. Purchase orders that remain open after thirty (30) days must be brought to the attention of the Financial Controller for disposition.

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Subject: Inventory Storerooms Department: Finance Reference # INV 101 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 101 INVENTORY STOREROOMS POLICY Proper safeguards should be maintained over storage areas, with access being restricted only to authorized personnel. PROCEDURE The storeroom should be maintained in an orderly manner so that each item has a standard location. Store items most often required in a convenient location. Store heavier items close to the floor and keep higher shelves for light items. All areas of storage must be kept clean, dry, well ventilated and well lighted. All food items must be properly rotated and issued on a First In First Out basis. Ensure that new deliveries are stored behind existing stocks on the shelves. Where appropriate, items entering the storeroom, after being received, should be clearly stamped or marked with the date received in the storeroom. Inventories should be requisitioned and issued on the FIFO (First In First Out) basis, law permitting. It is imperative that expiry dates are noted on receipt so that goods do not become obsolete while sitting on the self. Items which are always issued as cases may be priced with the unit price per case, as that will be the standard unit of issue and also the unit recorded in the inventory books. At any given time, every individual item in the storeroom should be clearly marked with the actual unit cost price. This will greatly facilitate the taking of inventories and the costing out of requisitions. Only one set of keys to the storeroom and other food storage areas should be available for circulation. One other set should be with the Financial Controller kept in a safe. The storeroom keys will not be part of the hotel master key system. The one set of circulating keys should be returned to Security or other designated key control / access centre. A key control log to include a sign in / sign out procedure is to be established so that a record of the location of the keys is maintained at all times. A “Key Authorization List” listing the names of personnel authorized by the General Manager and Financial Controller to sign out each set of keys must be maintained in security or other designated key control / access area and keys are to be issued only to those listed personnel. This list should be updated immediately whenever there is a change in the list of authorized personnel. The locks on the storeroom doors should be changed periodically for increased security. A written requisition, signed by an authorized person, is required for all Items issued. A list of authorized signatures, approved by the General Manager and Financial controller, must be posted in the storeroom and only signatures on this list should be accepted on requisitions. The storeroom clerk will sign his name at the bottom of the requisition upon completion of each order. Set hours of operation for the storeroom should be established by the Financial Controller and communicated to all department heads. Afterhours access to the storerooms shall be restricted, and entry made only with the approval of

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the General Manager, Financial Controller, Food & Beverage Director or Manager-On-Duty (MOD). After hour’s access to the storerooms must be noted on the MOD or security shift report and the entries are followed up by the Purchasing / Receiving Manager the next business day. All inventory stock counts should be performed by a minimum of two individuals (1 counter, 1 witness and recorder). An accounting representative (other than storeroom personnel) should be present once each month to participate in the stocktaking. For food and beverage, general store and resale consumable items carried on the hotel’s Statement of Financial Position, inventories must be taken monthly. For all other item, such as China, Glass, Silver, Linen, (SOE) items should be counted at least on a quarterly basis. An action plan for slow moving stock must be instigated by the Financial Controller. If stock is obsolete it must be written off in the period it is identified as obsolete. Storeroom Perpetual inventory records must be maintained for general storeroom items. A physical inventory of the general storeroom must be carried out monthly. The Hotel Controller/his team are responsible for supervising the count, pricing and calculation of the inventory. The general ledger must be adjusted as necessary. Access to inventory storerooms must be controlled. Receipts and issues must be accurately documented. All reserve inventories of linen, china, glass and silver must be valued at cost. Obsolete Inventory Obsolete inventory must be removed from stock and written off after obtaining prior approval from the Financial Controller/General Manager based on the value of disposal. If single item value exceeds US$1,000, the Financial Controller has to obtain 3 bids and also seek approval of the Regional Managing Director. If a single item value is less than US$1,000, the disposal of stock should be approved by the Financial Controller and the General Manager. The Financial Controller must undertake an annual physical inventory to reconcile inventory accounts. Any difference must be adjusted through the income statement. Valuation Method Inventories should be valued at lower of cost or net realizable value. Cost is determined by the weighted average method. Cost of purchases comprises both the price and costs directly attributable to the acquisition of the inventory, such as import duties and transportation charge, less all attributable discounts, allowances or rebates. Net realizable value is the estimate of the selling price in the ordinary course of the business, less the costs of selling expenses.

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Subject: Requisitions Department: Finance Reference # INV 102 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 102 REQUISITIONS POLICY Inventoried goods must be secured in locked areas or storerooms. A properly approved requisition must be used when stock is issued or distributed. PROCEDURE 1. When an inventoried good is issued from storage areas, a Requisition Form must be completed. Requisition

forms in use (either computer generated or manual) should be issued under numerical control and should provide for an original requisition, with one copy: • Original - follows to the goods from storage to the assigned area and contains all signatures required of the

transfer. The completed original requisition, with all appropriate signatures must be returned to the storeroom, where it will be compared to the information on the storeroom copy by the storekeeper. Discrepancies should be brought to the immediate attention of the Financial Controller.

• Copy - remains in the storeroom area under numerical control and is maintained for control and comparison purposes, as indicated above, as well as reconciliation of the month-end physical inventory.

2. Requisitions must be approved by the respective Department Head or designee authorized to receive inventoried goods. (Examples, Rooms Division Manager - Housekeeping items, F&B Director and Executive Chef - Food, Beverage).

3. Once inventory items are received, the manager receiving such items should sign the requisition. 4. Completed copies of requisitions should be logged and filed numerically, maintained on file in the storeroom,

and reviewed periodically by Accounting for evidence of proper procedure. 5. A list (with original signatures and initials) of personnel authorized to receive goods must be approved in writing

by the Financial Controller and be posted at all times in the storeroom.

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Subject: Beverage Control Department: Finance Reference # INV 103 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 103 BEVERAGE CONTROL POLICY: This organization will consistently follow the control procedures herein listed in all beverage outlets under its management. PROCEDURE: Financial Controller is primarily responsible to ensure that a comprehensive system of internal controls is put into operation within all food and beverage outlets. The Food and Beverage Director is responsible to ensure that the controls put into operation are consistently implemented and put into practice in all food and beverage outlets. The following lists of internal control, or acceptable variations thereof, is to be put into operation and consistently implemented in all food outlet operations. Purchasing Procedures and Controls: 1. All purchasing policy and procedure guidelines are to be followed in accordance with SOP EXP 101 - Purchase

Orders. 2. Par Levels are to be established by the Purchasing Manager, and signed off by the General Manager and Financial

Controller and Food and Beverage Director. The par levels should be set at an amount that is sufficient to order enough stock to supply the beverage operation in normal operating conditions.

3. Any changes made to beverage pars, including wine, liquor or beer menu changes that affect beverage inventory must be approved by the General Manager, Food and Beverage Director and Financial Controller.

4. Prior to stocking supplies related to any menu changes, a plan for the dissolution of old stock on hand must be presented by the Food and Beverage Director to the General Manager and Financial Controller for approval.

5. Prior to placing orders with beverage vendors, any adjustments for special event beverage sales such as New Years Eve, weddings, etc., must be considered and the purchase adjusted accordingly.

6. Purchase quantities should be adjusted to take advantage of any vendor discounts or special promotions being offered, after approval by the Financial Controller and Food and Beverage Director.

Receiving Procedures and Controls: 1. All receiving policy and procedure guidelines are to be followed in accordance with SOP INV - 100 – Receiving

Procedure. 2. All beverage product received must be received by an approved Manager/Supervisor. 3. As items are received, they must be checked as follows:

• Each item must match the ordered specification with regard to brand and size of container. • Each item must be verified to the quantity ordered. • Each item must be verified to the invoice. • Items purchased by quantity per case must be verified to the case received.

4. Many more receiving procedures are included in the actual SOP INV -100 – Receiving Procedure.

Requisitioning Beverage from Storage:

1. Beverage requisitions must be filled out by the night shift for each beverage outlet and left for the Receiving department to fill the next day.

2. Liquor requisitions must be accompanied by an empty bottle for each bottle of liquor being requested from inventory. Liquor requisitions will only be filled in a bottle-for-bottle exchange.

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3. When liquor is being issued to outlets, the Receiving person filling the requisition must examine the bottles to find the non-removable sticker on each bottle. Any empty bottles without the hotel’s unique tag will be reported to the Financial Controller and Food and Beverage Director.

4. For wine being requisitioned, a system of comparing bottles of wine sold individually and by the glass as evidenced by the Beverage Abstract Reports from the Point of Sale system for the prior day to the requisitioned bottle count must be maintained. Wine should then be issued according to the Abstract Reports.

5. A bin tag system should be utilized for all outlet wines. 6. Bar pars must be spot checked weekly to ensure proper stock and to look for bottle tags.

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Subject: Small Operating Equipment Department: Finance Reference # INV 104 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 104 SMALL OPERATING EQUIPMENT POLICY Small Operating Equipment (SOE) or Operating Equipment (OPE) inventories will be counted at least on a quarterly basis and compared to the hotel’s requirements. The GL should be adjusted accordingly and charged to the Income Statement. PROCEDURE 1. Small Operating Equipment should be counted once per quarter. No value for financial statement purposes will

be assigned to these inventories, but instead are intended to provide comparative information relative to the hotel's established current stock reserves, in order to assess loss and re-order needs.

2. Typical items subject to quarterly inventory include: Circulating Stocks Responsibility

Rooms linen Rooms Food & Beverage Linen and napkins F & B China, Glass, Cutlery and Crockery F & B Utensils, pots, pans, etc. Kitchen staff Uniforms Respective Dept.

3. Reports on quarterly SOE inventories must be prepared identifying the difference between the theoretical inventory of items and the actual inventory on hand. The report should summarize the value of the variance. The report should be signed by Financial Controller and a copy issued to General Manager and relevant Department Heads.

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Subject: Stock Card Department: Finance Reference # INV 105 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 105 STOCK CARD POLICY Stock cards should be recorded both the quantity and the value of incoming and outgoing inventories. This provides an internal check with respect to inventory transactions and balance, and is in compliance with accounting and taxation laws, which require the maintenance of stock cards recording quantity and value. PROCEDURE Financial Controller must formulate to establish responsibility and custody over stock. Pre-numbered internal transfer forms should be prepared to document the amount and type of stock issued/returned and that these be signed by the parties issuing and taking custody of the stock. Function of recording stock card should be assigned to staff not involved with the custody of goods Stock cards should be prepared for all items of goods and maintained so as to reflect both the incoming and outgoing movements of inventories on a daily basis. Stock cards should be up-to-date at the time of the count, and be compared with the quantities counted. Discovery of significant differences should be followed by an immediate recount and investigation.

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Subject: Monthly and annual stock-take Department: Finance Reference # INV 106 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents INV – 106 MONTHLY AND ANNUAL STOCK-TAKE POLICY The monthly and annual stock-take is an important process to ensure the correctness of the quantities of stock booked in accounting records. Without a well-prepared stock- take instruction, the stock count and related procedures may not achieve the desired results. PROCEDURE Financial Controller must develop the monthly and annual stock-take instruction. As guidance, the instruction should at least cover the following aspects: 1. Location, date and beginning time of the physical inventory 2. Number and composition of the count teams 3. Designated inventory area for each count team and second count team assignment 4. Detailed instructions on how to fill out inventory tags or sheets in order to expedite the subsequent

reconciliation process 5. Identification of damaged or obsolete inventory and scrap 6. Identification of inventory held for others 7. Control of the inventory tags or sheets issued and used 8. Accumulation of appropriate cut-off information

A training program should be provided for all staff involved in the physical inventory take. This program should address the processes of housekeeping, packing, counting and usage of tags. Staffs who are not also responsible for custody of stock should involve in monthly and annual stock-take. In addition, Financial Controller must ensure the control procedures are in place as follows; 1. Storekeeper should be required to properly prepare and organize the inventory in the locations where stock is to

be counted. 2. Summary of cut-off documents should be prepared before the stock-count is taken in order to ensure the

accuracy and reliability of the stock-take. 3. Stock should be clearly marked immediately after it is counted, both to ensure the count is not made twice, and

to increase the efficiency and effectiveness of the stock-take. 4. All discrepancies should be promptly investigated. Based on the results of such investigation corrective measures

should then be adopted to minimize the chance of any further occurrence. 5. Obsolete/damaged stock should be clearly marked during physical stocktaking to provide an accurate

determination of the quantity, descriptions and status of such items. This determination can be used in setting up adequate provision for obsolete and damaged stock.

6. Count teams should be supervised as closely as possible by senior personnel, to ensure that the work is carried out in a thorough and responsible manner. To this end both training and clear written instructions ought to be emphasized.

7. Cost Controller must prepare the results of inventory-take and the reason for any major variances and sign by all counters and witness. These reports should be reviewed and sign approval by Financial Controller.

8. Stock records should be adjusted to agree with the result of the physical count after Financial Controller approve.

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SECTION 6

EXPENDITURES

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Subject: Approval Levels Department: Finance Reference # EXP 100 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 100 APPROVAL LEVELS POLICY Decision making responsibility and authority should be at the lowest possible level. However, it is important to establish clear approval limits and levels throughout the organization in order to control the exposure, have risk associated with the proper legal entity, and comply with our management agreements. PROCEDURE Each hotel should develop a matrix for approval levels on hotel specific issues. A hotel specific matrix should be communicated in writing to all levels of employees and posted in specific areas as necessary (e.g., storeroom, receiving, Accounting, etc.). A hotel specific matrix will not conflict with Corporate or Management Agreement Contract. This matrix must be agreed with the Regional Managing Director at least annually is part of the Statement of Financial Position Review. No changes may be made to this matrix without the agreement, in writing, of the Regional Managing Director.

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Subject: Purchase Orders Department: Finance Reference # EXP 101 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 101 PURCHASE ORDERS POLICY Any item that needs to be purchased must have a purchase order. All purchase orders must be signed by the General Manager as primary signer and the Financial Controller and Purchasing Manager as secondary signers. Fresh food purchases may be conducted by Market Lists as an alternative. All purchases should be authorized and a three-way match should be done prior to approval of payment. PROCEDURE 1. Purchase order should be completed and approved by the Department Heads and routed to Purchasing Manager

for checking/preparation and to the Financial Controller and General Manager for approval. The Purchase order details the information necessary to make a purchasing decision as follows: • Vendor information including name, address and phone or e-mail contact information. • Quantity, unit price, extended price of units. Cost of freight, sales tax, duties and the total cost of this

purchase. • Reason for purchase. • The availability of funds for this purchase. On the purchase requisition, the fund availability area shows the

checkbook prior balance, amount of this purchase, and balance remaining after this purchase. If adequate funds are not available, an explanation of which account category was reduced in order to increase the funds available for this purchase. The following products or services are typically ordered by the following individuals:

If approved the General Manager and Financial Controller will sign the completed Purchase Requisition for the items requested. A minimum of three bids should be obtained on single items costing US$1,000 or more.

• Items having considerable annual usage may have been sourced and volume priced via established Bidding

process. If you purchase any of these items, such orders will not require three competing bids. However, an ongoing review of pricing should be performed to ensure competitiveness of such contracts and put out for competitive bidding on an annual basis. Contract services such as maintenance contracts must be re-bid with at least three competitive bids as contracts expire.

• The standard Purchase Order form as approved must be used at all times. It is very important that purchase orders include the correct legal identification of your entity. Vendors should be notified, of those individuals authorized to place orders. Vendors should also be notified in the event that there is a change in the individuals authorized to place orders.

Product or Service Who Orders?

Food and Beverage consumable products Purchasing Department

Food and Beverage Linen, China, Glass, Silver Food and Beverage Director/Director of Operations

Rooms Linen and Glassware Rooms Director/Director of Operations

Department Other Expenses Department Managers

Maintenance Contracted Services Director of Engineering

Capital Goods GM, Financial Controller or Director of Engineering

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• Whenever possible, automated computerized pre-numbered Purchase Order systems should be implemented.

2. The Purchase Order is now routed to the Accounts Payable department after approval by General Manager and Financial Controller for distribution of copies: • Copy 1 (Original) is routed back to the originator to facilitate purchasing the items. The vendor should be

sent a copy of this purchase order. • Copy 2 is routed to the Receiving Department and is filed in a temporary receiving file until goods are

received. • Copy 3 remains in A/P to be filed numerically.

3. The Accounts Payable coordinator will maintain three (3) separate files of all open Purchase Orders in alphabetical order. When the invoice and Goods Received Note arrive, he/she will compare the A/P copy of the PO with invoice, and if in agreement, attach a copy to support of the payment. The three types of open files include; • Open Purchase Orders • Partial Purchase Orders (some, but not all, goods have been received) and • Completed Purchase Orders, not having invoices

4. All open purchase orders should be reviewed at month end to determine if you have any unrecorded expenses for the period (invoice missing, but goods have been delivered etc.). No expense (or inventory) accruals should be recorded for goods not received by the hotel, even though they were “forecasted”, or “budgeted” to be expensed during the current period.

5. All open, partial and completed Purchase Orders without invoices that are unresolved for more than ninety days must be forwarded to and should be reviewed by the Financial Controller for final disposition.

6. General Manager and the Financial Controller should establish local SOP’s and set approval levels and limits on purchases. For example, the minimum level of authorization required for various purchases should be as follows:

CHEF HOD FINANCIAL

CONTROLLER GENERAL MANAGER

FOOD ⧫ ⧫ BEVERAGE ⧫ ⧫ OPERATING SUPPLIES

UNDER $100 ⧫ ⧫ OVER $100 ⧫ ⧫ ⧫ SERVICES FOR A PERIOD OF LESS THAN 12 MONTHS ⧫ ⧫ MORE THAN 12 MONTHS* ⧫ ⧫ ⧫

Any service contracts which contractually bind the hotel for more than a year, such contracts should be approved and co-signed by the Regional Managing Director and Regional Finance Leader.

Authorising Documentation Written authorising documents (purchase orders) are required for all purchases. An approved authorising document must contain: 1. Supplier name 2. Comprehensive description of goods and services to be provided and payment arrangements 3. Contracted or estimated cost, with cost breakdown by item where appropriate 4. Authorised signature and date

Purchase orders may not be practical for legal, professional or consulting services. In these cases, the authorised invoice together with a copy of the contract or letter of engagement shall be used as the authorisation for payment. Purchase orders are not necessary to approve the following: 1. Utility bills, Rent and Rates Payment, Insurance Bills 2. Taxes to governments (Room tax, Payroll taxes, VAT etc.)

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3. Bank interest, fees, repayments etc 4. Employee expense reimbursements and advances 5. Guest refunds

Quality The purchasing manager must ensure that suppliers provide goods and services of the best quality, including applicable specifications and environmental regulations. Special Purchases 1. Consulting services – see section “External Consultants and Services” 2. Property and liability insurance purchase – should be reviewed, coordinated and approved by the Regional

Managing Director and Regional Finance leader. 3. Employee benefit insurance purchase - should be reviewed, coordinated and approved by the Regional Managing

Director and Regional Finance leader. 4. Utility purchase – responsibility of the Chief Engineer and Hotel Controller for purposes of rate verification 5. Advertising – should be reviewed and approved by the General Manager and Director of Sale & Marketing 6. Real estate leases – should be reviewed, coordinated and approved by the General Manager & Hotel Financial

Controller

Relationship with Suppliers Purchasing personnel must avoid engaging or appearing to engage in unethical business practices or conflicts of interest and must exercise sound judgement guided by personal integrity at all times. Proprietary Information Supplier information should be treated as proprietary information. Pricing information may only be divulged to other U Hotels & Resorts personnel on a need to know basis. At no time should pricing information be shared with an external supplier to meet or beat the price. Other supplier information regarding conditions of purchase etc should be protected.

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Subject: Vendor Credit Applications Department: Finance Reference # EXP 102 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 102 VENDOR CREDIT APPLICATIONS POLICY All vendor credit applications should be forwarded to the Financial Controller for completion and execution. This will ensure vendors are provided with the most current and correct information as it relates to ownership and proper responsibility for the obligations. PROCEDURE 1. All credit applications received at the hotel must be sent to the Financial Controller to be processed. Requesting

department and contact must be noted on the credit application including the desired credit limit amount, the individuals authorized to charge.

2. The Financial Controller will process credit applications as they are received by providing the vendor with a standard credit letter and references, the correct legal information pertaining to the specific hotels and ensuring that no guarantees are signed. The Financial Controller is also responsible to assist the departments with follow up to establish credit. This process is designed to protect the Management Company because the credit applications will be completed using the owner / partnership name, federal ID number, etc. This will limit the potential liability of U Hotels & Resorts hotels.

3. Financial information should not be supplied by the hotel to the vendors without the consent of the General Manager or Owner if applicable.

4. New vendors will be instructed to contact the Financial Controller once the account has been set up. Once credit is set up, the Financial Controller will provide a copy of the completed vendor credit application to the Accounts Payable Co-coordinator for filing alphabetically.

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Subject: Payments Department: Finance Reference # EXP 103 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 103 PAYMENTS POLICY Payments to our vendors, lenders and others will be within prescribed terms, assuming that an original invoice is presented which agrees with our internal records of a purchase order and receiving report. The Financial Controller is ultimately responsible for ensuring that adequate support exists and that payments are made within the prescribed intervals and in accordance with the Hotel Operating Agreement. PROCEDURE 1. Any invoice received in Accounting will bear evidence of:

• Proper purchase authorization. In the form of a copy of the approved purchase order that is first agreed and then attached to the vendor invoice.

• Proper receipt of goods or service. Generally, in the form of goods received note or receiving stamp on the invoice or the department head’s signature indicating receipt (direct deliveries or service contracts).

• Proper pricing verified by individual purchasing the item(s) or services. Incoming invoices should be pre-checked for proper approvals and support daily. Vendors must be notified in writing that all invoices must be addressed to the attention of Accounts Payable only. The Accounts Payable co-coordinator should immediately bring to the Financial Controller’s attention, any invoice lacking either of the above requirements. The Financial Controller will request such missing information from the originating department and make record of such invoice in question for potential accrual at month end.

2. Invoices received in the mail, having no evidence of purchase approval, must be marked as Purchased without PO and signed by the Department Head ordering the item or service and the General Manager. Purchase Orders are not to be issued after the fact.

3. Only those invoices received by accounting meeting the criteria of proper purchase authorization and proper receipt will be entered into the Accounts Payable system on a daily basis by the Account Payable Coordinator. After entry, invoices should be stamped as entered/posted, with reference being made to the accounting period affected.

4. Invoices for the exact amount of the purchase order are not necessarily required before payment. If a greater than 5% variance (excluding tax and freight) occurs between the Purchase Order and the invoice, the Account Payable Coordinator must stamp the invoice “Exceeds PO” and report the variance to the Financial Controller for approval. Every effort must be made to include freight charges in a Purchase Order to expedite the matching process.

5. Presentation of any cheques or electronic transfers for signature must be accompanied by all necessary documentation. It is the responsibility of all cheque signers to ensure proper documentation exists before signing a cheque/transfer request. • Payee’s name and address are appropriate for the nature of expenditure • The numerical and written amounts agree • The date on the cheque is current • The payee’s name and address on the cheque agrees with the supplier’s name and address on the invoice • The amount payable on the cheque agrees to the invoice • The purchase order and delivery notes have been properly authorized and are attached to the relevant

invoice

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• Original invoices support cheques. Cheques accompanied by duplicate invoices should not be signed, except in the rare instance when original invoices have been lost, prior payment records have been examined, and the duplicates marked “no record of prior payment” by the accounts payable personnel

• The dates on the invoices are reasonably current • Any cancelled/un-used cheques should be kept for auditing purposes

6. Invoices rendered for payment must be ether cancelled by a “paid” stamp or perforated to prevent re-use afterwards.

7. Each hotel will run vendor payment process at least twice a month, ensuring all scheduled payment dates are met. Only those payments needed to be distributed during the next 2 weeks are to be prepared or “run”. Payments are not to be generated in advance and held for any other reason.

8. It is the responsibility of the Accounts Payable coordinator to record those vendor payments scheduled on the property Critical Date/Payment List. All critical payments will be on a timely basis. The Financial Controller is responsible to review the Critical Date/Payment List weekly to ensure compliance with requirements.

9. The Accounts Payable Coordinator will reconcile vendor statements on a monthly basis and maintain these documents on file for twelve (12) months.

10. When necessary to obtain a payment in advance of invoice receipt, a cheque request approved by the Department Head, the General Manager and Financial Controller as acceptable substitute. Prior to final processing/filing of the Vendor payment request, it is the Financial Controller’s responsibility to ensure a proper receipt or invoice is attached to the cheque request. No vendor payment should be raised without full backing to support payment.

11. Payments made by wire transfer, bank transfer or automatic clearing house funds require the same Internal controls as for cheque disbursements, including authorized signatories from group A and group B. Bank software used for wire transfers should have the necessary controls e.g. passwords, levels of authority etc. This is to ensure only authorized personnel have access to the software and to prevent fraud.

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Subject: Travel and Expense Reimbursement Department: Finance Reference # EXP 104 Page: 1/6 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 104 TRAVEL AND EXPENSE REIMBURSEMENT POLICY Business travel and entertainment must be recorded on an Expense Report. Expense Reports must be completed within 30 days of the expense being incurred. PROCEDURE Necessary and reasonable business expenses will be promptly reimbursed provided that: 1. The expenditures are prudent. 2. The Expense Report is properly completed, documented and the purpose is clearly defined. 3. The Expense Report is submitted within thirty days of the date the expense was incurred. 4. The Expense Report is approved by the responsible hotel General Manager.

All reimbursable expenses of at least US$10, listed on the Expense Report, will be supported with original receipts. Acceptable receipts are as follows:

TYPE OF EXPENSE ACCEPTABLE ORIGINAL RECEIPT FOR EXPENSES OF USD$10 AND

OVER

AIR TRAVEL E-TICKET ITINERARY/INVOICE SHOWING AMOUNT

REGULAR TICKET PASSENGER RECEIPT AND BOARDING PASS

HOTEL EXPENSE HOTEL BILL/EACH EXPENSE MUST BE ITEMIZED IN CORRECT CATEGORY

PHONE EXPENSE ORIGINAL CELL PHONE BILL/CURRENT MONTHLY CHARGES ONLY

MEAL/ENTERTAINMENT EXPENSE

ORIGINAL RESTAURANT RECEIPT/HOTEL BILL

TAXI/CAR RENTAL ORIGINAL TAXI/CAR RECEIPT SHOWING AMOUNT

ALL OTHER ORIGINAL RECEIPTS FROM THE SERVICE PROVIDERS

Photocopies of receipts are not acceptable. Authorization and reporting A travel authorization form should be prepared in advance and approved by the General Manager and Financial Controller. Reimbursable expenses must be tested for reasonableness and necessity. Hotel Controllers must review employee expenses for any items that the employee may be liable to pay tax on and ensure that local tax reporting requirements are satisfied. Personnel must settle all hotel expenses upon checkout using their personal credit card or cash. Advances

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Upon request, associates may be eligible for a cash advance for estimated expenses that cannot be paid with a credit card. A cash advance requires a written explanation of the need and prior written approval by the person who approves the associate’s Expense Report. The request for the approved cash advance should be made so that there is sufficient time for a cheque to be issued during a normal accounts payable cheque run. Settlement of all cash advances must be made immediately upon return from the business trip. Cash advances will be recorded as a Travel Advances until an Expense Report is submitted. Associates in arrears for the settlement of an advance will not be issued further advances and the amount of the advance will be deducted from their next monthly salary payments. Air Travel In order to take advantage of the advance purchase fares, associates should make reservations as early as possible. Travel by air is authorized for the most economical fare available within the following guidelines, at all times an authorized travel agent is used:

• All Air Travel should be made on the attached request form and submitted to GM for approval. • Refer to HR Policy manual on travel based on levels. • Employees may not downgrade flight/accommodations to absorb the cost of accompanying family members

that would otherwise be a personal expense of the employee.

If an airline ticket is exchanged or modified as a result of changes in itinerary, and a fare increase occurs, the documentation for the original fare increase must be submitted with the Expense Report for the trip. If a fare is decreased or unused, the ticket must be processed for a credit. Cash or credit refunds should not be used by the employee for future personal travel. The personal travel portion of the combined personal and business travel is not reimbursable. Such personal travel costs shall be calculated by subtracting the round-trip fare from the business destination from the total ticket price. The remainder is the responsibility of the associate. Frequent Flyer Frequent flyer awards may be kept by the individual who “earned” the awards. However, under no circumstances, in order to earn frequent flyer awards, can an individual select a carrier that charges a higher price than the lowest cost airfare utilizing advance purchase. In addition, credit card fees in excess of the standard fee for the sole purpose of participating in an award program are not reimbursable. There is no reimbursement if Frequent Flyer miles are redeemed for a business trip or for relocation travel. Memberships Membership dues to professional organizations (AICPA, ASAE, Chamber of Commerce, etc.) which are previously approved by the hotel GM may be processed through Accounts Payable or on an Expense Report. Excess Baggage The Company will reimburse an employee’s excess baggage charges only in the following circumstances:

• The authorized transportation of business materials. Prior approved from GM is required. • Business assignment longer than fourteen (14) consecutive days. Prior approved from General Manager is

required.

Length of stay must be in direct relation to associate’s business assignment, and not for the personal convenience of the associate. When requesting reimbursement for excess luggage fees, the associate must clearly state the reason for the excess luggage. Non-Air Travel Personal Automobiles – Travel will only be reimbursed with prior approval of the General Manager or Financial Controller and at a rate established as being reasonable for the trip required. Taxis – Taxi fare will be reimbursed when necessary based on actual receipt, which may include a reasonable gratuity.

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International Rental Cars – Internationally, insurance legislation and rental car company regulations vary widely; therefore, full insurance coverage should be requested. Parking fee and toll fee – expenses incurred, while on business travel, are reimbursable. Receipts should be obtained and submitted with the Expense Report. Fines and penalties – Fines or other expenses incurred as a result of traffic violations while on Company business must be borne by the violator and are not reimbursable. Limousine/Car Service Unless approved in advance by the General Manager, chauffeured limousine service while traveling is prohibited, Accommodation Employees should always stay at U Hotels & Resorts managed hotel. If an U Hotels & Resorts hotel is not available, then the lowest available business/leisure rate is to be negotiated at a comparable hotel. Reservations should be made for a standard room. Suites are not reimbursable. HOTEL CHARGES MUST BE SETTLED AT DEPARTURE. THERE WILL BE NO DIRECT BILLING OF EMPLOYEE HOTEL CHARGES. Business travel Employees and other officers traveling on business on behalf the hotel in which they are staying shall receive complimentary rooms, food, beverages, laundry, health club and any other necessary and reasonable charges related to doing business. In the event that an outlet or service is not managed by the hotel, the Hotel General Manager should secure the best available rate. Long-distance telephone calls and hotel charges not deemed to be business related (i.e., retail shops, movies and sports/recreation) are to be billed at 50% discount rate. Telephone credit cards should be used whenever possible for long-distance calls. Employees and other officers traveling on Company business not related to the hotel in which they are staying shall be charged the rate agreed by the General Manager. Employees shall receive a 50% discount on food, beverages, valet, laundry, garage, health club and any other necessary and reasonable charges related to doing business. Long-distance telephone calls and hotel charges not deemed to be business related (i.e., retail shops, movies and sports/recreation) are to be billed at the full rate. Telephone credit cards should be used whenever possible for long-distance calls. Telephone/Mobile Phone Charges Business-related mobile phone calls are reimbursable. Mobile phone bills are to be submitted monthly for reimbursement and will be reimbursed for current charges only. Mobile phone rentals will not be reimbursed. When traveling on company business, calls to family are reimbursed up to 5 minutes per day. The most economic means for these and all calls should be used. Internet Access Expenses related to connectivity between the employees’ network and a remote location (i.e., hotel) while traveling on business will be reimbursed when an associate travel with a laptop and requires Internet access to perform work. Meals and Entertainment Original receipts must be submitted for expenditures. A distinction should be made between personal meals while out of town on business and entertainment. 1. Reasonable personal meals while on travel are reimbursable with full receipts. 2. Client and other entertainment will be evaluated based on the circumstances. Entertainment expenses must be

reasonable. In order to receive reimbursement, documentation must always include names of attendees, company of attendees and business topics discussed.

3. Reasonable alcoholic beverages will be reimbursed if part of a meal only but are discouraged.

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4. Expenses incurred in conjunction with competitive shopping must be accompanied by a Competitive Shopping Report. One copy of the report is to be attached to the Expense Report.

5. Associates at same locations may conduct business conferences over meals either inside or outside of the company location. The cost of such meals will only be reimbursable when the purpose is clearly stated, persons attending are appropriate to the business purpose and prior approval is obtained by GM.

6. Entertainment of employees visiting from other locations may be appropriate where business matters are to be discussed and where prior authorization as to purpose and individuals attending is obtained. Meals and entertainment expenses must be submitted by the most senior employee in attendance.

Home Entertainment Employee home entertainment will not be reimbursed except when incurred for the specific benefit of the Company and approved in advance by the Hotel General Manager. The written approval must accompany the employee request for reimbursement. Spouse Accompaniment If the presence of the employees’ spouse is necessary for a bona fide business purpose, travel expenses incurred by that employee and employee spouse are reimbursable. Any business travel where the employee is accompanied by his/her spouse requires prior written approval from the Hotel General Manager. This written approval must be submitted with the associate’s request for reimbursement. Loss of Personal Effects Employees will be reimbursed up to USD$300 for personal property that is damaged, destroyed or stolen through no negligence or other fault of the employee involved, while the associate is traveling on authorized Company business, provided the loss is reported to the local police or hotel management. The reimbursement will occur only if the loss is not covered by the employee’s insurance company. No reimbursement will be made for:

• CASH • Items left unattended or carelessly exposed at the time of the loss. • Loss of valuables left unsecured in hotel rooms. • Computers, cameras, sporting or audio equipment, personal possessions of members of the employee family

or other non-employee, personal items not associated with the purpose for the business trip, or gifts purchased by the associate.

• Losses or damage to cars while parked in Company-provided facilities. • Personal property used as furnishings of the employee workplace.

Foreign Currency Expenditures When an employee exchanges one currency for another as part of a foreign business trip, the employee must obtain an exchange receipt and submit it with the Expense Report to support the rate used in translating foreign currency to a home currency. Fees charged for currency exchange are reimbursable as evidenced on the transaction receipts. Foreign currency expenditures not supported by exchange receipts will be translated at the Bank rate existing at the month-end prior to the expenditure. When an employee uses his/her credit card to settle bills, and the billing has not been received from the credit card company, the employee may translate foreign currency at the same rate at which the local currency was obtained. Miscellaneous Reimbursable Expenses

• Taxis • Tolls • Reasonable gratuities, ideally this must not exceed 15% of the bill value. • Foreign exchange rate fee • Parking • Telephone calls • Excess baggage (for business reasons or trips over 14 days) • Mini bars (excluding alcohol) up to US$10 per day. • Faxes

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• Postage • Overnight Delivery • Reasonable dues and subscriptions • Travelers check fees • Visas

Miscellaneous Non-Reimbursable Expenses

• Baby-sitting • Airline club dues • Country club dues • Traffic fines • Personal entertainment • Cellular phone rentals • Personal entertainment events at conferences (such as golf, tennis, etc.) • Personal items of service (such as salon service, shoe shine, toiletry items) • Medical and dental care insurance • Holiday cards • Family medical examinations • Eyeglasses, contact lenses or optical equipment • Kennel fees • Laundry and valet charges while traveling less than 4 days • Clothes • Passports • Magazine subscriptions • Late fees for credit cards • Health spas and massages • Credit card membership fee for points

Preparation of Expense Reports Expense Reports are to be completed on a weekly or trip basis by the employee and submitted for approval and reimbursement. It is be dated and signed before eng approved by the employee’s Head of Department. The report is then to be submitted to the Accounting Department. Relocation expenses must be submitted on a separate Expense Report. Reimbursement of all Expense Reports must be processed through account payable. Hotel bills can be listed as a total amount but the purpose of each item on the bill must have a written explanation on the bill i.e. meal and which meal period, entertainment with the requirements above, and all other items not reasonable recognized. Actual receipts are required for all items on the report except mileage and tips. Photocopies will not be acceptable. Individual Guest Checks on hotel bills are not required. Approval The General Manager and Financial Controller will approve all reimbursement all expense claims for hotel personnel. The Regional Managing Director must approve expense claims for the General Manager. Reference: Travel Authority Form

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TRAVEL AUTHORITY FORM No.___________________

Details of Traveler (Blocks) Full Name (as per passport/ID card) Position Department

Date of Visit

Reason for Visit

Date of Return

Departure Point

Destination Please choose one of the following options: Business Business & leisure

Journey From Journey To Date Time Class of Travel Preferred Flight Details Estimated Cost £

Is this the cheapest fare available on the given route? Please tick Y N

If no, which flight options were you offered as alternatives?

Please state why the cheaper option(s) are not suitable

Is a travel advance required Please tick Y N Details of Hotel & Miscellaneous Expenses Estimated Cost Details of Hotel & Miscellaneous Expenses Estimated Cost

Estimated total cost of travel (excl airfare) THB Confirmed by: Department Head Authorized by: Financial Controller (for advance) Approved by: General Manager

Signature Signature Signature

Name Date Name Date Name Date

Position Position Position

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Subject: Prepaid Expenses Department: Finance Reference # EXP 105 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 105 PREPAID EXPENSES POLICY In general, prepaid expenses represent payments for items, goods, or services that benefit future operating periods. Normally, the amounts are changed to operations based on when the benefits are received. Examples include, but are not limited to: insurance property taxes property assessments, dues and subscriptions, interest maintenance, and other similar items. Since prepaid expenses represent payments in advance for items, goods or service, and therefore have a financial impact on the available cash funds of the hotel careful consideration must be exercised before such expense is incurred. It is U Hotels & Resorts’ policy to adhere to standard acceptable accounting procedures in the recording procedures in the recording and expending of prepaid items. PROCEDURE 1. Expenses that benefit future operating periods are normally recorded in Prepaid accounts A worksheet is

maintained for each expense and includes the following information the payee, explanation of the prepaid (e.g., annual maintenance contract, operating licenses, etc.), benefit period ,the amount paid, the months in which the expense is spread, the monthly expense, the year-to-date expense and the balance to be carried over to the next year applicable.

2. A copy of an invoice or billing must be filed in a Prepayment File for ease of reference. At the beginning of the year, items carried forward from a prior year must also be documented.

3. Expenses are applied in accordance with the term of the prepaid item (i.e., dues and subscriptions are expended in the months they benefit, etc.). At the end of each month, a journal entry is made to recognize a prepaid expense by debiting the applicable expense and crediting the prepaid on a reversing journal.

4. The following is a list of items that can be prepaid: • Prepaid Advertising • Prepaid Dues & Subscriptions • Prepaid Insurance • Prepaid Licenses & Permits • Prepaid Maintenance Contracts • Prepaid Property Taxes

5. All items coded to Prepaid must be approved by the Financial Controller. It is his/her responsibility to ensure that item coded to a prepaid account are appropriate and fully supported by backup in the prepayment file.

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Subject: Receiving Department: Finance Reference # EXP 106 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 106 RECEIVING POLICY All goods received must be checked and verified against an approved Purchase Order. This will ensure that the hotel receives exactly what was ordered. Only a Manager or trained Receiving Clerk may receive items. PROCEDURE

1. A copy of each approved Purchase Order will be kept by the Receiving Department and the ordering Department Manager until the goods arrive.

2. It is recommended that all deliveries of goods and services be made thru the Receiving Area. 3. The Receiving Department will notify the ordering Department Manager or Assistant Manager of the delivery. If

he/she is not available, the Supervisor on duty should be notified. 4. The receiving individual will take the receiving document, packing slip or bill of lading and compare it to both

the Purchase Order and the gooks received to ensure the goods ordered are those received. 5. All goods should be physically inspected.

• Good are to be accepted only if the quality meets our written specifications. • The receiving individual should physically check to make sure everything appearing on the receiving

document/packing list is actually delivered by checking off the items as they are reviewed. This means counting cases.

• Cases should be opened on a random basis to check for quality, breakages and quantity. 6. In the case of shorted goods or returned goods, the receiving document/packing slip/bill of lading should be

signed only after the following steps are taken: • Shorted goods – these are goods appearing on the invoice that are not delivered. “ITEM NOT

DELIVERED” must be written next to the item and the receiving document/packing slip should be adjusted to reflect the changes. Also ensure it is signed and acknowledged by the delivery person.

• Returned goods – these are goods appearing on the invoice that were not ordered or do not meet our specification. “ITEM RETURNED” must be written next to the item and receiving document/packing slip should be adjusted to reflect the changes. The receiving individual should tell the delivery person that we do not accept these goods and obtain signed acknowledgement from the driver.

7. The Receiving Department should retain the receiving document/packing slip until the invoice is received. At this point, the receiving document/packing slip should be attached to the invoice as support before the invoice is stamped and coded. Refer to Standard Operating Procedure – Accounts Payments for additional instructions.

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Subject: In-House Functions Department: Finance Reference # EXP 107 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 107 IN-HOUSE FUNCTIONS POLICY Through the normal course of business, the Hotel may host in–house events or meetings for its clients, owners, investors or employees in–house. All in–house functions must be planned with specific objectives and returns in mind. All costs associated with these events shall be recorded on a “cost” basis to the hosting department in accordance with the following procedures. This policy excludes Intercompany events/meetings which are charged and covered by Revenue Policy REV-117. PROCEDURE 1. A Banquet Event Order (BEO) must be generated by the Catering Department for all in–house functions. The

BEO should schedule all of the associated costs, whether generated in–house or outsourced. This should include any associated props or decorations.

2. All items on the BEO must be priced at “cost”. 3. Employee service charges should be negotiated on a “flat” fee basis where possible. This practice may differ from

hotel depending upon the local market. 4. The completed BEO must be routed to the General Manager for acknowledgement and approval. Once

approved, the BEO should be distributed accordingly. 5. Upon completion of the function and prior to each month end, every BEO must formally be recorded. All food

and beverage items should be totaled and credited to a sub-account of food or beverage cost. The appropriate service charge and taxes should be calculated and credited to their respective liability accounts. The off-setting balance should be expensed to the sponsoring department. Under no circumstances should any labor or other related expenses be allocated to another department. All costs associated with these events shall be recorded on a “cost” basis to the sponsoring department.

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Subject: Accruals Department: Finance Reference # EXP 108 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 108 ACCRUALS POLICY Proper recognition of period expenses requires reasonable estimation and accrual of certain operating costs. It is U Hotels & Resorts policy that all expense accruals are based on reasonable, supportable data that is independently formulated or otherwise confirmed as to accuracy the Accounting organization. All expense accruals should be made via a reversing journal entry, with any prior month under/over accruals being recognized in the current period. PROCEDURE 1. Payroll and Employment Related Accruals

Payroll may represent the most significant operational expenses item that you would accrue each month. The payroll accrual must be accurate in order to properly evaluate period labor expenses. Accordingly, the following specific guidelines are to be followed when computing the accrual: • Payroll Costs - by utilizing your approved Time & Attendance System generated data for hours/payroll cost,

the reversing accrual should be recorded on a departmental basis so that all regular and overtime payroll costs will be accurately accrued.

• Direct Payroll Benefit costs such as employer related taxes should be accrued along with wages. The journal entry should clearly indicate the method of determining taxes

Other Employment Related Entitlements may also represent the significant operational expenses item that you would accrue each month. The Financial Controller must be aware of the local statutory laws that regulate employment entitlements. These Employment Related items must be accurate in order to properly determine future liability based on current period accrual of benefit. Accordingly, the following specific guidelines are to be followed when computing the accrual: • Vacation and Other Leave Entitlements – by utilizing the Payroll records to generate the YTD unused

entitlement in number of days and applying a daily payroll rate. • Retirement Entitlements - where this is not covered by Provident or Pension Fund, by utilizing the Payroll

records to generate to determine the length of service, period until retirement and estimated payment at retirement age (for example in Thailand the accrual to commence 5 years prior to retirement and accruing monthly until retirement age)

Every 3 Months, the Financial Controller must conduct a detailed review of the Employment Related Accruals compared to the supporting records from Human Resources Department.

2. Energy Accruals Energy represents a significant cost to the hotel, thus accruals for his expense require close scrutiny and review by the Financial Controller. By far, the most reliable basis for such accruals is achieved through independent meter readings at period end, coupled with an accurate reporting by engineering of usage costs (kilowatts x base rate, variable costs for peak demand, etc.).

3. Guest and Administrative Communication Accruals Guest communications costs should be accrued monthly based on your budgeted or YTD (or expected based on call accounting) percentage costs of sales to the respective period communication revenues.

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Accruals for administrative telephone calls may be established typically via your call accounting system, or in lieu of this, by historical average costs for direct phone lines, or by reference to manual telephone logs.

4. Accruals for Month-end Deliveries Goods may be received at the hotel prior to month end, and have no accompanying invoice. Accruals must be supported by written documentations. In such cases, use item costing data directly from the purchase order to record your accrual, including a provision for freight, taxes, etc. No expense (or inventory) accruals should be recorded for goods not yet received at the hotel, even though they were "ordered" or "budgeted" or "forecasted" to be expended during the current period.

5. Taxes, Insurance, Leases, etc. For service type contractual payments (leases, maintenance contracts, etc.), or other similar recurring obligations accrual of such expenses in lieu of the monthly invoice is proper and required. Likewise, accruals for taxes and insurance may be necessary when such costs are billed annually, yet in arrears of the current period.

6. Advertising/Brochure Contributions Advertising and Brochure Contributions can sometimes be committed well in advance to secure the space. Advertising should be committed through the Purchase Order system so that effective budgetary control and adequate accrual can be implemented. Brochure Contribution will generally be negotiated with Tour Operators once a year and can be supported by approved Tour Operator agreements.

7. Miscellaneous Expenses that are known to have been incurred in the month or the accrual is supported adequately either through systems reports or otherwise and is an expense for the month, must be accrued. Examples of these are: Travel Agent Commissions, Group commissions, Linen Cleaning, out booking costs, Central Reservations charge, Travel Expenses, Bank charges, Credit Card Commissions, etc.

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Subject: Deferred Expenses Department: Finance Reference # EXP 109 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 109 DEFERRED EXPENSES POLICY Certain expense items require periodic replacement and are of a nature whereby their expenditures benefit more than just one accounting period. Under situations provided below, the costs of certain expenditures may be amortized over future periods depending on the materiality and type of item(s). PROCEDURE 1. At the time of purchase, the Financial Controller and Divisional Head shall estimate the period during which

the material will be effectively utilized, but not more than one year. The cost shall be charged to Deferred Expenses under Current Assets and amortized by equal monthly installments over the estimated useful life. However, in order for an expense to be classified as Deferred, it must have a useful life beyond the current month and the invoice amount must be at least US$1,000. All other expense items, invoices, requisitions, etc., are to be recognized in the period of receipt, requisition, etc., as required under normal circumstances.

2. The Financial controller will maintain proper work papers, inclusive of invoice copies, to document the transaction and respective write-offs over the useful life of the items.

3. If at any time during the period of amortization the items are deemed obsolete (i.e., a menu change occurs within the former menu's six-month write-off period), the remaining balance, if any of the deferred expense will be written off in the period of such change.

4. Expenses for the following items may be deferred if in excess of US$1,000 and material in regards to the revenue it generates but may not be amortized beyond the number of accounting periods indicated: • Brochures - 12 months • Menus or Wine Lists - 6 months (or menu change) • Uniforms -12 months only for re-uniforming due to design or concept change.

Replacement of uniforms due to wear should be fully expensed in the period of replacement. Periodically, a review shall be made of the unamortized balance and adjustments made, if appropriate.

5. Quantities of stock may be held in the store room at a zero-inventory value and control exercised by following normal requisitioning procedure, including approval by the appropriate department head. All deferred expenses are not to be included in stock. Any other deferred expenses (beyond a year) must be agreed by the Regional Managing Director and Regional Finance leader in advance.

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Subject: Travel Agent Commissions Department: Finance Reference # EXP 110 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 110 TRAVEL AGENT COMMISSIONS POLICY U Hotels & Resorts recognize the extremely important contribution that travel agencies make to our business and ensure prompt and fair payment for bookings. PROCEDURE Payment Processing Travel agent commission must be processed for payment within seven days of guest checkout. Payments must be made as soon as possible thereafter. A copy of the guest folio/evidence of the reservation must be attached to all travel agent commission payments. Commission percentages must be reviewed before payment is made. Travel agent input, processing and payment functions must be segregated.

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Subject: Segregation of Duties Department: Finance Reference # EXP 111 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 111 SEGREGATION OF DUTIES POLICY U Hotels & Resorts recognizes the extremely importance of segregating duties so that the function is operated independently and cannot influence each other. PROCEDURE Purchasing must be independent of the receiving, storeroom control and accounts payable functions. If not, adequate controls should be in place to mitigate any risk. The receiving function must be separate from the purchasing, accounts payable and inventory function; however, not all hotels have enough staff to allow this. In this case the Hotel Controller should establish alternative or preventive or compensating controls to safeguard assets and ensure correct accounting. Alternative controls must be documented.

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Subject: Staff Loans and Advances Department: Finance Reference # EXP 112 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 112 STAFF LOANS AND ADVANCES POLICY It is not U Hotels & Resorts policy to provide advances and loans to employees PROCEDURE 1. Loans

Employee loans are strictly forbidden in normal circumstances. 2. Advances

It is company policy to minimize all fund advances to employees. Advances to employees must be maintained in a separate account. The account must be reconciled monthly. All advances must be cleared in the month following the advance. Payroll advances are not allowed at any time Travel and Expense advances may not be issued unless the circumstances warrant it. Relocation advances are prohibited. All expenses should be claimed on the employees’ relocation expense summary.

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Subject: External Consultant and Service Department: Finance Reference # EXP 113 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents EXP – 113 EXTERNAL CONSULTANT AND SERVICE OVERVIEW It is U Hotels & Resorts policy to minimize the use of external consultants and services by utilizing internal staff. POLICY In cases where using the services of consultants is deemed necessary, prior approval is required (does not include CAPEX design fees / Architect fees as this is approved as part of the CAPEX project process). Approval levels are as follows:

Consultant Cost Required Final Approval

Up to $4,000 General Manager

Over $4,000 Regional Managing Director

All agreements regarding consultants shall have terms of no longer than one year. For services required beyond one-year, annual review and approval must be obtained. Former U Hotels & Resorts Hotel Employees The corporate office must approve use of former employees as consultants. External Services External services are used when these are not available internally and are generally of an advisory nature. The service is usually required for projects that do not justify permanent personnel.

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SECTION 7

INTERNAL CONTROL OVER FINANCIAL REPORTING

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Subject: Financial Reporting Standards Department: Finance Reference # REP 100 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 100 FINANCIAL REPORTING STANDARDS POLICY All General Managers, with the assistance and direction of the Financial Controllers, are responsible for maintaining operational financial reporting in compliance with the standards. PROCEDURE All financial reporting methods and formats will comply with industry standards as detailed in the following publications: 1. Uniform System of Accounts for the Lodging Industry published by the American Hotel and Motel Association. 2. Generally accepted accounting principles. 3. U Hotels & Resorts Standard Operating Procedures. 4. U Hotels & Resorts Chart of Accounts.

Financial controllers are responsible for resolving financial reporting contradictions and are expected to consult with the Regional Finance leader regarding issues or omissions that affect the integrity of the property’s financial statements. It is the responsibility of the Regional Finance leader to specify and make available to the Financial Controllers sufficient reference documents, materials, equipment and resource support to maintain financial reporting integrity.

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Subject: Journal Entry Standards Department: Finance Reference # REP 101 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 101 JOURNAL ENTRY STANDARDS POLICY Journal entries support postings to the general ledger and will be prepared on a consistent basis, have adequate explanation and support, and be clearly referenced to the general ledger accounts affected. PROCEDURE 1. Paramount to accurate and supportable financial results is a clear reference from the original books of entry, the

general ledger, subsidiary ledgers, etc., to the supporting journal entries. 2. The general ledger should at all times be adequately safeguarded from perils such as fire, accidental erasure,

intentional damage or destruction, etc. and be maintained as a permanent record in support of the financial activities of the hotel.

3. Financial Controllers will carry out a consistent methodology of journal entry preparation, including support and analytical explanation, and ensure the following minimum standards are maintained at all times: • All entries will include the account numbers being affected, account description (abbreviations are

acceptable), currency amount(s), and included a clear, written explanation of the intended purpose of each entry. Support for the entry could be in either supporting, subsidiary details (inventory listings, for example), or analytical calculations appearing on the journal entry form, such as the computations in support of the monthly accrual entries.

• The Financial Controller is responsible for ensuring that all manual journals to the general ledger are adequately reviewed prior to closing each financial period. Approval of each entry would be denoted by the Financial Controller’s signature on the respective journal entry form.

• Once “entered” in the general ledger, the bottom-most entry on the journal entry form will be stamped as entered directly below that last entry, the entered stamp indicating that all entries above the stamp were successfully entered into the general ledger accounts. The employee developing and entering such entries will be clearly denoted on the journal entry form.

4. All journal entries are to include a proper cross-reference to the general ledger accounts being affected through use of a numerical entry control scheme.

5. Recurring entries may be recorded either via a standard journal entry. For example, the “reason” and local currency amount may be repetitive throughout the year, thus creation of original entry each period may be time consuming. However, use of such standard entries does not relieve the written approval requirement of the Financial Controller.

6. Any entries not having an “entered” stamp or adequate explanation or support must be reported immediately to the Financial Controller for corrective action prior to final closing. Where available, use of computer-generated edit reports that are attached to the journal entry will simplify the review process.

7. Journal entries, and their related attached supporting details, should be securely bound in individual, monthly folders and be maintained under locked drawer (or cabinet) security in the Financial Controller’s office, becoming a permanent record of the hotel. Each folder should contain a journal entry reference index affixed in the front of the file, for ease of reference to the support entries.

8. The period end files must be available for audit purposes for 12 months, and not removed from the Financial Controller’s office.

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Subject: Food and Beverage Intra - Department Allocation

Department: Finance

Reference # REP 102 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 102 FOOD AND BEVERAGE INTRA – DEPARTMENT ALLOCATION POLICY Financial Controller is responsible to ensure that Food & Beverage overhead department costs be allocated to the revenue outlets on a reasonable basis and be consistently applied and in order that the outlets reflect an accurate profitability. PROCEDURE Financial Controller, Food and Beverage Director and Executive Chef must agree in the allocation of Food & Beverage overhead expenses on a reasonable basis. In the event of disagreement if the allocation basis, the Financial Controller and if necessary, the General Manager must decide on the appropriate charge basis Overhead expenses which can be specifically identified should be charged directly to the relevant revenue outlet. This would include the payroll of a satellite kitchen where the chefs work solely for that outlet. A separate outlet profit center should be established for each Food & Beverage overhead department to record overhead expenses which cannot be specified identified to a particular revenue outlet. Relevant expense should be charged to these departments, for example where there is a central kitchen servicing several outlets. At month-end as part of the financial statement preparation, an allocation for the total expenses of each overhead department should be made to their respective revenue outlets. The overhead departmental statement would reflect all individual account expense categories, with the allocation to revenue outlets shown as a credit either in total re detailed by outlet, resulting a zero departmental income.

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Subject: Allocation of Shared Expenses Department: Finance Reference # REP 103 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 103 ALLOCATION OF SHARED EXPENSES POLICY It is the policy of U Hotels & Resorts to encourage the responsibility of individual managers for departmental profitability in producing financial statements. Accordingly, only expenses which are material in value and benefit more than one department should be allocated on a clearly identifiable and consistent basis. PROCEDURE Then entrepreneurial approach of managers should be encouraged; however, with respect to allocation, it must be realistic, material, within the policies and procedures, account dictionary guidelines and generally accepted accounting principles, and be applied on a consistent basis. During Annual Operating Plan preparation, all Division Heads shall agree in the allocation of shared expenses on a reasonable basis. In the event of disagreement if the allocation basis, the Financial Controller and if necessary, the General Manager shall decide on the appropriate charge basis There are many areas in which departments have to work together. If comprehensive and detailed allocation or cress-charging is to be carried out, it would result in unwieldy and time-consuming administration for little overall benefit. Examples include: Security: if an outside Contract includes a specific allocation to a particular position, such as a Nightclub doorman, then this portion should be charged to the department. For general patrolling and common areas, the expense should be charge to Administrative & General. Lobby Entertainment could be allocated between Rooms and a Food & Beverage outlet, if there is a benefit to both. It is recommended that the expenses that ate to be shared by many departments and the base of allocation should be standardized in each region.

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Subject: Laundry Department Accounting Department: Finance Reference # REP 104 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 104 LAUNDRY DEPARTMENT ACCOUNTING POLICY It is the policy of U Hotels & Resorts that the costs charged out to the user departments from an In-House laundry department should be on a predetermined reasonable unit cost basis. Financial Controller is responsible to ensure that the operating department’s laundry costs vary in line with business levels and that the laundry department receives a fair credit for cost incurred in serving the departments. PROCEDURE Each hotel must determine its own reasonable unit cost based on the local situation. 1. The unit if measure should be determined and normally would be the number of individual pieces of linen,

uniform, etc. An alternate system would be based on weight. 2. The total number of pieces is determined based on past actual or forecast for each division. 3. Of the total Laundry department expenses, the combined cost of sales for guest services needs to be determined

in a reasonable basis. This could be calculated based on estimated time and thus payroll costs, chemical usage and other relevant factor. A less accurate basis would be to take the traditional 60/40 split. The difference between the total costs and the guest cost of sales is thus the total in-house cost.

1. A unit price is obtained from external contractor. 2. A unit cost per piece for in-house is then calculated by prorating the total in-house cost with the number of units

as determined in point 2 and the external contractor pieces per point 4. 3. At month end, each department shall be charged based on the number of pieces laundered times the unit costs,

there by reflecting an accurate cost based on actual volume. The remaining unapplied cost is thus the guest cost of sale percentage may fluctuation on a monthly basis with the volumes of business but by year end should be in line with the budgeted cost percentage.

4. When this procedure is first introduced, the unit costs charged should be adjusted, if necessary, on a monthly basis until both the laundry department achieves a reasonable profitability and the departmental charge is acceptable. Thereafter, the unit costs should be applied on a consistent basis.

5. There should be an annual review of the unit costs, normally at the tine if the Annual Operating Plan preparation. As an alternative to estimating the total guest services cost per point 3 and the determining the in-house unit costs as above and per the example, the guest costs could be calculated by also estimating the number of guest items and obtaining contractors’ prices, then including these in the overall prorate calculation per point 5. The total guest cost element and the individual in-house unit costs would thus be established. The unit guest costs determined in this manner would not be used in calculating the guest cost of sales as this would still be the unapplied balance if total monthly costs less in-house charges.

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Subject: Statement of Financial Position Reconciliations Department: Finance Reference # REP 105 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 105 STATEMENT OF FINANCIAL POSITIONS RECONCILIATIONS POLICY All Statement of Financial Position accounts are to be reconciled to supporting detail and account in General Ledger on a monthly basis and reviewed by the Financial Controller for accuracy. The Financial Controller’s signature or initial is required on all reconciliations as evidence of review. PROCEDURE Each Statement of Financial Position account will be reconciled monthly. The reconciliation process consists of agreeing balances to supporting detail and making correcting journal entries to clear incorrect items. Individual account reconciliations will be maintained in separate year-to-date file folders or binders. Whenever possible, schedules should be maintained utilizing spreadsheets or other computer-generated formats. Reconciliation folders will include substantiation for all current account balances. Examples of substantiation include: 1. Floats

Current copy of General Cashier’s float contract and recap of floats issued from his/her float and also, a copy of the most current audit of the General Cashier’s float.

2. Bank Reconciliation Current copy of bank reconciliation.

3. Accounts Receivable (Guest Ledger and City Ledger) Copy of current month subsidiary ledger or listing as generated by the property’s PMS system. Debtor Aging and Debtor Ledger, Guest Ledger & City Ledger, in PMS system and control account in General Ledger must be balanced on a regular basis, and that any discrepancies should be investigated and adjusted accordingly.

4. Reserve for Bad Debt Copy of calculation based on the month-end ageing balances as per U Hotels & Resorts Finance Policy.

5. Inventories Copies of current month extended inventory listings. Where listings are computer-extended, then original count sheets should be included. Inventories Aging and Inventory balance report in Inventory system and control account in General Ledger must be balanced on a regular basis, and that any discrepancies should be investigated and adjusted accordingly.

6. Prepaid Prepaid schedules depicting the required general ledger balances for all future periods affected. Copies of invoices should be attached to substantiate all current year additions.

7. Security Deposits Itemize in detail of what deposits represent, the expected return date, vendor and amount. Copies of cheque vouchers and agreements should also be attached. All deposits should be verified with the vendor annually with written affirmation kept on file.

8. Fixed Assets/Intangible A reconciliation of the balance between the fixed assets/intangible register and control account should be carried out on monthly basis to ensure the correctness of accounting data.

9. Trade Payables

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Copy of current month-end Accounts payable outstanding item listing. The balance in this account should equal amounts owed to vendors at the end of the accounting period and the Account Payable Aging and Account Payable Sub Ledger. Any difference should be investigated and reconciled.

10. Advance Deposits Current month listing of all outstanding deposits which relate to future periods.

11. Accruals All accruals should reflect the calculation used to create the current month balance. All accruals for goods and services received but not yet invoiced must be supported by receiving documents, purchase orders and/or similar documentation. Accrual balance in the detailed report should be agreed each month with that in the account in General Ledger. Any difference should be investigated and reconciled.

12. Tax Value added Tax Financial Controller must prepare reconciliation between the sales amount per the general ledger and per the VAT accounts to avoid any disputes with the tax authorities and to ensure the correctness of both accounting data and the calculation of monthly VAT, that a reconciliation between the sales amount per the general ledger and the VAT return be prepared on a monthly basis, in addition to the reconciliation of the VAT accounts. Payroll Tax Liabilities. The amounts in these accounts should equal amounts withheld from employee paychecks as well as the employers’ portion of the expense for the period, which has not been remitted to the government authorities. Other taxes. Any tax balance accounts, a reconciliation of the balance between the register and control account should be agreed on monthly basis to ensure the correctness of accounting data. Any difference should be investigated and reconciled.

13. Other Accounts Payroll Financial Controller in conjunction with Human Resource Department must prepare the payroll reconciliation. Such reconciliation is a good measure to help ensure that no salaries / payroll is paid to staff who have already resigned or are on leave without pay, and additionally makes sure that the resignation or hiring of staff is brought to management attention. Such reconciliation would help to explain to management the reasons for fluctuations in salaries and payroll from month to month, and accompanies the payroll summary when it is sent for management review and approval. All other Statement of Financial Position accounts not supported by a PMS-generated report or a calculation used to estimate the balance should have details of the month-end balance scheduled out each month. Other Accounts balance in the detailed report should be agreed each month with that in the account in General Ledger. Any difference should be investigated and reconciled. All hotels should have a minimum of a yearly Statement of Financial Position review performed by their Regional Finance leader or designate or internal audit. This Statement of Financial Position review must be documented for audit purposes.

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Subject: Financial Statements Analysis Department: Finance Reference # REP 106 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 106 FINANCIAL STATEMENTS ANALYSIS POLICY Statements of Financial (e.g. Statement of Comprehensive Income and Statement of Finance Position and etc.) are to be analyzed by the Financial Controller as well as the related department heads to closely monitor the hotel performance on monthly basis and report appropriately. Ratio and Variances (both favorable and unfavorable) analysis will be reported to management. Action plans are to be developed and approved. PROCEDURE 1. Ratio Analysis

In analyzing Financial Statements for the purpose of monitoring the hotel performance, Financial Controller must calculate the financial ratios in each of the principle categories include, but are not restricted to, for each month / each quarter and year to date as the following.

2. General Ratios Liquidity Ratios: To assess the ability to pay short-term debts • Current • Quick • Account Receivable Turnover • Collection Period • Operating Cash Flows to Current Liabilities • Working Capital

Solvency Ratio: To assess the ability to pay long-term debts • Solvency • Account Payable Turnover • Payment Period • Debt to Equity • Debt to Assets • Operating Cash Flows to Total Liabilities • Time Interest Earned

Activity Ratio: To assess the ability to effectively utilize assets • Inventory Turnover • Property and Equipment Turnover • Total Asset Turnover

Profitability Ratio: To assess the ability to create a return form owner • Profit Margin • Gross Operating Profit Margin • Return on Assets • Return on Equity • Earnings per Shares

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3. Hospitality-Specific Ratios Room Division Ratios • Occupancy Percentage • Average Daily Rate (ADR) • Revenue per Available Room (RevPAR) • Room Payroll per Occupied Room • Room Other Expenses per Occupied Room • Cost per Occupied Room (CPOR)

Food and Beverage Division Ratios • Food Cost Percentage • Beverage Cost Percentage • Average Sales per Guest (Average Check) • Food and Beverage Payroll per Cover • Food and Beverage Other Expenses per Cover • Seat Turnover

4. Variance Analysis For current account balance with 10% fluctuation from budget/forecast or previous year, Financial Controller must do the analytical review and investigate any unexpected changes (or the absence of expected changes).

5. Ratio and Variance Analysis will be reported both quantitative and qualitative information in WRITTING to the attention of General Manager and the related department heads for final resolution, and then forward to Regional Managing Director and Regional Finance leader for consideration.

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Subject: Intercompany Billings Department: Finance Reference # REP 107 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 107 INTERCOMPANY BILLINGS POLICY Intercompany billings from and management fees due to U Hotels & Resorts entities should be recorded monthly, with payments being forwarded on a monthly basis. The Intercompany account should be reconciled each period and provided to corporate accounting on a quarterly basis. PROCEDURE Monthly billings from the corporate office must be paid in full by each hotel each month. Payments for monthly billings and management fees should be sent to corporate accounting. All payments for management fees and reimbursable require proper posting in the financial statements in accordance with the provisions of the management agreement. If any items on the billing appear incorrect, a memo detailing such items should be sent to corporate accounting along with the payment for the adjusted billing. The disputed items will be researched and corrected on the following month’s billing.

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Subject: General Ledger Account Approval Department: Finance Reference # REP 108 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 108 GENERAL LEDGER ACCOUNT APPROVAL POLICY U Hotels & Resorts will maintain consistency of its financial reporting structure by utilizing one Chart of Accounts throughout the system. In the event new accounts need to be added to enhance reporting or meet specific owner/management requests, the following procedure will set forth the guidelines for account/chart additions/modifications. PROCEDURE When it is deemed necessary to track certain information, and therefore establish a new account, the “SOP New / New Nominal Code / Exception Request Form” must be completed and forwarded to the Regional Finance leader for review and approval. Once all approvals are final, notification will be sent to all properties informing them of the addition. The account will then be added, immediately, by all hotels.

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Subject: FC Monthly Checklist Department: Finance Reference # REP 109 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 109 FC MONTHLY CHECKLIST POLICY The monthly financial performance of each hotel must be reviewed in a manner, which identifies and communicates pertinent issues to senior management. PROCEDURE 1. Each month the Financial Controller will review the “Financial Controllers Checklist” (per attachment) with the

General Manager. Both the Financial Controller and General Manager must sign the monthly checklist as acknowledgement of this review. Items not completed should be noted, listing completion date.

2. The monthly checklist must be kept in the front of the period end file for audit purposes. 3. This checklist should be submitted by the 10th of each month to the Regional Managing Director and Regional

Finance leader. Reference: Financial Controllers Checklist

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FINANCIAL CONTROLLER MONTHLY CHECKLIST

Hotel Name Month Ending:

Item Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

1 All control deficiencies identified during the last internal and external audit have been remediated by the date specified in the management responses to the audit report.

2 All journal entries have been reviewed, approved, signed and dated by both the preparer and reviewer and supporting documentation was attached or referenced.

3 All statement financial of position and bank reconciliations have been prepared, reviewed, signed and dated using the standard form with supporting documentation was attached.

4 All cash floats and takings drops were independently counted\verified during the month.

5 House bank contracts and personal guarantees are valid and up to date. 6 All cash takings have been deposited daily. 7 All credit card credits have been checked daily by someone independent of credit card

processing. 8 All receivable sub ledgers (City Ledger, Guest Ledger, and Advance Deposits) detailed

listing agrees to their general ledger accounts. 9 Each item in the City Ledger and Guest Ledger has been reviewed for accuracy

(including PM folios) and any non-collectable charges have been adjusted by month end accordingly.

10 All Inter-company and Management Company accounts (i.e., AHS) have been reconciled and any disputes communicated.

11 All rebates have been approved by the relevant Department Head and countersigned by the Controller.

12 A monthly credit meeting was held and minutes were prepared, signed and dated. 13 All pricing has been approved in accordance with the policy 14 Checking of room rates is conducted daily and packages have been broken down

accurately and loaded into the PMS correctly. 15 All No-show, cancellation and guaranteed booking charges have only been recorded to

revenue as received. 16 All Barter amounts have been approved and have been recorded as per policy. 17 All prepaid expenses have been written down in accordance with the term of the

expense item and closing balance matches to the unexpired period. 18 All other receivable accounts have been checked for accuracy 19 All physical inventory counts have occurred including an independent witness, and they

balance to the GL. 20 The detailed vacation accrual report agrees to the general ledger and was reviewed for

withdrawn (terminated or transferred) employees. 21 All gratuities and/or service charges have been distributed according to the approved

hotel policy. 22 All VAT, Withholding Tax and Other tax returns have been reviewed prior to

submission and no late payment penalties have been incurred. 23 All Travel and entertainment claims have been prepared and approved in accordance

with policy 24 Taxes are properly accrued based on the last tax payment made or substantiated

estimates of future amounts payable. 25 Invoices are matched to an approved purchase order and receiving report, where

applicable. 26 All contracts, agreements or leases (other than sales contracts) have been entered into in

accordance with policy. 27 All Capital Expenditure purchases and disposals are recorded in accordance with policy 28 All complimentary rooms have been approved by the General Manager 29 All bonus & incentive accruals have been reviewed and adjusted at least monthly. 30 Critical Date Listing has been prepared and submitted 31

Fixed Asset Register has been reviewed to ensure accurate recording. 32

All IT Backups have been completed and restored 33 OPE Physical Inventory has been conducted and adjustments made 34 The provision for doubtful accounts was calculated and adjusted per credit policy. 35 Inventory of Master Keys has been conducted 36 Guest Safety Deposit Box audit has been completed 37 All licenses and permits are current 38 Management Contract Synopsis has been completed 39 All Staff Incentive Programs have been approved in accordance with the policy 40 All accruals/reserves are reviewed at least quarterly to determine adequacy; excess

reserves are reversed in the period the obligation is no longer probable & estimateable. Comments

Signed: (Controller) Date Signed: (General Manager) Date

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Subject: Internal Control Checklist Department: Finance Reference # REP 110 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 110 INTERNAL CONTROL CHECKLIST POLICY The Financial controller will ensure the standard operating procedures detailed in this manual are operating effectively by performing self-audits twice a year. PROCEDURE 1. The Internal Control Checklist was developed to provide a tool for self-auditing of the controls and operating

procedures defined in the Accounting SOP manual. Each section is referenced to the related SOP contained in this Accounting manual.

2. Half yearly, the Financial Controller will conduct a “self-audit” of the current procedures and controls by fully completing the enclosed checklist. The Financial Controller will review the completed checklist with the General Manager.

3. Completed copies of the checklist are to be forwarded to the Regional Finance leader by the 20th day following each half-year end. Copies should be maintained on property for a minimum of 12 months, as they may be needed for reference and follow-up by the Regional Finance leader during periodic visits to the hotel.

4. The Internal Control Checklist is a tool to ensure that the hotel is in compliance with the Accounting Standard Operating Procedures. Use this opportunity to determine the training needs of your employees, then immediately follow-up with the required policy and procedure training in order to ensure your hotel remains in compliance.

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Subject: Statement of Financial Position Reviews Department: Finance Reference # REP 111 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 111 STATEMENT OF FINANCIAL POSITION REVIEWS POLICY The Regional Finance leader will conduct Statement of Financial Position Reviews in the hotels in his region on an annual basis. PROCEDURE 1. The Regional Finance leader will notify the Financial Controller of his intention to perform a Statement of

Financial Position Review no sooner than two weeks before the planned date. 2. The Financial controller will ensure that all necessary documentation is available to the Regional Finance leader

at the time of the meeting. 3. Any follow up items will be agreed during the meeting and an action schedule will be prepared and agreed

between the Regional Finance leader and Financial Controller.

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Subject: Internal Audit Department: Finance Reference # REP 112 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 112 INTERNAL AUDIT POLICY U Hotels & Resorts will perform full internal Audits on all hotels at least every two years. PROCEDURE 1. The Financial Controller will be notified at least 2 weeks prior to an internal audit visit. 2. The Financial Controller will ensure that he/her and their staff are well prepared for the audit and that every

assistance is forwarded to the Internal Audit staff during the course of this audit. 3. The Financial Controller will ensure that they fully answer any questions that the internal auditors may have. 4. Financial Controller will agree any outstanding action points with the internal staff prior to any report being sent

to the Regional Finance leader. 5. All action points must be dealt with within the agreed time frames set out on the report.

Scope The scope of internal auditing encompasses the examination and evaluation of the adequacy and effectiveness of the organizations system of internal control and the quality of performance in carrying out assigned responsibilities. The scope of internal auditing includes the following responsibilities: 1. To review the reliability and integrity of financial and operating information, and the means used to identify,

measure, classify and report such information. 2. To review the systems established to ensure compliance with those policies, procedures, laws and regulations that

could have a significant impact on operations and reports, and to determine whether the organization is in compliance.

3. To review the means of safeguarding assets and, as appropriate, to verify the existence of such assets. 4. To appraise the economy and efficiency with which resources are employed.

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Subject: External Audit Reports Department: Finance Reference # REP 113 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents REP – 113 EXTERNAL AUDIT REPORTS POLICY All audit reports (certified financial statements) and the management letter from External auditors shall be approved by the Regional office prior to being issued. All reports should be issued within 90 days of the hotel’s fiscal year end or as specific in the Management Agreement. All of audit comments and recommendations are appropriately approved before being released. PROCEDURE 1. The draft report from the External auditors should be agreed at the property level by the General Manager and

Financial Controller, and then forwarded to the Regional Finance leader. 2. Should the Auditors indicate they intend to issue a qualification on the audit opinion, the Regional Finance

leader shall be informed immediately by Financial Controller, setting out full details 3. The verified financial statements must contain a note disclosure which presents the computation must be

presented. If adjustments are made to GOP for purposes of computing the incentive fee, reconciliation must be presented. The report should be distributed as follows;

Copies Distribution

3 Property Files

* Owning company (* as required)

1 Regional office

1 Corporate office

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SECTION 8

CAPITAL EXPENDITURE

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Subject: Definition of Capital Expenditure Department: Finance Reference # CAP 100 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 100 DEFINITION OF CAPITAL EXPENDITURE POLICY Expenditures must meet the criteria below in order to be capitalized. PROCEDURE 1. CRITERIA

Fixed Asset • A fixed asset an item must meet the three following criteria: ➢ Have an anticipated Useful life of one year or more.

• Exceed the following limits; ➢ Furniture & Equipment, US$100 per item total cost ➢ Equipment Upgrade, USD$500 ➢ Building Upgrade, USD$1,000 ➢ Refurbishment/Renovation Project, USD$1,000

• Purchase of a tangible item and not for the repairing of an existing item (i.e., the item can be removed from the premises and resold).

2. Replacement of Component Parts If an estimated job or the total invoice cost (including parts and labor) of a particular item or series of items acquired with respect to one particular job or the replacement of the following major building components is under USD$500 in aggregate, then the expenditure is considered an expense item. Example of the types of' component parts that generally are capitalized: • Heating Equipment – pumps, boilers, heat exchangers, thermostats, pressure, gauges, alarm devices and

piping. • Plumbing Equipment – pipes, meters, sprinklers, piping and fire alarm system. • Air Conditioning Equipment – compressors, condensers, motors, cooling towers, evaporating coolers,

piping. • Fire Prevention Equipment, major fire system sprinklers, smoke detectors and alarm systems.

3. Improvements If the estimated job or total invoice cost is above USD$1,000 and the expenditures will enhance the value of and extend by more than one year the useful life of the asset previously capitalized, then the expenditure should be capitalized. Remember to write off the existing asset amount. Wall paper vinyl, re-upholstery of furniture, re-plastering, replacement of chain locks, key locks, lock sets, locks and lock sets installed in new doors, or offering substantial security improvements should be capitalized if the expenditure is over USD$100 per item.

4. Repair and Maintenance The following replacement expenditures are considered maintenance, should not be capitalized and are not subject to the total invoice cost guidelines above: ➢ Repainting of buildings, pools, park areas ➢ Refinishing of furniture and glass replacement ➢ Maintenance service contracts such as grounds and landscaping, television, elevator and swimming pool etc.

Replacing of silverware or banquet service items is customarily an expense to Food & Beverage silver or utensils.

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Patching of car parks, roof repairs, waterproofing, section replacement of signage, caulking and sealing, chrome fittings such as taps, towel rails etc., toilet and toilet seats, stolen or damaged televisions, small parts for equipment, landscaping, plants, clocks, clock radios, or similar small items. Repairing of car parks, including resealing and resurfacing, will be capitalized if the expenditure includes resurfacing of the entire car park and it is not just a patch and repair project. Major roof repair, including resealing and resurfacing, will be capitalized if the expenditure includes the entire roof and it is not just a patch and repair project. Landscaping may be capitalized if it is a new or replacement of existing interior or exterior landscaping which exceeds the USD$1,000 aggregate purchase and is not seasonal landscaping, such as seasonal flowers, and has a useful life of greater than one year. Expenditures for exterior and interior painting including caulking and sealing of the building, wallpaper, refinishing furniture, plastering or reupholstering may be capitalized if, ➢ these expenditures are a part of a major refurbishment project ➢ the cost of these expenditures exceeds USD$1,000 and enhances the value of and extends the useful life

of the asset by more than one year. 5. Development

The following costs can be capitalized for new hotel construction or conversion of an existing hotel to an U Hotels & Resorts brand. • Land

Purchase of land, lease costs, landscaping costs. • Developer’s Fees

U Hotels & Resorts development fees, expenses including any external development fees and expenses. • Financing Costs

Financing fees, lenders fees, loan fees, interest, lender inspection fees. • Collateral material could be capitalized as part of the project cost (for example photo shoot, brochure design

fees, internet/web design and setup etc.)

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Subject: Annual Capex Budget Department: Finance Reference # CAP 101 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 101 ANNUAL CAPEX BUDGET POLICY An Annual Capital Expenditure Budget is to be prepared as part of the Annual Operating Plan and approved by Regional Managing Director and Regional Finance leader prior to submission to owners. PROCEDURE Each property will prepare a Capital Expenditure Plan identifying the capital expenditure needs for the budget year. The Capital Plan will be submitted with the Annual Operating Plan in a format required by U Hotels & Resorts and reviewed and approved during the same time frame as operation plan reviews. Timing of works and disruption of business should be coordinated between the two plans. A Capital Plan may be subject to owner approval in accordance with the respective Hotel Operating Agreement. The Capital Plan should be based on a methodical evaluation of the physical asset condition, its component useful life and a systematic program for replacement or renovation to ensure asset performance and compliance with current design, operating and life safety standards. A project is defined as a budget line item on the plan and authorization is required prior to the Hotel’s commitment for any capital purchase, even though the item was approved in the annual capital plan Capital Expenditure Items will be classified as one of four types: 1. Replacement (replace an existing item) 2. Addition (additional to existing register with profit improvement objective) 3. Mandatory / Brand Standard (Health, Safety, Legal, etc.) 4. Renovation / Refurbishment / Enhancement

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Subject: Monthly Report Department: Finance Reference # CAP 102 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 102 MONTHLY REPORT POLICY The Financial Controller will be responsible for the preparation of a Capital Expenditure Report every month and should be submitted to Regional Managing Director and Regional Finance leader with other month-end reporting. PROCEDURE The Financial Controller will prepare a Monthly Capital Plan Summary Report with the minimum information per the attached format. The Summary Report will only list a summary of every capital expenditure item by the following Departments.

FO – Front Office and Public Areas RM – Rooms and Housekeeping AC – Accounting, Finance and Executive Office LD – Laundry FB – Food & Beverage Operation KT – Kitchen and Stewarding LP – Loss Prevention/Security EN – Engineering and Gardening HR – Human Resources FT – Fitness, Sports, Recreation, Health Club SP – Spa OD – Other Operating Departments IT – Information Technology

A detail listing of every capital expenditure item per department must be maintained and match to the Summary Report. The detailed report in similar format should include specific details of CEA numbers for commitments and substitutions and PO numbers of individual orders raised and the amounts.

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Subject: Capital Expenditure Authority Department: Finance Reference # CAP 103 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 103 CAPITAL EXPENDITURE AUTHORITY POLICY The purchase of any capital assets shall be not be commenced, committed or issued until a Capital Expenditure Authority (CEA) has been approved. Approval of the Capital Plan by owners does not constitute authority for a property to commence incurring commitments. An approved CEA provides final authorization to commit individual contracts, purchase orders, and other detailed commitment documents to implement a project and commit to capital expenditures. A CEA will be completed for each budgeted line item in the Capital plan. Projects that carryover from a prior year do not require a new CEA as long as the spillover amount is included in the Capital Plan for the current year. The CEA will detail the scope, schedule, cost components, cash flow and funding parameters. Sourcing and tendering shall be in compliance with the tendering and the company purchasing policy. Each CEA shall include an executive summary appropriately explaining the business rationale, funding, and budgetary impact of the request and a budget. Backup documentation will be attached where necessary, such as supplier quotes, tender recaps, contracts, purchase orders, design documents, schedule charts, etc. The construction management group will provide management services on all capital projects involving the hiring of design consultants, construction which alters the physical characteristics of a property, or exceed USD$50,000. They will also provide support on smaller projects at the request of operations and will review all CEA submittals greater than USD$25,000. All profit improvement type projects will require the financial analysis on CEA form. In an emergency, funds may be committed with the proper e-mail authorization prior to the completion of a CEA. Emergency projects are defined as projects that require immediate action to correct conditions that are hazardous to human life or to prevent an interruption of normal operations. The approval by the respective owners of the property must also be secured prior to commitment for purchase of Capital Expenditure. CEA Approval Levels Managed Properties – levels and contacts, as specified in the Hotel Operating Agreement.

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PROCEDURE The Financial Controller and General Manager are responsible for ensuring all CEA requirements are met. The Financial Controller will control and monitor all supporting documentation pertaining to an approved CEA from inception to final completion. The Regional Managing Director and General Manager are responsible for the business rationale, understanding the financial analysis model and the financial analysis. 1. CEA Numbering

TYPE METHOD

BUDGETED PROJECTS

HOTEL CODE + BUDGETED LINE ITEM ON CAPITAL PLAN + YEAR

NON-BUDGETED PROJECTS

HOTEL CODE + NB + SEQUENTIAL LINE ITEM AT BOTTOM OF PLAN + YEAR

EMERGENCY PROJECTS

HOTEL CODE + E + SEQUENTIAL LINE ITEM NUMBER AT BOTTOM OF PLAN + YEAR

SUPPLEMENTAL AUTHORIZATIONS OF AN EXISTING CEA

CEA NUMBER + DECIMAL POINT AND SEQUENTIAL NUMBERING STARTING FROM 1

2. CEA for Budgeted Expenditures

The General Manager and the Financial will confirm the following in preparation of a request for authorization: • The initial project scope and budget are substantially the same as that included in the approved Capital

Plan. • The CEA with all attachments is fully and properly completed, as required, and is mathematically accurate. • Proposed expenditures are properly distributed to be capitalized or expensed, as appropriate. • All required supporting documentation and attachments as herein indicated (i.e., budget, executive memo,

tender offers, purchase orders, etc.) are completed. Signed as appropriate, and included with the request. • Appropriate Discounted Pay Back period/IRR/Discounted Cash Flow calculations are provided to support

the request, where required. 3. CEA for Non-Budgeted Expenditures

The Financial Controller’s responsibilities for the processing of all Non-Budgeted Expenditures are the same as those required for Budgeted items. The funding of a Non-Budgeted Project is found within the approved Capital Plan by canceling and substituting an existing planned item. A Non-Budgeted project should not be submitted for approval unless there are sufficient funds to cover the cost. The CEA must specifically identify which Budgeted Projects are to be cancelled and substituted to provide the necessary additional funding.

4. CEA for Emergency Expenditures The Hotel is not authorized to proceed on an Emergency Capital Project without first obtaining approval from the Regional Managing Director and Regional Finance leader prior to submission to owners. The request should be provided with the details of the emergency, as well as the estimated scope and cost of the resulting Emergency Capital Project. The Financial Controller’s responsibilities for Emergency Capital Project Releases are the same as those required for Budgeted Projects. It is not required to find funding for an Emergency Capital Project to obtain approval; however, the hotel will have to make adjustments to their Capital Plan in order to fund the work.

CEA SUBMITTAL REQUIREMENTS 1. CEA Form

A CEA Form must be prepared for all budgeted line items. Use the same form for a Supplemental CEA. 2. Executive Summary

All CEA's require an executive summary appropriately explaining the business rationale, funding, and budgetary impact of the request.

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The aim of the rationale is to provide information to evaluate the project quickly and make a timely decision. It should be clear, concise and demonstrate that the proposal is a project with limited risk

3. Project Documentation /Contracts Projects with multiple vendors and/or suppliers also require a detailed cost schedule, a detailed time schedule, plans, specifications, etc. that accurately describe the detailed scope of the project. The unsigned contract for the selected vendor or the unsigned purchase order for the supplier should be included in the package. Submittal of individual purchase orders is not required for large renovation projects where a detailed cost schedule and specifications are included in the submittal package.

4. Proposals/Tender Offers Attach a copy of all proposals/tender offers. Indicate which proposal was selected and if not, the lowest cost indicate the reason.

5. Capital Lease Analysis A copy of the lease versus buy analysis should be signed by the General Manager and the Financial Controller, as support for the lease or purchase decision.

6. Owner Approval Hotels without funded reserves require Owner approval for Capital Projects. In all situations where Owner approval is required, a letter from the Owner indicating approval and agreement to fund the project must be obtained prior to any project commitments.

DEFINITIONS Budgeted Projects A budgeted project is one that has been approved by owners for inclusion in the hotel's current Capital Plan. The hotels will be notified of approved Capital Plan at the beginning of the budget year. Non-Budgeted Projects A Non-Budgeted Project is one that has not been approved by owners for inclusion in the Capital Budget. They include substantial scope changes and/or project budgets, which exceed budgeted costs including established contingencies. Emergency Capital Projects An emergency Capital Project is one that requires immediate attention to rectify the following situations: 1. Danger to human welfare 2. Curtailment or elimination of critical guest services 3. A penalty resulting from a citation that requires immediate attention

This policy is intended to recognize that in rare cases work must begin to correct a dangerous situation prior to the submission of the project paperwork.

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Subject: Asset Disposal Department: Finance Reference # CAP 104 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 104 ASSET DISPOSAL POLICY To ensure that the disposal of fixed assets, including transfer, write-off, sales and donation, are properly approved and updated in the Fixed Asset Register PROCEDURE The disposal of fixed assets includes sales, trade in, write-off and donation. All fixed asset disposals must be recorded on a Fixed Asset Disposal (FAD) form. The General Manager and Financial Controller must be fully involved to ensure that fair value is received from sales of the assets, and that the sale is conducted without preferential treatment to any group. The disposal must be reported on a FAD and reported to the Owning Company for appropriate recording in the fixed asset register. In case of Disposal by Sale to third party/ Trade in or Auction, the property must get at least three independent bids. When an asset is disposed or removed, an entry must be made to retire the asset from the fixed asset account including the accumulated depreciation account, or otherwise written off at the time of disposition. Any net difference between the asset and the accumulated depreciation (book value) will be charged to Rent & Other - Gain/Loss of Sale of Assets. Approval As noted in the Hotel Operating Agreement.

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Subject: Leases Department: Finance Reference # CAP 105 Page: 1/1 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 105 LEASES POLICY U Hotels & Resorts recognizes the option of leasing versus purchasing fixed assets. Therefore, it is required that whenever an option exists to lease or purchase any fixed asset addition, a lease versus purchase analysis be prepared to determine the best and most viable economic alternative. A copy of this analysis, signed by the General Manager and Financial Controller, is to be included in the Capital Expenditure Authority package as support for the lease or purchase decision, as indicated therein. PROCEDURE Finance leases must be included in the Hotel's Capital Plan and factored into any reserve requirements, as imposed by the Hotel Operating agreement. The lessee shall record a finance lease as an asset and liability at an amount equal to the present value of the minimum lease payments at the inception of the lease term. DEFINITION A finance lease transfers substantially all of the benefits and risks of ownership. The lessee should account for the finance lease as the acquisition of an asset and the incurrence of a liability. Other leases should be accounted for as operating leases, i.e. the rental of property. If a particular lease meets any of the following classification criteria, it is a finance lease: 1. The lease transfers ownership of the lease property to the lessee at the end of the lease term. 2. The lease contains a bargain purchase option, i.e. a lessee's option to purchase the leased property at a bargain

price which makes the exercise of the option almost certain. 3. The lease term is equal to or greater than 75% 0f the estimated economic or useful life of the leased property (for

the purpose for which it was intended, regardless of the lease term). 4. At the inception of the lease, the present value of the minimum lease payments, with certain adjustments, is 90%

or more of the fair market value of the leased property, i.e. the price the leased property could be sold for in an arm’s - length transaction.

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Subject: Depreciation and Amortization Department: Finance Reference # CAP 106 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 106 DEPRECIATION AND AMORTIZATION POLICY This policy applies to all managed properties. PROCEDURE The Depreciation rate to be applied to an asset will be as per the annually distributed rates as per table below. The Depreciation rates are to be applied for budgeting purposes. Depreciation will be recorded and applied in the month following acquisition. Acquisition is determined as being in the month in which the asset is delivered and utilized. For projects, depreciation will be recorded and applied in the month following certification or practical completion of the projector when the asset has been put into use. Additions received and recorded in the last month of the year will commence depreciation in the following year in the first month. When an asset is disposed or removed, an entry must be made to retire the asset from the fixed asset account including the accumulated depreciation account, or otherwise written off at the time of disposition. Any net difference between the asset and the accumulated depreciation (book value) will be charged to below GOP - Gain/Loss of Sale of Assets. In order to avoid any tax dispute and assessment from the local authorities of each hotel, The Financial Controller must concern all depreciation or amortization rate which useful lives are longer or shorter than local tax laws including other conditions should be deducted/added back respectively in computation of corporate income tax (if any). For example, according to some local tax laws, the minimum useful life of fixed assets is five years. So, if depreciation or amortization rate are provided for fixed assets in a shorter period than the period specified above, the different amount of depreciation between the Company and that local tax laws must be added back in computation of corporate income tax.

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Asset Class Asset Type Useful Life

In Years

LAND IMPROVEMENTS Roadways 20

Landscaping 20

Drains and Piping 20

Trees and Plants 20

Paths and Walkways 20

BUILDING Freestanding Buildings 20

Swimming Pools 15

Tennis Courts 10

LEASEHOLD IMPROVEMENTS Lease Term

BUILDING IMPROVEMENTS Renovations 15

Refurbishments 15

Additions 15

PLANT & EQUIPMENT Heating, Ventilation and Air-Conditioning 15

Electrical Supply Systems and Accessories 15

Fire Protection and Sprinkler Systems 15

Boilers, Chillers and Generators 15

Water Supply, Storage and Treatment 15

Lifts and Elevators 15

Plumbing and Sanitary 15

Telephone and Communication Systems 10

Laundry & Dry-cleaning Equipment 10

Kitchen and Refrigeration Equipment 10

Restaurant, Bar and Banquet Equipment 10

Engineering Tools and Equipment 10

Spa and Health Club Equipment 10

Fitness, Sports and Recreation Equipment 5

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Asset Class Asset Type Useful Life

In Years

Audio Visual Equipment (TV, VCR, DVD, OHP) 5

Housekeeping and Cleaning Equipment 5

Security, Keys/Locking Equipment (Safety box) 5

Office Equipment (Fax & Photocopiers) 5

Lighting and Sound Systems 5

Antiques & Artwork Artwork, Paintings, Sculptures, Artifacts No Depn.

FURNITURE, FIXTURES Carpets and Floor Coverings 7

& FITTINGS Tables, Chairs, Stools 10

Beds, Mattresses and Bedding 10

Office Furniture 10

Outdoor Furniture 10

Curtains and Blinds 10

Sofas, Lounge Chairs and Cushions 10

Minibar and Household Appliances 10

Cabinets, Lockers and Safes 10

Signage and Decoration 10

Wall Coverings and Tiling 10

Bathroom Fittings 15

IT EQUIPMENT Computers 5

Printers & Servers 5

Network and Cabling 5

Software 5

VEHICLES and VESSELS Water sports Equipment 5

Motor Vehicles (Cars & Vans) 5

Vessels and Boats 10

Tractors and Buses 10

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Subject: Fixed Asset Register Department: Finance Reference # CAP 107 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 107 FIXED ASSET REGISTER POLICY To ensure that the adequate control procedures on the management of Fixed Assets are used and establish guidelines for physical and cycle count of fixed assets. The Financial Controller is responsible to ensure that every head of outlet/ department manages properly the assets in their control and is required to maintain records of transfer and disposal of fixed assets. The Financial Controller has the responsibility for recording and management of the fixed asset register and for the physical count of fixed assets. PROCEDURE 1. Transfer of Fixed Assets

Department Assets Transfer: This is for transfer of assets from one Department to another Department. The Department who request assets transfer must fill in request form and obtain the approval of the General Manager and sends to Financial Controller to record the transfer.

2. Fixed Asset Label: All assets must have a label generated from the fixed asset register and affixed before move to anywhere in property expect category of Operating Equipment, Building and some asset in guest room.

3. Physical count of fixed assets Financial Controller must perform a physical count of them at least once a year to ensure both that management are aware of any losses of fixed assets, and that accounting records of fixed assets reflect reality, the result of the count should be compared with the fixed assets register, and any discrepancy investigated and adjusted in general ledger accordingly. To facilitate this count, the numbers marked or tagged on each item of fixed assets should be cross-referenced to the fixed assets register. Numbering will also facilitate identification of the original cost and accumulated depreciation of any fixed assets which the Hotel may wish to dispose of.

4. Accounting treatment and others Financial Controller must prepare reconciliation of the balance between the fixed assets register and control account of general ledger be carried out on at least a monthly basis to ensure the correctness of accounting data.

The fixed assets register should be specified, but are not restricted to, the following: 1. Tag number of all individual fixed assets 2. Acquisition Date/Disposal Date/Write off Date 3. Fully depreciation date 4. Full detailed description 5. Quantity 6. Cost per unit 7. Amount 8. Location 9. Department In Charge 10. Depreciation or Amortization rate / Useful life 11. Accumulate Depreciation of Beginning Balance

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12. Monthly Depreciation 13. Accumulate Depreciation of Ending Balance 14. Net Book Value 15. Disposal Price 16. Gain/Loss of Sale of Assets 17. Vendor name and address 18. Warranty period 19. Funding source restrictions on use or disposition 20. Etc. (if any).

In order to comply with local tax regulations for each hotel (If any), and to create proper control of fixed assets which may be disposed of in the future, Financial Controller must consider under local tax regulations fixed assets should retain a minimum of book value (Scrap value) - they should not be amortized to zero value. Financial Controller is responsible to ensure that Hotel take out insurance to cover any possible loss of fixed asset to reduce risk of any possible substantial damage or loss which could affect the Hotel’s business should be avoided whenever possible. The legal title to all vehicles (which is evidenced by the registration cards) must be transferred to the name of the Hotel as soon as possible. To register vehicles under any other person’s name could cause the depreciation of the vehicles to be disallowed by the local tax authorities (if any), and is in any case not good practice from the point of view of safeguarding of the Hotel’s assets. Fixed Asset Label and Physical Count: For tagging fixed assets label and physical count, fixed assets will be classified in 6 categories: 1. High value and non-movable fixed assets

• The company will have list of fixed assets which specify location of each asset. • Need to tag fixed assets label (If practical). • Need to have physical count.

2. High value and movable fixed assets** • The company will have list of fixed assets which specify location of each asset. • Need to tag fixed assets label. • Need to have physical count.

3. Fixed assets in guest room • The company will have list of fixed assets in each standard guest room. • No need to tag fixed assets label. • Need to have physical count.

4. Low value and movable fixed assets • The company will have list of fixed assets which specify location of each asset. • Need to tag fixed assets label (If practical). • No need to have physical count.

5. Operating equipment • The company will have list of fixed assets which specify location of each asset. • Need to tag fixed assets label (If practical). • No need to have physical count.

6. Land, building, building improvement • No need to tag fixed assets label. • M&E system and vehicle. • No need to have physical count.

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Subject: Small Operating Equipment Department: Finance Reference # CAP 108 Page: 1/2 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents CAP – 108 SMALL OPERATING EQUIPMENT POLICY Expenditures for Small Operating Equipment must meet the criteria below in order to be capitalized and, procedure for Small Operating Equipment controls are implemented and carried out to protect the assets of the hotels PROCEDURE 1. Typical items subject to quarterly inventory include:

Room’s linen Food & Beverage Linen Chinaware Glassware Silverware Kitchen utensil (including kitchenware) Uniforms

All of above should be segregated accordingly to the departments with which they are directly related. This will afford a direct means of determining the loss and breakage of Small Operating Equipment applicable to each department and serve as a guide in determining the amount to be replaced in the succeeding year’s budget. An equipment ledger must be kept for all reserve Operation Equipment stock, which should contain a separate control account for each type or classification of equipment by departments. Detailed recorded supporting the equipment ledger control accounts should be kept. A separate record should be maintained for each type and size of equipment. The records should contain the following information: • Description of item • Date of purchase or requisition • Number of units • Unit price • Total price • A balance of units • A balance of amount

All departments shall in writing, inform the Financial Controller in all broken or condemned items (indicating the item and volume) which will then be verified and recorded separately. Excessive broken/losses should be invested promptly and corrective action taken. In order to give management a better indication of the relationship between Operating Equipment losses and turnover, the following analysis would helpful: Number of Food Covers Served (F&B) Number of Rooms Occupied (Room) Unit loss for each 100 covers served. Unit loss for each 100 rooms occupied.

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For equipment that is specific to one F&B Outlet only, use the covers from that outlet only.

2. Criteria for depreciation life Stocks of Small Operating Equipment are determined annually by a physical count and valued at net book value after deducting appropriate portion of depreciation. Subsequent purchases are expended when incurred, except for the additional purchase for the restaurants newly opened. To illustrate the foregoing, the criteria summary for depreciation life will be as follows;

New Hotel/ New Outlet Replacement Reopen of Old Outlet in Old Hotel

Asset of Old Outlet Asset of New Outlet

Depreciate 5 years on 50% of asset value

Record to Expense No write off * Depreciate 5 years on 100%

of asset value

* If there is renovation or replacement on asset of old asset before year 5 of start date or purchasing date, all remaining depreciation of 50% of asset value (First 50%) should be written off.

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SECTION 9

BEST PRACTICE

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Subject: Revenue Control Department: Finance Reference # BEP 100 Page: 1/4 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents BEP – 100 REVENUE CONTROL The hotel should ensure that: 1. All revenue is captured and recorded on a daily basis. 2. Revenue is correctly classified in the financial statements. 3. Revenue is recorded in the proper accounting period.

To develop a common understanding every effort should be made at both a corporate and hotel level to describe reports as detailed below. Unless otherwise specified, procedures should be carried out periodically by members of the accounting department. All procedures must be sufficiently documented to allow third party review. • Senior Hotel Management must ensure that they have an updated emergency plan in place in the event of

system down time. The plan should be regularly tested for effectiveness (Disaster Recovery Procedure DRP) • At the end of the day the property management system (PMS) will generate a daily revenue report. The daily

revenue report will detail all revenue captured by the property for the day, month and year to date. • In most hotels this report is compiled by direct interface to the source e.g. the food and beverage electronic

point of sales systems (EPOS) will interface with the PMS system updating revenue information automatically. A member of the accounting department, on a daily basis, will be required to agree the revenue report to the source: ➢ Room sales, to the room’s revenue report ➢ Food and beverage sales, to the EPOS end of day sales summaries ➢ Telephone and telex sales, to telephone and telex traffic sheets/reports ➢ Laundry and valet sales, to sales summaries ➢ Other department sales, to relevant sales summaries

The night auditor tasked with closing the day, will not be able to close the day unless all systems have been closed. Problem transactions can be closed by posting to a paymaster account/permanent folios (typically a dummy account set up in the PMS). The night auditor must, on a daily basis, review all posting to paymaster accounts/permanent folios. On a daily basis a member of the accounting department will ensure this is being done correctly. The following procedures must be carried out periodically by persons independent of the front office. If material discrepancies are noted, they should be brought to the attention of both the Financial Controller and General Manager. • The daily room revenue report should detail the available rooms for sale, the market source of business, the

revenue generated by rooms sold, complimentary rooms, house use rooms and zero-rated rooms. The income auditor will periodically ensure that the General Manager has approved all house use rooms.

• It is the General Manager's responsibility to ensure all rates and rate codes are documented, approved and loaded in the hotel's PMS and reservations systems. A member of the accounts department should periodically review all rates loaded on the PMS/reservation system to the approved rate structure.

• The room rate discrepancy report (produced by the PMS), identifies occupied rooms and the room rates versus rack rates. This report should be printed every morning and the variances between rack rates and actual rates should be investigated by the income auditor. The report should be signed to evidence the review and be filed.

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• The housekeeping room status report printed from the PMS system details both vacant and occupied clean/dirty rooms. The housekeeping department will be required to test, on a daily basis, the accuracy of the report. The income auditor should review the report and investigate any discrepancies. The report should be signed to evidence the review and filed.

• Vacant room spot-checks should be performed on a test basis. These tests should be documented and filed. The income auditor should print a room status report on an ad hoc basis and visit rooms reported as vacant. This procedure will highlight unauthorized occupancy or collusion between the front office and housekeeping staff, which may not be apparent from a review of the room status report. The income auditor should check whether the telephone lines/pay TV channels are blocked, the mini-bar is full etc.

• There must be a documented procedure to ensure that all rebates, discounts, rate changes, paid outs, and other adjustments to revenue are approved by management.

REVENUE CONTROL – Continued 1. A guaranteed method of payment should be secured for all in-house guests. 2. Guaranteed no-shows should be reviewed by management best qualified to decide whether to charge or not. The

decision will be based on a combination of the hotel's occupancy and the guest's history. The guest ledger (maintained in the PMS) should be reconciled monthly to the general ledger. Any old outstanding balances should be investigated and resolved promptly i.e. within seven days.

Menu Prices The Food and Beverage Director and General Manager will approve all food and beverage (F&B) menu prices, inclusive of banquet menus. Pricing must be reviewed at least twice per annum. The Income Auditor should on a periodic basis review menu prices configured in the electronic point of sales system (EPOS). Food and Beverage Revenue Reconciliation The Night Auditor should perform the end of day on the EPOS system. This will automatically print out revenue summaries for each outlet. These reports should be used to reconcile to the PMS system and general ledger by the Income Auditor. Discrepancies should be investigated and documented promptly by the Income Auditor. Cash receipts should be traced to the general cashier's daily summary. The Income Auditor should review voids on a daily basis. Totals should be traced to checks detailing reason for void and signed off by food and beverage Management. Voiding Procedures Procedures should be in place to ensure that void access is given only to those in supervisory positions. Cashiering Access to the Electronic Point of Sales System In most operations all waiting staff will have cashiering access to the EPOS. Each member of waiting staff will be allocated a password and or a personal access card. Food and beverage management should ensure that waiting staff are using their password/access cards and that access cards are not left in the EPOS. Access to Run Point of Sales X and Z Reports Access to run "X" and "Z" reports should be restricted to supervisors. Manual Checks If manual checks are used, adequate control should be exercised over their numerical sequencing. Spot checks should be made to ensure the sequence is complete, and that adequate procedures are in place to follow up on missing checks.

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Par Stocks Par stock must be established and maintained for all beverage outlets. The Inventory Controller should periodically spot check stock levels. Employee Meals Officer checks and employee meals report should be generated using the EPOS system. On a daily basis the income auditor should review officers' checks for reasonableness. It is recommended that the General Manger periodically review the report. Conference and Banqueting Revenue Minimum Control Procedures A signed contract, deposit or form of guarantee should be obtained for all banquet functions. Contracts should be executed in accordance with the hotel's credit policy. The Financial Controller must approve any deviations from the standard contract. All individuals and groups with functions to be billed on account must have prior approval by the credit department. The banquet department will prepare a function sheet. If manually prepared it should be pre-numbered; the sequence of numbers will be controlled. The function sheet will detail menu items, prices, minimum covers, miscellaneous charges for audiovisual equipment or flowers etc. Function sheets must be distributed to the relevant staff (Executive Chef, Food and Beverage Manager, etc.) for planning and scheduling of employees. A copy must also be forwarded to the accounts department to allow comparison with the final banquet bill. All amendments to the function sheets must be numbered with reference to the original and similarly circulated. Beverage stock counts should be completed for all banquets. The forms should indicate the type of beverage, opening stock, closing stock, consumption and sales. Banquet bills should be raised on the same day as the function, or the following day for late night functions. The guaranteed number of guests or the actual number present, whichever is the greater, should be charged. All items on the function sheet, and amendments to function sheets and incidentals, such as telephone calls, should be appropriately charged. The Income Auditor should audit the function bill for completeness. Telephone Minimum Control Procedures With guests relying more heavily on calling cards, personal hand phones and internet communication, hotels should be actively marketing in-house telecommunication services. Hotel management should ensure that telecommunication rates are competitive and encourage usage. The telephone interface report should be reviewed on a daily basis by the Night/Income auditor, to ensure that all guest phone calls made through the telephone system are subsequently charged to guest folios. No-post (missed postings) accounts should be investigated, as should calls charged to permanent folios. When not in use, banquet telephone lines and phone lines intended for guest usage but not located in guestrooms should be blocked. These lines should be configured to permanent folios. All permanent folios should be cleared / reconciled on a daily basis. Administrative calls should be reviewed by the Income Auditor to ensure calls made are reasonable (time and cost). Any suspicious calls should be investigated and reported to the Financial Controller. Laundry and Valet Revenue Minimum Control Procedures Guests should complete a laundry form, to be turned in with the articles to be cleaned. Upon receipt of the clothes, the laundry/housekeeping department should count and document the articles in the control column on the laundry form. Any items not recorded by the guest should be added to the laundry voucher and charged appropriately. If an

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item recorded by a guest is not in the laundry bag, a note should be delivered immediately to alert the guest of the discrepancy. The end of day laundry revenue totals should be reconciled, on a daily basis, by the Income Auditor. Discrepancies should be investigated. If an outside company performs the laundry service, the items should be counted upon their return and compared to the hotel log to ensure that all laundry has been returned. The laundry invoice received from the external company should be reconciled with the hotel log to verify the accuracy of charges. Accepting cash payments for laundry charges should be avoided. Other Revenue Minimum Control Procedures It is impractical to detail procedures to be implemented in all revenue centers. Management is therefore required to customize the procedures detailed above to accommodate the Hotel revenue centers. Rental Income Rental income derived from showcases, stores, and other third-party concessions must be supported by a contract. The Financial Controller should ensure billing is timely and that payments are received promptly.

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Subject: Procurement, Accounts Payable, Travel Expenses

Department: Finance

Reference # BEP 101 Page: 1/4 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents BEP – 101 PROCUREMENT, ACCOUNTS PAYABLE, TRAVEL EXPENSES The minimum control standards aim to ensure purchases and subsequent disbursements recorded are for goods and services received and are consistent with the best interests of the hotel. All purchase and disbursement transactions are properly authorized, valued, recorded timely and classified in accounts payable and related inventory ledgers. Documenting Purchasing Policies and Procedures Hotel management should document purchasing policies and procedures, to include emergency and petty cash purchases. The policies and procedures must be distributed to key personnel. Typically, a department head requests to purchase an item. The purchasing department handles the logistics of sourcing and ordering the item; senior management deals with the approval cycle. For each and every purchase a purchase requisition/order has to be raised, this must clearly: Detail the three competitive bids taken in support of the item to be purchased. If competitive bidding is precluded due to a sole or limited number of suppliers, this fact should be reflected on the face of the PR. The in-house purchasing policy will detail situations where competitive bidding is not required e.g.:

Items below a certain monetary value Market list items Approved vendors

The purchase requisition/order will detail whether or not the item is budgeted and the number of items currently in stock. If there is a dedicated purchase manager, he will ensure that a copy of the purchase order is sent to the receiving department, and to the person originating the request. In the absence of a purchasing manager, the person placing the order will ensure receiving and the originator of the request receive copies of the purchase order. The latter will maintain a log of the items purchased. The Financial Controller should periodically select a random sample of purchases and audit the purchase process. Approved Vendor Listing/Market Lists/Market Surveys In lieu of competitive bidding, an approved vendor list maybe drawn up. The approved vendor list, as the name implies, authorizes the hotel's purchasing agent to buy defined items from the vendor without bidding the purchase. When compiling the list, the purchasing agent will place tenders with three vendors and select the vendor that meets quality, price and delivery guidelines. The tendering process should be carried out when market conditions require, or at least on an annual basis. The Financial Controller will periodically audit the tendering and selection process. For food purchases the daily food market list should be reviewed by the chef before orders are prepared. Cash Purchases Cash purchases are to be discouraged.

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Inventory The hotel is required to direct expense storeroom items. In some situations (exceptional) storerooms items will be maintained. In the event that stores are maintained it is preferable to maintain minimum and maximum store levels for defined lines of stock. The minimum and maximum store levels should be agreed with the relevant Head of Department and Financial Controller. When setting the minimum and maximum inventory levels, the following should be taken into account: Consumption levels of the item Delivery lead times Storage limitations Quantity discounts The Purchasing Manager should periodically review purchases at random to ensure compliance with minimum and maximum stock levels. Minimum and maximum stock levels should by no means be inflexible; the levels should be modified to meet operational requirements. Emergency Purchase Procedure Emergency purchasing promotes inefficiency and is therefore to be avoided. It is however recognized that emergency purchases will likely have to be processed at some time; hence the need for the hotel to document the policy. It is recommended that emergency buying procedures are not distributed to department heads (except for the purchasing manager), in order to keep the procedure from becoming the rule instead of the exception for which it is intended. Accounts Payable Minimum Control Procedures The minimum procedures to be adhered to in the accounts payable cycle are detailed below. The receiving agent should mark/stamp the delivery note or invoice with "received" to evidence the receipt of the ordered item(s). The ultimate recipient of the item i.e. a department or the storeroom clerk will also verify the receipt of the item by signing the delivery note or invoice. The delivery note, purchase order and invoice should be submitted to the Accounts Payable Clerk for processing. The Accounts Payable Clerk should verify that: The invoice prices match the prices agreed upon on the purchase request The invoice has been approved by the initiator of the order The order levels agree with the purchase order The purchase order has been approved and is dated pre the invoice date The delivery note has been signed by relevant personnel The invoice is arithmetically correct The invoice posted into the inventory system (where applicable) The general ledger account code is correct The invoices should be posted to the relevant accounts in the general ledger by supplier number. It is highly likely that the hotel will repeatedly use the same suppliers. Suppliers' details, including banking information, should be input into the accounts payable system. If possible, the system must be configured to flag all additions, deletions and changes to supplier information. The Financial Controller should review and sign the report on a monthly basis.

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It is recommended that cheque/electronic funds transfers are run on a periodic basis. All relevant documentation should be submitted to the Financial Controller and General Manager for review and approval. The Financial Controller will then approve payment and sign the cheque/approve the electronic funds transfer. All documentation will then be passed to the General Manager for approval. To ensure adequate segregation of duties, the approved cheque must not be returned to the Accounts Payable Clerk, they will be mailed directly by an independent person. Access to process the electronic funds transfer file will be restricted to the Accounts Payable Clerk. Access to the file transfer will be password protected. The passwords will be held with the Financial Controller and General Manager. The funds transfers should be set up as such that two passwords are required to transfer funds. Petty Cash Disbursements The procedures for processing petty cash disbursements are as follows: Petty cash disbursements should be reimbursed at least once per week and on the last day of each month. The General Cashier should prepare a summary of all petty cash vouchers before reimbursing. The summary should contain the following information: Voucher number Date Description Amount Account to be charged The vouchers and supporting documents should then be reviewed and approved by the Financial Controller/ Hotel Accountant before being reimbursed. Contracts and Travel Expenses Contracts All contracts should be recorded and regularly monitored by the Financial Controller and General Manager. All contracts should be properly approved. The hotel should take all reasonable precautions to limit liability and exposure. A log of contracts showcases, services, barters, rentals, concessions, etc. should be maintained by the Financial Controller. The log should contain all relevant contract information. The Financial Controller and General Manager should review and jointly approve the contract. Contract/lease terms should be reviewed periodically and agreed to invoices and/or other supporting documentation to ensure payment amounts are in accordance with documented terms. Contracts and Accounts Payable The Accounts Payable Clerk should maintain a listing of all monthly contracts/services. This will be used for ease of reference at month-end to determine which expenses have been paid and which contracts need to be accrued for. Travel Expense Reports Minimum Control Standards Expenses are properly classified, described and stated.

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Expenses are properly authorized, and when claimed are properly supported, approved and recorded in the period in which they were incurred. All reimbursed expenses are in accordance with the U Hotels & Resorts Finance policy. Travel expenses must be submitted promptly after incurring the expense. Note that expense must first be disclosed in the currency incurred, then translated into the currency to be reimbursed. A bank receipt/credit card statement must support the rate of exchange used. In the absence of either, the U Hotels & Resorts published monthly rates (or the bank rate) will be used. All airline tickets will be bought and paid for by the hotel. Purchasing policies and procedures are applicable. Department heads may be permitted to request travel advances. Travel advances shall only be given prior to a trip and will be fully accounted for immediately after the trip. The Financial Controller and General Manager should authorize the advance. All travel expense claims should be approved by the employees’ line Manager before reimbursement. Travel Expense Reports and Accounts Payable To ensure an adequate audit trail, all employee expense reimbursements are to be paid by cheque. Travel expense claims should be reimbursed through the accounts payable system (or the payroll system where local practice dictates). Entertainment Expenses All entertainment claims must detail the name of the person(s) entertained and the reason for entertaining. The General Manager must approve all entertainment claims. Employee Purchases at Cost Hotels must develop their own policy for purchases at cost (employees' contracts may detail entitlement). It is recommended that this be seen as a privilege, granted only to senior members of staff. It is also recommended that purchases be capped at a pre-determined monetary level. No credit shall be extended.

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Subject: Accounts Receivable Department: Finance Reference # BEP 102 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents BEP – 102 ACCOUNTS RECEIVABLE Granting of credit facilities Credit has been granted in accordance with a formally approved hotel credit policy. Where applicable perform credit search on new customers using external credit agencies. Receivables represent valid claims and are properly supported. Receivables are collected on a timely basis. An adequate reserve for doubtful accounts exists. Accounts Receivable Minimum Control Procedures Guest to City Ledger Transfers All guest ledger accounts, including master folios, must be transferred to city ledger accounts within three days of the guest checking out. The guest ledger account should include only in-house guests and any live account guests (like members who have special arrangements to use the Hotel facilities and invoiced on a monthly basis) If an account is disputed at check out this will not preclude its transfer. If disputed, the nature of the dispute should be clearly noted on the folio and followed up by front office within twenty-four hours. The Financial Controller should ensure the above is being adhered to. Guest and City Ledger Reconciliation The guest and city ledgers must be reconciled with the general ledger control accounts monthly and all discrepancies resolved. In House Guest Ledger Report The guest ledger report should be printed, reviewed and approved by the Front of House Manager on a daily basis, also review the guest credit limits and collect payments on large balances (if the credit limit has exceeded) Advance Deposits Deposits should be posted to an advance deposit account in the general ledger and the PMS system. If a guest fails to show up, the deposit should either be returned or dealt with according to the terms and conditions of the contract. Analytical Review of City Ledger The Financial Controller should review the aged debtors list on a regular basis. This can actively influence credit decisions/the level of the hotel's debt by identifying problem accounts. If problems are flagged early enough corrective action can be taken. Credit Meetings The Financial Controller should ensure monthly credit meetings are held to discuss debtor position. All key head of department must attend the meeting. Minutes of the meeting should be noted.

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Collection of Overdue Accounts Every effort should be made to collect overdue accounts. These collection efforts will be directed by the credit meeting and must be documented on a follow-up form. All letters, statements, phone calls and personal visits to a client will be documented on the follow-up form with the date, action taken and by whom the action was taken noted. Client responses should also be documented for future reference. A third-party collection agency may be utilized to collect overdue outstanding balances once in-house efforts have been exhausted. Write-Offs Accounts receivable write-offs should be reviewed and approved by the Financial Controller and General Manager. Any write-offs over $1,000 (on an individual basis) should be approved by the Regional Managing Director. Hotels should establish a monetary value under which it is not economical to follow normal collection procedures, e.g. mini bar late charges of USD$10. The writing off of an un-collectable receivable must not imply the end of further collection efforts. The eventual collection of an amount written off will be credited to the reserve for bad debts and the General Manager/Financial Controller should approve such write off. Financial Controller must provide evidence of a final attempt at recovery in accordance with each Local Revenue Authorities regulation. Such evidence could be a notice of intention to take legal action, or a strongly worded warning letter to prevent any dispute with above each local regulation which may lead to a tax assessment, penalty and surcharge. Bad and Doubtful Debt Reserves The policy on the setting up of a provision for doubtful debts must be established and adhered to. Procedures should then be set up including a guideline that the size of the provision is to be reviewed and approved by the management, on a monthly basis in order to ensure that adequate and accurate provision is made. Allocation of Cash Payments received to settle city ledger accounts should be immediately posted to the relevant city ledger account by the Accounts Receivable Clerk. In the event that a payment cannot be matched, the payment will be posted and allocated against the oldest pending balance. In the event that a payment cannot be matched to a city ledger account it should be posted to a city ledger unallocated cash account. The account should be cleared monthly and should not be included as part of the ageing analysis. Credit Cards Credit card queries should be dealt with promptly ensuring the company does not incur any unnecessary financial loss. Credit Card Reconciliations The cashier responsible should only perform the end of shift/day procedure on the credit card terminal once all credit card transactions have been reconciled to the PMS/EPOS system. The General Cashier should reconcile the daily credit card totals with the PMS/EPOS reports. Differences should be investigated immediately by the General Cashier and resolved. All credit card accounts should be kept current i.e. under 30 days. Credit Card Document Retention All documents relating to credit card processing should be retained for a minimum of 18 months.

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Charge-backs Charge-backs are initiated by the cardholder's bank, as a result of a cardholder inquiry or in an attempt to protect itself from a potential loss. Every effort should be made to mitigate charge-backs. All charge backs to be approved by the Financial Controller. Credit Card Refunds The ability to refund a credit card will be restricted to relevant departmental Managers. All refunds should be documented, detailing the reason the refund has been processed and signed by the relevant departmental Manager and Financial Controller. Third Party Credit Cards If a guest proposes to pay his account using a third party's credit card, the hotel will require: The card holder to attend the hotel and sign the pre-approved credit card voucher. Approval by signed letter or fax from the cardholder is unacceptable. Credit Policy The Financial Controller should draft a comprehensive credit policy, which is adapted to the hotel's particular requirements, periodically updated and made known to all necessary personnel in the reservations, front desk, marketing, accounting, food & beverage and credit departments.

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Subject: Inventory Department: Finance Reference # BEP 103 Page: 1/3 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents BEP – 103 INVENTORY Inventory Minimum Control Standards All inventories are owned and properly valued with consistent pricing each month and the pricing system used is acceptable. Inventory count procedures are operating effectively to ensure a complete and accurate count of inventory, and all physical variances are approved and recorded on a timely basis. The procedures to be applied over the control of inventory will vary depending upon staffing levels within each hotel. The procedures outlined below offer alternatives dependent upon staffing levels. Please also note that most inventory systems, extending to requisitioning, are computerized. These procedures are applicable to both manual and automated systems. If the hotel is operating with part-time Inventory Clerks it is recommended that storerooms be operational for only a limited number of hours per week. Inventory stores will be adequately secured with lock and key, and access restricted to assigned Inventory Clerks. Inventory Clerks will not always be on duty and non-authorized personnel will occasionally need access to stores. The hotel will develop a key policy to cover such eventualities Updating Inventory Records Upon acceptance of the items into the store, the Inventory Clerk should verify that the quantity and quality of the items agree to the delivery note/invoice. The clerk will sign/stamp the delivery note/invoice as proof of this check. In the absence of inventory clerks, empowered department heads will ensure this procedure is carried out. In the absence of a cost control department, the receiving agent will update the computerized inventory record. It is accepted that this procedure undermines the concept of segregation of duty. As a compensating control a member of the accounting department will, on a random and surprise basis, be tasked with vouching a sample of purchase requests through to the recorded inventory. If perpetual inventory cards are used, the clerk, or in his absence the individual tasked with safeguarding inventory, will document the date and quantity received. Valuation of Inventory Inventories must be valued on the average cost or market basis under the ‘first in, first out’ method. Under GAAP, no item of inventory on the statement of financial position can be carried at a valuation that is more than the cost of that item i.e. no upward revaluation of assets is permissible. Store Requisitions Requisitions must be prepared for all items leaving the stores. The inventory clerk or department head tasked with maintaining the store will record or initial the quantity of items requisitioned as being accurate. The party initiating the requisition will be required to sign for receipt of the items.

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Completed requisitions will be forwarded to cost control for prompt entry into the perpetual inventory system and subsequent filing for permanent record. If a cost control function is not in place, the requisition will be entered into the system by the Inventory Clerks or in their absence by a member of the accounting department. It is accepted that the involvement of the Inventory Clerk in updating the perpetual inventory system undermines the concept of segregation of duties. As a compensating control accounting will be required, on a surprise basis, to take a random sample of requisitions and trace them through to the updated inventory account. Please note that the inventory system must be configured to allow edit/update reports to be run; these reports must reflect the movement of stock. Emergency Requisitions Emergency requisitions are to be discouraged but are accepted as a practical necessity. The requisition should be completed and left with the custodian of the store who will process the requisition during business hours. The Duty Manager will be required to access and issue the requisitioned item. Inventory Counts Inventory counts must be performed in such a way that all items are counted at least once a month for food, beverage, tobacco, guest supplies, printing and stationery and cleaning supplies and at least once a quarter for operating equipment (OPE/SOE). All inventory counts must be performed or supervised by a member of the purchasing/receiving/inventory function and the relevant Head of department or a person that has been designated by the Head of Department i.e. food inventory – Head Chef etc. All material variances between the perpetual inventory and the physical count should be investigated and resolved promptly. The controller is required to document the action taken to redress the stock imbalance if no conclusion is reached with regards to material variances. Analytical Review of Inventory Inventories should be regularly monitored to identify adverse trends in stock rotation and purchasing practice. Inventory turnover ratios will be generated and reviewed by the Financial Controller to satisfy this minimum control procedure. Slow Moving Stock The inventory system will be configured to flag slow moving items. Slow moving item lists will be prepared at least monthly. The report will be reviewed by the Financial Controller and circulated to the General Manager and Department Heads. There must be evidence to support the efforts taken to move the items, e.g. staff sales, use in banqueting functions etc. Inventory items older than twelve months should be written off (for example out of date / obsolete items). Maintaining Inventory versus Direct Expensing In determining whether an item should be controlled as inventory as opposed to a direct expense, consideration should be given to:

• The item's resale value • The cost versus benefit of controlling the item • The delivery lead-time • The benefit of foregoing bulk order discounts versus the cost of holding inventory. • Tying up working capital in inventory is to be actively discouraged; every effort will be made to maintain as

little inventory as is operationally possible.

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Receiving Receiving should be independent of the purchasing function. All goods entering the hotel will be processed through the receiving department. The Receiving Clerk shall receive a copy of all authorized purchase requests, he will file them alphabetically. Periodically a member of the accounting department will review the file to ensure all purchase orders are recent. Purchase orders that appear dated will be investigated to ensure the goods have not been inadvertently delivered. If this is the case and the invoice has been paid, a review of the receiving, inventory and accounts payable function will be necessary. If the item has not been delivered, the purchasing process will have to be reviewed, All goods received must be compared with the purchase request or market list. The goods and delivery note or invoice received must match the item description, quantity and price on the purchase request. Purchasing will be notified of delivery discrepancies. Receiving will check the quality of the items received; unacceptable items should not be accepted. If the item delivered has been ordered by weight, the receiving department will ensure they have suitable weighing scales to check net weight. A person independent of the receiving function will check the scales, every quarter, for accuracy. If a partial delivery is received the invoice/delivery note and purchase order will be marked as 'partial delivery'. A copy of the purchase request will be made and attached to the delivery note/invoice. The original purchase order will remain on file until the full delivery is received. Cost Control – Introduction Cost Control Minimum Control Procedures Regardless of whether or not a cost control functions exists; the following procedures must be carried out: Food and beverage cost reconciliations must be prepared monthly. They must be fully analyzed and approved by the Financial Controller. Analytical procedures (as well as physical verification) should be established to control banquet beverage consumption. Beverage accountability forms must be used for all functions. These will be reviewed and approved by the Banquet Manager. A member of the accounting department will periodically review the adequacy of banquet beverage control procedures. In the absence of a cost control function, the chef, in the first instance, will be responsible for all menus costing. Menu costing should be approved by the Financial Controller and Food and Beverage Director. Prior to costing a menu, the Chef and the Food and Beverage Director will ensure that the composition of all menu items and portions are standardized. Without the implementation of this procedure menu costing is compromised. Periodically a person independent of the food and beverage function must ensure that this procedure is adhered to i.e. portion control is practiced in the kitchen.

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Subject: Payroll Department: Finance Reference # BEP 104 Page: 1/4 Issued by: Corporate Finance Department Issued date: November 2007 Updated by: Finance Director Updated date: December 2011 Approved by: CEO Approved date: December 2011

Back to Table of Contents BEP – 104 PAYROLL Payroll Minimum Control Standards The minimum standards will ensure: 1. Only bona fide employees are paid, that their pay is based on approved wage rates for actual time worked and

that deductions are correct. 2. Overtime hours are properly approved and monitored. 3. The hotel complies with labor laws. 4. Management approves the payroll and conduct payroll audits 5. Contracts of employment exist for all employees.

Payroll New Starters, Amendments & Storage of Records Human resources must develop a standard new starter form/contract. The form/contract will summarize a new employee's pertinent personal and remuneration details. Included in this form will be details of all items issued to the new employee. The General Manager and Human Resource Manager will authorize the form/contract. The employee will be required to sign the form/contract in acknowledgment. Copies will be filed with the human resource department. The form will be updated as the employee's remuneration, position changes. The hotel must develop a standard form for communicating changes in payroll information. This will originate from the human resource department and be approved by the General Manager. All personnel files will be kept in a secure location. Irrespective of whether payroll processing duties have been assigned to accounts, human resource or outsourced, spot-checks should be performed each pay period by someone independent of the payroll processing function. The spot checks will focus on ensuring that employees on the payroll exist, and that the remuneration is correct. Segregation of Duties Where possible the human resource function and the payroll processing function should be separate. Time Sheets All employees should complete time sheets. These should be reviewed and approved by the Head of Department prior to being submitted to the payroll processing function. Holiday Pay The human resource department must maintain a register of holiday pay due/taken. Sick Leave The human resource department is required to ensure that the appropriate documentation is received to support sick days taken. A summary of sick days taken per employee should be prepared and approved to department heads. The General Manager should be advised of adverse trends.

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Overtime All overtime should be recorded on an overtime authorization sheet and be pre-approved by the Head of Department and the General Manager. The forms should be attached to the time sheets. Overtime should be booked to a separate account so it can be tracked. Payroll Approval The Financial Controller is required to approve the final payroll prior to the payments being released. The system will be configured to generate an exception report that flags all changes to the existing payroll. The Financial Controller, Human Resource Manager and General Manager should review and approve this report. On a periodic basis the accounts department should review a random sample of employees and attest the gross and net pay for accuracy. This will involve checking payroll back to: 1. The new starter forms 2. Time sheets to verify hours worked 3. Overtime sheets 4. Payroll tax tables 5. Gratuities After detailed checking, the reviewer will attest the payroll for reasonableness. This will be achieved by reconciling the current payroll to the previous months payroll and also include head count. All discrepancies should be investigated and explained. The Financial Controller and General Manager will approve the payroll. In the event that the payroll is outsourced, the Financial Controller will be required to ensure the above procedures are carried out. Distribution of Payroll The distribution of payroll can take many forms. If employees are personally handed cash or a cheque, they will be required to produce appropriate photo ID and sign for acceptance of their salary. If employee salaries are transferred directly into their bank accounts, a member of the accounts department should periodically check the bank details correspond with personnel records. Terminated Employees The human resource department should ensure a termination form is completed for all terminated employees. A copy of the form should be retained in the employee personnel file and the original should be passed to the person responsible for processing payroll. A review by accounts should take place to verify that all employees who have left the employ of the hotel were subsequently removed from the payroll. Prior to the employee receiving his final pay cheque, the relevant Head of Department will be required to sign off that all items issued to the employee, e.g. floats, uniforms, loans, equipment, etc. have been returned by the employee. Salary Advances Salary advances are to be discouraged. They are not to be confused with employee loans. Advances are only permitted in exceptional situations. All salary advances should be approved by the General Manager. Casual Employees The Human Resource Manager must have a detailed knowledge of the local regulations pertaining to the hiring of casuals. Payments should be processed via the payroll processing function. Distribution of Gratuities

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It is the responsibility of the relevant Head of Department to monitor gratuities and relay this information to the accounts department at the end of the month for reconciliation purposes. Once the reconciliation has been agreed, the information should then be passed on to the person responsible for processing payroll. All gratuities should be processed via the payroll function. Unclaimed Wages All unclaimed pay cheques will be given to the general cashier for safeguarding. Employees requesting unclaimed wages must provide adequate proof of entitlement. All expired pay cheques will be cancelled, with an appropriate debit raised in the bank account and a credit recorded in the unclaimed wages account. A similar entry should be recorded for pay cheques that have been picked up but not cashed. The liability will remain in the general ledger for the length of time required by local regulations. After this period, unclaimed wages will be debited and the applicable salaries and wages account credited for the same amount. Local labor law may require unclaimed wages to be handled differently e.g. handed over to the state. Where this is the case, this best practice policy may be amended accordingly. Statutory Deductions Periodic spot-checks will be performed by the accounts department to ensure that statutory deductions are correctly processed. Payroll Reconciliation Such reconciliation would help to ensure that no salaries / payroll is paid to staff who have already resigned or are on leave without pay, and additionally makes sure that the resignation or hiring of staff is brought to management attention. Payroll reconciliation would be expanded to show variations in the number of staff or salaries, and thus justify fluctuations in the amount of salaries paid from month to month. This should subsequently be submitted to Financial Controller and General Manager for review before payment is made.

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PAYROLL RECONCILIATION

FOR THE MONTH OF : December 2011 Basic salaries (USD) This month 35,000 Last month 31,500

Increase / (decrease) 3,500

Represented by : 1. Joined this month :

Name Department Date Mr. Sumit M. Accounting 01.12.11 1,200 Ms. Lawan L. Admin. 16.12.11 1,100 Mr. Pan J. Admin. 16.12.11 1,000 2. Joined last month :

Name Department Date Mr. Amnart P. F&B 16.11.11 900 3. Resigned this month :

Name Department Date Ms. Somjai T. HK 01.12.11 (200)

4. Resigned last month : Name Department Date Mr. Uthai T. F&B 21.11.11 (5,000) Net increase 3,500

Prepare: (HR Department) Review : (Financial Controller) Approve : (General Manager)

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SECTION 10

INFORMATION TECHNOLOGY GENERAL CONTROLS

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Introduction The objective and scope of this part is to preliminarily guide the effectiveness of the general controls surrounding the Hotel’s accounting-related computer systems, i.e., Property Management System (PMS), Point of Sale (POS) and Back Office Accounting Program which, in turn, will be used by U Hotels & Resorts in our regular consideration of the adequacy of the controls relevant to the accounting procedures of The Hotel. Our guideline of the general controls (i.e., controls not specific to any one application) covered the following areas.

• Information system security policy • IT organization • Software development, acquisition, and maintenance • Documentation of computer-based systems • Physical security and environmental control measures • Logical access to program and data • Back up, recovery and contingency planning

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Subject: Information Systems Security Policy Department: Finance Reference # ITGC 100 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents ITGC – 100 INFORMATION SYSTEMS SECURITY POLICY POLICY A companywide policy on Information systems security must exist and be documented to serve as a basis for establishing accountability and responsibility for information systems security. PROCEDURE Regional Managing Director in conjunction with Regional Finance leader is responsible to consider the size of the Hotel and the inherent risk associated with maintaining assets on the computer. The Regional Finance leader must assign the Security Administration function to a person who is independent from Computer management and operation. The responsibilities of the designate that performs the Security Administration function may include, but not be limited to, the following: 1. The development and administration of the Hotel’s information system security policies and procedures. 2. Provision of security and procedure for granting and monitoring access privileges to program libraries and data

files under the various access controls utilized by the Hotel and for administrating the access levels for terminated or transferred employees.

3. Provision of methods for monitoring and investigating security breaches and unauthorized access attempts. 4. The periodic review of user IDs and passwords, and control over password master tables relating to user security

environment. 5. The review of information appearing on security violation reports and follow-up when needed. 6. The preparation, testing and maintenance of the Hotel’s contingency plan for computer operations. 7. The resolution of IT security queries, issues and concerns.

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Subject: IT Organization Department: Finance Reference # ITGC 101 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents ITGC – 101 IT ORGANIZATION POLICY There should be adequate segregation of duties between operations, system and application development, and user functions and responsibilities. PROCEDURE Duties within the IT department should be properly segregated. No one person controls more than one phase of an operation which enables the person to perpetrate and conceal irregularities in the normal course of his/her duties. Within a data processing environment, this means a separation of duties among programming, operations and user/system/database administration functions. However, in case of the number of available IT personnel and resources do not facilitate the Hotel from pursuing proper segregation of duties, Financial Controller must review the security-relevant events logs which should be generated from the Hotel’s accounting-related computer systems, i.e., Property Management System (PMS), Point of Sale (POS) and Back Office Accounting Program on a regular basis to detect unauthorized activities and accesses.

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Subject: Software development, acquisition and maintenance

Department: Finance

Reference # ITGC 102 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents ITGC – 102 SOFTWARE DEVELOPMENT, ACQUISITION AND MAINTENANCE POLICY There should be management controls in place over software development, acquisition, and maintenance to ensure adequate control over program and system changes. Standards of such are documented and updated in U Hotels & Resorts IT Manual as issued by the Corporate Office. PROCEDURE Financial Controller in conjunction with IT department is responsible to establish the procedure over program development and maintenance in accordance with corporate directives. The formal change control procedure for all types of changes (e.g., report program, operating system, database, infrastructure change) must be established and implemented. Users must always convey change requests to the IT department using some types of formal correspondence such as a standard change request form, or electronic form. The request should include, at a minimum as follows; 1. Requestor’s name 2. Date of the request 3. Date the change needed 4. Priority of the request 5. Type of change request 6. Description of the change request 7. Reason for the change

In addition, the request must provide evidence that it has been reviewed and authorized by appropriate user management. General Manager, Financial Controller and the relevant application owner must approve before implementing the change to system configuration/parameter setting into the production environment. Financial Controller and the user management must ensure that authorization and acceptance include user acceptance test at all key stages of report program enhancement be obtained and properly documented before using the reports program in the production environment. Change requests must be kept in a format that ensures all changes are considered for action and that allows the IT department to easily track the status of the request such as keeping the request at a single location or in an electronic form easy to search, sort and stored for future reference and review on the appropriateness and correctness of work done.

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Subject: Logical Access to Program and Data Department: Finance Reference # ITGC 103 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents ITGC – 103 LOGICAL ACCESS TO PROGRAM AND DATA POLICY There should be sufficient controls such as sign-on and password controls and formal procedures to grant access rights to program and data in place to ensure that access to the Company’s resources are effectively managed to maintain information confidentiality, integrity, and availability. PROCEDURE Formal user access request procedure Financial Controller in conjunction with IT department must that formal user access request procedure be established The request forms must be required for new user ID, user ID deletion, user profile update, and password reset. The user access request form must be assigned number and be filed in a numerical sequence and be kept for future reference, as an audit trail to verify appropriateness and authority of such assigned access rights, until particular users are no longer employed by the Hotel. Sign-on and password control Financial Controller in conjunction with IT Department is responsible to ensure that the formal, written standards and procedures on sign on and password usage and control are in accordance with management intention. The standards and procedures on sign on and password controls should be established, approved, distributed to all users, strictly followed throughout the entire organization, and periodically reviewed and redistributed to the users. The standards should include, but not be limited to, the following: 1. Password formatting rules (e.g., password length (5-8 characters), combination of alpha and numeric characters

etc.) 2. Use of passwords which are difficult to guess (e.g., not allow password the same as login name, not allow obvious

numeric/alphabet sequence, restriction on using certain characters, not allow using the same character more than once in the password,)

3. Confidentiality of passwords (e.g., initial password must be forced to change when users log in for the first time) 4. Prohibit sharing of user ID and passwords to ensure that access authorization cannot be compromised through a

use of another individual’s authorized data access 5. Automatically deactivating of user ID when a wrong password is entered for a predefined number for times,

typically three 6. User IDs not used after a number of days should be deactivated or removed to prevent possible misuse.

For passwords of high privilege IDs, Financial Controller must ensure these passwords for these IDs must be frequently changed every 30 days or promptly changed if they are suspected of being disclosed. The minimum password length must be greater than that of general users, such as 8 or 10 figures, to make it more difficult to guess. Other password restriction parameters must also be configured accordingly to strengthen controls over password use. Password must not be shared to others. Users who need access to the system resources be assigned unique IDs and passwords to improve the level of accountability for activities within the system

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The Financial Controller must launch a user awareness program to educate users of their roles over information security. Periodically review user IDs (PMS, POS and Back Office Accounting Program) Financial Controller must develop procedure for reviewing active users and their access rights. List of active users and their rights must be periodically sent to each department for confirmation and authorization by department heads. Such review must be conducted periodically to keep current with responsibilities and employment status. Apparent conflicts must be investigated and acted on. Record of such performance should be kept as an evidence of work done. Captured and regularly reviewed security relevant events. Security violation log reports must be generated on critical areas and events included remote access. Financial Controller and the assigned Security Officer must review these logs on a regular basis and retain a page of the log printout duly initialed as evidence of work done. The frequency of the review must be commensurate with the sensitivity of the computerized information being protected. Management must perform a spot check on those retained printouts and the audited personnel should not know the schedule of the check. In addition, access violations should be followed up to determine the login ID and terminal from which the violation was made, and the reason for the violation. To facilitate proper handling of access violations, written guidelines must exist for identifying various types and levels of violations and how they should be addressed. This will effectively provide direction for judging the seriousness of a violation.

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Subject: Back-up, recovery, and contingency planning Department: Finance Reference # ITGC 104 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents ITGC – 104 BACK-UP RECOVERY AND CONTIGENCY PLANNING POLICY Backup of critical computer resources and the recovery of information services following unanticipated interruptions are adequate plans and procedures exist. PROCEDURE Back-up control Financial Controller is responsible to establish a formal backup procedure which specifies, for each logical grouping of data, the following issues: 1. What type of system and application files should be backed up 2. When the back-up should take place 3. Number of copies required 4. Number of generations of the back-up files required 5. Retention period.

Backup inventory must be prepared to keep track of all backup media kept on-site and sent off-site. Backup log sheet must also be developed and used to record all information by the person responsible for backup tasks and be reviewed regularly by the head of IT Officer to ensure backup tasks are actually taken place and to detect any problem that might occur during the backup operations. The Hotel Financial Controller must find a secure off-site storage for the backup media to ensure that both the backup media and the servers must not be destroyed by the same disaster. In addition, testing the completeness and usability of backup files must be performed. Disaster Recovery Plan Financial Controller in conjunction with IT department is responsible to establish a formal disaster recovery plan which covers all critical applications as per the result from doing business impact analysis and test to ensure their effectiveness. An effective plan must address, but not be limited to, the following areas: 1. Definition of the types of risk and steps taken to mitigate them 2. Definition of a disaster 3. Business impact analysis including classification of business processes and their recovery prioritization 4. Time frames for escalation from a processing interruption into a disaster 5. Location of a hot, warm or cold alternate processing site 6. A list of equipment and configuration options required to replace the existing configuration 7. A method to replace the existing equipment on short notice 8. The location of the offsite storage tapes and procedures to access them 9. Procedure to restore the backups to the replacement processing platform 10. Staff required and their home phone numbers 11. Procedure which will be used during the system restoring period 12. Procedure for testing the plan 13. Procedure for updating the plan

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A formal disaster recovery plan, when updated, must be approved by Regional Managing Director and Regional Finance leader and communicated to all relevant users and IT department. In addition, the plan must be reviewed on a periodic basis to ensure that it is up-to-date and reflects the current environment. The plan and any subsequent changes must also be communicated to all personnel involved.

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SECTION 11

ANNUAL OPERATING PLAN/BUDGET GUIDELINES

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Introduction The following Annual Operating Plan/Budget guidelines and suggestions are not intended to replace hotel management’s hotel specific knowledge or better judgment, only to suggest a method of making financial and statistical projections on the most appropriate basis. Should hotel management find that in their circumstances another method of budgeting is appropriate, and then those methods should be followed.

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Subject: Annual Operating Plan Submission Department: Finance Reference # BP 100 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 100 ANNUAL OPERATING PLAN SUBMISSION POLICY Submissions to owners must be made in accordance with the Hotel Operating Agreement, the regional office must receive the submission a minimum of 30 days prior to the owner’s submission date for review. PROCEDURE The Annual Operating Plan for the following must be approved by the Regional Managing Director and Regional Finance leader prior to submission to the owners. The Annual Operating plan must follow the standard template as established by U Hotels & Resorts. The Regional Managing Director will set an Annual Operating Plan submission schedule for all properties annually.

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Subject: Annual Operating Plan Sensitivity Department: Finance Reference # BP 101 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 101 ANNUAL OPERATING PLAN SENSITIVITY POLICY It is U Hotels & Resorts policy that Annual Operating Plan must deal with these "what ifs?" and be reflective of changing business conditions. The General Manager and Financial Controller will conduct the Sensitivity analysis for looking at a wide range of variables and assumptions in the Annual Operating Plan to determine the impact on the Hotel and the viability of the plan if and when these planning assumptions change - which they invariably and inevitably will. PROCEDURE In calculating profitability and performance measurements, risk inherent to the Annual Operating Plan must be taken into consideration. Financial Controller must calculate the critical factors (e.g. RevPAR, Overhead Expenses, etc.) the best (+5%, +10%, +15% and +20%) and the worst scenarios (-5%, -10%, -15% and -20%) to the attention of the Regional Managing Director and Regional Finance leader for review prior to submission to the owners.

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Subject: Market Segment Statistics Department: Finance Reference # BP 102 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 102 MARKET SEGMENT STATICTICS POLICY General Manager, Financial Controller and Director of Sale and Marketing are responsible to ensure all Market Segment Statistics assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Director of Sale and Marketing in conjunction with General Manager must prepare the Market Analysis Workbook by per market segment per month by no later than 90 days before financial year for Financial Controller to budget Room revenue.

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Subject: Room Division Department: Finance Reference # BP 103 Page: 1/3 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 103 ROOM DIVISION POLICY General Manager and Financial Controller are responsible to ensure all Room Division assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Accommodation Revenue This caption is budgeted by extracting the total of the segment by segment analysis derived from the Sale & Marketing Situation Analysis Workbook. Accommodation Rebates are not usually budgeted or re-forecast. No Show Revenue Review the ratio of No-Show Revenue to Accommodation Revenue, net of rebates, month by month for the period and current years, and apply an appropriate percentage for the budget year. Consider the levels of the occupancy and special events when assessing what the appropriate percentage for each month should be. No Show Rebates are not usually budgeted or re-forecast. Revenue for Functions Assess the anticipate demand and enter the appropriate amount month by month. Rebate for Functions are not usually budgeted or re-forecast. Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Commission Travel Agent: Estimate commissionable Room Revenue by month and apply the appropriate commission percentage. It may be appropriate to estimate commissionable revenue and the resulting commission on Market Segment by Market Segment basis. Other: If other non-Travel Agent Commission is payable budget the monthly commission amounts on the basis of this commission. Laundry Linen:

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Estimate a Cost per Occupied Room. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Uniforms: Estimate a Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. General Cleaning Estimate an Amount per Month based on the projected schedule of cleaning required. Cleaning Supplies Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Occupied Room accordingly. Guest Supplies Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases (such as changes in Service Standards) for the upcoming year and adjust the Cost per Occupied Room accordingly. Printing and Stationary Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Occupied Room accordingly. Other Supplies Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Occupied Room accordingly. Decorations Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases for the upcoming year and adjust monthly cost accordingly based on anticipated standards. Increase due to seasonal events such as Christmas, Easter and locally recognized holidays should be reflected in the respective months rather than being average throughout the year. Guest Transport Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Occupied Room accordingly. Licenses and Taxes Budget an Amount per Month if the nature of Licenses and Taxes is fixed per annum by the local authorities. The annual expense is spread equally across the months of the year. Budget as a Percentage of Revenue if the Licenses and Taxes cost is based on revenue. Communication costs Review the actual costs on a monthly basis. Consider inflationary or their increases or decreases for the upcoming year and adjust the monthly cost accordingly. In Room Television and Technology Complimentary Television: Budget the cost based on the actual calculation of the cost of providing complimentary cable television services. This may be a fixed Amount per Month, a Cost per Occupied Room or some other calculation. Complimentary Movies: Budget the cost based on the actual calculation of the cost of providing In House movies services. This may be a fixed Amount per Month, a Cost per Occupied Room or some other calculation.

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Television Information Services: Budget the cost based on the actual calculation of the cost of providing interactive services such as TV folio display. This may be a fixed Amount per Month, a Cost per Occupied Room or some other calculation. Television Interactive Services: Budget the cost based on the actual calculation of the cost providing interactive services such as TV folio display. This may be a fixed Amount per Month, a Cost per Occupied Room or some other calculation. In House Music Budget the cost based on the actual calculation of the cost providing complimentary centralized (e.g. in Telephone Operators Room) piped-in music, music tapes etc. This may be a fixed Amount per Month, a Cost per Occupied Room or some other calculation. Guest Internet Access Budget the cost based on the actual calculation of the cost Internet access. This may be a fixed Amount per Month, a cost per Occupied Room or some other calculation. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Sundry Equipment Complete the annual Sundry Equipment purchase requirements for Room Division, then use one the following methods of monthly allocation:

• Divide the total amount by twelve for each month’s budget. • Divide the total amount by total Room Revenue and then apply the resulting percentage against monthly

revenue for each month’s budget

Transportation Budget an Amount per Month based on anticipated costs.

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Subject: Food and Beverage Division Department: Finance Reference # BP 104 Page: 1/4 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 104 FOOD AND BEVERAGE DIVISION POLICY General Manager and Financial Controller are responsible to ensure all Food and Beverage Division assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Food Revenue Calculate on per outlet/per meal period basis. Where the outlet is predominantly a food outlet, food will be classified as Primary Revenue. For each outlet select the meal period Breakfast, Lunch, Dinner or Other and complete both Budget and Forecast data entries for the relevant meal periods. Food revenue should be calculated as the result of the Average Food Check multiplied by the number of Food Covers per month per meal period. The total number of food covers is comprised of covers generated per meal period by In House guests and those generated from external guests or Walk In covers. In House covers should be calculated as a ratio or percentage of In-House guests utilizing an outlet in a given meal period, known as the Guest Utilization factor. In this way, total covers generated by In House guests will vary in accordance with the level of occupancy for any given utilization ratio. Utilization factors should be determined in accordance with the historical trend adjusted for other factors such as: 1. Future pricing decision which may increase/decrease utilization 2. Change in business mix and behavioral characteristics of the different market segments. 3. The absolute level of occupancy – for instance, proportionately a lower utilization factor may be experienced as

occupancy increases – restaurant capacity per meal should also be considered in addition to the number of covers being generated by external guests.

Once the In-House utilization factor has been estimated, the resultant number of In-House covers should be verified for reasonableness. The number of Walk In covers should be calculated by either estimating the average number of Walk In covers per day per meal period or as some ratio to the number of In House covers. Once the total number of Food Covers has been calculated, the average food check for each meal period (and each month) should be estimated after considering the historical trend adjusted for changes in pricing decisions, changes in business mix and according to the total number of covers being generated. The definition of a cover should be in accordance with policy Food and Beverage Covers. Food rebate are not usually budgeted or re-forecast. Beverage Revenue Revenue derived from beverage sales in all outlet of the Hotel including Mini Bar sales must also be completed for both Budget and Forecast periods. For reasons of practically, food items sold in the Mini Bar should also be recorded as Beverage Sales and the cost charged to Beverage Cost of Sales. Beverage charged on Officer and Entertainment Checks should not be included as beverage revenue. This consumption should be valued at cost and deducted from beverage cost of sales. The corresponding expenses should

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be charged to the respective divisions’ employee meal expense or in the case of entertainment account. Revenue from sale of empty bottles and barrels should not be included and should be credited to Beverage Cost or Deposits as the case may be. The method of projecting Beverage Revenues will vary accordingly to whether and outlet is predominantly a Food outlet or a Beverage outlet. For Food outlets, beverage revenues may be calculated as a factor of total food revenue per meal period per month. More usually, an average amount per food cover will be used to project secondary beverage revenues. In predominantly Beverage outlets, beverage revenue should be projected as the result of total number of drinks served multiplied by the average check per drink, per meal period per month. In this instance, food revenues may be calculated as multiple of factor of estimated beverage revenues per meal per period per month. Beverage rebate are not usually budgeted or re-forecast. Other F&B Income Tobacco Revenue Budget a Percentage of Food and Beverage Revenue, outlet by outlet. Function Room Revenue Assess the anticipated demand and enter the appropriate month by month. Other Income Review the type of revenue credited to this account and budget accordingly. Unredeemed Meal Coupon Income Review previous years’ results and enter as estimate taking into account anticipated changes in meal inclusive room sales. Food and Beverage Sponsorship Income Review previous years’ results and enter as estimate taking into account anticipated changes in sponsors’ generosity. Cost of Sales Food Food Cost of Sales should be calculated per month for each outlet. The calculation basis is a percentage factor of total monthly Food Revenue. Estimates per month may be based upon the historical trend adjusted for changes in outlet menu prices, changes in menus or recipes, anticipated increase/decrease in input costs from supplier, seasonal price variations, and in some cases such as where a buffet is common, variations in sales volumes. Beverage Beverage Cost of Sales should be calculated per month for each outlet. The calculation basis is a percentage factor of total monthly Beverage Revenue. Estimates per month may be based upon the historical trend adjusted for changes in outlet prices, changes in beverage lines, and anticipated increase/decrease in input costs from supplier. Tobacco Budget a Percentage of Tobacco Revenue, outlet by outlet Function Room Function Room Cost of Sales should be calculated per month. The calculation basis is a percentage factor of total Function Room Revenue. Estimates per month may be based upon the historical trend adjusted for changes in prices and anticipated increase/decrease in input costs from supplier. Other Income Budget a Percentage of Other Income, outlet by outlet. Payroll and Contract Service

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Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Commission Approved Commission paid to approved distribution channels (such as Wedding Agents) for food and beverage business should be estimated as a percentage of the relevant outlet’s total Food and Beverage revenue per month, or as a fixed functional currency amount where identifiable. Kitchen Fuel Review the actual costs in a per cover basis. Consider inflationary or other increases or decreases for upcoming year and adjust the Cost per Cover accordingly. Laundry Linen: Budget the Cost per Cover. If the hotel has its own laundry, the costs will be based on the charge out form the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Uniforms: Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Music and Entertainment Musician’s Fees: Budget an Amount per Month based on the existing and anticipated schedule of entertainment. Musician’s Other Expenses: Budget an Amount per Month based on the historical trend and schedule of entertainment. Consider inflationary or other increases or decreases for the upcoming year. In House Music: Budget an Amount per Month based on the historical trend. Consider inflationary or other increases or decreases for the upcoming year. Royalties: Budget an Amount per Month based on the historical trend. Consider inflationary or other increases or decreases for the upcoming year. Cleaning Supplies Review the actual costs on a per cover basis. Consider inflationary or other increases or decrease for the upcoming year and adjust the Cost per Cover accordingly. Bar Supplies Review the actual costs on a per cover basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Cover accordingly. Guest Supplies Review the actual costs on a per cover basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Cover accordingly. Paper Supplies Review the actual costs on a per cover basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Cover accordingly. Printing and Stationery Review the actual costs on a per cover basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the Cost per Cover accordingly.

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Other Supplies Review the actual costs on a per cover basis. Consider inflationary or other increase or decreases for the upcoming year and adjust the monthly cost accordingly. Decorations Review the actual costs on a per Occupied Room basis. Consider inflationary or other increases or decreases for the upcoming year and adjust monthly cost accordingly based on anticipated standards. Increase due to seasonal events such as Christmas, Easter and locally recognized holidays should be reflected in the respective months rather than being average throughout the year. License and Taxes Budget an Amount per Month if the nature of Licenses and Taxes is fixed per annum by the local authorities. The annual expense is spread equally across the months of the year. Budget a Percentage of Revenue if Licenses and Taxes cost is based on revenue. Menu and Wine Lists Estimated the cost of all replacement menus and wine lists (including production costs) and the cost of reprinting existing menus. Allocate the costs over the useful life of the menus, but not past the date at which the menus will be changed. Special Food & Beverage Promotion Expense Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Spoilage Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Sundry Equipment Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Operating Expenses Review the actual costs on monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Depending on the nature of expense charged to this caption, there may also be a fixed Amount per Month required. Transportation Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Charge out F&B Admin: Budget the expenses for the F&B Administration department. Then pro-rate the total department costs to the outlets month by month based on an appropriate ratio such as the outlet F&B Revenue as a percentage of Total F&B Revenue. The Total F&B Administration Charge out should be equal to the Charge out from F&B Administration in each outlet. Chef’s office: Budget the expenses for the Chef’s Office/Commissary Kitchen. Then pro-rate the total department costs to the outlets month by month based on an appropriate ratio such as the outlet Food Revenue as a percentage of Food Revenue. The Total Chef’s Office Charge out should be equal to the Charge out from F&B Administration in each outlet.

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Stewarding: Budget the expenses for the Stewarding department. Then pro-rate the total department costs to the outlets month by month based on an appropriate ratio such as the outlet covers as a percentage of Total covers. The Total Stewarding Charge out should be equal to the Charge out from F&B Administration in each outlet.

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Subject: Telephone Department Department: Finance Reference # BP 105 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 105 TELEPHONE DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Telephone department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Local Call Revenue Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in telephone rates. The budgeted figure for this caption should be the hotel cost of providing the guest call – the hotel markup is budgeted under Local Call Surcharge. Local call Surcharge Budget a Percentage of Local Call Revenue based on the hotel profit margin. Long Distance Call Revenue Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in telephone rates. The budgeted figure for this caption should be the hotel cost of providing the guest call – the hotel markup is budgeted under Long Distance call Surcharge. Long Distance Call Surcharge Budget a Percentage of Long-Distance Call Revenue based on the hotel profit margin. Calling Card Surcharge Budget an Amount per Month based on the hotel surcharge and historical usage. Commission on Public Telephones Budget an Amount per Month based on the hotel commission and historical usage. Commission on Telephone Card Sales Budget an Amount per Month base on the hotel commission and historical usage. Cost of Sales Local Calls Cost of Sales Budget 100% of Local Call Revenue, or an appropriate percentage of Local Call Revenue – Net. Long Distance Calls Cost of Sales Budget 100% of Long-Distance Call Revenue, or an appropriate percentage of Long-Distance Call Revenue – Net. Cost of Line Rental Budget an Amount per Month based on anticipated fixed charges for telephone line rental and long-distance inter-carrier access fees. Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy.

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Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Equipment Changes Budget an Amount per Month based on the estimated charges from the telephone company for installing and moving costs for equipment changes, extra line, etc. requested by the hotel. Other Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Printing and Stationery Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Subject: Business Center Department Department: Finance Reference # BP 106 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 106 BUSINESS CENTER DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Business Center Department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Telefax Revenue Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in telephone rates. The budgeted figure for this caption should be the hotel cost of providing the guest call – the hotel markup is budgeted under Telefax Surcharge. Telefax Surcharge Budget a Percentage of Telefax Revenue based on the hotel profit margin. Conference Room Rental Assess the anticipated demand and enter the appropriate amount month by month. Photocopies Revenue Review the actual revenue on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Secretarial Service Revenue Review the actual revenue on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Other Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Printing and Stationery Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Subject: Fitness Center Department Department: Finance Reference # BP 107 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 107 FITNESS CENTER DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Fitness Center Department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Membership Initiation Fees Assess the anticipated demand and potential for new members and enter the appropriate amount month by month. Membership Annual Fees Estimate the membership for the coming year and budget accordingly, allocating any increases in fees to the appropriate periods. Membership Monthly Fees Estimate the membership for the upcoming year and budget accordingly, allocating any increases in fees to the appropriate periods. Daily Fees Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Guest Fees Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Locker Fees Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Squash/Tennis Fees Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Activity Fees Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Massage Fees Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Merchandise Sales Revenue Review the actual revenue on a monthly basis. Consider list price and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly.

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Cost of Sales Squash/Tennis Cost of Sales Review the actual costs and budget as appropriate percentage of Squash/ Tennis Fees if the services are provided by an outside contractor. Activity Cost of Sales Review the actual costs and budget as appropriate percentage of Activity Fees if the services are provided by an outside contractor. Massage Cost of Sales Review the actual costs and budget as appropriate percentage of Massage Fees if the services are provided by an outside contractor. Merchandise Cost of Sales The calculation basis is a percentage factor of total monthly Merchandise Sales Revenue. Estimate per month may be based upon the historical trend adjusted for change in item price, changes in sales line anticipated increases or decreases in input cost from suppliers. Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Laundry Linen: Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Uniforms: Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Cleaning Supplies Review the actual costs on a per Guest or Percentage of Revenue basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the cost accordingly. Guest Supplies Review the actual costs on a per Guest or Percentage of Revenue basis. Consider inflationary or other increases or decreases such as changes in Service Standards for the upcoming year and adjust the cost accordingly. Other Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Printing and Stationery

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Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Communication Cost Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Subject: Guest Laundry Department Department: Finance Reference # BP 108 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 108 GUEST LAUNDRY DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Guest Laundry Department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Guest Laundry Revenue Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in laundry price. Guest Dry Cleaning Revenue Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in laundry price. Guest Valet Revenue Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in laundry price. Outside Laundry Revenue Assess the anticipated demand and enter the appropriate amount month by month. Cost of Sales Guest Laundry outside Review the actual costs and budget an appropriate percentage of Guest Laundry Revenue if the services are provided by an outside contractor. Note that if ALL Guest Laundry is provided by an outside contractor and the hotel does not have a Laundry department, then the mark up charged by the hotel should be credited to the Guest laundry Concession Income in Other Income and Rental not to Guest Laundry Revenue. Guest Dry Cleaning outside Review the actual costs and budget an appropriate percentage of Guest Dry Cleaning Revenue if the services are provided by an outside contractor. Note that if ALL Guest Dry Cleaning is provided by an outside contractor and the hotel does not have a Laundry department, then the mark up charged by the hotel should be credited to the Guest laundry Concession Income in Other Income and Rental not to Guest Dry Cleaning Revenue. Guest Valet outside Cost of Sales Review the actual costs and budget an appropriate percentage of Guest Valet Revenue if the services are provided by an outside contractor. Note that if ALL Guest Valet services are provided by an outside contractor and the hotel does not have a Laundry department, then the mark up charged by the hotel should be credited to the Guest laundry Concession Income in Other Income and Rental not to Guest Valet Revenue. Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment

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Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Cleaning Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the cost accordingly. Laundry Supplies Review the actual costs on a monthly basis. Consider laundry volume, inflationary or other increases or decreases for the upcoming year and adjust the cost accordingly. Other Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Printing and Stationery Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Transportation Review the actual costs on a monthly basis. Consider laundry volume, inflationary or other increases or decreases for the upcoming year and adjust the cost accordingly. Utilities Review the actual costs on a monthly basis. Consider laundry volume, inflationary or other increases or decreases for the upcoming year and adjust the cost accordingly. Charge out Budget the expense for the Laundry department. Then calculate the charge out to the Laundry – Linen and Laundry – Uniforms account for the following each division and department:

• Room • Food & Beverage • Telephone • Business Center • Lobby Shop • Administration & General • Human Resources • Sales and Marketing • POMEC

All of expenses are allocated month by month based on unit costs calculated in accordance with Laundry Department Accounting.

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Subject: Lobby Shop Department Department: Finance Reference # BP 109 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 109 LOBBY SHOP DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Lobby Shop Department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Merchandise Sales Revenue Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Merchandise Sales Refunds are not usually budgeted or re-forecast. Delicatessen Sales Revenue Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Delicatessen Sales Refunds are not usually budgeted or re-forecast. Flower Sales Revenue Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Flower Sales Refunds are not usually budgeted or re-forecast. Sundries Sales Revenue Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Sundries Sales Refunds are not usually budgeted or re-forecast. Book Sales Revenues Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Book Sales Refunds are not usually budgeted or re-forecast. Tobacco Sales Revenue Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Tobacco Sales Refunds are not usually budgeted or re-forecast. Photo Development Revenue

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Review the actual revenue on a monthly basis. Consider list pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Photo Development Refunds are not usually budgeted or re-forecast. Cost of Sales Merchandise Cost of Sales The calculation basis is a percentage factor of total monthly Merchandise Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier. Delicatessen Cost of Sales The calculation basis is a percentage factor of total monthly Delicatessen Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier and or the hotel Pastry/Bakery/Commissary kitchen. Flower Cost of Sales The calculation basis is a percentage factor of total monthly Flower Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier. Sundries Cost of Sales The calculation basis is a percentage factor of total monthly Sundries Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier. Books Cost of Sales The calculation basis is a percentage factor of total monthly Books Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier. Tobacco cost of Sales The calculation basis is a percentage factor of total monthly Tobacco Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier. Photo Development Cost of Sales The calculation basis is a percentage factor of total monthly Photo Development Sales Revenue. Estimates per month may be based upon the historical trend adjusted for changes in item prices, changes in sales lines anticipated increases or decreases in input costs from supplier. Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Other Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Printing and Stationery Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Subject: Garage/Car Park Department Department: Finance Reference # BP 110 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 110 GARAGE/CARPARK DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Garage/Car Park Department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Revenue Seasonal Parking Fee Revenue Assess the anticipated demand and potential for new seasonal parking customers and enter appropriate amount month by month. Daily Parking Fees Revenue Review the actual revenue on a monthly basis. Consider pricing and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Guest Parking Fees Revenue Review the actual revenue on a monthly basis. Consider pricing, anticipated occupancy and Food & Beverage covers and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Cost of Sales Garage/Car Park cost of Sales Analyze any actual direct costs of parking and budget accordingly Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Other Expenses Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Cleaning Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Printing and Stationery Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Subject: Other Income and Rentals Department: Finance Reference # BP 111 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 111 OTHER INCOME AND RENTALS POLICY General Manager and Financial Controller are responsible to ensure all Other Income and Rentals assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Space Rental Shop Rental Review current and anticipated Shop Rental contracts and budget an Amount per Month based on contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out through the year. If rental is based on a percentage of Shop Revenue, adjust the monthly amounts based on anticipated occupancy or other changes in lobby traffic. Office Rental Review current and anticipated Office Rental contracts and budget an Amount per Month based on contractual rates. Increase in rates should be reflected in the relevant months and should not be spread out the year. Showcase Rental Review current and anticipated Showcase Rental contracts and budget an Amount per Month based on contractual rates. Increase in rates should be reflected in the relevant month and should not be spread out through the year. Concession Guest Laundry Concession Income Review the actual revenue on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Note that only the mark up that the hotel charges on a laundry, dry cleaning and valet services provided by an outside contractor is credited to their caption. Restaurant Concession Income Review current and anticipated Restaurant Concession contracts and budget an Amount per Month based in contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out through the year. If concession income is based on a percentage of Restaurant Revenue, adjust the monthly amounts based on anticipated occupancy or other change in Restaurant traffic. Fitness Center Concession Income Review current and anticipated Fitness Center Concession contracts and budget an Amount per Month based on contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out through the year. If concession income is based on a percentage of Fitness Center Revenue, adjust the monthly amounts based on anticipated occupancy or other change in Fitness Center traffic. Commission Income Auto Rental commission Review current and anticipated Auto Rental Commission contracts and budget an Amount per Month based in contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out through the year. If commission is based on a percentage of Auto Rental Revenue, adjust the monthly amounts based on anticipated occupancy or other change in Auto Rental traffic.

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Flower Commission Review current and anticipated Flower Commission contracts and budget an Amount per Month based in contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out through the year. If commission is based on a percentage of Flower Sales, adjust the monthly amounts based on anticipated occupancy or other change in Flower traffic. Garage/Car Park commission Review current and anticipated Garage/Car Park Commission contracts and budget an Amount per Month based on contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out through the year. If commission is based on a percentage of Garage/Car Park Revenue, adjust the monthly amounts based on anticipated occupancy or other change in Garage/Car Park traffic. Pay TV and Movies Commission Budget Revenue per Guest based on historical guest utilization and any anticipated inflationary or other increases or decreases in pay TV and movie rates. Sundry Commission Review the actual revenue on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Taxi Stand Commission Review the actual revenue on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Other Income Cash discounts Earned Review the actual revenue on a monthly basis. Consider the hotel policy on taking advantage of cash discounts along with the anticipated availability of the required cash, and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Foreign Exchange Earned Review the actual revenue on a monthly basis. Consider possible changes to the hotel markup or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Cancellation Penalty Review the ratio of cancellation Penalties to Accommodation Revenue, net of rebates, month by month for the prior and current years, and apply an appropriate percentage or amount for the budget year. Consider the hotel cancellation policy and levels of occupancy and special events when assessing what the appropriate percentage or amount for each month should be. Interest Review the actual revenue on a monthly basis. Consider the anticipated level if cash interest rates and other increases or decreases for the upcoming year and adjust the monthly revenue accordingly. Miscellaneous Review the actual revenue on a monthly basis. Consider inflationary or other increases or decrease for the upcoming year and adjust the monthly revenue accordingly. Salvage Review the actual revenue on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly revenue accordingly.

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Subject: Administration and General Division Department: Finance Reference # BP 112 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 112 ADMINISTRATION AND GENERAL DIVISION POLICY General Manager and Financial Controller are responsible to ensure all Administration and General Division assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other expense Bank Charges Review the actual costs in a monthly basis. Consider changes in transaction, cash volume, inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Cash Overages and Shortages Review the actual costs on a monthly basis and the hotel and/or labor policy relating to recovery shortage from employees. Consider policy changes and other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Communication costs Review the actual costs on a monthly basis. Consider inflationary or their increases or decreases for the upcoming year and adjust the monthly cost accordingly. Credit Card Commission Review the actual costs on a percentage of revenue basis. Consider contractual credit card commission or other increases or decreases for the upcoming year and adjust the budget percentage of revenue accordingly. If the actual data is captured in sufficient detail, on a card type basis, historical values can be factored to total revenue. Then the budget for each card type can be generated by applying that factor and the card commission rate to the budgeted total revenue. Credit and Collection Charges Review the actual costs on a monthly basis. Consider the status of Accounting Receivable – Trade, any standing or contracted charged and any other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Information System Expenses Software: Review current and anticipated Software Maintenance contracts and budget an Amount per Month based on contractual rates. Increase in rate should be reflected in the relevant months and should not be spread out throughout the year. Also, budget for software purchases if not included in FF&E.

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Other Costs: Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Donations Review the actual costs on a monthly basis. Consider the hotel donations policy and adjust the monthly cost accordingly. Internal Audit Expense Audit Fees: Determine the date and anticipated Audit Fees from Corporate Office and budget accordingly. The expense can be spread evenly over the year. Other Costs: If Internal Audit Expenses – Audi Fees are budgeted, estimate other costs associated with the audit such as airfare and budget accordingly. The expenses can be allocated to the period in which the audit is expected or can be allocated to the period in which the audit is expected or can be spread evenly over the year. Professional Fees External Audit: Enquire as to the anticipate Audit Fees from the External Audit Firm and budget accordingly. Legal: Review current and anticipated legal retainer contracts and budget and Amount per Month based on contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out throughout the year. Also review the history of ad hoc charges, any anticipated legal service requirements and adjust the monthly budget accordingly. Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Provision for Doubtful Accounts Review the actual costs on a percentage of revenue basis. Consider the status of the Account Receivable Aged Trial Balance, bad debt history, changes in economic conditions and any other factors that may affect the expense for the upcoming year and adjust the budgeted percentage of revenue accordingly. Sundry Write Offs Review the actual costs on a percentage of revenue basis. Consider the status of the history of Sundry Write Offs, changes in economic conditions and any other factors that may affect the expense for the upcoming year and adjust the budgeted percentage of revenue accordingly. Trade Association and Publication Prepare a list of all associations that the hotel or Administration & General employees belongs to plus a list of all publication that are subscribed to. Review whether all associate/publication cost are warranted and based on anticipated price changes, budget accordingly. Transportation Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Travel Expenses Review planned and anticipated travel and estimate and budget the expenses.

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Subject: Human Resource Division Department: Finance Reference # BP 113 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 113 HUMAN RESOURCE DIVISION POLICY General Manager and Financial Controller are responsible to ensure all Human Resource Division assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Awards and Social Activities Review the planned and anticipated award and activities and estimate and budget the expenses accordingly. Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Trade Association and Publication Prepare a list of all associations that the hotel or Human Resource employees belongs to plus a list of all publication that are subscribed to. Review whether all associate/publication cost are warranted and based on anticipated price changes, budget accordingly. Training Internal: Review the hotel wide training needs including core training. Estimate the cost of each training session. Add to this, the corporate training budget meets the minimum recommended training budget per FTE. Material and Equipment: Review the material and equipment need of the Training Department for the upcoming year and estimate and budget the expense accordingly. External – Outside Consultants: Review planned and anticipated training programs that are to be held outside of the hotel and estimate and budget accordingly. External Training Programs: Review planned and anticipated training programs that are to be held outside of the hotel and estimate and budget accordingly. Other: Review the actual cost on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Transportations Review the actual cost on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Subject: Employee Restaurant Department Department: Finance Reference # BP 114 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 114 EMPLOYEE RESTAURANT DEPARTMENT POLICY General Manager and Financial Controller are responsible to ensure all Employee Restaurant Department assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Charge out Budget the expenses for the Employee Restaurant department. Then calculate the charge out to Employee Related Expenses – Meals account for each related revenue and cost center as follows; 1. Room 2. Food and Beverage 3. Telephone 4. Business Center 5. Fitness Center 6. Laundry 7. Lobby Shop 8. Garage/Car park 9. Administration and General 10. Human Resources 11. Sales and marketing 12. POMEC 13. Etc.

This expense must be allocated month by month based on the ratio of each related revenue and cost center FTE to total FTEs. Note: That only non-payroll and related expenses are charge out from the Employee Restaurant.

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Subject: Sales and Marketing Division Department: Finance Reference # BP 115 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 115 SALES AND MARKETING DIVISION POLICY General Manager and Financial Controller are responsible to ensure all Sale and Marketing assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Trade Association and Publication Prepare a list of all associations that the hotel or Marketing employees belongs to plus a list of all publication that are subscribed to. Review whether all associate/publication cost are warranted and based on anticipated price changes, budget accordingly. Entertainment Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Business Development Other Expenses Sale Office Expenses: Review current and anticipated Sales Office Rental contracts and budget an Amount per Month based on contractual rates. Increase in rates should be reflected in the relevant months and should not be spread out through the year. Trade Shows: Review planned and anticipated trade show participation and estimate and budget the expenses accordingly. Travel Expenses: Review planned and anticipated travel and estimate and budget the expenses accordingly. Other Operating Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly.

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Integrated Marketing Communications Other Expenses These expenses could be divided into 3 categories as follows: 1. Advertising

• Print, Out of Country • Print, Local • Electronic • Outdoor • Production Consider based on Marketing Activity/Media schedule, estimate and budget expenses accordingly.

2. Direct Marketing • Material • Delivery • Database • Fulfillment Consider based on Marketing Activity/Media schedule, estimate and budget expenses accordingly.

3. Collateral and Give – A ways • Print • Electronic • Give-A way

Consider based on Marketing Activity/Media schedule, estimate and budget expenses accordingly.

Public Relations Other Expenses Civic and Community Projects: Review planned and anticipated Civic and Community Project participation and estimate and budget the expenses accordingly. Photography: Review the actual costs on monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Public Relations Agency Fees: Review current and anticipated Public Relations firm retainer contracts and budget an Amount per Month based on contractual rates. Increases in rates should be reflected in the relevant months and should not be spread out throughout the year. Also review the history of ad hoc charges, any anticipated PR requirements and adjust the monthly budget accordingly.

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Subject: Property Operations & Maintenances Division Department: Finance Reference # BP 116 Page: 1/3 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 116 PROPERTY OPERATIONS AND MAINTENANCE DIVISION POLICY General Manager and Financial Controller are responsible to ensure all Property Operations & Maintenances Division assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Payroll and Contract Service Consider and calculate in accordance with Payroll and Related Expenses Policy. Provision for Replacement of Operating Equipment Consider and calculate in accordance with Provision for Replacement of Operating Equipment Policy. Other Expenses Air Conditioning and Ventilation Review the routine Repair and Maintenance program according to manufacturer recommendations and estimate the possible increase in maintenance contracts based on previous agreements or any negotiated amounts. Include any major one tine repairs deemed necessary (such as the overhaul of a chiller) and the cost of supplies and ad hoc repairs of all air conditioning and ventilation systems. Building Review the routine Repair and Maintenance program and assess any ad hoc repair required to building. Estimate the possible increase in maintenance contracts based on previous agreements or any negotiated amounts. Include the cost of supplies and repairs to building both interior and exterior. Curtains and Drapes Review the routine Repair and Maintenance program and estimate any ad hoc repairs that may be necessary based on prior years experience. Include also the cost of supplies and repairs to curtains, drapes and movable partitions including cost of hangings, covers, rods, etc. Electrical Review the routine Repair and Maintenance program and assess any ad hoc repairs that may be necessary based on prior year experience. Include also the cost of supplies and repairs to all electrical and electronic equipment. Electric Bulbs Review prior year actual expenditures and consider any planned change to the replacement program for electric bulbs. Elevators and Escalators Review the routine Repair and Maintenance program accordingly to manufacturer recommendations. Estimate the possible increase in maintenance contracts based on previous agreements or any negotiated amounts. Including also supplies and amount for ad hoc repairs based on previous experience. Floor Covering Review the routine Repair and Maintenance program and estimate the budget year amount based on previous years experience. Include any planned replacements which are not charged against the FF&E reserve.

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Furniture Review the routine Repair and Maintenance program and estimate the budget year amount based on previous years experience. Include any planned replacements which are not charged against the FF&E reserve. Grounds and Landscaping Review the Overall requirements for the upkeep of gardens and landscaped areas with the respective division heads. Estimate the possible increase in maintenance contracts based on previous agreements or any negotiated amounts. Note that indoor plant maintenance should be charged to Decoration under the relevant division. Information Systems Estimate the amount for the cost of supplies and repairs to computers, building automation and management systems based on prior year experience. Estimate the possible increase in maintenance contracts based on previous agreements or any negotiated amounts. Do not include software costs, which should be charged either to Administration & General Information Systems – Software or if appropriate, to FF&E reserve. Kitchen and Refrigeration Review the routine Repair and Maintenance program and estimate the budget year amount based on previous experience. Include the cost of supplies and repairs to kitchen and refrigeration equipment. Laundry Review the routine Repair and Maintenance program and estimate the budget year amount based on previous experience. Life Safety Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Locks and Keys Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Mechanical Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Include the cost of supplies and repairs to miscellaneous mechanical including housekeeping equipment. Other Repairs & Maintenance Expenses Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Painting and Decorations Estimate the budget year amount for the cost of materials for painting and decorations based on prior experience and planned special programs. Plumbing and Heating Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Include the cost of supplies and repairs to plumbing and heating equipment. Recreation Facilities Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Include the cost of supplies and repairs to all recreation facilities including swimming pool, tennis courts, squash courts, etc. Signs Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Include the cost of supplies and repairs to all signs and sky lighting.

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Vehicle Maintenance Review the routine Repair and Maintenance program and estimate the amount for ad hoc repairs based on previous experience. Include the cost of supplies and repairs to all hotel vehicles. Laundry – Uniforms Budget the Cost per FTE. If the hotel has its own laundry, the costs will be based on the charge out from the Laundry department and calculated in accordance with Laundry Department Accounting Policy. Cleaning Supplies Review the actual costs on a monthly basis. Consider inflationary or other increases or decreases for the upcoming year and adjust the monthly cost accordingly. Note that cleaning supplies specific to the repair and maintenance of a specific system item be charged to the relevant R&M account (e.g. cleaning material used in the maintenance of fan coil unit should be charged to Air Conditioning and Ventilation). Consultancy Fees Based on prior year experience and planned special projects for the budget year, estimate the Fees for outside consultants for review and advice on all aspects of the hotel’s engineering systems. Energy Costs Electricity: Based on prior experience and projected business levels, project the amount for the cost of electricity charges from outside concerns including demand charge, power factor penalty, fuel for hotel generator, etc. Also take any possible tariff increases into consideration. Boiler Fuel: Based on prior experience and projected business levels, project the cost of boiler fuel. Also take into consideration of any possible tariff increases. Diesel Fuel: Based on prior experience and projected business levels, project the cost stream. Also take into consideration of any possible tariff increase. Steam: Based on prior experience and projected business levels, project the cost stream. Also take into consideration of any possible tariff increase. Water and Sewage: Based on prior experience and projected business levels, project the cost of water supplies including city supply, fixed charges, well supply, tank trucks and sewage removal. Also take into consideration any possible tariff increases. Energy Charges to Other Divisions Based on prior and projected business levels, project the cost of utilities supplied to other divisions. Presently, only the cost of energy supplied to the Laundry department is identified and charged

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Subject: Payroll and Related Expenses Department: Finance Reference # BP 117 Page: 1/3 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 117 PAYROLL AND RELATED EXPENSES POLICY General Manager and Financial Controller are responsible to ensure all Payroll and Related Expenses assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Payroll Salaries and Wages Determine staffing requirements on a position by position basis, based on projected business levels and service standards. Estimate the pay rates for the other budget periods on a month by month basis and apply to the required staffing levels. Should daily business level dictate, ensure that premium rates are included. Ensure that salaries quoted in a foreign currency are adjusted month by month accordingly to the anticipated exchange rate. For Food and Beverage Division, where possible overhead payroll such as the Stewarding and Kitchen Staff should be included in the outlet manning guide where clearly identifiable as being associated with that outlet. For expenses which this is not clearly identifiable, and then overhead salaries and wages should be allocated in accordance with F&B Intra-Department Allocation Policy. Vacation Credits If the trend of business is expected to be similar to previous year then: 1. Review the ratio of Vacation Credits to salaries and Wages, month by month for the prior and current years, and

apply an appropriate percentage for the budget year. Consider the levels of business and special events when assessing what the appropriate percentage for each month should be. Should significant changes in business level be expected or a more sophisticated approach is required then:

2. Plan vacation time on position by position basis in accordance with entitlements and anticipated business level. Enter the month by month Vacation Credits based on the vacation planning,

The value of vacation taken by employees during the month should be included in Salaries and Wages should also be reflected as a credit to Vacation Credits. Extra Wages Determine staffing requirements on a position by position basis, based on projected business levels and service standards. Determine the overtime and casual staff necessary to reach the required staffing levels over and above the available full- and past-time staff. Estimate the pay rates for the budget periods on a month by month basis and apply to the required staffing levels. As with the full-time manning guide, the planning if extra wages should be determined through the application of established productivity criteria. Extra wages may be calculated as a monthly function currency amount and in accordance with business trends, or as a ratio to the number of covers. Payroll Related Expenses Department Training Determine which focused training sessions are anticipated to be held during the budget year and estimate the total costs. Average the annual cost over the twelve months of the budget year.

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Employee Transport Based on the position by position staffing guide used to budget Salaries and Wages, apply transportation expenses in accordance with statutory requirements, collective bargaining conditions and employment contract, taking into account early shift, late night or additional costs and allowances. Housing Assess the contractual housing commitments and share of common housing for this caption and project the anticipated expenses for the budget year. Ensure that you take into account possible new commitments and changes at the renewal dates of each commitment based on changes in entitled staffing. Monthly budgeted figures should reflect the actual expenses anticipated in each month and should be not averaged over the year. Incentive Bonus Calculated the maximum Incentive Compensation costs based on the estimated year-end salaries of eligible employees of the department and average over the twelve months of the budget year. Local Bonus Calculate the total estimated cost based on local statutory or customary practices and budget in accordance with the method of calculation (for example, if the local bonus is calculated as a percentage of wages, budget the bonus expense as a percentage of wages). Long Service Leave Calculate the total estimated cost based on local statutory or customary practices and budget in accordance with the method of calculation (for example, if the long service leave is calculated as a percentage of wages, budget the leave expense as a percentage of wages). If significant, also include in the budget, the amount required to “top up” the cumulative reserve to cover current wage levels. Meals Compare the budget of the Employee Restaurant and allocate all costs except Payroll and Related Expenses to the departments based on monthly ration of FTEs. For each department, take the Employee Restaurant charge out and add the estimated cost of Officer’s Check and any meal allowances. Medical Expense Review prior year actual results, adjust for any unusually circumstances and apply to the budget year on a per FTE basis. Medical Insurance If available, obtain updated premium rates from your insurance broker or provider and calculate in a per eligible FTE basis. Recruitment Calculate prior year departmental cost divided by departmental turnover ratio and apply against projected turnover ratio for the budget yea Relocation Determine which key employees are anticipated to be replaced in the budget year and estimate an average relocation cost. Budget the costs in the period(s) during which the relocation is expected to occur. Retirement Fund Calculate and budget local retirement/pension costs in accordance with statutory requirements or employment contract and add any applicable U Hotels & Resorts pension plan contributions. Severance Pay There are at least two forms of severance pay – service based and redundancy or labor tribunal settlements. If severance pay is service based, the cost should be budgeted based on a percentage of wages. If significant, also

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include in the budget, the amount required to “top up” the cumulative reserve to cover current wage levels. Otherwise, the budget may be based on historical costs. Sick Leave Review the prior and current sick leave cost as a percentage of Salaries and Wages, consider any unusually circumstances, and apply an appropriate budgeted percentage. Social Security Apply the statutory formula for this caption against Salaries and Wages. Vacation Travel Review any vacation travel entitlements as per employee contracts. Average the annual cost over the twelve months of the budget year. Vacation Pay Accrual Apply vacation entitlements against the projected Salaries and Wages and budget as a monthly percentage of Salaries. Worker’s Compensation Apply the statutory formula for this caption against Salaries and Wages. Employee Income Tax Apply a percentage of Salaries and Wages (plus any other taxable benefits), calculated as required by the local authorities. Payroll tax Apply a percentage of Salaries and Wages (plus any other taxable benefits), calculated as required by local authorities. Other Related Expenses Budget this caption only if all related expenses are not included in other specific. Payroll Cross Charges Review shared payroll and determine the appropriate allocation. And then apply the charge out on an Amount per Month or Percentage of Salaries and Wages basis. Contract Services For fixed rate contracts, budget an Amount per Month based on contract rates or anticipated contract rates. For variable contracts, the basis may be Amount per Room Occupied or some other basis. Increases in rates should be reflected in the relevance months and should not be spread out throughout the year

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Subject: Provision for Replacement of Operating Equipment

Department: Finance

Reference # BP 118 Page: 1/1 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 118 PROVISON FOR REPLACEMENT OF OPEARATING EQUIPMENT POLICY General Manager and Financial Controller are responsible to ensure all Provision for Replacement of Operating Equipment assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Provision for Operating Equipment should be zero-based according to the perceived operation needs of each division. The basis of calculation should be an assessment of established par inventory requirements, anticipated stocks at current year end, and average rates of loss and breakage. Consideration should also be given to the possibility of changing Operation Equipment designs or Uniforms during the budget period as opposed to simple replacement requirements. Provision for Chinaware Complete the annual Chinaware purchase requirements for each Division, and then use one of the following methods of monthly allocation: 1. Divided the total amount by twelve for each month’s provision budget. 2. Divide the total amount by total each Division Revenue and then apply the resulting percentage against monthly

revenue for each month’s provision budget.

Provision for Glassware Complete the annual Glassware purchase requirements for each Division, and then use one of the following methods of monthly allocation: 1. Divided the total amount by twelve for each month’s provision budget. 2. Divide the total amount by total each Division Revenue and then apply the resulting percentage against monthly


Provision for Linen Complete the annual Linen purchase requirements for each Division, and then use one of the following methods of monthly allocation: 1. Divided the total amount by twelve for each month’s provision budget. 2. Divide the total amount by total each Division Revenue and then apply the resulting percentage against monthly


Provision for Silverware Complete the annual Silverware purchase requirements for each Division, and then use one of the following methods of monthly allocation: 1. Divided the total amount by twelve for each month’s provision budget. 2. Divide the total amount by total each Division Revenue and then apply the resulting percentage against monthly


Provision for Uniforms Complete the annual Uniforms purchase requirements for each Division, and then use one of the following methods of monthly allocation: 1. Divided the total amount by twelve for each month’s provision budget.

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2. Divide the total amount by total each Division Revenue and then apply the resulting percentage against monthly revenue for each month’s provision budget.

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Subject: Fixed Charges and Other Deductions Department: Finance Reference # BP 119 Page: 1/2 Issued by: Finance Director Issued date: December 2011 Updated by: Updated date: Approved by: CEO Approved date: December 2011

Back to Table of Contents BP – 119 FIXED CHARGES AND OTHER DEDUCTIONS POLICY General Manager and Financial Controller are responsible to ensure all Fixed Charges and Other Deductions assumptions of making Business Plan are most reasonable and appropriate basis. PROCEDURE Fixed Charges Basis Management Fees Budget the amounts calculated as specified in the Management Agreement. Incentive Management Fees Budget the amounts calculated as specified in the Management Agreement. Reserve for Replacement of or Additions to FF&E Budget the amounts calculated as specified in the Management Agreement. Rent and Rates Assess the tax and rent commitments for this caption as defined in the Management Agreement and project the anticipated expenses for the budget year. Ensure that you take into account any anticipated changes. Monthly budgeted figures should reflect the actual expenses anticipated in each month and should be not averaged over the year. A supporting schedule should be prepared to justify the monthly charges budgeted. Rent/Lease Rentals Assess the contractual commitments for this caption and project the anticipated expenses for the budget year. Ensure that you take into account possible new commitments and changes at the renewal dates of each commitment. Monthly budgeted figures should reflect the actual expenses anticipated in each month and should be not averaged over the year. A supporting schedule should be prepared to justify the monthly charges budgeted. Insurance Comprehensive General Liability: Take the current year’s schedule of insurance, review the basis of premium calculations being applied and adjust the parameters such as Total Revenue to the budgeted revenue figures. If available, obtain updated premium rates from your insurance broker. Monthly budgeted figures should reflect the average cost over the insurance period in each month and should be not averaged over the budgeted year. Automobile: Take the current year’s schedule of insurance and adjust any anticipated changes to the fleet. If available, obtain updated premium rates from your insurance broker. Monthly budgeted figures should reflect the average cost over the insurance period in each month and should be not averaged over the budgeted year. Other Deduction Amortization and Depreciation Prepare a schedule of assets that require amortization or depreciation against the hotel operation as approval in accordance with the Depreciation and Amortization Policy. Calculate the appropriate amortization and depreciation charges and enter to the budget on a month by month basis.

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Interest Expenses Assess the actual loans and credit facility current balances as well as schedule add/settlements for the budget year. Ensure that you take into correct interest rates of each agreement. Monthly budgeted figures should reflect the actual interest expenses anticipated in each month and should be not averaged over the year. A supporting schedule should be prepared to justify the monthly charges budgeted. Special Projects Assess the projections that have been agreed between U Hotels & Resorts and the Owners to be charged to this caption and project the anticipate expenses for this budget year. Monthly budgeted figures reflect the actual expenses anticipated in each month and should be not averaged over the year. A supporting schedule should be prepared to justify the monthly charges budgeted.

U HOTELS FINANCIAL POLICY MANUAL R

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