INTRODUCTION

1. This chapter outlines the procedures and controls that are unique to CANEX Food Services.

TYPE OF OUTLETS

2. Outlets comprising this group consists of:

1. Cafeteria. An outlet equipped to serve hot and cold full course meals;

2. Restaurants. An outlet equipped to service hot and cold full course meals with table service, self-service, or a combination of both. In certain authorized areas, and with the approval of the BComd, restaurants may serve wine, beer, and spirits;

3. Snack Bars. An outlet equipped to serve limited snack food items, hot and cold drinks, pastries, and confectionaries; and

4. Cocktail Lounge. An outlet equipped to serve alcoholic beverages.

FRANCHISES

3. Where CANEX operates franchises (eg. Harvey's, Pizza Hut, etc), there are two possible types of franchise fees. These expenses and their accounting action are as follows:

1. Continuing Franchise Fees. This expense is paid by CANEX to the franchiser on a regular continuing basis and is calculated as a predetermined percentage of sales. Continuing fees are to be recorded in GL 5331:0001. Accruals are to be made at month-end as required; and

2. Initial Franchise Fees. This expense is paid upfront by CANEX to the franchiser at the start of the operation. Due to its materiality, this expense is charged to Prepaid Expense and amortized on a monthly basis over the period of the franchise agreement. The monthly expense is to be charged to GL 5331:0002.

DEPARTMENTALIZATION

4. Sales shall be departmentalized in accordance with Chapter 41.

INVENTORY ACCOUNTABILITY

5. Departments 50 and 51 shall be controlled by the Cost Accountability (current cost) method.

6. For further information on the Cost Accountability (current cost) method see Chapter 25.

PURCHASES

7. Purchases shall be made in the manner outlined in Chapter 21.

TRANSFERS

8. Transfers shall be effected in the manner outlined in Chapter 22.

SALES

9. The accounting for sales and the submission of Daily Sales Reports (DSRs) to the NPFAS shall be as outlined in Chapter 18.

10. All credit sales shall be processed as outlined in Chapter 52.

REPORTS AND RETURNS

11. The following schedule of reports and returns represents the minimum acceptable frequency of reporting. All month-end paperwork must be submitted to NPFAS within two working days following the month-end date. Where the volume of transactions is such that more frequent reporting is necessary a revised schedule, acceptable to CANEX Management and the NPFAS, may be introduced.

1. Daily Sales Report. These are completed and forwarded to the NPFAS daily as per Chapters 6 and 18.

2. Invoices. Suppliers' invoices (with PO attached) and credit notes are forwarded minimum weekly to the NPFAS as per Chapters 6 and 21.

3. Transfers. Merchandise Requisitions (CF 603) are completed at cost when issued or received and forwarded to the NPFAS as per Chapters 6 and 22.

4. Inventory Report. These reports are generated by ABACIS from the information submitted at subparagraphs a. to c. above and as outlined in Chapter 25.

STOCKTAKING

12. Stocktaking shall be carried out in accordance with procedures set forth in Chapter 26 and the CANEX Policy and Procedures Manual, Operations 430.

INVENTORY SHRINKAGE

13. There shall be no Inventory Shrinkage recorded for the Food Services' outlets.

SPOILAGE AND BREAKAGE

14. Spoilage and breakage is not expensed and, therefore, will automatically be included in any overage/shortage determined by a stocktaking.

15. A Spoilage and Breakage Register (see Chapter 36, Annex B) may be maintained but is strictly for management and control purposes and is not to be actioned to the books of account.