BUKHATIR GROUP

Cash Purchases Policy

1. Purpose

This policy governs the use of cash (petty cash, cash floats, and corporate debit/credit cards used for immediate over-the-counter purchases) for procurement transactions across all Bukhatir Group Business Units. Its objective is to prevent misuse, ensure proper documentation, and maintain compliance with Group Finance controls while allowing operational flexibility for low-value, urgent purchases.

2. Scope

This policy applies to all employees who are authorised to make purchases using cash or cash-equivalent instruments. It covers petty cash purchases, imprest fund disbursements, field-site cash buys, and corporate card transactions for immediate physical purchases. It does NOT cover travel and entertainment expenses (governed by the Travel Policy) or recurring subscription/online payments.

3. Definitions

Cash Purchase: A procurement transaction settled immediately at the point of sale using physical cash, petty cash float, or a corporate payment card, without a pre-issued Purchase Order.

Petty Cash Float: A fixed cash amount maintained at a BU or site for small, day-to-day purchases. The float limit is set by Group Finance for each BU.

Threshold: The maximum value per single cash transaction permitted for a given BU, as established by Group Finance. Staff must follow their company-set threshold.

Cash Purchase Voucher (CPV): The mandatory form (F-CSH-01) documenting each cash purchase, including receipt, purpose, GL code, and approval.

4. Policy Principles

4.1 Company-Set Threshold

Each BU must adhere to the cash purchase threshold set by Group Finance. This threshold defines the maximum value of any single cash purchase transaction. Staff must follow their company-set threshold established by Group Finance for all cash purchases. Splitting a purchase into multiple transactions to stay below the threshold is strictly prohibited and constitutes a disciplinary offence.

Typical thresholds are communicated by Group Finance during the annual budget cycle. BUs must not exceed their assigned limits without written pre-approval from Group Finance. If a BU's operational needs require a threshold increase, the BU General Manager must submit a formal request to Group Finance with justification.

4.2 Permitted Categories

Cash purchases are restricted to the following categories unless Group Finance grants a specific exemption:

• Office supplies and stationery
• Minor maintenance materials and consumables
• Urgent site materials where normal PO cycle would cause project delay
• Refreshments for meetings and events (within approved budget)
• Transportation and delivery charges (ad-hoc, not contracted)

4.3 Prohibited Uses

Cash purchases must NOT be used for:

• Any item available through existing framework agreements or approved suppliers
• IT equipment, software, or subscriptions (governed by IT Procurement)
• Personal purchases of any kind
• Items that require warranty, after-sales service, or HSE certification
• Gifts, entertainment, or hospitality (governed by P-POL-012)

4.4 Documentation

Every cash purchase must be supported by:

• An original tax invoice or receipt from the vendor (no handwritten receipts without stamp)
• A completed Cash Purchase Voucher (F-CSH-01) with GL code, cost centre, and business justification
• Pre-approval from the Line Manager (verbal for site urgency, confirmed in writing within 24 hours)

4.5 Segregation of Duties

The petty cash custodian must not be the same person who approves cash purchase vouchers. Replenishment requests are reviewed by BU Finance Controller before release.

5. Procedure

5.1 Pre-Purchase

Employee checks if the item is available through existing contracts or the PO process. If not, and the value is within the BU's Group-Finance-set threshold, the employee obtains verbal or written approval from their Line Manager.

5.2 Purchase & Receipt

Employee makes the purchase, obtains a tax invoice/receipt, and brings the item and receipt to the office/site. The item is inspected for quality and completeness.

5.3 Documentation

Employee completes F-CSH-01 (Cash Purchase Voucher), attaches the original receipt, and submits to Line Manager for signature. Line Manager verifies the purchase was necessary, within threshold, and properly categorised.

5.4 Reimbursement / Float Settlement

Signed F-CSH-01 + receipt are submitted to BU Finance. For petty cash: the custodian reimburses the employee and files the voucher. For corporate card: the cardholder reconciles the statement monthly using F-CSH-02 (Monthly Cash Purchase Reconciliation).

5.5 Replenishment

When the petty cash float drops to 25% of its limit, the custodian submits a Replenishment Request (F-CSH-03) to BU Finance Controller for approval and cash release.

6. Controls & Reporting

BU Finance performs a monthly reconciliation of all cash purchases against the float and GL postings. A Monthly Cash Purchase Summary is submitted to Group Finance. Any transaction that breaches the threshold or lacks proper documentation is flagged as a non-conformance and reported to Group Procurement Audit (P-POL-027).

7. KPIs

• Cash purchase compliance rate (proper documentation): target ≥ 99%
• Cash purchases as % of total procurement spend: target ≤ 2%
• Threshold breach incidents: target = 0 per quarter

8. Related Documents

• P-POL-015 — Delegation of Authority
• P-POL-012 — Gifts & Hospitality
• P-POL-027 — Procurement Audit & Compliance
• F-CSH-01 — Cash Purchase Voucher
• F-CSH-02 — Monthly Cash Purchase Reconciliation
• F-CSH-03 — Petty Cash Replenishment Request

9. Review & Ownership

This policy is owned by Group Supply Chain in coordination with Group Finance. Thresholds are reviewed annually by Group Finance during the budget cycle. Policy content is reviewed annually. Next review: April 2027.