1997 Annual Report - Four Seasons Hotels and Resorts

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTINGThe management of Four Seasons Hotels Inc. is responsible for the preparation and integrity of the financial statements andrelated financial information of the Corporation and the selection of accounting principles appropriate to the Corporation’scircumstances. The consolidated financial statements, notes and other financial information included in the Annual Reportwere prepared in accordance with accounting principles generally accepted in Canada. The statements also include estimatedamounts based on informed judgments of current and future events, for items such as the useful lives of capital assets andprovisions for impairment in the value of assets. These estimates are made with appropriate consideration of the materialityof the amounts involved. The financial information presented elsewhere in the Annual Report is consistent with that in thefinancial statements.Management is also responsible for maintaining a system of internal controls and budgeting procedures which aredesigned to provide reasonable assurance that assets are safeguarded, transactions are executed and recorded in accordancewith management’s authorization, and relevant and reliable financial information is produced. To augment the internalcontrol system, the Corporation maintains a program of internal audits covering significant aspects of the operations.The Corporation’s Audit Committee is appointed by the Board of Directors annually. The Committee meets withthe internal and independent auditors (who have free access to the Audit Committee) and with management, to satisfyitself that each group is properly discharging its responsibilities, and to review the financial statements, the independentauditors’ report and other financial information appearing in the Corporation’s Annual Report. The Audit Committeereports its findings to the Board of Directors for its consideration in approving the financial statements for issuance tothe shareholders.KPMG, the independent auditors appointed by the shareholders of the Corporation, have examined the financialstatements in accordance with generally accepted auditing standards.Isadore SharpChairman and Chief Executive OfficerFebruary 18, 1998Douglas L. LudwigChief Financial Officer,Executive Vice President and TreasurerAUDITORS’ REPORT TO THE SHAREHOLDERSWe have audited the consolidated balance sheets of Four Seasons Hotels Inc. as at December 31, 1997 and 1996 and theconsolidated statements of operations, deficit, cash provided by operations and changes in financial position for the yearsthen ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is toexpress an opinion on these financial statements based on our audits.We conducted our audits in accordance with generally accepted auditing standards. Those standards require that weplan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation.In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position ofthe Corporation as at December 31, 1997 and 1996 and the results of its operations and the changes in its financial positionfor the years then ended in accordance with generally accepted accounting principles.Toronto, CanadaFebruary 18, 1998KPMGChartered Accountants52Four Seasons Hotels Inc.