Delta Evision Fi

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EPACK POLYMERS (P) LTD. HCL INFO SYSTEM LTD.

Delta Document

Finance & Controlling

For

E-Vision Dehradun

EVision Process: Finance & Controlling

Document Number: CDEV

Version: 1.0

Module: FI - CO

Release Date: 20 Dec.’2012

Status: Final




This document contains E VISION To Be process descriptions and fulfilling the various user requirements for the purpose of SAP

implementation. The major contents of this document includes process objectives, users’ requirements and expectations, process

description gaps, improvements, major inputs, major output and KPI and Key MIS requirements. This document is the outcome of

various levels of interactions with process owners and department heads across locations of E VISION, Dehradun Including the Head

Office.

Process Owner’s Approval – Version 1.0

Approver Name Title Signature Date




Table of Contents

1. Finance and Controlling........................................................................................................................................................................................................ 7

1.1. Finance Organization Structure ........................................................................................................................................................................................... 8

1.1.1 Finance Organization Structure ........................................................................................................................................................................................... 8

1.2. Planning, Budgeting and Forecasting ................................................................................................................................................................................ 13

1.2.1 Annual Budgeting............................................................................................................................................................................................................... 13

1.2.2 Forecasting ......................................................................................................................................................................................................................... 21

1.3. Asset Accounting................................................................................................................................................................................................................ 37

1.3.1 Capital Expenditure Budgeting .......................................................................................................................................................................................... 37

1.3.2 Asset Master Creation .............................................................................................................................................................. Error! Bookmark not defined.




1.3.3 Asset Acquisition ...................................................................................................................................................................... Error! Bookmark not defined.

1.3.4 Asset Transfer........................................................................................................................................................................... Error! Bookmark not defined.

1.3.5 Asset Disposal........................................................................................................................................................................... Error! Bookmark not defined.

1.3.6 Period End Processing .............................................................................................................................................................. Error! Bookmark not defined.

1.4. Accounts Payable ..................................................................................................................................................................... Error! Bookmark not defined.

1.4.1 Vendor Invoicing-(Material & Services) .................................................................................................................................... Error! Bookmark not defined.

1.4.2 Vendor Invoicing-(Non-Stock Items) ....................................................................................................................................... Error! Bookmark not defined.

1.4.3 Vendor Payment....................................................................................................................................................................... Error! Bookmark not defined.

1.4.4 Advance Payment .................................................................................................................................................................... Error! Bookmark not defined.

1.4.5 Period End Closing..................................................................................................................................................................... Error! Bookmark not defined.

1.5. Accounts Receivable................................................................................................................................................................. Error! Bookmark not defined.

1.5.1 Customer’s Billing..................................................................................................................................................................... Error! Bookmark not defined.

1.5.2 Incoming Payment .................................................................................................................................................................... Error! Bookmark not defined.

1.5.3 Period Closing ........................................................................................................................................................................... Error! Bookmark not defined.

1.6 Cash & Bank .............................................................................................................................................................................. Error! Bookmark not defined.




1.6.1 Bank Reconciliation Process...................................................................................................................................................... Error! Bookmark not defined.

1.6.2 Cash Receipts ............................................................................................................................................................................ Error! Bookmark not defined.

1.6.3 Cash Payments ......................................................................................................................................................................... Error! Bookmark not defined.

1.6.4 Borrowings ................................................................................................................................................................................ Error! Bookmark not defined.

1.6.5 Import Payments (Letter of Credit) ........................................................................................................................................... Error! Bookmark not defined.

1.7 General Ledger Account ..................................................................................................................................................................................................... 50

1.7.1 Chart of Account ................................................................................................................................................................................................................. 50

1.7.2 Journal Posting.......................................................................................................................................................................... Error! Bookmark not defined.

1.7.3 Period End Processing ............................................................................................................................................................... Error! Bookmark not defined.

1.8 Direct Taxation ......................................................................................................................................................................... Error! Bookmark not defined.

1.8.1 TDS Process .............................................................................................................................................................................. Error! Bookmark not defined.

1.8.2 TCS Process .............................................................................................................................................................................. Error! Bookmark not defined.

1.8.3 Corporate Taxation .................................................................................................................................................................. Error! Bookmark not defined.

1.9 Indirect Taxation ...................................................................................................................................................................... Error! Bookmark not defined.

1.9.1 Tax Masters .............................................................................................................................................................................. Error! Bookmark not defined.




1.9.2 Input Tax Process ...................................................................................................................................................................... Error! Bookmark not defined.

1.9.3 Output Tax Process ................................................................................................................................................................... Error! Bookmark not defined.

1.9.4 Period end processing................................................................................................................................................................ Error! Bookmark not defined.

1.9.5 Form Tracking........................................................................................................................................................................... Error! Bookmark not defined.

1.10 Product Costing ........................................................................................................................................................................ Error! Bookmark not defined.

1.10.1 Product Costing ............................................................................................................................................................... Error! Bookmark not defined.




1. Finance and Controlling

The ‘Record to Report’ process includes the following components/ sub -processes:

► Finance Organization Structure

► Planning, Budgeting & Forecasting

► Asset Accounting

► Accounts Payable

► Accounts Receivable► Cash & Bank

► General Ledger Accounting

► Direct Taxation

► Indirect Taxation

► Insurance

► Product Costing




1.1. Finance Organization Structure

1.1.1 Finance Organization Structure

1. Process objective:

The objective of this process is to create a new company code EVISION in the Organizational Structure for Finance & Controlling.

Controlling area is same, Profit center to be created for new company code EVISION etc. are defined based on the Current

Structure of the E PACK Group.

2. Process Flow:







3. Process Description:

SL.

NO.

ACTIVITY TO BE PROCESS DEPARTMENT MODE

(SAP/MANUAL)

SAP

FUNCTIONALITY TO

BE USED

1 Creation of

Operating Concern

and Controlling Area

► Operating concern is the highest

organisational unit in Controlling

under which all reporting w.r.t internal

management is done.► Controlling area 1000 is same.

► For E PACK group, one operating

concern and one controlling area is

there i.e. ‘E PACK Group’.

► IT / SAP

Team

► SAP ► Enterprise

Structure

2 Creation of Company

Code

► A company code represents a legal

entity in the system. All external

reporting is done based on the

company code. New Company Code

2000 to be created for EVISION.

► IT / SAP

Team


Structure

3 Création of Profit

Centers

► Profit centers are the reporting units

under a company code.

► 1 Manufacturing Units at Dehradun

► IT / SAP

Team


Structure




SL.

NO.


(SAP/MANUAL)

SAP

FUNCTIONALITY TO

BE USED

under Evision.

4. Integration Aspects:

SL.

NO.

INTEGRATION ASPECTS

1. ► Integration with MM, SD, PP modules.

5. Interface Requirements:

SL.

NO.

INTERFACE REQUIREMENTS

► NA

6. Key Outputs:

SL.

NO.

KEY OUTPUTS OF THE PROCESS




SL.

NO.KEY OUTPUTS OF THE PROCESS

1. ► Organizational structure of E PACK completely mapped with the SAP Enterprise Structure.

7. Gaps Indentified/ Process Improvements

SL.

NO.

GAPS INDENTIFIED/ PROCESS IMPROVEMENTS REFERENCE

1. ► Currently the units of E PACK Group and the processes thereof are not well integrated.

The new SAP based process Re-Engineering approach will bring the required

Integration across the E PACK Landscape and the processes thereof.

►




1.2. Planning, Budgeting and Forecasting

1.2.1 Annual Budgeting


The objective of the process is to employ Annual plan that is focused on the achievement of long term strategic objectives and

to ensure that resources are coordinated & used in the most effective way and to provide a mechanism to measure, report,collate feedbacks, and implement corrective actions

2. Process Flow:




<Planning, Budgeting & Forecasting - Detailed Budgeting>

B u s i n e s s U n i t s / D e p a r t m e n

t s

D S C

– P

l a n n i n g & B u d g e

t i n g

M a n a g e m e n t

0

Derive Financial

targets & Key

assumptions

0

Strategic Plan

1

Initiate Targets

(Strategy,

expectations)

2

Set high level Business

Unit Targets and

assumptions

3

Draft high level revenue,

Capex EBIT (incl. key

constraints)

4

Distribute Business unit

targets and budget

guidelines and

assumptions

5

Align BU Targets

to Group BU

targets

5

Review Key

Business Drivers &

KPIs

6

Use model plans

to arrive at Budget

numbers

7

‘What If’ analysis/

scenario modeling

8

Complete

Budgeting

Templates

8

Consolidate

9

Review/Challenge/

Validate

10

Review/Challenge/

Validate

11

‘What If’ analysis/

scenario modeling

12

Communicate

amendments

required

13

Amend Online

Templates to

reflect changes

14

Re-consolidate

15

Review/Challenge/

Validate

15

Process Internal

Allocations

16

Budget

Acceptable

17

Sign Off Budget

NO

YES

17

Final Budget

available online

End

Answer

Queries

Answer

Queries

Ist Cut Budget

available




► ► ► ► ► ► ► ► ► ►

3. Responsibility

SL.

NO

.

ACTIVITY RESPONSIBILITY ACCOUNTABILITY CONSULT INFORMATION

1 Initiate high level Targets (Strategy,

expectations)

► Manageme

nt

► Manageme

nt

► Management ► DSC/ Units

Heads

2 Set High level Business unit Targets

and Assumptions

► Manageme

nt

► Manageme

nt

► Management ► DSC/ Units

Heads

3 Draft high Level Revenue, Capex, EBIT

(incl. key constraints)

► DSC ► DSC ► DSC ► Managemen

t

4 Distribute Business Unit Targets and

budget guidelines and assumptions

► DSC ► DSC ► DSC ► Unit Heads

5 Align BU Strategy to Group BU targets

and review Key business Drivers

► Unit Heads ► Unit Heads ► Unit Heads ► Unit Heads

6 Use Model plans to arrive at Budget

numbers

► Units/

Plants

► Units/

Plants

► Units/ Plants ► Units/ Plants

7 What-if analysis/scenario modeling ► Units/ ► Units/ ► Units/ Plants ► Units/ Plants




SL.

NO

.


Plants Plants

8 Complete Budget Templates and

Consolidate

► Units/

Plants

► Units/

Plants


9 Review/ Challenge/ Validate by DSC ► DSC ► DSC ► DSC ► DSC

10 Management Reviews/ Challenges/

Validates the budget

► Manageme

nt

► Manageme

nt

► Management ► Managemen

t

11 What-if analysis/scenario modeling ► DSC ► DSC ► DSC ► DSC

12 Communicate amendments required ► DSC ► DSC ► DSC ► DSC

13 Update online templates to reflect

amendments

► Units/

Plants

► Units/

Plants


14 Re-consolidate ► DSC ► DSC ► DSC ► DSC

15 Review/ Challenge/ Validate by DSC

and process internal allocations

► DSC ► DSC ► DSC ► DSC

16 Budget Acceptance ► Manageme

nt

► Manageme

nt


t

17 Final budget signed off ► DSC ► DSC ► DSC ► DSC

4. Key Control Requirements




SL.

NO.CONTROL REQUIREMENTS TO BE PROCESS

(STANDARD

SAP/CUSTOMIZATION/

MANUAL

PRIORITY (HIGH/MEDIUM/LOW)

SAP FUNCTIONALITY TO BE USED

1 ► There should be reasonable tolerance

thresholds established to facilitate a

budget vs. actual review

► Manual ► High ►

2 ► The significant variances should be

thoroughly investigated and

appropriately documented

► Manual ► Medium ►

5. Key MIS/Report Requirements

SL.

NO

.

KEY MIS KEY FIELDS TO BE PROCESS

(STANDARD

SAP/CUSTOMIZATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/

LOW)

SAP FUNCTIONALITY TO

BE USED

1 ► Plan Vs Actual ► Period► Nature of

expense► Planned amount

► Actual

expenditure

► Manual ► Low ►




SL.

NO

.

KEY MIS KEY FIELDS TO BE PROCESS (STANDARD

SAP/CUSTOMIZATION/

MANUAL

PRIORITY (HIGH/MEDIUM/

LOW)


BE USED

2 ► Variance Analysis ► Variance

amount

► Manual ► Low ► 3 ► Annual Budgeting at Unit Level ► Unit / Plant wise

annual budgets► Department

wise budgets


6. Key Performance Indicator (KPI’s)

SL.

NO.

KEY KPIS TO BE PROCESS

(STANDARD

SAP/CUSTOMISATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/LOW)

SAP FUNCTIONALITY TO BE

USED

1 ► Days to complete Budgeting

process

► Manual ► Low ► 2 ► Percentage of accuracy

between budgets & actual





SL.

NO.KEY KPIS TO BE PROCESS

(STANDARD

SAP/CUSTOMISATION/

MANUAL



USED

3 ► Deviations from targets ► Manual ► High ►


SL.

NO.

INTEGRATION ASPECTS

1. ► All unit/ plant heads

2. ► Management


SL.

NO.


► NA




9. Key Inputs:

SL.

NO.

KEY INPUTS TO THE PROCESS

1. ► Previous year performance reports

2. ► Strategic business plan and objectives

10. Key Outputs:

SL.

NO.


1. ► Annual budget for company as a whole and individual for all business unit/ plants.


SL.

NO.


1. ► Systematic method of preparing, maintaining and monitoring annual budgets. ►




1.2.2 Forecasting


The objective if the process is to employ short term forecasting that is focused on the achievement of long term strategic objectives

and to ensure that resources are co-ordinated & used in the most effective way.

2. Process Flow:




<Planning, Budgeting & Forecasting - Forecasting>

B u s i n e s s U n i t s / D e p a r t m e n t s

D S C

– P

l a n n i n g &

B u d g e t i n g

M a n a g e m e n t NO

YES17

Sign Off forecast

7‘What If’ analysis/

scenario modeling

5

Review actual vs

budget BU reports

11‘What If’ analysis/

scenario modeling

0

Actual Vs Budget

Reporting

Answer Queries

12

Communicateamendments

required

1

Set High level

revised Targets(Strategy,

expectations)

6

Use model plans

to derive revisedforecast numbers

15

Process Internal

Allocations

10

Review/Challenge/Validate

15

Review/Challenge/

Validate

8

Consolidate

4

Distribute Business unittargets and forecast

guidelines and

assumptions

14

Re-consolidate

17

Final forecast

available online

8

Completeforecasting

Templates

2Set high level revised

Business Unit Targets

and assumptions

0

High levelenvironmental

analysis (internal

& External

Answer Queries

9

Review/Challenge/

Validate

3Draft high level

revenue, CapexEBIT (incl. key

constraints)

End

5Review Key

Business Drivers &KPIs

13

Update Online

Templates to reflectamendments

16

forecast Acceptable

0

Extrapolateexisting data

Ist cut forecast

available





SL .N

O.


(SAP/MANUAL)

SAP

FUNCTIONALITY

TO BE USED

0 Purpose of

Forecasting

► Forecasting is used to periodically update

an annual budget to reflect revised

assumptions or changed business

circumstances in order to take corrective

action on a timely basis where

appropriate and also to manage

expectations.► The most appropriate form of forecasting

is to adopt quarterly rolling forecasts.

► Forecasting should, in effect, adopt the

same process as budgeting starting with

a review of strategic plans and corporate

objectives. This review should then

underpin the restatement of financial

projections.

► In all cases, however, forecasting should

be undertaken at a higher level, with lessdetail, that the annual budget.

► It is not recommended to adopt the

process of monthly rolling forecasts

► ► Manual ►




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

except in exceptional circumstances, as it

carries the risk that the “art of planning”

becomes institutionalized and the

forecasting process is viewed as a

“number crunching exercise” rather than

a strategic review of how well the

business is meeting its long term

objectives.1 Set high level

revised Targets

(Strategy,

expectations)

► The management considers the external

and internal changes to the environment

which will impact achieving the budget

results (adverse or favorable) e.g.,

economic downturn, impact in raw

material price, divestment of a business

unit, etc.► The current period performance is

reviewed against the Budgets and the

variances are analyzed.► The existing data is extrapolated to set

revised “top down” targets.► Management defines the strategy and

► Manage

ment

► Manual ►




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

expectations.

2 Set High level

revised Business

unit Targets and

Assumptions

► Revised high level targets are broken

down at Business unit levels considering

the Business units parameters, capacities

clearly linking it to the Business unit wise

Strategic plan and corporate objectives.

► DSC ► Manual ►

3 Draft high Level

revised Revenue,Capex, EBIT (incl.

key constraints)

► DSC department prepares revised high

level Financial Figures (Revenues, EBIT,Capex, etc) based on Targets set by

Management.


4 Distribute Business

Unit Targets and

forecast guidelines

and assumptions

► DSC department communicates the

Business unit revised targets set by

Management for the respective Business

Units.

► The DSC department also communicates

proper forecasting guidelines, and

assumptions.


5 Review actual VsBudget Business

unit-wise reports,

Business drivers

► Respective Business units shall review theactual Vs Budgets performance reports;

analyze the variances, business drivers

and Key performance indicators.

► Units/Plants

► Manual/SAP

► Currently as the

planning

tool is




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

and KPIs not

being

impleme

nted so

the

same

will be a

manualprocess.

► In SAP

cost

center

planning

tool can

be use

for

annual

budgeting

6 Use Model plans to ► Respective Business units prepare the ► Units/ ► Manual/ ► Currentl




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

arrive at Budget

numbers

forecasts in pre-defined forecast

templates in the system based on the

revised targets and forecast guidelines.

► Business units can refer to current year’s

actual results Vs budgets to arrive at

forecast numbers.

Plants SAP y as the

planning

tool is

not

being

impleme

nted so

thesame

will be a

manual

process.

7 What-if

analysis/scenario

modeling

► Respective Business units shall then carry

out what-if analysis/scenario modeling in

the ERP system to simulate different

permutations/combinations before

arriving at the revised forecast figures in

line with the Group BU targets.

► Units/

Plants

► Manual/

SAP

► Currentl

y as the

planning

tool is

not

beingimpleme

nted so

the




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

same

will be a

manual

process.

8 Complete forecast

Templates and

Consolidate

► Respective Business units shall finalize

the revised forecast templates based on

different What-if analysis and the

Business unit wise forecast templates arethen consolidated by the DSC-Planning

and Budgeting department to arrive at

Consolidated forecast numbers for the

company as a whole.

► Units/

DSC

► Manual/

SAP

► Currentl

y as the

planning

tool isnot

being

impleme

nted so

the

same

will be a

manual

process.

9 Review/ Challenge/Validate by DSC

► The consolidated forecasts are reviewedby the DSC. DSC co-ordinates with the

Business units to obtain explanation

regarding any queries regarding the





SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

forecasts.

► On completion of the review, the

consolidated forecast is finalized and sent

to the Management for review and

challenge

10 Management

Reviews/

Challenges/Validates the

forecasts

► Management reviews the 1st cut

forecasts forwarded by the DSC and

challenges/validates theassumptions/drivers, etc and

explanations for the significant variances.

► Changes/additional requirements, if any,

are communicated by the management

to the DSC.

► Manage

ment

► Manual ►

11 What-if

analysis/scenario

modeling

► Based on Inputs received from

Management, DSC carries out What-if

scenario analysis and identifies if the

forecasts require any amendments.

► It further identifies the amendments thatare required to be made in the Business

unit wise forecasts


12 Communicate ► DSC communicates the amendments ► DSC ► Manual ►




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

amendments

required

required to the respective Business units

for making changes in the unit wise

forecasts.

13 Update online

templates to reflect

amendments

► Respective business units will review the

amendments communicated by the DSC

along with the original forecasts and

assumptions.

► Post review, amendments shall beincorporated in the Business unit wise

forecasts and the revised forecasts will be

forwarded to the DSC for re-

consolidation.

► Units/

Plants

► Manual ►

14 Re-consolidate

forecasts

► DSC re-consolidates the business unit

wise forecasts and arrives at the

consolidated forecasts for the company

as a whole


15 Review/ Challenge/

Validate by DSCand process

internal allocations

► The revised consolidated forecasts are

reviewed by the DSC. DSC co-ordinateswith the Business units to obtain

explanation on any queries regarding the

budgets.





SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

► On completion of the review, the revised

consolidated forecasts are finalized.

► Post finalization, DSC allocates the

revised common costs (like corporate

costs, other support function costs, etc)

to the respective business units.► The updated forecasts are then

forwarded to the Management for itsacceptance and sign-off.

16 Forecast

Acceptance

► Revised consolidated forecasts are

reviewed by the Management. In case the

Management is satisfied with the

Forecasts, the forecasts are signed off as

final by the Management.

► In case the Management still has queries

regarding the forecasts, the same is sent

back to the DSC with management

comments for revision and further action.

► Manage

ment

► Manual ►

17. Final Forecasts

signed off

► Management signs off the final forecasts

and then DSC update the final forecasts

online.

► Manage

ment

► Manual/

SAP

►




SL .NO.


(SAP/MANUAL)SAP

FUNCTIONALITY

TO BE USED

► Actual can then be compared against

Budgets as well as forecasts.

4. Responsibility

SL.

NO

.


1 Set high level revised Targets

(Strategy, expectations)

► Manageme

nt

► Manageme

nt


t

2 Set High level revised Business unit

Targets and Assumptions

► DSC ► DSC ► Management ► Units/ Plant

Heads

3 Draft high Level revised Revenue,

Capex, EBIT (incl. key constraints)

► DSC ► DSC ► Mangement ► Units/ Plant

Heads

4 Distribute Business Unit Targets and

forecast guidelines and assumptions

► DSC ► DSC ► Management ► Units/ Plant

Heads

5 Review actual Vs Budget Business unit-

wise reports, Business drivers and KPIs

► Units/

Plants

► Units/

Plants

► DSC ► Units/ Plants

6 Use Model plans to arrive at Budget

numbers

► Units/

Plants

► Units/

Plants


7 What-if analysis/scenario modeling ► Units/ ► Units/ ► DSC ► Units/ Plants




SL.

NO

.


Plants Plants

8 Complete forecast Templates and

Consolidate

► Units/ DSC ► Units/ DSC ► DSC ► Units/ DSC

9 Review/ Challenge/ Validate by DSC ► DSC ► DSC ► Unit/ Plant

Heads

► DSC

10 Management Reviews/ Challenges/

Validates the forecasts

► Manageme

nt

► Manageme

nt


t

11 What-if analysis/scenario modeling ► DSC ► DSC ► DSC ► DSC12 Communicate amendments required ► DSC ► DSC ► Management ► Units/ Plants

13 Update online templates to reflect

amendments

► Units/

Plants

► Units/

Plants


14 Re-consolidate forecasts ► DSC ► DSC ► DSC ► DSC

15 Review/ Challenge/ Validate by DSC

and process internal allocations

► DSC ► DSC ► DSC ► DSC

16 Forecast Acceptance ► Manageme

nt

► Manageme

nt


t

17 Final Forecasts signed off ► Manageme

nt

► Manageme

nt


t





SL.

NO

.


(STANDARD

SAP/CUSTOMISATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/

LOW)


BE USED

1 ► Forecasts Vs Actual ► Period► Nature of

expense► Planned amount

► Actualexpenditure

► Manual/

Customization

► High ►

2 ► Variance Analysis ► Variance

amount

► Manual/

Customization

► High ► 3 ► Changes w.r.t previous annual

budget.

► Unit/ plant wise

annual budgets

► Revised

forecasts

► Reasons thereon► Approving

authority

► Manual/

Customization

► Medium ►





SL.

NO.


(STANDARD

SAP/CUSTOMISATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/LOW)


USED

1 ► Days to complete Forecasting

process

► Manual ► Low ► 2 ► Percentage of accuracy between

budgets & actual



SL.

NO.

INTEGRATION ASPECTS

1. ► All Business units/ Plants/ User Departments

2. ► Management





SL.

NO.INTERFACE REQUIREMENTS

► NA

9. Key Inputs:

SL.

NO.


1. ► Current period actual Vs Budgets performance reports

2. ► Revised targets and assumptions.

10. Key Outputs:

SL.

NO.


1. ► Revised forecasts for company as a whole and individual for all business unit/ plants.





SL.

NO.GAPS INDENTIFIED/ PROCESS IMPROVEMENTS REFERENCE

1 ► Systematic method of preparing, maintaining and monitoring annual budgets. ►

1.3. Asset Accounting

1.3.1 Capital Expenditure Budgeting


Capital expenditure budgeting would be done to capture budgets for each unit/ department and company as a whole and to

have real time budget availability checking and the variations, if any.

9. Process Flow:




<Asset Accounting – Capital Budgeting>

< M

a n a g e m e n t >

< A l l D e p a r t m e n t >

< D S C

>

2

Prepare Capex

requirement planning

3

HODs to review &

finalize capex

requirement

Whether Capex

finalized at Department/

Unit level

Capex plan

forwarded to DSC

4

Consolidates Capex plan

under CFO

5

Consolidated Capex plan

reviewed by management

along with all HODs

Whether the Capex

plan requires change

No

Yes

Plan forwarded to DSC for

making changes

6

Requisite changes are

made and forwarded to

management for approval.

7 Approves Capex plan and

treated as Budget.

Capex budget forwarded

to DSC for updating in

system.

End

8

Updates budget and

intimates to all

departments.

NO

1

Communicate Budget

Guidelines, timelines &

constraints

Yes

Start





SL.

NO.


(SAP/MANUAL)

SAP

FUNCTIONALITY

TO BE USED

► The budgeting process for the comingyear should get initiated in the last

quarter for the previous year. The basis

should be taken from the management

plan for expansion, setting of new units

and acquiring heavy machinery.

► ► ►

1 Communicate

Budget

Guidelines,

timelines &constraints

► The management should prepare the

guidelines as per its future plans and

communicate the same to the

departments/ units to make them awareof the management’s vision with respect

to the expansion and investment plans.

► Management ► Manual ►

2 Prepare Capex ► All the departments / units should prepare ► Units/ Plants ► Manual ►




SL. NO.

ACTIVITY TO BE PROCESS DEPARTMENT MODE(SAP/MANUAL)

SAP FUNCTIONALITY

TO BE USED

requirement

planning

detailed capital expenditure requirements

identifying all major / minor capital assets

expenditure to be incurred during the

year.► Technical details are prepared and

benefits from the expenditure are

evaluated and updated in ‘Capex plan

approval’ form.3 HODs to review &

finalize capex

requirement

► HOD of the respective department/ Unit

reviews the detailed capital requirements

plan in terms of technical viability

considering useful life of the asset, ease of

modification / change to existing

investment, timelines for execution of

plan and financial feasibility considering

the cost benefits analysis for the

investment, and finalize the same.

► Units/ Plants ► Manual ►

4 ConsolidatesCapex plan under

CFO

► DSC consolidates Capex plan receivedfrom all departments/ units to each asset

level.

► The consolidated plan is prepared





SL. NO.


SAP FUNCTIONALITY

TO BE USED

department wise, unit wise and for the

company as a whole

► CFO to review the consolidated plan in

view of fund availability and make

appropriate changes if required.

5 Consolidated

Capex plan

reviewed bymanagement

along with all

HODs

► The consolidated Capex plan is reviewed

by the management with all departments/

units’ heads. ► The technical viability, financial feasibility

etc. are measured.

► Changes are identified by the

management in the budget and the same

is forwarded to Corporate MIS for

amendments.


6 Requisite changes

are made and

forwarded to

management forapproval

► DSC makes requisite changes as decided

in the budget approval meeting and

forwards the same to management for

approval.


7 Approves Capex

plan and treated

► Management approves the Capex plan

and the same is treated as Capex budget.





SL. NO.


SAP FUNCTIONALITY

TO BE USED

as Budget.

8 Updates budget

and intimates to

all departments.

► DSC maintains the budget in the system

for all individual assets.

► A reference number for each individual

asset is generated.► All departments / units are intimated for

their respective budget reference number.

These budget reference numbers will beused by respective departments at the

time of generation of purchase indent.

► The system will check the availability of

budget at the time of creation of purchase

indent. If the budget is available then only

purchase indent should get created

otherwise a sanction of additional budget

needs to be obtained

► DSC ► SAP ► Internal

Orders

11. Responsibility




SL. NO

.


1 ► Communicate Budget Guidelines,

timelines & constraints

► DSC ► Unit heads/

Department

heads

► Management ► All units/

Departments

2 ► Prepare Capex requirement

planning

► Respective

Department

► Unit heads/

Department

heads


Departments

3 ► HODs to review & finalize capital

expenditure requirement

► Unit heads/

Departmentheads

► Unit heads/

Departmentheads


Departments

4 ► Consolidates Capex plan under

CFO

► DSC ► DSC Head ► Management ► All units/

Departments

5 ► Consolidated Capex plan

reviewed by management along

with all HODs


Department

heads


Departments

6 ► Requisite changes are made and

forwarded to management for

approval


Department

heads


Departments

7 ► Approves Capex plan and treatedas Budget.

► Management ► Management ► Finance Head ► All units/Departments

8 ► Updates budget and intimates to

all departments.

► DSC ► DSC ► Management ► Management




12. Key Control Requirements

SL.

NO.

CONTROL REQUIREMENTS TO BE PROCESS

(STANDARD

SAP/CUSTOMISATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/LOW)

SAP FUNCTIONALITY TO BE USED

1 ► The capital expenditure request forms

should be utilized for all fixed asset

purchases

► Manual ► Medium ►

2 ► The fixed asset purchases should be

against an approved budget

► SAP ► Medium ► Internal Order


SL.

NO

.


(STANDARD

SAP/CUSTOMISATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/

LOW)


BE USED

1 ► Report on Budget Vs Actual

Capex.

► Asset number

► Budget amount

► Actual

► Standard SAP ► Medium ► Report on

Internal Order




SL. NO

.

KEY MIS KEY FIELDS TO BE PROCESS (STANDARD

SAP/CUSTOMISATION/

MANUAL

PRIORITY (HIGH/MEDIUM/

LOW)

SAP FUNCTIONALITY TOBE USED

Expenditure

► Cost center

2 ► Un-utilized sanctioned budget

w.r.t to assets not procured as

per the plan.

► Asset number

► Budget amount► Actual

Expenditure

► ► ► Listing will have

to be taken out

of internal

orders which

have budget atthe end of the

year.


SL.

NO.


(STANDARD

SAP/CUSTOMIZATION/

MANUAL

PRIORITY

(HIGH/MEDIUM/LOW)


USED

1 ► Time consumed in budget

preparation





SL. NO.

KEY KPIS TO BE PROCESS (STANDARD

SAP/CUSTOMIZATION/

MANUAL


SAP FUNCTIONALITY TO BEUSED

2 ► Efforts in terms of time and

money in budget preparation.

► Manual ► Low ► 3 ► Percentage of accuracy

between budgets and actual.

► Standard SAP/Manual ► High ► The report on Budget

Vs Actual Capex would

help in calculating the

percentage

4 ► Number of approvals forsanction of additional budget.

► Manual ► High ►


SL.

NO.

INTEGRATION ASPECTS

1. ► User Departments

2. ► Management

3. ► Procurement Department





SL.

NO.


► NA

17. Key Inputs:

SL.

NO.


1. ► Management’s vision about the expansion and investment plan.

2. ► Capital expenditure requirements from various departments.

18. Key Outputs:

SL.

NO.


1. ► Department/ unit wise Capex budgets to the individual assets levels.2. ► Available budgetary balance for individual department/ unit





SL.

NO.


1 ► Budget availability at the department/ unit level. ► 2 ► Online estimates and system validation of budgets at the transaction level. ► 4 3 Way matching? ► Once the materials are quality cleared,

SAP matches the invoice, PO and goods

receipt / service Acceptance sheet. This

match is performed by checking the PO

number quoted on the three documents.SAP tool shall also check other fields such

as value and quantity. The comparison

will be done as follows:

o Quantity and price of the

goods ordered as per PO,

o Quantity of goods received as

per the GRN, and

o Quantity and price of the

goods invoiced by the vendor

► When matching the three documenttypes, pre-defined tolerance limits are

used for all fields other than the PO

number. If the invoice is within the limits

► Finance

Department

► SAP ► Invoice

Verification




SL. NO.


then it is progressed through the process.

If system can’t match one of the

documents, based on the PO number, it

will report any unmatched documents

which have the same value, quality and

vendor.

► For services, where an invoice and PO is

matched but a services acceptance form

is missing, system workflow shall notifythe requesting department to ensure the

acceptance has not been missed

5 Review matching

exceptions

► Invoices without a valid PO or which have

failed the tolerance checks and require a

correction in the invoice to be processed

within the system shall be identified.

► Exceptions will be resolved internally first

and in case exceptions cannot be

resolved, the invoice will be returned to

the vendor.

► Finance

Department

► Manual ►




1.6 General Ledger Account

1.6.1 Chart of Account


Same Chart of Account 1000 used for new company code EVISION.

2. Process Flow:




<Sub-process –

Chart of Account>

F i n a n c e -

D S C

U s e r D e p a r t m e n t s

Start

1Identify need for

new/amended GLCode

2Prepare request for change to Chart of

Account code

3Review and

approve Chart of Account codes

4Set up new code

in Chart of Account

Notify user

Confirm if change isrequired?

YES

Request accepted? YESNew GL/Changes

approved?YES

NO

END

NO

NO

New/Amended GLCode request




Business Processes

Same process are mapped and followed in EVISION as in EDURABLE.

Company Code is 2000 for E Vision with same Controlling Area and Business Area is 2000, Profit centre is

2010.

Documents

Delta Evision Fi