Yearend Activities _ TATA Cummins

Yearend Activities

Author: Creation Date: Last Updated: Version:

Tata Consultancy Services Ltd. 20-Mar-2007 20-Mar-2007 1.0 (Draft)

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INTRODUCTION............................................................................................................. 3 PRE-REQUISITES........................................................................................................... 3 YEAREND ROADMAP................................................................................................... 3 1. BUDGET ACTIVITIES ............................................................................................... 4 DEFINE BUDGET ............................................................................................................... 4 ENTER BUDGET (EXPENSE) .............................................................................................. 6 CARRY FORWARD BUDGET & ENCUMBRANCE ................................................................. 7 OPEN ENCUMBRANCE PERIOD .......................................................................................... 8 2. RATE UPDATION IN OVERHEADS AND RESOURCES ................................................ 9 3. LOCALIZATION ACTIVITIES................................................................................... 10 4. INVENTORY ACTIVITIES ........................................................................................ 13 5. WIP ACTIVITIES ................................................................................................... 15 ALL WIP JOBS NEED TO BE CLOSED.BY 31ST MARCH,2007. ............................................ 15 6. FIXED ASSET ACTIVITIES...................................................................................... 16 7. HR ACTIVITIES ..................................................................................................... 16 8. OTHER ACTIVITIES ............................................................................................... 17 9. YEAREND BALANCE TRANSFER ACTIVITIES ......................................................... 20 CONCLUSION ............................................................................................................... 22

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Introduction
This document addresses year-end activities specific to TATA Cummins Limited.

Pre-requisites
This document will address issues / activities as a top up over normal period end issues / activities. For normal period end activities, please refer Period End Activities.

Yearend Roadmap
Task Name Yearend Activities Budget Activities Define Budget Create Capital Budget Define Values Create Budget Organization Create Assignments and create budget (Capital) Enter Budget (Expense) Prepare Data (to be loaded through Web ADI) Run Web ADI Post Budget Journals Open Encumbrance Year Carry Forward Budget and Encumbrance Finalize Carry forward Strategy Perform Carry Forward Action Open Periods / Calendars (Budget) Open Encumbrance Period Rate Updation in Overheads and Resources Calculation of Resource / Overhead Rates Revisiting Mass Allocation Formula Update Resource and Overhead Cost through Data Loader Localization Activities Identification of Transaction Types Opening Excise Calendar Attaching Transaction Types CENVAT Claim (50%) TDS Set Up VAT Claim Inventory Activities Duration 23 days 12 days 5 days 1 day 4 days 1 day 1 day 7 days 6 days 1 day 1 day 1 day 12 days 5 days 1 day 1 day 1 day 12 days 7 days 7 days 2 days 7 days 1 day 1 day 1 day 1 day 1 day 1 day 10 days Start 19-Mar-07 19-Mar-07 19-Mar-07 19-Mar-07 19-Mar-07 23-Mar-07 23-Mar-07 19-Mar-07 19-Mar-07 27-Mar-07 27-Mar-07 27-Mar-07 19-Mar-07 19-Mar-07 1-Apr-07 1-Apr-07 1-Apr-07 19-Mar-07 19-Mar-07 19-Mar-07 31-Mar-07 26-Mar-07 26-Mar-07 1-Apr-07 1-Apr-07 1-Apr-07 1-Apr-07 1-Apr-07 31-Mar-07 Finish 14-Apr-07 1-Apr-07 23-Mar-07 19-Mar-07 22-Mar-07 23-Mar-07 23-Mar-07 27-Mar-07 26-Mar-07 27-Mar-07 27-Mar-07 27-Mar-07 1-Apr-07 23-Mar-07 1-Apr-07 1-Apr-07 1-Apr-07 1-Apr-07 27-Mar-07 27-Mar-07 1-Apr-07 1-Apr-07 26-Mar-07 1-Apr-07 1-Apr-07 1-Apr-07 1-Apr-07 1-Apr-07 11-Apr-07

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Task Name Physical Adjustment - Yearend Physical Adjustment Entry in System Item Cost Update WIP Activities Job Closure Decision / Effect / Effort Discussion Existing Job Close New Job Open Fixed Asset Activities Asset Category Assignments HR Activities HR activity Strategy HR-Leave Balance Updation Other Activities Pending System Entries Yearend Balance Transfer Activities Finalize Balance Transfer Strategy Finalize treatment for Adjustment Periods Creation of Yearend Provisions

Duration 10 days 10 days 2 days 12 days 1 day 5 days 1 day 6 days 6 days 7 days 1 day 1 day 2 days 2 days 23 days 2 days 2 days 12 days

Start 31-Mar-07 31-Mar-07 31-Mar-07 19-Mar-07 19-Mar-07 27-Mar-07 1-Apr-07 31-Mar-07 31-Mar-07 26-Mar-07 26-Mar-07 1-Apr-07 31-Mar-07 31-Mar-07 19-Mar-07 19-Mar-07 19-Mar-07 31-Mar-07

Finish 11-Apr-07 11-Apr-07 1-Apr-07 1-Apr-07 19-Mar-07 31-Mar-07 1-Apr-07 5-Apr-07 5-Apr-07 1-Apr-07 26-Mar-07 1-Apr-07 1-Apr-07 1-Apr-07 14-Apr-07 20-Mar-07 20-Mar-07 13-Apr-07

1. Budget Activities
There are two types of budgets Capital Budget and Expense Budget.

Define Budget
For Capital Budget, Step1 : Create separate budget as TCL_CAP 07-08.

If new capital budget is not created, against existing capital budgets, we have to open next budget year by pressing Open Next Year. Step 2 : Future3. Next activity will be creating values for project segment in value set

Step 3 : After that we have to create one budget organization as TCL CAP BUDGET 07-08 Step 4 : Define Account Ranges and attach this funding budget name (TCL CAP BUDGET 07-08) against the ranges Step 5 : We assign accounts against these ranges.

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Step6 : Then enter budgets through worksheet mode. As per our Set of Books, budgets will be created through journals. Hence, we have to click Budget Journals.

Click for Create Journals

. Step7 : operative.

We have to press Check Funds and Reserve Funds to make the same

For Expense Budget, the same budget (TCL_EXP_BUDGET) will be maintained. We have to change last budget period as ADJ07-08 and open next budget year by pressing Open Next Year.

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Click for Open Next Period

You can change the last period to a later period only if the period you are changing from corresponds to the last period of your fiscal year. Hence, put last period as ADJ07-08

Enter Budget (Expense)

Step Step Step Step 1 2 3 4 : : : : Prepare data in excel in given format. Use Web ADI to upload these journals. We have to post these journals to make them operative. We have to open Encumbrance Year.

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Click for Open Next Year

Carry forward Budget & Encumbrance

Step Step 1 2 : : Finalize Carry Forward Strategy. Perform Budget Carry Forward into the system.

Different Carry Forward Options are as follows: Encumbrance only Encumbrance and Enc Budget Funds available In our case Encumbrance and Enc Budget is applicable since we want to move Encumbrance along with corresponding Budget amount.

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Click Carry Forward Option

Open Encumbrance Period

Encumbrance period needs to be opened.

Decision Pointers:
Sl. No. 1. Issue When Budget data will be available for loading? Whether Capital Budgets will be created on 31st March 2007? Whether Budget carry forward will be used? If yes, which carry forward option needs to be selected? Finalization of Client Name and timeline under Responsibility Matrix Resolution

2. 3.

4.

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Responsibility Matrix:
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Activity Create Capital Budget Define Value Set for Project (required for capital budget) Create Budget Organizations for Capital Budget Create Account Ranges and Assignments for Capital Budget Enter Budget from Front End for Capital Budget Perform Open Next Year for Capital and Expense Budgets Prepare Expense Budget Data for loading purpose Run Web ADI Open Encumbrance Year Finalize Carry Forward Strategy Perform Budget Carry Forward Owner Client Client Client Client Client Client Client TCS (Chittaranjan) Client Client Client 27-Mar-2007 27-Mar-2007 23-Mar-2007 01-Apr-2007 Timeline

2. Rate Updation in Overheads and Resources

Overhead and Resource Rates will be recalculated and accordingly all the overhead and resource rates will be updated.

Decision Pointers:
Sl. No. 1. Issue Whether Resource and Overhead Rates need to be changed? Resolution

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Sl. No. 2, 3.

Issue Resolution Whether Mass Allocation Formula needs changes? Finalization of Client Name and timeline under Responsibility Matrix

Responsibility Matrix:
Sl. No. 1. 2. 3. Activity Create Rates for Resources and Overheads Create new Mass Allocation Formula Upload Resource and Overhead changed rates through dataloader Owner Client Client TCS (Meeta) 01-Apr-2007 Timeline

3. Localization Activities
Localization Organization Additional Information Set Up
The following have to be done: For the Inventory Organization Main Plant TCL and null Location & Inventory Organization Master Org - TCL & null Location: Step 1 : Click on Tax Calendar button to Open Tax Calendar Information India Localization Screen. In the Tax Calendar Information India Localization Screen do the following : (a) Click on the button Open Next Year to Open next Fiscal Year (b) Click on the button Excise Generation to Open the Excise Generation India Localization Screen. Step 3 : In the above mentioned Screen, Query on the existing Records. The following Transaction Types will be visible - ORDER and INVOICE. For the Transaction Type INVOICE, change the Prefix to SUPP/07-08

Step 2 :

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This activity has to be done after the last shipment / receipt of the current financial year

Claiming 50% CENVAT for Capital Goods

The following have to be done: Step 1 : Through Purchasing Responsibility and the following Navigation / Menu for the Inventory Organization TC1 : Purchasing Responsibility >> Receiving >> Claim MODVAT on Receipts This will open up the Find Receipts India Localization Query Screen. Select the Parameters : Capital Goods Only = Yes Pending 50% Claim Only = Yes Click on the Find Button to find on that apply and Claim 50% CENVAT from the Claim CENVAT On Receipts India Localization Screen This activity has to be done in the new financial year

Step 2 :

Claiming VAT for capital goods

This will be applicable to Items which are having the Item Class as Capital Goods in the VAT Item Classification setup. Step 1 : A Query Output will be given which will have the Receipts against which VAT installment have to be claimed. From the Purchasing Responsibility, run the concurrent program India VAT Claim Processor with parameters as : Regime : VAT Registration No : 20420801489 Organization : Main Plant TCL Receipt No : << from the Excel Sheet >> The above process to be done before 31st March, 2007 in order to have all the Accounting Entries generated in March, 2007

Step 2 :

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CLAIMING VAT FOR FINISHED GOODS

This will be applicable to Items which are having the Item Class as Finished Goods in the VAT Item Classification setup. Receipt-wise claim of such has to be done as is in the existing process. The above process to be done before 31st March, 2007 in order to have all the Accounting Entries generated in March, 2007

OPEN TDS CALENDAR

TDS calendar needs to be opened in the new financial year

Decision Pointers:
Sl. No. 1. Issue Finalization of Client Name and timeline under Responsibility Matrix Resolution

Responsibility Matrix:
Sl. No. 1. Activity Providing the list of Receipts for which VAT Claim Processor is to be run for Claiming VAT on Capital Items. Run the VAT Claim Processor Concurrent Program for Claiming VAT Installments for Capital Goods (Receipt No wise) Claim VAT for Finished Goods Opening Localized Additional Organization Info Calendar Changing Suffix for Transaction Type in Localization Addition Info Opening TDS Calendar Owner TCS (Chitaranjan) Timeline

2.

Client

31-Mar-2007

3. 4. 5

Client TCS (Meeta) TCS (Meeta)

31-Mar-2007 01-Apr-2007 01-Apr-2007

TCS (Chitaranjan)

01-Apr-2007

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Sl. No. 7

Activity Claim 50% Excise Balance for Capital Goods

Owner Client

Timeline Post 01-Apr-2007

4. Inventory Activities
Physical Inventory Adjustments Yearly Stock will be counted between 31st March, 2007 and 01st April, 2007 which is to be entered in the system in the consecutive days based on the discussion TCS had with TCL in Jamshedpur. Oracle suggests that no transaction should take place in the system between the period snapshot is taken and launching of final adjustment is done The following Activities are be performed prior to 31st March: 1. Physical Inventory creation 2. Tag generation (if system generated TAG is used) 3. Tags to be made available The following activity to be performed after the last inventory transaction on 31st March, 2007 / prior to starting fresh transaction in next Financial year. Since 1st April, 2007 falls on a Sunday, this activity can also be done on that day. 1. Freezing the Physical Inventory 2. Running a report / Scripts to find out the Stock / Cost of each Item. It is assumed that the users will enter the Stock using the Physical Inventory Counting Screen between the period 02nd April, 2007 onwards and at the same time transaction will also continue in the system. At the end of the stock entering activity, a Customized report / script to be run to find out that which are the Stock adjustments, if done will try to drive Inventory negative and hence error out the Adjustment Transaction. After identification these counts will have to be Rejected. Being satisfied that there is enough stock to carry out negative adjustment, Launching of Physical Inventory Adjustment may be done in the system. After discussion with core team, it has been decided that the launching will be done at the current date of the transaction. The Adjustment Account will be provided by the Finance Department. A Report will be run to find out the difference in Valuation had the adjustment been done on 31st March, 2007 based on the data available in the system. Accordingly

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General Ledger entries will be passed in the system, if required, through Provisional reversible journals. Note: According to the recent discussions, it is found out that TCL has decided to perform Physical Inventory Counting in the System on 31st March, 2007 and 01st April, 2007 itself and to launch the Adjustment on 01st April, 2007 or 02nd April, 2007 before Transaction starts. Hence the Report related activities are not required and adjustment entries in General Ledger are also not required.

Cost Update transactions for items This will mainly be done on the items which have multiple sources of Procurement Indigenous and Imported. As a single Item Code is maintained for such items, it becomes difficult to segregate the cost of the Item from two different sources, affecting Schedule 6 Reporting and wrong Inventory Cost and COGS. To correct the cost at Year-end cost for such Stock following activity is carried out: 1. Take the total Stock of the Item from the system and the average rate. Ex: Say the Total Stock of the Item is 150 and Average Rate is 32 2. Physically segregate the item based on Procurement sources Indigenous and Imported and find out the last Purchase rate from the system. Ex: Say 90 Qty from Imported Source with Purchase Rate at Rs 100/- and 60 Qty from Indigenous Source with Purchase Rate at Rs 10/3. Calculate the Closing Stock / rate based on the above information. Ex. The Closing Stock may be arrived at as (90*100) + (60*10) which equals to 9600. The Rate is evaluated to 9600/150 which equals to 64 4. Perform Cost Update of the Item with the differential cost from steps 1 and 3 Above i.e., (64-32) = 32. The Adjustment Account to be provided is to be decided by the Finance Department. However, we recommend this account should come under COGS / COS Roll Up Group.

Decision Pointers:
Sl. No. 1. Issue Resolution Finalization of Client Name and timeline under Responsibility

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Sl. No.

Issue Matrix

Resolution

Responsibility Matrix:
Sl. No. 1. 2. Activity Performing Physical Inventory Activities Perform Cost Update of Items procured through multiple sources Owner Client Client Timeline

5. WIP Activities
Closure of WIP Jobs may be done in the system for the following reasons : To close the completed jobs so that the variances (if applicable) are relieved from the Job To close all jobs which are partially open. New Jobs needs to be dropped with new Resource and Overhead Rates which will be a pre-requisite to be entered in the system.

Decision Pointers:
Sl. No. 1. Issue Resolution Finalization of Client Name and timeline under Responsibility Matrix

Responsibility Matrix:
Sl. No. 1. Activity A list of jobs which will have to be closed by TCL, needs to be extracted from back end. Closure of existing Jobs Dropping New Jobs Owner TCS (Meeta) Timeline 26-March-07 to 31-March07 on daily basis.

2. 3.

Client Client 01-April-2007

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Note: For better control, once new resources and overhead rates are defined in system.

6. Fixed Asset Activities

Under Fixed Asset, primary activity will be changing the depreciation rates attached against the respective assets due to change in shift wise depreciation rates. Regarding the same already one TAR is open to obtain Oracle views / action map on the same.

Decision Pointers:
Sl. No. 1. Issue Resolution Whether depreciation rates need to be changed for assets? When we can prepare data related to change in fixed asset rates? Finalization of Client Name and timeline under Responsibility Matrix

2,

3.

Responsibility Matrix:
Sl. No. 1. Activity Finalization of Fixed Asset Depreciation rate change process. Already one TAR is open with Oracle. TAR Number is Identification of assets which will undergo these rate changes. Assign new asset categories against the identified assets. Owner TCS (Chittaranjan) / Client (Anoop) Timeline 29-March2007

2. 3.

Client TCS (Chittaranjan) / Client (Anoop) 01-Apr-2007

7. HR Activities

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In TCL, HR related activities are not applicable at financial year end as the same is applicable for calendar year end. However, a few decisions can be validated involving HR people.

Decision Pointers:
Sl. No. 1. Issue Resolution Whether Position Hierarchy, Leave Balance Updation will be carried out at financial year end? Finalization of Client Name and timeline under Responsibility Matrix

2.

Responsibility Matrix:
Sl. No. 1. Activity Organize a meeting with HR to finalize the decisions Owner Client Timeline

8. Other Activities

This will be addressed on As and When Required mode during April,07. However, the following document can be treated as a guideline for doing so. The following extract describes how to correct Pending Transactions : ********************************************************* Pending/Errored Inventory Transactions Inventory Responsibility >> Accounting Close Cycle >> Inventory Accounting Periods -- Select Pending Button related to an OPEN period. -- In the top region -- Resolution Required -- If it show pending records, These must be fixed prior to trying to close the period. -- form only shows a count of pending records against the period. Inventory Responsibility >> Transactions >> Transaction Open Interface
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-- This form queries the MTL_TRANSACTIONS_INTERFACE table -- Records can be resubmitted from this form. Inventory Responsibility >> Transactions >> Pending Transactions -- This form queries the MTL_MATERIAL_TRANSACTIONS_TEMP table -- Records can only be resubmitted via the form. -- Records must be processed out of this form in order to close inventory accounting periods. Inventory Responsibility >> Transactions >> Material Transactions -- Records can be viewed from this form to know whether the transactions has costed flag as 'YES' or 'No', also other related columns under Alternate Region >> 'Reason/Reference'. -- We re-submit the records only through SQL.

Pending/Errored WIP Move and WIP Resource Transactions Work in Process Responsibility >> Move Transactions >> Pending Move Transactions -- This form queries the WIP_MOVE_TXN_INTERFACE table -- Records can be updated, deleted, and resubmitted via the form. Work in Process Responsibility >> Resource Transactions >> Pending Resource Transactions -- This form queries the WIP_COST_TXN_INTERFACE table -- Records can be updated, deleted, and resubmitted via the form.

Resolving Pending Material Transactions Resolving Pending Material Transactions is a process of determining and fixing what is preventing a record from being processed through the TRANSACTIONS_INTERFACE table. Details of pending transactions can be viewed through the application by navigating to the Transaction Open Interface form. Using the Transaction Open Interface window, you can view, edit, correct and resubmit transactions received through the open interface. There are five selections in the alternate region list of values: Error, Location, Source, Intransit and Other. These provide detailed information to help you resolve pending transactions. In the Error alternate region: a. The error code describes the error on the last attempt to process the line item. b. The error explanation gives a reason for the error. c. The process flag indicates whether the row has been processed by the concurrent manager. The process flag status codes are:

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1 = Pending 2 = Running 3 = Error Resubmitting Transactions for Processing: In the Transaction Open Interface window, check the Resubmit [] box next to the transaction you want to resubmit or choose Resubmit All from the Special menu. If you have many transactions to resubmit, use the Resubmit All button to select all transactions for processing and then selectively deselect individual transactions you do not want to resubmit. Save your work to submit the transactions for processing. Resolving Pending WIP Cost Transactions Resolving Pending WIP Cost transactions is a process of determining and fixing what is preventing a record from being processed through the WIP_COST_TXN_INTERFACE table Pending transactions can be viewed through the application by navigating to the WIP Responsibility >> Pending resource transaction form. In the Pending Resource Transaction window you can view, update, delete, and resubmit resource transactions that have failed validation and remain in the WIP_COST_TXN_INTERFACE table. You can also resubmit transactions whose concurrent process has failed and have a processing phase of Complete and process status of Error. There are eight selections in the alternative region list of values: Processing, Source, Concurrent Request, Job or Schedule Name, Operation, Resource, Transaction and Comments. Error transactions will have the Transaction ID and Group ID populated and the Status will be error. Pending transactions will have the Transaction Id and Group ID fields blank and the Status will be pending. To view error details for failed resource transactions, select the erred transaction and click on the [Error] button. The Pending Resource Transaction error window appears. Column indicates the name of the column in the resource transaction interface table (WIP_COST_TXN_INTERFACE)that failed validation. Message indicates why the transaction failed.

To resubmit failed resource transactions: In the Pending Resource Transactions widow either check the transaction's Resubmit check box to resubmit one record or choose select All for Resubmit from the Special Menu then save your work. *********************************************************

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Decision Pointers:
Not Applicable

Responsibility Matrix:
TCS / TCL.

9. Yearend Balance Transfer Activities

Yearend activities are the final activities under yearend initiative. Step 1 : Create Provisional Journals.

We have to create Provisional Journals and will reverse it in the next period when the same will be opened.

Put Period as the period APR07-08 where journals will be reversed.

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Step 2 : Step 3 : Step 4 :

Finalize treatment of Adjustment Periods. Create Statistical Journals. Once Balance Transfer Strategy is finalized, we have to submit one Closing Entry.

Different Closing Entry options are: 1. 2. 3. Calculating Retained Earning Balance without creating journals Calculating Retained Earning Balance with journals without using offset account. Calculating Retained Earning Balance with journals with using offset account.

Decision Pointers:
Sl. No. Issue Resolution
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Sl. No. 1. 2, 3. 4.

Issue Resolution Which option should we select to pass Closing Entry? How do we use Adjustment Period for analysis purpose? Which are the provisional journals need to be passed? Finalization of Client Name and timeline under Responsibility Matrix

Responsibility Matrix:
Sl. No. 1. 2. 3. 4. 5. Activity Finalize Balance Transfer Strategy Finalize treatment for Adjustment Period Creation of Yearend Provisions Creation Statistical Journals Pass Closing Entry Owner Client Client Client Client Client Timeline

Conclusion
TCS people will be available over phone / mail for 24 * 7 for any assistance.

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