aarohan ( ERP project, Oil India Limited ) Change Management Finance and Controlling

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) FICO – KEY PROCESS CHANGES  All expenses which were represented by cost codes in legacy will be GL Accounts in FI  Job Numbers which were part of the General Ledger in Legacy will be Cost Centers in CO  Sphere wise sub ledgers will be eliminated through use of Business Area  Structured numbering of GL Accounts through use of Accounts Group for easy identification and grouping.  Centralized creation and maintenance of all master records  Use of other modules for F&A functions : – - Payroll to be processed through HR module - Sales Billing to be done through SD module - Inventory Accounting & Invoice verification in MM module

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) FICO – KEY PROCESS CHANGES  95% value write off in respect of slow/non moving inventory items will be through provision entry not affecting Stock ledger  MRN to be valued at Current Moving Average price instead of issue price.  Automatic GRN valuation through inclusion of planned delivery cost in Purchase Order.  Use of Special GL for Down payment, Supplier Advances etc.  Departmental Advances to be linked to Personal Account through Alternate GL for easy identification  Traveling, Medical, LFA/LTC advances and adjustments will be done through off cycle payroll and not through personal A/C  Employees Personal A/C will be a 7 digit Number starting with 7 and ending with Salary code/Regn No. ( e.g )  All Loan payments to be disbursed through Off cycle payroll

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) FICO – KEY PROCESS CHANGES  Doctors Pool Fund payments through Payroll  Three GL Accounts for every Bank Account : - Main Account, Issue Account & Deposit Account  Use of Cash Journal for all Cash Transactions  Cash payments vouchers prepared by other sections will be through Cash Payment contra account  Departments will be authorized to adjust the amount spent from Imprest cash through Cash Journal, as per DOP.  Payment vouchers not to be routed through planning or any other department.  FI expenses will automatically flow to Cost Centers, Profit Centers and Business Area  Self verification of assets like Furniture etc. by user departments through the system

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) FICO – KEY PROCESS CHANGES  Responsibility accounting through Profit Center  Use of Process orders in LPG for product costing  Alternate Hierarchy in Profit Center and Cost Center  Restrictions on use of wrong Job Number  Condensate to be considered as Joint Product of LPG plant  Production cost and Depletion will be allocated to well level.  Capturing of depreciation at cost center level  General Overheads will be General Services in SAP  General Services will be Engineering Services in SAP  Departmental Overheads will be Drilling & Production Services

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) FICO – KEY PROCESS CHANGES  Iterative cost allocation between General and Engg. services  Man power Cost will be directly booked to related cost centers at primary level through payroll. No Wage Allocation advice to be sent by departments  Maintenance Cost to be booked through Plant Maintenance (PM) Orders.  Departments to provide information for cost allocation e.g. vehicle utilization statement etc. through the system.  Expenditure of Delhi office, S&CP, Vigilance, S&IA, BD & TPP etc. are to be shown as Corporate expenses directly in P&L A/C  Income and Expenses of BD & TPP services rendered by various departments to be shown under respective departments

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) FICO – KEY PROCESS CHANGES LegacyPost ERP Budget Head (e.g IG/05/01) WBS element (e.g PI.05ASPG.001) Capital Job No. (e.g 37/**** ) WBS element No (e.g PI.05ASPG ) Standing Revenue Job No. (e.g 06/0651) Cost Center (e.g OILNKA0651) Special Revenue Job No. (Presently uses 6 Digits) Internal order (Internal system generated number with 9 Digits starting with 8)

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) Numbering Logic for Capital Jobs PI First Two digit signifies “Plug In” Project 05Next Two digit signifies Financial Year i.e AS 5th and 6th digit "AS" signifies Assam Business Area (AP for Arunachal Pradesh) LP Next Two digit "LP" signifies LPG Deptt (Short name of the Deptt.) 001Next Three digit signifies Budget Serial Number 01 Last digit signifies Item Number Example: Job No 37/**** = WBS Element No.PI.05ASLP

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) Numbering Logic for Cost Centers  a) First three digits = Department or sphere, say Production/ Delhi  b)Next two digits = Sub Location, say Digboi /Naharkotia  c)Next one digit = Type of cost center say  A=Operation B=Maintenance and C= Common  d)Last four digits = existing job numbers  Example: OILNKA0651 = OCS 5- Operations (Job No. 06/0651) OILNKB0652 = OCS 5- Maintenance (Job No. 06/0652) ELENKC0580 = CE- Electrical office (Job No. 17/0580) DELDLC0703 = Delhi office (Job No. 17/0703)

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) What we need – where we get What we needWhere we get  Balance Sheet and Profit & Loss Account for Oil India Ltd.  Company code  Location/ sphere wise Financial records and statements for audit etc.  Business area  Responsibility area /SBU wise profitability & performance report  Profit center  Detailed cost analysis up to the lowest level  Cost center

 SAP AG 2003, - (SAP India) Oil India Ltd. aarohan ( ERP project, Oil India Limited ) Thank you