Presentation to OAUG - SIG Atlanta 21-Oct-2005

Inter – Company Transactions

Agenda Overview of Inter-Company Transactions Organization Structure Business case – Solution

Inter-company Transactions Movement of Goods : Between Divisions belonging to Same Legal Entity Across more than one Legal Entities within US Across Many International Subsidiaries Single face to Customer (One Selling Company – Multiple Internal Supply Companies) Selling Company Books Order & Raises Bills on Customer Supply Company drop-ship goods directly to Customer warehouse. Intercompany Billing between Selling and Supply company. Multiple Selling Companies – Single Supply Companies Multiple Selling Companies – Multiple Supply Companies Cross Charging for Goods & Services across Projects Inter-project Billing between projects owned by different legal entity. Intercompany Journals Shared Bank Accounts across Legal Entity : To receive Customer payments To disburse Supplier Payments

Business Case Single face to Customer Single Selling Company – Multiple Supply Companies Multiple Selling Companies – Multiple Supply Companies

Why Single Face to Customer ? 1. What the customer was seeing before…multiple legal entities, no single interface Customer LE 1 LE 2 LE 3 LE 4 LE 5 LE 6 2. Multiple businesses servicing a single customer order…time consuming internal negotiations Customer LE 1 LE-3 LE-2 LE-4 3. Multiple acquisitions…many faces to the customer. ITO / Application confusion etc. LE-1 LE-3 LE-4 LE-5 LE-6 LE-2 Customers Customer desired a single ITO face…One Brand

New Simplified Organization / LE Structure “New” Organizational / Legal Entity Structure HR Legal IT Primary Objectives Single Face to Customer Compliant Legal Structure & Branding Rationalize multiple USA Benefit Plans Re-align people to operational owners Single ITO Platform Parent Company Finance Leadership Commercial Statutory Entity - CSE (Selling Company – Customer facing) Sample LE - 1 LE - 2 LE - 3 Future Acquisitions (US / Non-US) Product Line Product Line Home Base Statutory Entities - HBSE (Supplying Company – Fulfillment Center)

Oracle Solution : Multi – Org Structure & Transaction Flow (Within US) AR Invoice USD Set of Books Shipment Set of Books Sales Order Legal Entity LE - US Selling OU IC-AR Operating Unit Supplying OU IC - AP Demand Inventory Organization Average Cost Entity 1 Average Cost – Entity 2 Average Cost- Entity - 3 Average Cost - Entity - 4 Sub- Inventories Sub - Inv Sub - Inv Sub - Inv Sub - Inv …..

Consolidation Set of Books (Financial Consolidation + I/C Elimination) Oracle Solution : Multi – Org Structure & Transaction Flow (Intl. Outside US) Consolidation Set of Books (Financial Consolidation + I/C Elimination) MRC USD Set of Books Sales Order AR Invoice USD Set of Books Non-USD Set of Books MRC Set of Books Shipment Intercompany AP Intercompany AR Legal Entity LE - US LE – Non-US Operating Unit Selling OU Supplying OU Supplying OU Demand Inventory Organization Average Cost Entity 1 Average Cost – Entity 2 Average Cost- Entity 3 Average Cost - Entity 4 Average Cost Entity 5 Sub- Inventories Sub - Inv Sub - Inv Sub - Inv Sub - Inv Sub - Inv

Select One of the Fulfillment Org as Shipping Warehouse on Sales Order Oracle Solution : Process Flow Diagram Supply Chain Model - Selling Company (Order Management) Select One of the Fulfillment Org as Shipping Warehouse on Sales Order CSE – Selling OU Generate Progress Bill Cycle from Receiver Project to Customer Book Order Auto invoice Import Run Create Inter-company AP Invoice Import Inter-Company AP invoice Create Receiver Project Inter- company Invoice Settlement & Elimination Ship Goods to Customer Run Create Inter-company AR Invoice Custom Program updates the Inter-Co Inv Amount Auto Invoice Import Inter-company HBSE – Supplying OU Manual Automatic Manual or Automatic

Select One of the Fulfillment Org as Shipping Warehouse on Sales Order Oracle Solution : Process Flow Diagram Manufacturing Model - Selling Company (Project Accounting) Book Order Select One of the Fulfillment Org as Shipping Warehouse on Sales Order Generate Progress Bill Cycle From Receiver Project CSE – Selling OU Book Order Create Receiver Project Generate Final Bill and Recognize Revenue Import Inter- company AP Invoice Inter- company Invoice Settlement & Elimination Generate an Intercompany AR invoice on CSE from Provider Project Create Receiver Project Accumulate Cost against Provider Project Ship Goods to Customer HBSE – Supplying OU Manual or Automatic Manual Automatic

Oracle Solution : Setup Details & Customization Details Selling Company Supply Chain Model Manufacturing Module Involved : OM, AR, AP, INV ) Modules Involved : (OM,PA, INV, AR, AP) Define Intercompany Customer & Supplier Create Intercompany Relationship in Inventory Module Setup Auto-accounting Rule in AR Setup AR Transaction Type and link to Order Transaction Type. Create Custom Program to calculate Transfer price and update AR Auto invoice Interface table. Define Intercompany Customer & Supplier Define Implementation option in PA (Internal Billing) Define Billing extension. (Optional) Set up Automatic Billing (Optional). Setup Auto-accounting Rule in PA Setup Auto-accounting Rule in AR Setup AR Transaction Type and link to Order Transaction Type. Define and link Receiver project & Provider project. (Required) Create custom program in AP to handle one to many Supplier relationship.

Operational Structure – Process Flow & Accounting CSE Books order from Customer Order Booking No Accounting Entries CSE Assigns order to appropriate HBSE business @ Established TP Order Assignment (Internal Demand) No Accounting Entries HBSE makes or buys Parts Make / Buy Dr. Inventory (HBSE-LE) Cr. Cash (HBSE-LE) Ship to Customer HBSE business drop-ships parts to Customer Warehouse. Dr. COGS (HBSE – LE) Cr. Inventory (HBSE-LE) CSE raises Invoices to Customer. Invoice to Customer Dr. External Receivables (CSE-LE) Cr. External Revenue (CSE – LE) HBSE raises an Inter-company AR invoice on CSE @ agreed Transfer Price. Intercompany AR Invoice Dr. Due From CSE (HBSE – LE) Cr. Internal Revenue (HBSE – LE) CSE creates an Inter-company AP invoice on HBSE @ agreed Transfer Price Intercompany AP Invoice Dr. Internal COGS (CSE-LE) Cr. Due To HBSE (CSE – LE) Intercompany Revenue (HBSE) is eliminated with COGS (CSE) Due From & Due To Elimination Intercompany Settlement & Elimination a) I/C Revenue & COGS Elimtn b) DF/ DT Elimination

E-Mail : hari.mundhra@ge.com Phone : +1-678-844-4062 Contact Information Name : Hari Mundhra E-Mail : hari.mundhra@ge.com Phone : +1-678-844-4062 www.genpact.com

Disclaimer This presentation was prepared exclusively for the benefit and internal use of Genpact in order to indicate, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure to any other party. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Genpact. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of Genpact.