As-Is PD Document Financial Control BALA Revised 2 4[1]

3i Group plc, UK

Process Definition DocumentProcess Definition Document

3i SBU: Finance

Process : Financial Controls

Sub-process : Portfolio Accounting, Agresso Controls and Processing,

Agresso system reconciliation and expenses accruals.

Version/Revision : PD-Draft-v 1.5

Date : June 09, 2007

Author : Ankur Lakhani

Reviewer : Bala Natrajan

Version History

Version No. Date Author History of changes

Approved By

(3i Group plc.

Representativ

e)

PD-Draft-v1.5 09th June,

2007

Ankur

Lakhani AS-IS process

1. Introduction…………………………………………….........................................................................3

2. Portfolio Accounting....................................................................................................................... 7

2.1 Processing the Investment/Divestment deals in system.....................................................7

2.1.1 As-Is Process Analysis...........................................................................................7

2.1.2. Detailed As-Is Process Flow...................................................................................8

2.1.3 Variations...........................................................................................................12

3. Agresso Controls………………………..........................................................................................13

3.1 As-Is Process Analysis............................................................................................13

3.2 As-Is Process Flow.................................................................................................14

3.3 As-Is Detail Process Description...............................................................................14

4. Processing & Posting Accounting Packs on Agresso...............................................................15

4.1 As-Is Process Analysis...............................................................................................15



4.4 Process Variations.................................................................................................17

5. Expenses accruals and Systems reconciliation - Agresso.......................................................18

5.1 As-Is Process Analysis...............................................................................................18



5.4 Process Variations.................................................................................................20

5.5 Process Exclusions................................................................................................20

6. Compliance………………………………………………………………………...................................21

7. Glossary of terms used................................................................................................................22

Confidential Page 2 of 22 4/11/2023

1. Introduction

Objective of the document

This document captures the process of accounting for all investments and managing them on

portfolio basis. This document also identifies Static data maintenance as currently being done by the

Portfolio accounting team operating from UK. The concept of the As-Is process and context is

captured along with description of other incidental/supporting activities, applications used, and a

glossary of terms used within 3i Group plc, UK.

Portfolio accounting:

The portfolio accounting team initiates and maintains the accounting for all investments, divestments

and income recognition on Frameworks, the investment accounting system at 3i.

The investment process will require the following documents:

(1) Investment paper with signatures

(2) Committee minutes approving the investment

(3) Setting Up Forms (SUF)

(4) Variation notes before Completion

(5) Investment checklist

(6) Investments Funds Requisition (IFR)

Similarly the divestment process will require the following documents:

(1) Divestment paper – details on sale (cash only/stock only/cash-stock), full/partial status, proceeds,

deductions (brokerage fees, legal fees, commissions etc)

(2) Divestment checklist

(3) Setting up Forms, if divestment proceeds include new stocks issued

(4) Paper work for write-offs

Investing entities are reviewed for correctness on papers submitted; accounting is executed for 14-15

investment entities including the ELPs/SLPs. An investment request will need to be set up for each of

the entities on Trema; this will then be coded as a FrameWorks control account.

The transaction may be effected through inter-company transactions when 3i pays up (typical for

specific currencies) or individual payouts from each of these entities, while the external funds pay out

separately.

All investment requisitions need to be authorized and approved by respective groups and portfolio

accounting team separately. Lawyers and/or investment operations would review prior to release of

funds. Summary of Investment Completion (SoIC) is the final form received from legal team indicating

that the investment is completed.


The greater challenge in this function is to get the paperwork and information rather than actual set

up on Frame Works. All cash outflows through the month need to be registered by end of the month.

Typically data capture on FrameWorks should be completed within 2-3 business days.

Forex runs are affected after transactions are closed for the month end; all capital items are required

to go through the forex run. Rollback transactions relate to corrections of errors on the system and

can be done only within the month end. There could be utmost 2-3 rollbacks daily and routed through

specific people within 3i.

Income recognition is equally involved as the investment/divestment transaction. Investment

administration has to address each legal entity separately. For example, if five legal entities are

involved in an investment, five separate interest bills go out to the investee company for the share of

loan given out by each legal entity. Cash reports are pulled off daily and all non-Treasury receipts are

coded as GL, FrameWorks, and company transactions. The investment related to the receipt and the

involved entities need to be traced and coded. Conversations with related portfolio administrator will

be necessary to understand the transaction. Cross currency transactions involve receipts in one

currency from an investment made in a different currency.

Systems Overview:

All SMi deals remain on GASP while all open non-SMi deals have been migrated to FrameWorks.

FW version 7 upgrade (current version 6.4) is scheduled to be completed (user testing with resources

from Trinity Park) before Dec 2007. Numerous bugs were identified in the earlier version and are yet

to be fixed. FW includes many modules such as (1) portfolio accounting (2) portfolio manager (3) fund

accounting (4) nominal ledger (5) contact management.

The basic record details for a company captured on FrameWorks include the following:

(1) Name/address of customer

(2) Currency of investment

(3) Standard industry code

(4) Business line within 3i

(4) Cost centre code

The securities involved in a typical deal structure captured on FrameWorks are as follows:

(1) Equity shares – every investor has same rights (dividends) for the same class of equity; e.g.

alphabet shares include A-Z ordinary shares

(2) Interest bearing loans – For each entity, an interest profile (includes rate, billing address and

frequency, invoice template, gross of tax for direct investments with Investment Trust status, net of

tax for Eurofunds) & a redemption profile (amount, redemption frequency, Group may have PIK loans

while EuroFunds have deep discount bonds)

(3) Preference shares


(4) Deep discounted bonds

(5) PIK notes

Financial Controls:

Individuals in this group have responsibilities along horizontal services and accounting for individual

entities. There are multiple horizontal services within this function which support all business lines

and support functions, as follows:

o Interface processingo Reconciliationso Controls

Refer to systems overview for more details on interface processing.

Reconciliations among the core systems - FrameWorks/Aggresso/GASP – are executed by cost

centre, by legal entity, by currency and by sterling and also with the data warehouse. This process

typically takes over 4-5 days. This team also investigates why some entries are found the way they

are in FW or GASP to answer queries from the investment team.

The controls process manages the individual heads such as Gross investments, Debtors & Creditors

accounts across the entities.

A brief summary of the activities performed by the financial controls team include the following:

o Foreign exchange rates are uploaded monthly into both GASP & FW and manually captured on Agresso. Portfolio accounting systems use last forex rates recorded but can be overridden, where required.

o Day 1 processing will be initiated by moving data from the interface tables. All data are transferred at the transaction level and not at the summary level.

o FW provisions are income provision runs where the provisions are applied on the income streams based on the health status rules for investments. These are computed in the interface tables and hence provision data sits in Agresso but not on FW.

o Expenses are captured on Aggresso through the Purchase ledger and include board costs, audit costs, acquisition and divestment costs. These expenses are also only on Aggresso but not on FW.

o Revaluations & translation processing is executed by client (2 FTEs x 4 hrs) in a 2 step process and is done 3 times monthly. This is required to get the 4 currency views in line.

o Partnership level capital & income distributions cannot be tracked on Aggresso, and hence the use of MS Excel.

The group company month end is around Day 8-Day 10, the funds month end is around the end of

next month.

System Overview:


Aggresso is the ERP accounting system for statutory reporting for different entities. There are no

automatic data feeds into Aggresso; Richmond/Frameworks & GASP have daily transactions and

once a month, those are interfaced with Aggresso. Richmond can post automatically into GASP daily,

but cannot do so in Frameworks, hence control accounts (FW) are used, for nominal ledger accounts

on Aggresso, since they cannot be posted directly. Data from GASP and control accounts get into

Aggresso on a monthly basis via interface tables. The PowerBuilder based interface tables use the

FW GL codes while taking data into Aggresso from FW.

Aggresso organizes itself by collecting statutory entities into “clients”. Clients are defined by 4 key

elements - Year end/Reporting currency/Regulatory requirements (country)/chart of accounts.

Reporting views are by 4 currencies – transaction currency, reporting currency, Euro and Sterling.

While FW and IA are used for all other countries, France based transactions have separate

transaction numbers which factor both entity and transaction type.

Organisation of the team

The portfolio accounting team for the UK geography is a part of the Financial Controls group within

the Finance Department. In the current structure, there is a Portfolio Accounting Manager who reports

to the Head of Financial Control and within her team there are six portfolio administrators. Also, there

is one executive each for Frameworks Support & Maintenance and Systems Development team.

The Financial Controls team has 6 executives managing Agresso Support & Maintenance (1

executive); System Reconciliation and reporting (2 executives) and Agresso processing & controls (3

executives).

The portfolio accounting function for the US is currently supported out of Birmingham besides also

being dispersed in regional geographies like France, Germany and Sweden.


2. Portfolio Accounting

Portfolio accounting describes the processing and maintenance of investment records of the deals

made by the business lines. The Portfolio administrators are responsible for gathering information on

the investment deals from the investment executives; processing them; setting-up entities and

investments on Frameworks; passing entries in Trema as well as Frameworks. The Portfolio

administrators as a part of processing & posting the entries through Frameworks, create entity and

investment level master files in Frameworks and in this sense enter and maintain Static Data.

2.1 Processing the Investment/Divestment deals in system

The process begins when a payment request is initiated by the investment executives for a proposed

investment to the portfolio accounting team at least 48 hours prior notice should be given, but it is

likely that cash is required to move out of Treasury with lesser notice. The portfolio administrator

receives the investment papers with required Committee approvals, set-up forms (hard-copy of the

relevant portion is provided) and request for payments.

The portfolio administrator verifies the documents to ensure the completeness of the information

given. The administrators would also ensure that the document has all the necessary approvals in

place (includes variations before completion). The portfolio administrator verifies if the investment is

made in an existing investment or in a new company (Please note that currently, investments are

maintained on the basis of entities). The portfolio administrator sets-up the contact details; entity and

investment level details in Frameworks.

Once this information is updated in Frameworks, the portfolio administrator sets up payment

requisition entries in Trema (Treasury Management system; also known as Richmond) and these

entries are authorised by a senior portfolio administrator. These entries would in effect be verified by

the administrator in the Treasury middle office team.

The portfolio administrators similarly post entries in Frameworks (Please note that the entries in

Frameworks would be done only after the cash is paid out of Treasury i.e. only once the actual

payment is made). Once the entries are posted on the systems, the portfolio administrators set up the

income related details for accruing the income (For e.g. Interest rates and billing intervals are set up

for loans). Similarly, the details of repayment schedules are entered by the team along with one-time

and recurring fees. The portfolio accounting team also manages the accounting for divestment deals

in a similar fashion.

2.1.1 As-Is Process Analysis

Inputs

The main inputs are investment/divestment papers; approvals of relevant authorities; set-up

forms; request for payment, variations before completion, variations after completion, write-

off forms, investment and divestment checklists, 3rd party authorities, summary of investment

and divestment completions. The investment executives and group secretariat are the main


sources of information, the advice from tax & legal departments act as important inputs to

understand increasingly complex investment structures.

Enablers

Trema/Frameworks systems;

Outputs

Complete set of Portfolio accounts; facilitating investment payment and receipt.

2.1.2. Detailed As-Is Process Flow

As-is- Portfolio Accounting Entries for Gross New Investments & Portfolio Maintenance

Sys

tem

s- T

RE

MA

Clie

nts

Por

tfolio

Acc

ount

ants

Orig

inat

or-

Inve

stm

ent

Exe

cutiv

es/G

roup

S

ecre

taria

tS

yste

ms-

Fra

mew

orks

Start

Gather deal related

documents. Fill up Set-up forms. Send Investment

paper

Collect all the approvals/

documents and send

End

Receive Investment

paper/payment

requisition

Do necessary documents exist?

Request for all necessary documents

Pass gross investment

entries

Set-up Interest definitions;

billing format; capital

repayment profiles

Process interest/other accruals by

2nd week every month

No

Yes

Is this investment in existing entity?

No

Update contact details

Set-up securities

details

Set-up Requisition for payment to customer/lawyers for each legal

entity. Authorise requisition

Is it within Gross Commitment

figure?

Yes

Request for increasing gross

commitment

No

Generate invoices from

available templates & send it to the

clients

Obtain necessary

approvals for increasing limits

Receive Invoices

and check for

accuracy

Are calculations done accurately

Receive Queries. Check

validity. Resolve

queries and send Invoice

Receive fresh invoice with

accurate amounts

Raise Queries. Request for fresh inoice

No

Make Payments in form of cash/

PIK notes

Cash is coded while PIK notes

have to be converted by

Portfolio Administrator

Yes

Process periodicity-for every drawdown

Process periodicity: income accrual cycle

Forward Investment committee

minutes

Is this further investment?

Yes

Yes No

Allocate cash against

outstanding invoices


As-is- Portfolio Accounting Entries Processing for DivestmentsS

yste

ms-

TR

EM

AP

ortfo

lio A

ccou

ntan

tsO

rigin

ator

- In

vest

men

t E

xecu

tives

/Gro

up

Sec

reta

riat

Sys

tem

s-F

ram

ewor

ks

Start

Gather divestment

related document and send it to

Portfolio administrator

Collect all the approvals/

documents and send

Receive Divestment

details

Do necessary documents exist?

Request for all necessary documents

No

Yes

Process periodicity-for every divestment

Forward Investment committee

minutes

Receive cash

proceeds

Receive proceeds in form of cash

& paper

Receive proceeds in

form of Paper

Receive cash proceeds and do the coding

Investigate, calculate and

allocate cash to the investment either a full or

partial divestment

Set-up new investment/capital/fee definitions or amend existing ones for

partial divestments or close those no longer and create

deferred consideration

Receive cash proceeds and do the coding

Investigate, calculate amount of cost relating to the cash proceeds and paper proceeds and allocate the cash for both full or partial

divestment

For the new paper investment create contact details and

set-up security details

End




EndInvestigate and

calculate the transfer/conversion to the new entity for both full and partial

divestment




End

Is this only Cash divestment

Yes

Is it for cash & paper both

Yes

No No

Receipt of Investment deal documents and setting-up process

As the Business line executives get ready to complete an investment they send a request to the

portfolio accounting team for processing the entries related to the deal. As a policy guideline, the

payment request should reach the portfolio accounting team at least 48 hours prior to date on which

cash is required to leave treasury, but rarely happens and regularly get the paperwork when we

chase following receipt of the monies. This request would be accompanied by investment papers;

committee approvals; set-up forms; variation forms, write-off documents, requests for payment etc.

Please note that the minutes of the Committee Meeting in which Investment is approved is sent by

the group secretariat to the portfolio administrators. Variations before and/or completion consist of

changes to the original terms of the investment, ranging from changes in interest rates, repayment

profiles, to conversion of one security to another, and one currency to another.

The portfolio administrators are required to exercise their diligence on these approval documents and

identify missing information. When the portfolio administrator identifies that some information

necessary for processing the payment is incomplete, s/he should go back to the investment

executives/group secretariat and obtain all relevant information. (Presently, this communication is

mainly via phone and email). Once complete information is obtained, the portfolio administrator


gathers all the details about the investee company from the details provided by the investment

executives. These details are analysed to understand if the investment is in an existing company or in

a new entity. If the investment is in a new entity the portfolio administrators must set-up contact and

entity details, and for new and further investments the investment, income, repayment related details

of the investee company are required to be set up. Following are the main activities done for setting-

up entities in Frameworks:

I) Set up Contact and company details: Once complete details are available, the portfolio administrators would first set-up contact details [name & address of customer], contact person (the addressee on the interest invoice bill as specified in the Set-up form) etc. [line 5 has to be populated to enable data retrieval by other users]. The portfolio administrators can also make use of an application called Interaction, a database which maintains details on companies that are normally in contact with 3i. The contact details entered are then pulled into Frameworks.

After setting-up contact details, entity wise details are set-up in the Frameworks system. These details would include place of operation, type of company, Group to which it belongs, currency, Industry, sector, MIDAS number (this number enables data to flow to data warehouse) etc. Once the entity data is updated, the case status (health of the investee entity) is set-up. Please note that while updating many arrears, such as the region/place, cost centre, legal entity, billing template etc, in Frameworks when there is a need to add a new region for example, in the drop box, a request is to be made to Support & Maintenance executive (presently, Ms. Birte Lassetter) and the region would get updated from back-end. The portfolio administrator would then update the Accounting information in Frameworks. This code would help identify the industry/sector in future references. This code is to be obtained from the Industry & Sector team via an email.

II) Once the contact and entity details are set-up, the portfolio administrator sets up Security details in Frameworks. The attributes of the securities are mainly the types of security (Equity, Loans, Deep Discount bonds; (currently deep discount bonds are not supported in Frameworks)); type of interest (fixed/floating), rate of interest applicable; date of accrual of interest (if the security is a loan).

if the investment is in an existing company, then the setting-up of contact details and generic company details are not required. However, the administrator must inquire whether it’s a further investment in the investee company. If so, the administrator needs to set-up the security details. if it is not a further investment, then the administrator needs to check if the request for payment is within the gross commitment figure. If the drawdown is higher than the gross commitment approved, the administrator needs to liaise with the Investment executives for enhancing this limit. The enhancement must be approved by appropriate authorities before the portfolio administrator can go ahead with setting-up of the requisition for payment in Trema (Treasury management system). ii) This updating of master data is required only when the investment is in a new entity.

Setting-up requisition for investment payment in Trema & Posting entries in Frameworks

Once the contact, entity and security details are updated for a company, (this information would already be available for existing investments) the portfolio administrator sets up the requisition(s) for payment in Trema to forward cash to the client/lawyers for each legal entity. Portfolio administrators make the payment entries after the payment requisition is set-up in Trema. The entry has to be authorised in Trema by senior administrator in after which the administrator in Treasury middle office would be able to view, verify and authorise the payment online.


Once this is done, entries have to be posted in Frameworks. For passing these entries, the Investment Commitment has to be set-up. Investment commitment is the total amount of investment (in the form of equity participation, loan etc) approved by the authorities in a particular investee company. This defines the approved commitment limit. Once the commitment limit is set, the gross investment is set-up in Frameworks, which is actually the first drawdown.

Setting-up Income definitions, billing formats, accruals processing and Capital repayment schedules

Once the gross investment is set-up, income definitions are set-up in Frameworks. These income

definitions include Interest /dividend/fee definitions. The portfolio administrator has to use a string of

codes to set-up income definitions. The income accrued may not be received in the form of cash, in

which case, the client would pay in the form of PIK notes and these have to be converted. Where the

income accrues and the payment is to be received in the form of PIK (payment in kind), a new

investment account has to be opened. Once the income definitions are set-up, accrual processing is

started. Presently, accrual processing is done at the middle of every month (presently the income

accrual calculations pertaining to PIK notes are done on Frameworks but a spreadsheet is used to

confirm the calculations).

After the income accrual processing is done, the administrator sets up the billing formats, the invoice

layout, tax regime for the investment and the country of residence. After this, invoices can be

generated on Frameworks. These invoices are uploaded in Frameworks as templates and it is

important to select the correct template. Once the invoices are generated in the prescribed template,

they have to be sent to the addressee through post.

The portfolio administrator also has to set-up the Capital Repayment profile on Frameworks. This

process involves entering the repayment schedule, fees receivable and other details.

Activities flow for Divestments

In case of Divestments, the portfolio administrator must identify the consideration to be received. The administrator must check the divestment paper to identify if it is a cash divestment or the consideration is received in the form of another security (e.g. divestment proceeds would be received in the form of equity/loan in other investee company) or in the form of cash and paper. Once the consideration is understood the portfolio administrator has two methods of accounting for the proceeds. These methods are as under:

I) Cash Divestment: The Business line would dispose-off investments (as approved) and the investment executives would forward all the necessary divestment papers (e.g. committee approvals) to the portfolio administrators. Once these documents are received the portfolio administrator would verify them for completeness. If the documents provided are not complete, the portfolio administrator must liaise with the investment executives/group secretariat to obtain the required documents.

Once the portfolio administrator is in possession of all necessary documents, the cash that is received in Trema would be coded. Once the entries are done, the portfolio administrator would determine the investment relating to the proceeds and account for them in Frameworks. If this is a partial divestment, calculations have to be done to ensure that the correct cost, valuation and foreign exchange gain/ loss are accounted. The consideration may also be received in a different currency and corresponding forex conversions have to be completed.


II) For Divestments where consideration is not in cash:

In such a situation, there can be 2 possibilities:

a) Where proceeds received are in the form of cash and securities- The portfolio administrator must code the cash on Trema and calculate the costs relating to the cash and paper proceeds and allocate the cash for both full and partial divestments. For the new paper investment, the administrator must create contact details and set-up new security details on Frameworks. The transactions on Frameworks are treated as conversions. The administrators would set-up new interest/capital/fee definition or amend the existing definitions for partial divestments or close those that are no longer required and create deferred considerations if applicable

b) Proceeds received in the form of paper only: The administrator calculates the transfer/conversion to the new entity for both full and partial divestments. The administrators set-up new interest/capital/fee definitions or amends the existing definitions for partial divestments or close those that are no longer required and create deferred considerations if applicable.

For partial divestments, the administrator has to take special care while allocating the proceeds (presently allocated on a pro-rata basis in a spreadsheet). Full and partial divestments will require different actions. Full divestments require all profiles to be closed down and deferred consideration and no embarrassment clauses to be set up, whereas partial divestments will require the profiles to possibly be amended, especially for loan capital repayment schedules.-The Portfolio administrator has to calculate offline for cash and paper transactions, the cost to be attributed to the cash and paper proceeds.

Other activities:

i) The team has to reply to calls from clients, on billing calculations, missing invoices, follow-up on

R185 and PIK note certificates etc.

ii) The portfolio administrator has to regularly liaise with lawyers/tax-consultants for developing a

correct understanding of the investment/divestment deal papers.

2.1.3 Variations

The investment/deal related documents must be sent to the portfolio accounting team at least 48

hours prior to the cash leaving treasury. Often, the documents are not received by the portfolio team

before 48 hours. In effect, the papers are received on 24hrs notice and in few urgent cases the notice

is lesser than 24hrs.


3. Agresso Controls

3.1 As-Is Process Analysis

Inputs

The main input for agresso controls is an excel sheet sent to the users for knowing the status

of activity completed.

Outputs

Status of activity completion in Agresso.


3.2 As-Is Process Flow

As-is- Agresso System Activity Controls- Financial Controls

Sys

tem

- A

gre

sso

Ori

gin

ator

- A

gre

sso

P

roce

ssin

g te

amA

gre

sso

use

rs

Start

Send an excel sheet seeking information on

status of activity completion

Complete the activity

End

Receive the excel file YesIs the activity

completeUpdate excel & send it back

No

Receive individual

updated excel sheets

Print individual

responses for filing

Track/follow-up with users to get updated

file

3.3 As-Is Detail Process Description

Agresso control is a process of ensuring that all the activities required to be completed in Agresso are

completed. This process is critical because on a monthly basis data from Frameworks and GASP

move into Agresso and from Agresso this data moves into Data Warehouse. Hence, 3i presently

maintains a cut-off date at month-end after which the data from other systems cannot flow into

Agresso.

Sending excel sheet to all the users and documenting their responses

The primarily responsibility of this team is to make sure that all Agresso processes are run on time

and they exercise control on the processes. This process begins when an excel sheet is sent to all

the users in Finance, in the 3rd week before the month-end to get a signoff on the status of the

activity that they are responsible for. This excel sheet is sent via an email and responses from the

users are stored in physical form. Where the activities are pending completion, the team would follow

up with the users.


4. Processing & Posting Accounting Packs on Agresso


Inputs

The main input for agresso processing is the accounting packs from other geographies where

agresso system is not rolled-out.

Enablers

Agresso.

Outputs

Accurate entries are posted in Agresso.



As-is- Processing & posting A/c packs on Agresso- Financial Controls

Sys

tem

- A

gre

sso

Ag

ress

o P

roce

ssin

g te

am

Ori

gin

ator

- B

usi

nes

s u

nit

Start

Receive the accounting

packEnd

Send accounting

pack at beginning of the month

Post entries

Do the decoding YesAre the entries

correctly posted?

No

Pass necessary Journals

Generate compiled

report

Receive compiled reports

Check for accuracy and raise queries

if any

Receive queries, if any

Check for accuracy and raise queries

if any


Agresso processing involves revaluation, processing, and posting manual entries in Agresso,

accounts for statutory accounts, Interfaces from GASP/TREMA, making sure that the entries are

routed to the correct accounts.

Asia and Italy do not have Aggresso and their financials are received and captured on Aggresso manually. The outputs from Aggresso are sent back to these geographies.This process is critical because it must be completed before the monthly agresso-run. This

information flow happens on a monthly basis when data from Frameworks and GASP move into

Agresso and from Agresso this data moves into Data Warehouse. Hence, 3i presently maintains a

cut-off date at month-end after which date the data from other systems cannot flow into Agresso.

Receiving accounting packs, decoding and posting entries in agresso

The team receives the accounting pack from the business units where agresso is not rolled-out

(currently, Italy and Asia) at the beginning of the month. Once the accounting pack is received, the

executive decodes the pack and inputs in Agresso. This would be done by the end of working day 8,

every month.

Other Activities done by the team:

i) Controlling yearly accounts for Pension Plans: Process Overview: The pension accountant is responsible for compilation of statutory Pension Plan accounts and the year-ending followed is 30th June. Pension accountant would prepare/compile the financials along with a trustee report (on draft basis) which would be presented to the members of the pension plan (Trustees of the pension fund). The members or the trustees would lend their suggestions on the financials, which are incorporated by the accountant and submitted to the members for approval in a Trustee meeting. The accountant would prepare the Trustee report in conjunction with the HR team. The employee details pertaining to the pension plan is provided by the HR in hard copy. HR would administer the plans; provide AVC (valuations related document); control


annuity plans etc. The investment managers for the pension plan are Legal & General. They would produce a report capturing the new investments and the movements in existing investment on a fortnightly basis via email (the accountant can also view the website of Legal & General). The accountant would draw out the details and analyze the movements in investments which are then reflected in the financials. The details of pension plan are to be manually entered on Agresso where the pension plan rests as a client. The accountant is presently using excel spreadsheet for preparing the financials statements and is an extremely manual process. The statutory financials are required to be audited after the year-end by statutory auditors (Ernst & Young is currently managing the audit) as required by SOX.Accountant Profile: The accountant has 18+ years of work experience (3 yrs+ with 3i) and is an Association of Accountants and Technicians & has to finish module of Chartered Accountancy (Semi-Qualified). The accountant is solely responsible for preparing the statutory accounts and does not have any other support/assistant working with him.

ii) Interfaces from GASP/TREMA, making sure that entries are routed to the correct clients/accounts.

iii) Revaluations and translation processing is a two stage process for getting the monetary assets in

Balance sheet at month end rate. (There exists a procedure form/checklist which is attached below).

A month end rate is requested from Treasury through an email. Once this month-end rate is received

from treasury, it would be copied into Agresso. An individual administrator would make entries for a

particular currency. For example, an administrator would pick out all entities where GBP/EURO

equivalent rate needs to be entered and would enter the same for all such entities. Once the rates are

entered in agresso, a print of the screen is taken and compared with rates sent by treasury to check

accuracy of rates entered. This is also an important check point because once the exchange rates

are authorised and saved in agresso, it is difficult to amend them.

iv) Profile of the team handling Agresso Processing and controls: There are 2 semi-qualified

administrators working in the team. One person is training to be a chartered administrator (in her final

year) while the other administrator is a graduate.

v) Statutory report compilation of other 3i subsidiaries.

vi) VAT filing for the above said entities on quarterly basis.

Agresso system development & support involves the management of Agresso rollout to new

geographies, training for new users and ongoing assistance to Agresso users across the company

globally.

4.4 Process Variations

i) Constant challenge to get users to correct/amend information on the system and rather than in an

excel.


5. Expenses accruals and Systems reconciliation - Agresso


Inputs

The main input for reconciliation is the data that flows into Agresso from other systems like

Frameworks, Trema, and GASP. The input for expense accruals is an excel sheet containing

the details of expenses sent by respective departments.

Enablers

Agresso.

Outputs

Accurate data flow in Agresso and proper expenses accrual.



As-is- Expenses Accruals processing on Agresso- Financial Control

Sys

tem

- A

gre

sso

Ori

gin

ator

- F

ina

nci

al

cont

rol t

eam

Con

cern

ed D

epa

rtm

ents

Start

Send an excel sheet seeking information on expenses to be

accrued

Post entries on basis of cost

centresEnd

Receive the excel file

Compile accruals data

Receive individual

updated excel sheets

Verify accruals data

Is required data compiled? Yes

Send the compiled data to Financial

Controls team

No


Expenses accruals: The process begins when the administrator in Financial Controls sends a

template spreadsheet, and compiles accrual data from different departments (currently, 15

departments) and uploads the data into Agresso. The entries are done on the basis of cost centres,

included in the details sent in the spreadsheet by the different departments. The administrator is also

responsible for data reconciliation of Data Warehouse and Frameworks with Agresso.

Expenses Accruals: Sending excel spreadsheet and posting entries in Agresso

In the last week of the month, the administrator sends a spreadsheet to different departments asking

them to send expense accrual data by the second working day of the month Once the departments

send the spreadsheet with accrual details, the administrator must check all accruals data (to confirm

if there are any duplicate entries) before posting entries in Agresso

The entries are made on the basis of cost centres provided in the spreadsheet sent by the

departments. In case cost details are required, the administrator gets the same from the respective

department. When there is request for adding new cost centre details, the cost centres have to be

created in Agresso, Frameworks, Trema and GASP.

For setting-up a new cost centre, an email request is received from a department and the request is

prepared in a prescribed format. This request would go to the Head of Financial Controls for approval.

Only when it is approved by the Head of Financial Control it would be sent to the executive who

provides Agresso support and maintenance.

Reconciliation between Agresso and Frameworks & Data Warehouse


At every month-end, reports are generated from Agresso, Frameworks and Data Warehouse and are

then uploaded onto a spreadsheet. The administrator must investigate this spreadsheet and find out

entries with discrepancies. After discrepancies are identified, the administrator emails the concerned

executive asking him/her to journalize rectifying entries. The administrator in financial controls would

make sure that rectification/journal entries are routed through the systems and not through manual

adjustments (for e.g. when an entry in Frameworks needs rectification, the administrator would

ensure that the entry is passed through Frameworks and not through back-end adjustments in

Agresso.

Other Activities:

i) Every month when data flows from all the systems into Agresso, the administrator must ensure that

all the entries have gone into proper accounts and there are no pending entries in any of the

control/suspense accounts. If such entries exist then the administrator must ensure that these entries

are routed to proper accounts.

ii) Accounts Payable would send details of all payment entries during a month to the administrator on

the 1st working day of the next month. These entries need to be checked and closed on the same day

in Agresso.

A significant share of the communication between this team and other divisions is via email.

5.4 Process Variations

No variations noticed.

5.5 Process Exclusions

i) Agresso support/maintenance and Pension accounting process are excluded from the scope of this

document.


6. Compliance

There are no compliance requirements around staffing and training.


7. Glossary of terms used

Portfolio: Represents the investment made in a company.

PIK notes: This refers to Payment in Kind notes. These are notes issued in lieu of cash. These are

notes received against payment of current income such as dividends, interest etc.

Summary of Investment Completion: Provides complete summary of the investment completed

which would be useful in setting up the investment in Frameworks.


Date post:	11-Apr-2015
Category:	Documents
Upload:	anon-28231
View:	188 times
Download:	0 times

As-Is PD Document Financial Control BALA Revised 2 4[1]

Documents