SAP Localization Summit 2011, Bangalore, India

SAP INDIA LOCALIZATION PORTFOLIO It’s time to Run Better

The SAP® Business ByDesign™ solution is the world’s most complete and adaptable on-demand business offering, designed specifically for midsize companies that want to grow profitably. SAP Business ByDesign helps you streamline and optimize every area of your business. The solution provides transparency and control over all your operations, so you can immediately identify and respond to issues and opportunities – and it’s adaptable, so you can meet new business requirements with minimal time, effort, and cost. And with SAP Business ByDesign, you have SAP managing your software for you, so you can be confident about a successful deployment and predictable operation, with minimal total cost of ownership.

Complying with government regulations is not optional, it’s a necessity. SAP Business ByDesign provides visibility, transparency, and integrity to all your business processes – as well as localized business content and best practices to help you with regulatory compliance in all countries where the solution is currently available. SAP Business ByDesign reduces the cost, time, and effort required to comply with regulations.

India localization provides for compliance covering the requirements with respect to legal provisions in scope of business operations such as Value Added Tax (VAT), central Sales Tax (CST), Tax Deducted at Source (TDS) and Service Tax. Provisions governing the requirements for Balance Sheet, Profit and Loss statement, Cash Flow statements as per Companies Act are also supported.

Tax Compliance

Legal Reporting

India localization provides for tax computation w.r.t Value Added Tax (VAT), Central Sales Tax (CST), Service Tax, and Tax Deducted at Source (TDS) as applicable at business transactions covering procurement and sales of goods and services. Applicability for VAT or CST based on the regional scope of transactions is automatically taken care of. India Localization also provides preconfigured content for tax codes with applicable components, tax rates, Service categories (service tax), and nature of payment (tax deducted at source (TDS)) etc., enabling faster implementation and easy adaptation.

The localization solution also provides for Challan process w.r.t Service Tax and Tax Deducted at Source (TDS) with

details of tax paid and Challan submission data being captured at the system.TDS vendor certificate as per legal format (Form 16A) and TDS Quarterly Return as per legal format (26Q) is also supported. VAT return, format being state specific is provided in a generic way with relevant data. Service Tax Return (ST3) is also provided for with the limitations based on the data captured and available at the system.

Additionally depreciation calculation, Balance Sheet and Profit and Loss accounts are also provided for as per Companies Act 1956. Cash flow statements provided also gives an insight to the financial health of the organization.

Run Adaptive Run BetterLOCALIZATION AT SAP Business ByDesign

Since its inception in 1996, India localization (Country Version India – CIN) has been a key factor for its customers to bring in profitability together with legal compliance to their businesses. The solution has undergone continuous enhancements since then resulting in improved usability and consistent compliance with Indian tax requirements. Close interaction with SAP ERP customers, having Indian operations, has been a key factor in the success of our solutions. Until SAP R/3 4.6C, India Localization was available as an add-on solution complementing SAP ERP with functionality for Indian-specific statutory requirements. From SAP R/3 Enterprise Core 4.70 release onwards, India Localization is delivered as part of the standard SAP Solution. With a dedicated team at Labs Bangalore, SAP proactively keeps track of legal changes affecting its customers in India and incorporates such changes into its solutions seamlessly, enabling complete compliance.

Indirect Taxation system in India covering business operations taxation is quite complex and includes excise tax, value added tax, service tax on a broad scale. India Localization provides complete compliance as per the provisions of laws governing these taxation segments.

SAP CIN provides complete provisions for excise definition including material chapter ID configuration, excise rates, assessable value etc. It offers two ways of calculating excise duty, a condition-based method and a formula-based method supported by Pre-Defined tax procedures ensuring standardization and compliance. Various components of excise tax, surcharges and Cess (ECess & SHECess) applicable are also supported.

Determination VAT rates, applicability and computation is completely supported by India localization. Specific provisions w.r.t.

Tax Compliance

Excise Tax (CENVAT)

VAT (Value Added Tax)

official document numbering, VAT registration number, valuation based on VAT applicability of material and credit treatment is also covered as a part of India Localization. SAP provided 24/7 support to our customers to ensure a smooth transition to a VAT regime on April 1, 2005.

Service tax is of the nature of deferred tax. Such specific treatment as per law is fully supported by Country Version India (CIN). Localization functionality facilitates the service tax computations and transfer of duty payable/ input credit from interim account to final account on part receipts or full payment ofbill/ invoice respectively. Tax credit cross utilization between goods and services are also supported.

Tax credit utilization greatly impacts the working capital requirements of business and, at the same time, laws governing the tax credit are equally complex. India Localization provides a comprehensive support for tax credit utilization in a seamless manner. It provides the complete support for tax credit utilization across goods and services.

Country version India (CIN) provides complete compliance across the logistics operations covering procurement and sales transactions between different business entities, as required by the legal provisions in India as explained below.

India Localization provides for integration of excise processes with the goods movement functionality. Incoming excise invoices can be captured and posted instantly in the SAP ERP solution for goods receipts arising from external procurement, subcontracting and stock transfer. The posting of excise invoices generates the appropriate accounting entries for CENVAT credit, where applicable. The amount posted to these accounts is available for CENVAT utilization. Current excise rules allows for availing immediate CENVAT credit to the extent of only fifty percent for capital goods and the balance can be availed in subsequent financial years. India Localization supports the same. Entries in CENVAT registers are maintained in the system with reference to source transaction data, thus ensuring traceability.

Service Tax

Credit Utilization

Process Compliance

Procurement

Run Compliant Run BetterLOCALIZATION AT SAP ERP OPERATIONS Subcontracting

Factory Sales

Depot Operations

Export / Import operations

Reporting Capabilities

The India Localization provides for monitoring materials issued to a subcontractor under excise law. Features such as challan creation and tracking, quantity reconciliation and CENVAT reversal on non-receipt of material within prescribed time-frame and re-credits on subsequent receipts are provided for.

An excise invoice can be created during the billing cycle. India Localization provides for both immediate and periodic credit utilization. Immediate CENVAT utilization provides for inline updates on CENVAT credit in the relevant registers (RG 23A/C) during goods movement. Periodic CENVAT utilization functionality allows you to utilize CENVAT accumulated during a period and debit balance to your personal ledger account (PLA).The utilization functionality provides for cross utilization between goods and services whereby CENVAT credit can be utilized to pay service tax and viceversa. There are functions for handling Excise implications w.r.t concessional rates scenarios, for example, free samples, stock transfers, and deemed exports are also addressed by India Localization.

At a depot, materials can be received from manufacturing facilities, other depots, and dealers. Excise duty needs to be passed on as it is received. For depot sales or stock transfers, as there is no value addition done at a depot, India Localization provides for the mother excise invoice selection & referencing at depot. Consolidation in duties at commercial invoice and creation that is based on a delivery document prior to goods issue is also supported. Excise Register RG23D maintenance as required by excise laws is also been provided for.

India Localization allows you to process exports and deemed exports under excise regulations. Under exports, India Localization provides for maintenance and processing of excise bonds (running bonds), creation and processing of ARE - 1s under deemed exports, maintenance of licenses and creation and processing of ARE-3s are provided. Reporting in terms of ARE document ageing, the running bond report, and bond summary report provide for tracking their status. In case of imports, credit availment for countervailing duty (CVD) and additional duty for customs are supported.

India Localization facilitates data capture at transaction and master level and offers a comprehensive set of report generation capabilities covering reports as per Indian statutory requirements as well as business audit requirements. Some of the major reports supported are:

? RG 23A Parts I and II (CENVAT)? RG 23C Parts I and II (CENVAT)? RG 23D? RG 1? ER-1 (including xml data file export)? GAR 7 Challan data? Service tax Return - ST3 (section 3, 4 & 5)

Ease of Implementation

Services

Credit Utilization

Process Compliance

Procurement

Subcontracting

From SAP R/3 Enterprise core 4.7, India Localization configuration is a part of SAP standard implementation guide (IMG) including preconfigured templates for tax calculation based on Indian statutory requirements. SAP Library documentation is also available online (http://help.sap.com) for Country Version India, which is a comprehensive user manual with detailed information on the India Localization functionality from a user’s perspective. Its ease-of-use and accessibility makes it the ideal companion to a feature packed localization solution. These features have proved to be very effective in accelerating implementations as well as enabling quick adaptations to legal changes. In addition, Best Practices for Baseline and select Industries are offered with India Localization as an integral part to facilitate quicker implementation.

SAP offers you a complete spectrum of services for India Localization:

? Professional consulting services for project planning and system implementation

? Training? E-Learning? Audits bill/ invoice respectively. Tax credit cross utilization

between goods and services are also supported.

Tax credit utilization greatly impacts the working capital requirements of business and, at the same time, laws governing the tax credit are equally complex. India Localization provides a

comprehensive support for tax credit utilization in a seamless manner. It provides the complete support for tax credit utilization across goods and services.

Country version India (CIN) provides complete compliance across the logistics operations covering procurement and sales transactions between different business entities, as required by the legal provisions in India as explained below.

India Localization provides for integration of excise processes with the goods movement functionality. Incoming excise invoices can be captured and posted instantly in the SAP ERP solution for goods receipts arising from external procurement, subcontracting and stock transfer. The posting of excise invoices generates the appropriate accounting entries for CENVAT credit, where applicable. The amount posted to these accounts is available for CENVAT utilization. Current excise rules allows for availing immediate CENVAT credit to the extent of only fifty percent for capital goods and the balance can be availed in subsequent financial years. India Localization supports the same. Entries in CENVAT registers are maintained in the system with reference to source transaction data, thus ensuring traceability.

The India Localization provides for monitoring materials issued to a subcontractor under excise law. Features such as challan creation and tracking, quantity reconciliation and CENVAT reversal on non-receipt of material within prescribed time-frame and re-credits on subsequent receipts are provided for.

“India Localization provides compliance across the logistics map”

Quick Reference Notes:

Since its inception in 1996, India localization (Country Version India – CIN) has been key for its customers to bring in profitability together with legal compliance to their businesses. The solution has since undergone continuous enhancements resulting in improved usability and consistent compliance with Indian tax requirements. Close interaction with SAP ERP customers, having Indian operations, has been a key factor in the success of our solutions. Up to SAP R/3 4.6C, India Localization was available as an add-on solution complementing SAP ERP with functionality for Indian-specific statutory requirements. From SAP R/3 Enterprise Core 4.70 release onwards, India Localization is delivered as a part of the standard SAP solution. With a dedicated team at SAP Labs Bangalore, SAP proactively keeps track of legal changes affecting its customers in India and incorporates such changes into its solutions seamlessly, enabling complete compliance.

Taxation system in India covering business operations is quite complex in nature. One aspect of this complexity is the Indian Income Tax Act 1961 such as tax deducted at source (TDS). Tax Collected at Source (TCS) and Asset Depreciation. India Localization (Country Version India – CIN) for ERP Financials provides compliance as per the

provisions of laws governing these taxation segments.

India localization (Country Version India – CIN) provides for the computation and deduction of TDS at service acceptance, vendor down payments, invoice posting or provisions whichever is earlier, as per the statutory requirements. TDS Challan is linked with individual transactions, providing details on TDS payables. TDS vendor certificates as per legal format and Quarterly returns, including e-file return for online submission can be generated using the system. India Localization supports customer TDS scenario where TDS deducted by customers can also be tracked. A migration tool has been provided for customers on Classic TDS to migrate into an Extended Withholding Tax scenario seamlessly.

The provisions of Income Tax Act 1961 requires the seller to collect TCS amount from the buyer on specific materials and services (e.g. Scrap sales) applicable at the time of debiting the

Tax Compliance

Tax Deduction at Source (TDS)

Tax Collection at Source (TCS)

amount payable to the account of the buyer or at the time of receipt of such amount from the said buyer, whichever is earlier. India Localization provides for TCS computation on buyer A/c Debits or Receipts, TCS Challan update, TCS certificate printing and TCS return as per the legal format.

India Localization provides support for various statutory reports and forms including:

? TDS certificate (form 16A)? TDS quarterly returns ( e-File 26Q / 27Q)? TCS certificate (form 27D)? TCS quarterly returns (e-file 27EQ)

The Income Tax Act 1961 provides specific provisions for governing depreciation accounting in India w.r.t. depreciation calculation methods, rates, reporting etc. India Localization for SAP ERP Financials provides compliance across such segments of the governing statute.

As per Income Tax Act 1961, depreciation is computed and allowed on the written down value (WDV) of the block of assets. The localization solution offers grouping the assets along with the applicable depreciation rates as per the prescribed rules.

To facilitate master data maintenance of existing assets, data migration programs are provided for:

? Existing group assets to asset blocks? Opening WDV for the existing block of assets? Assignment of assets to asset blocks

Depreciation computation is performed at the asset block level as required by the governing statute. The solution consolidates normal transactions such as acquisitions, retirements, transfers, as well as special transactions like post capitalization, write-up etc at block level and computes depreciation considering opening WDV, asset transactions, adjustments and capital gains/losses. The solution offers depreciation computation until date at any point of time in a financial year.

The solution offers a drill down program enabling users to see the details of asset level transactions that impact depreciation under the asset block. In addition, the solution provides for a projection program that shall forecast depreciation values for the remaining part of the fiscal year based on probable transactions.

Reporting Capabilities

Asset Depreciation

Asset Block Definition

Data Migration

Depreciation Computation

Additional Features

Run Compliant Run BetterLOCALIZATION AT SAP ERP FINANCIALS

Localization Highlights

• TDS/TCS computation at transaction level

• TDS/TCS Certificate Print

• TDS/TCS Quarterly Returns (e-File output)

• TDS on Provisions

• Asset depreciation computation as per Income Tax Act

Customer deployments of CRM “stand-alone” sales and service scenarios continue to increase at a steady pace (stand-alone refers to scenarios where ordering, invoicing, taxing, and pricing occur in CRM). Billing is an essential part of sales and service processes and is critical in ensuring the timely processing of a company’s revenue stream. Billing comprises of the collection of billable items in the billing due list and the functionality to invoice this data and producing billing documents that are transferred to accounting. Additionally taxation impacts as per the legal requirements needs to be taken care of at the CRM Billing. India Localization of SAP

CRM solution addresses these requirements via providing a logical combination of optimized tax engine and pricing procedure to assist the customers in performing compliant and efficient billing in CRM.

India localization of SAP CRM enables computation of applicable taxes as per the governing statute and fulfills the corresponding

Tax Compliance

invoicing requirements for CRM scenarios where billing takes place in CRM. Localization piece transaction tax engine (TTE) provides the capability for identifying applicable tax components and the respective calculation covering value added tax (VAT), central sales tax (CST), and service tax by including sub-components such as Education Cess (ECess) and Secondary & Higher Education Cess (SHECess). Additionally the pricing procedure takes care of applicability and computation of excise taxes (BED, SED, AED) by including sub-components such as Education Cess (ECess) and Secondary & Higher Education Cess (SHECess) as per the legal provisions.

Tax laws in India necessitate additional requirements with respect to official document numbering and invoice splitting at CRM Billing. This includes determination of which 'category' an invoice belong to: excise invoice, VAT invoice, bill of sales, or service invoice. Each category has its specific requirement and individual numbering series to be used. Additionally VAT numbering is region-specific, that is, one series is required per region (state) if the selling company is registered in several regions (states). India Localization solution provides for invoice splitting based on the applicability of tax at the invoice line items and invoice document numbering accordingly. Invoice splitting can also be customized to achieve a fixed number of line items per invoice.

Additional Features

Run Integrated Run BetterLOCALIZATION AT SAP CRM

Localization Highlights

• Enhancement on taxation and billing

• Invoice splitting

• Document Numbering

• Seamless integration with SAP ERP Financials

• Extensibility and performance optimization of billing application

SAP CRM LOCALIZATION SNAPSHOT

Being a world leader in business software, SAP boasts over 9500 SAP® Human Capital Management (HCM) solution customers worldwide. India Localization of the HCM solution brings about providing the global business practices with Indian tax compliance as a solution for a company’s HR and payroll processing needs. Additionally India Localization of SAP ERP HCM provides for business process requirements specific to the Indian Public Sector organizations.

The India Localization of SAP ERP HCM has been developed after an extensive study of Indian tax and business practices across industries and organizations of varying sizes. Since its inception, a dedicated team has been enhancing and supporting the localization features and functions well integrated with the SAP ERP HCM solution. Close interaction with Indian SAP ERP HCM customers has been a key success factor.

India Payroll solution responds to tomorrow’s needs today. It is flexible, reliable, and designed to meet your payroll requirements. SAP India Payroll calculates your employee’s compensation accurately and efficiently from ‘configuring’ rules of salary, taxation to provident fund contributions and deductions, and loans. If employee’s pay details require back dated changes, the retroactive processing program automatically recalculates pay, deductions, and taxes. The revised figures update the employee’s history, payroll, and tax records as well as ledger entries. SAP India Payroll offers a suite of state-of-the-art functions that cover the daily requirements of those working in the payroll management environment.

SAP India Payroll can handle scenarios with different variations of basic salary and increments which are normal or due on promotion of the employee. SAP India Payroll computes the dearness allowance (DA) using options such as fixed Dearness Allowance and linkage to consumer price index (CPI). It can also handle provisions for multiple CPIs for different locations and maintain linkages to basic salary.

Any number of wage elements can be created and used for administering compensation. These can be regular monthly wage elements or periodic wage elements or annual/one-off wage elements. The wage elements can be assigned to various employee groups depending on their characteristics such the department of the employee, his pay scale grade, and the location he works at.

Payroll Management

Basic Salary

Wage Elements

Allowances & Reimbursements

Benefits

Loans

Flexible Benefit Packages (FBP)

Taxation

Other Statutory Aspects

SAP India Payroll can handle multiple allowances and reimbursements. You can define characteristics for payment, taxability, computation and so on to suit your organizational requirements. SAP India Payroll supports multiple user defined deductions from salary. The taxation treatments of these reimbursements can also be defined.

SAP India Payroll computes varied benefits provided to your employees such as leave travel allowance, medical reimbursement, medical insurance, furniture, house rent allowance, company cars, company housing and other long term reimbursements. These benefits are computed after considering parameters such as eligibility, computation, and taxability.

The standard loans functionality has been enhanced to meet the requirements of eligibility, maintenance of balances, computation of interest and monthly installment repayment, and the perquisite computation relating to interest subsidy for company loans.

The SAP India Payroll offers the functionality of FBP/ basket of allowances practice as seen in a number of companies. This provides limits on the FBP, sub-limits on individual components of the package and the processing of outstanding balances during and at the end of the year.

Designed to comply with the individual income tax laws of India, the system stores all your employee tax details, including previous employment tax and professional tax. The tax calculations take into consideration an employee’s taxable income, tax slabs, deductions permitted, applicability of surcharge and any additional cess. In addition the system provides for computation of Sec 89(1) relief for arrear payments. The pre-configured SAP India Payroll allows you to set parameters and update data as and when any policy or legislative changes occur. Tax is computed not only for salary income but also for other income declared by the employee. Voluntary tax/ additional tax payments on behalf of the employee can be configured in the system.

SAP India Payroll automatically computes provident fund benefits, ESI eligibility and contributions, labor welfare fund contributions and professional tax for states where applicable at the relevant frequency.

Run Compliant Run BetterLOCALIZATION AT SAP ERP HCM Retirement Benefits

Employee Separation

Off-Cycle Payroll Processing

Retrospective Processing

Mid-Year Go-Live

Multinational Capabilities

Payslips

Correction Run

Gratuity and superannuation computation supporting multiple trusts and user definable contributions can be implemented with SAP India Payroll.

SAP India Payroll has been configured to address requirements for employee separation due to resignation, retirement, or VRS. It can handle recovery of benefits for part year service, payment of terminal benefits, notice pay, and tax computation only for part of the year.

Besides the regular payroll, companies have sundry payments processing requirements. SAP India Payroll supports off-cycle payments along with the computation of respective tax.

SAP India Payroll supports retrospective computation of changes to the various data heads and makes the appropriate computation and payments in the current period. These include changes in:

? Eligibility for a wage element? Changes to wage amounts (arrears payments) ? Changes in applicability of statutes e.g. provident fund, ESI,

professional tax? Changes in tax exemptions e.g. rent paid for housing

Since the financial year as regards to income tax is April to March, in order to support annual tax reports, the system needs to be updated with data for the entire year. In the event you are implementing SAP India Payroll in the middle of a financial year, the system provides for transferring legacy payroll results into SAP.

If your company is a multinational operation with subsidiaries in various countries, SAP ERP HCM is the ideal solution for you. SAP Payroll is available in 55 countries by means of standard versions (35), add-on versions (11) from SAP and add-on solutions (9) from partners, in the languages of each specific country. In each case, payroll is run in local currency while taking into account the relevant statutory regulations.

The salary slip lists amounts and information for the employee per payroll period in a clear format. This includes gross and net payments, outgoing payments, and any additional information. The salary slip is flexible in design and can meet customer specific format requirements or changes with less effort.

One of the recent significant enhancements provided at localization for SAP ERP HCM: India Payroll is “Correction Run”. Corrections on a payroll may be required for the reasons such as, wrong base amounts, missing allowances, and tax related errors. As of now impacts of such errors can't be addressed until the next payroll. India Localization now provides for such corrections via "Correction Run" enhancement.

Correction Run is one of the types of Off-Cycle Run, which enables re-processing the payroll for those periods for which payroll accounting is closed. A correction run can be run on any day before the pay date of the next pay period and triggers retro - recalculation of gross to net during the retro run, impacting tax calculation and reporting.

Further correction run functionality can also prove to be the key in the following use cases:

? Late submission for investment proofs at the year end

? Adjustments required at transfer cases? Corrections to salary data after close of financial year? Probation confirmation and promotions

Global payroll functionality of SAP is activated for India. With this the employee movement from one country to another in the same organization can be processed along with payroll data transfer. Non-resident status determination and the income tax implication thereon is a feature of this solution.

The India Localization of SAP® ERP HCM has been enhanced to include requirements specific to Indian Public Sector/Services organizations. A detailed study of the business processes across public sector/services organizations was conducted interacting with the experts in the industry and the result has been incorporated into the solution. These enhancements are well integrated within SAP ERP HCM solution and handle topics such as rosters, reservation policy for the public sector/services, correspondence relating to various actions during employment, annual increment process, pay fitment during promotions as well as during annual increments and ESS scenarios for claims and loans, and leave encashment processing.

Certain Public Sector organizations follow the financial year of salary of March paid in April to salary of February paid in March, in effect a financial year of March to February. India Payroll now provides our customers with the option selecting the financial year applicable to them. The system provides the flexibility of defining certain payments paid in March to be accounted in the previous financial year.

Global Payroll

Localization for Public Sector

Financial Year: March to February

Statutory Reporting:

Besides the standard reports of HCM, SAP India Payroll offers the following statutory reports:

Income Tax

• Form 16 with digital signature• Form 24Q (e-filing) • Form 27A

Provident Fund

• Form 3A• Form 5• Form 6A• Form 10• Form 12A

Pension Fund

• Form 4• Form 5• Form 6• Form 7• Form 8

Employee State Insurance (ESI)

• Form 5• Form 6

Company’s Act

• Form 217 (2A)

In addition to the above, state specific Professional tax and LWF reports are provided.

Roster Maintenance

Salary Fitment during Annual Increment and Promotion

Public sector/ services organizations of India are governed by the reservation policy which necessitates consideration of reservation rules during the life cycle of an employee from hire to retire. Organizations are required to follow the reservation policy norms as specified by the central and state governments, maintain records of the process followed and submit reports or respond to enquiries from the parliament as and when required.

India Localization of SAP for Public Sector: HCM provides for creation of model rosters on the basis of reservation rules prescribed by central and/or state Government as applicable. These model rosters are a reference for creation of reservation rosters which are subsequently updated with the details of employees hired into the organization, promotions and transfers. Organization specific policy for roster updates can be maintained through configuration provided for the same. The solution also provides for year-end processes of roster management,

reorganization of roster settings in addition to roster maintenance as per the cadre strength i.e. providing distinction between less than 13 roster and general roster.

All the above processes are supported for the various types of rosters such as vertical rosters (for SC, ST and OBC), horizontal rosters (for handicapped), and rosters for ex-servicemen. The relevant master data for vertical rosters (for SC, ST and OBC), horizontal rosters (for handicapped), and rosters for ex-servicemen is supported. The relevant master data such as caste, whether handicapped has also been provided for. Furthermore there is a provision to upload legacy roster data into the system.

Public sector/ services organizations in India have a well defined structure for salary fitments. Salary fitments are of mainly two types, annual increments, and promotion based increments. The salary fitment component is either percentage based or quantum based on the pay scale of the employee. The salary fitment process in the India localization of SAP for Public Sector: HCM provides for defining the various pay scales and increment structure as per the Indian public sector rules.

The localization solution provides for defining the date of increment at the employee level either on calendar year basis or on the date of joining / confirmation / promotion of the employee. The solution

ensures compliance of organization specific policies on the increment rate taking into consideration variation in increment rate depending on the length of service (in the event of the date of employee joining the organization is less than a year from the date of increment).

The salary components (referred to as wage types in SAP ERP HCM) that constitute the basic pay for the purpose of increment processing can be configured in the solution. The solution provides for consideration of loss of pay impact on the increment depending on applicability across pay scale groups. In addition the treatment of increment in the event of approaching the maximum limit specified, consideration of stagnation increment, withholding of increment, and increment reversal are supported by the solution.

Public Sector specific requirements of slab based interest calculation, deferred interest payment(where the principal is recovered first), petty loan definition are part of the recent

enhancements in the Loan functionality delivered for India., Additional housing types have been delivered along with Employer paid tax on perquisites

Particularly in the Indian public sector / services, during any personnel action (e.g. hiring or transfer), a letter is provided to the employee covering organization and pay related information, if any. The content and structure of the letter is normally standardized across the organization with only certain parameters varying depending on the personnel action. These correspondences are required to be generated, printed, communicated to employee, and recorded.

The correspondence during personnel actions are possible through the new functionality released wherein the solution would support generation of one or more letters for a personnel action and the same would be recorded for future reference. This functionality provides information on the status of the letter on whether the same has already been printed or emailed and by whom.

The letters can be created in Adobe format on the lines of the sample letter formats released by SAP and these can be assigned to various personnel actions which would help default the letters respectively. Letters can also be created online during the personnel action. The solution supports batch processing of printing or emailing the letters based on certain selection criteria.

Loans and Other features

Correspondence during Personnel Actions

SAP boasts over 9500 SAP® Human Capital Management (HCM) solution customers worldwide. Employee Self Services localized for India covers an array of solutions by SAP. The services of information capture such as personal data, address, bank and personal identification details provides for India specific requirements. In addition, SAP offers ESS on reimbursement claims, loan application, leave encashment, income tax declarations and projections, etc. ESS provides for flexible structure formatting by customer facilitating easy layout designing at customer end. This brings in the capability for customer to provide the input and approval screens as per their requirements without having to change standard code. Customizing is provided to define the various features like mail format, record of self declarations, storage of documents, and multiple levels of workflow on ESS.

The reimbursable claims process provided in the India Localization of SAP ERP HCM has been enabled in ESS to support entry of such claims by employees using the web based ESS functionality. The solution supports defining of various reimbursements as per the each policy. As the employee is entitled to various reimbursement benefits, the solution provides a summary representation of the various claims applied for along with the status details along with drilldown flexibility for each claim. The employee would also be able to create a claim, provide for additional information as applicable, and request for the claim to be processed. The employee can also seek an advance of a claim through this process. Workflow is provided for claims approval after which the relevant data elements in the solution are updated for subsequent processing either during off-cycle or regular payroll run. Ensuring tax exemption benefits where applicable, the solution provides for the respective updation on approval received by the relevant authority. During the approval, the approver can modify the claim amount, activate applicability of tax exemption, provide his comments and decide on whether the payment is to be done through off-cycle payroll or regular payroll.

The standard delivery provides for three levels of approval as per the Indian needs. ESS for Reimbursement Claims provides for recording and processing the various claims such as medical, leave travel allowance, leave travel concession (LTC), and any other reimbursement provided by the organization to employees.

The ESS application for company loans opens with an overview screen providing information of all loan requests and, special repayments along with their status for the valid selection period. In addition to the status of the loan requests, the solution displays disbursals done, repayment status, and balance loan amount with the employee. Suitable provision is available for organizations to create their specific information requests and list of documents.

Reimbursement Claims Processing

Loan Application Processing

Besides the regular repayments through payroll, an employee can apply for a special repayment request based on his eligibility. Both, the loan request as well as the repayment request follow a workflow process for approval. The standard delivery provides for three levels of approval as per the Indian public sector / services needs.

An employee is entitled to encash leave either during service or at time of leaving the organization depending on the organization policy. The solution provides employee the facility to request for leave encashment through ESS. Organizations can set up their own rules for leave type applicability, encashable limits etc., and these are validated during of the employee’s request for leave encashment. The standard delivery for ESS on leave encashment provides for three levels of approval as per the Indian public sector / services needs.

To meet people management tasks effectively, customers are increasingly moving from transaction-based applications to process-based solutions. The e-Separation solution offers an end-to-end process, right from employees’ decision to leave their organization until the 'due clearance' and acceptance of their separation request. The benefits as seen by organizations are reduction in paperwork, greater transparency, and facilitation of timely closure of the separation process thereby achieving higher sustainability targets.

ESS for Income Tax Declaration supports capture of details of employee investment or income for the purpose of computation of income tax for employees. The tax declarations process provides for capture of both proposed and actual amounts as applicable with the facility to choose workflow process if required. The tax declarations supported in the service are:

? Sec 80 / Sec 80C ? House rent for HRA exemption? Income/loss from house property ? Income from other sources? Previous employment income

One of the recent offering at India Localization for SAP HCM: Employee Self-Service is "Salary and Income Tax Projection Statement" that facilitates an employee to get an overview of all the salary components and the income tax calculations for the current financial year. This solution enables an employee to view the projected income tax figures for the current financial year, based on the changes made in the components such as additional payments, income from other sources, Section 80 and 80c deductions, and so on. This helps an employee to check and assess how the Income tax for the current financial year will be affected due to such changes. The solution also enables employee to send the salary and income tax projection statement to his/her mail ID.

Leave Encashment Request

e-Separation

Income Tax Declaration

Salary and Income Tax Projection

Run Easy Run BetterLOCALIZATION AT SAP HCM EMPLOYEE SELF SERVICE

Retailers worldwide are operating in increasingly complex and challenging business environment. There is a constant pressure towards operational efficiency and visibility across the entire Retail value chain. SAP for Retail is designed to address the end to end retail value chain It provides a proven retail merchandising solution that drives operational excellence in core business processes while delivering top line revenue growth and cost reductions.

Retail is one of India’s largest industries, accounting for over 10 percent of the country’s GDP and witnessing revolution in India. One of the most important challenge in organized retail sector in India is poor supply chain and logistics management coupled with Intrinsic complexity arising out of the rapid price changes in retailing. SAP for Retail in India caters to the players in the organized sector and is continuously evolving to help its customers handle these challenges with a flexible approach.

Indian Scenario

Retailer’s Margin Protection

Additional features

Availability

In India, articles are physically labeled with a price referred to as the “Maximum Retail Price” (MRP), set by the manufacturer. A retailer is restricted to charge the consumer to the extent of MRP only. The retailer's margin is negotiated with the vendor based on the MRP of the product, which needs to be protected against the MRP fluctuations by a manufacturer/ dealer.

SAP for Retail localization helps you to eliminate such inefficiencies in the supply chain and provides a mechanism for retailers’ margin protection. The solution captures pricing changes and identifies margin breaches during the goods receipt process. This helps to prevent the potential revenue leakage due to such MRP price fluctuations. Margin also gets influenced by pricing factors (conditions) other than MRP, for example, VAT rates. Localization solution provides flexibility to bring it in this control framework.

Complexities of Indian tax structure are also handled by SAP’s flexible tax procedure (TAXINN) framework in place. Hence intricacies of taxes like excise and VAT are met strengthening the solution from the compliance side. The localization solution also handles the region dependency for taxes applicable via capability to default tax codes based on the region selected as vendor sub-ranges at purchase orders/scheduling agreements, as configured.

IS Retail India Localization Solution shall be delivered in SAP ECC 6.0, EhP5 release.

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Localization Highlights

• Capture Price changes during Goods Receipt process

• Protection of Retailer's Margin through approval based price changes

• Automated Purchase order updates for price changes

• Seamless control process through tolerance mechanism

• Access control via role based authorization

• Region based tax code

Supported by SAP Netweaver platform, SAP for Utilities is the trusted application for more than 1000 utilities worldwide. India Localization of SAP for Utilities provides the high degree of flexibility and adaptability to the state-of-the-art software (SAP for Utilities) tailored to the specific standards, processes and challenges of the diverse utilities industries including power generation, transmission and distribution, meter operation and retail and services utilities. The solution covers the major Indian regulatory and business requirements such as ECS mandate, late payment charges, interest computation of arrears and security deposit.

India Localization of SAP for Utilities has been conceptualized based on the regulatory and key business needs of the Indian customers. Keeping in mind the varied regulations across states/ territories, the solution is flexible in design and aims to handle subsequent major legal changes. India Localization of SAP for Utilities is released as an add-on to IS Utilities 600 and FI-CA 600, the relevant SAP release being ERP 2005. This solution addresses the requirements in the areas of billing, contract accounting, and device management.

India Localization of SAP for Utilities supports the RBI regulation requirements for electronic clearing scheme (ECS). The system provides the administration of ECS Mandate amount at a contract account level, which represents the maximum limit for payment processing through the direct debit option. During payment processing, the system checks the invoice amount for the period against the mandate limit. In this check, other payments applicable for direct debit in the same period are also considered. In the event the invoice amount is within the mandate limit, the system will proceed through the direct debit option. In situations where the invoice amount is greater than the ECS mandate amount, the system offers the option of ‘No payment’ or the option of ‘Partial Debit Payment’ up to the mandate limit.

The regulatory guideline of the applicability of a late payment charge (LPC) on any open items of invoices unpaid in a previous period is supported. The system provides for defining the LPC at a state level and its computation as a percentage of the total value of applicable components of the invoice or as a fixed amount. The various components of an invoice can be identified as being applicable for LPC or not. Additionally, the system provides for defining the delay period beyond which LPC is applicable, as well

India Localization

Electronic Clearing Scheme (ECS)

Late Payment Charges (LPC)

as tolerance limits and exemption rules. Consumers (contract accounts) can be informed of the LPC charge in the invoice document itself, if the previous invoice amount is yet to be paid by the consumer. The system would compute the applicable LPC and

charge it in the invoice.

India Localization provides the provision of computing an incentive to the consumer to encourage payment of utility charges well within the due date. This prompt payment incentive (PPI) can be defined at a state level and is computed as a percentage of the total value of applicable components of the invoice or as a fixed amount. The system computes the PPI during the invoicing run, if the previous invoice was fully cleared within the specified number of days before the payment due date.

When a customer delays a payment beyond the next billing cycle, the system provides the option to charge an interest on the previous open items. The interest payable is calculated on the total overdue amount. The system provides for defining the interest charge on an overdue amount slab basis, the various invoice components on which the interest would be applicable and the number of days beyond which the interest would be applicable. All this can be defined at a state level.

India Localization of SAP for Utilities provides for a user triggered updating of the security deposit amount based on the consumption pattern of the previous period(s). In order to cater to a cross section of utility customers, the system offers defining the conditions on the basis of which the security deposit value will be updated such as the consumer type (commercial, residential etc), the components of invoice for determination of security deposit amount, the factor for the calculation of the security deposit amount, and a tolerance limit. The standard functionality of interest on security deposit has been enhanced to meet India specific requirements such as definition of interest at the level of state, consumer type and security deposit amount, tax deducted at source (TDS) on interest on security deposit, and related transactions.

In case of partial payment of an invoice by consumer, different treatments are applicable for clearing this value against the various invoice components. The standard SAP for Utilities solution

Prompt Payment Incentive

Interest on Overdue Items

Security Deposit Enhancements

Pro-rated Clearing Options

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Localization Highlights

• Electronic clearance scheme (ECS) mandate

• Late payment charges (LPC)

• Prompt payment incentive (PPI)

• Interest on overdue items

• TDS on Interest on security deposit

• Pro-rated clearing options

• Seal Management

• Retrospective change of tax

provides for a flexible generic definition on the clearing options against the components of invoice. To illustrate:

? Defining that tax is settled first and then the other components are to be adjusted in a predetermined order.

? All components are cleared with an amount in the proportion of their value to the total invoice amount.

Seals are placed on electricity meters to avoid misuse of power. India Localization of SAP for Utilities offers a comprehensive solution for seal management whereby a seal is tracked through the various stages (statuses) of its life cycle such as:

? Generation of a seal with a unique seal number? Issue of a seal to a responsible person? Allocation of a seal to a device? Removal of a seal

In addition to the above statuses, user defined statuses can also be maintained and tracked. The system provides for both individual processing as well as mass processing for seal generation and the subsequent activities of issue, allocation, and removal. The seal status is updated after processing each of the above activities. A report is provided which gives an overview of the statuses of the various seals.

Seal Management

Retrospective Change of Tax

Availability

Retrospective changes of tax on sales percentages, Government duties and energy rates are frequent in India and the utility companies have to recover the difference amounts from the consumers. At the same time the reversal of invoices is not an allowed business practice in India. A consulting note (SAP Note 983341) has been released for the retrospective energy rate and tax calculation permitting.

? The revised calculation of the different components of the invoice starting from a given date, without reversing the invoices

? The printing of the correction values on the next invoice for all consumers or for groups of them are supported.

The India Localization solution of SAP for Utilities will be delivered as an add-on for:

? IS-Utilities 600? FI-CA 600.

The relevant SAP release is ERP 2005. This solution will be released through the Support pack 0003 of the core components IS UT and FICA.

Pressured to reduce supply costs while maintaining high quality output, companies are seeking greater efficiencies and savings from their procurement operations. The SAP Supplier Relationship Management (SRM) delivers comprehensive procurement functionality that automates, simplifies, and accelerates procure-topay processes for goods and services. With SAP SRM, you can reduce procurement costs, build collaborative supplier relationships, better manage supply bases, and improve your top line with innovative offerings and a faster time to market.

Today's successful buying organizations must extend their reach into their supplier base so well that they are able to plan and position supplier assets as if they were their own. The SRM promotes communications and collaboration with your vendors, to empower Supplier Self-Services and streamline procurement for speed and efficiency. SAP Supplier Self-Services (SUS) is a Web-based application that provides full processing capabilities for service orders and integrates small or medium-sized suppliers into the procurement processes of large buying organizations. Such suppliers do not require their own sales system to offer products and services – just Internet access. Buyers can easily enhance their Enterprise Buyer (EBP) system to make SUS available to suppliers.

The Indian tax laws require Excise duty to be paid by the manufacturer when the goods leave the manufacturing site. Additionally taxes including VAT, Service tax, Cess etc are also applicable on a business transaction involving sale or purchase of goods or services which forms an important component at the pricing. Supplier needs to review such tax details as agreed upon at the purchase order and any related changes thereon. An Excise invoice should also needs to accompany the goods dispatched by the supplier and needs to be recorded at the buyer's financial books. India Localization solution provides for these requirements through seamless data exchange between SAP SRM - SUS (Supplier Self Service) and SAP ERP operations (MM: Material Management) in an integrated SUS-MM scenario.

SAP SRM-SUS

India Localization

Tax & Pricing display

Excise Invoice

Additional features

India localization enables the display of Tax and Price details at SRM-SUS orders corresponding to the Purchase orders created in ERP (MM). Additionally all applicable taxes as per the ERP supplier nvoice gets accumulated as a single amount and shown at the supplier invoice header at SRM-SUS (Supplier Self Service).

India localization solution enables Supplier to enter Excise Invoice Number, Excise Invoice Date and text during creation of Advanced Shipping Notification (ASN) with respect to purchase Orders

releases at SRM-SUS. This data is then seamlessly available at ERP - MM Inbound delivery captured w.r.t ASN from SRM-SUS and the same gets defaulted at the Excise Invoice Capture at the Goods Receipt done w.r.t inbound Delivery at SAP ERP-MM.

Localization solution also provides to capture Excise invoice in the

background with respect to the inbound delivery captured against the ASN created at SRM-SUS. Invoice number and date entered at ASN gets defaulted at such Excise invoice. Additionally Excise invoice can be captured manually through MIGO (at ERP) or J1IEX (CIN transaction for Excise Invoice Capture) w.r.t Inbound Delivery captured against ASN from SRM-SUS.

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Localization Highlights

• Tax information at SUS orders

• Excise info at SUS ASN

• Background Excise Invoice Posting

• Tax information at SUS Invoice

The Next Wave

Distribution Franchisee Management

New Service Connection

Energy Audit

SAP is putting continuous efforts to make SAP for Utilities more and more suitable for customers in India, keeping in mind the specific needs of the region. Customers may look forward to some significant enhancements done in the areas of billing, new service connections, distribution franchisee management and energy audit.

A franchisee is an entity empowered to operate a distribution and maintenance system within an identified contiguous area for a prescribed duration and collect revenues directly from consumers. India localization would be providing for franchisee and service definitions and respective relationship parameters. Additionally franchisee evaluation based on the respective service efficiency results calculated as per the accepted industry standards is also provided for.

An enhancement would be available at localization solution related to seamless document submission and maintenance at the new service connection notification. A required document list for a particular customer type can now be maintained in the system and can be defaulted at the new connection request for submission and verification. Based on which a document submitted, a status is derived, which can also be used as one of the connection release criteria.

Energy Audit provides the vital information base for overall energy conservation program covering essentially energy utilization analysis and evaluation of energy conservation measures. The localization solution will provide such vital information as injection and consumption data, collection efficiency, and AT&C loss data at the consumption node level in a utility network.

Billing Reversal

Amount in Local Language

Availability

The immaturity of utility billing systems in India results in frequent corrections at mass level. Such a scenario presents a need for a more efficient and flexible billing reversal process. Localization solution will provide for a flexible selection criteria including portion, posting date, and rate category enabling an efficient mass reversal.

Pre-printed stationary in a local language is commonly used for generic text at utility bills. However, the payable amount is always system generated and printed mostly in the system language, that is, English, in figures and in words. This can be a challenge to understand for a regional customer. Localization solution will enable the amount in words to get printed in local language chosen as per the customer contract.

These enhancements would be available with SAP ECC 6 EHP 6 release.

SRM LOCALIZATION SNAPSHOT

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