Solution Design Document

Funds Creation and Allocation

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Document Control:

Title TRA Agreement

Process Name Bank Account Management
Sub Process Name  Bank Master Data
 Transactions
 Bank Reconciliation

Version:

Version Date Created by Notes

ABM Knowledgeware Ltd in
V0 04.02.2020 Consortium with itelligence India
Software Solutions Pvt Ltd.

Table of Content

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1.
Business Process Description and Objectives.................................................................................5
2. Current Scenario As Is Process (BPD)........................................................................................5
3. Process Flow Chart..................................................................................................................... 6
4. SAP Process Steps..................................................................................................................... 6
5. Gap Analysis............................................................................................................................... 6
6. Master Data Details..................................................................................................................... 7
7. Key Data Structure (KDS)........................................................................................................... 8
8. Data Migration requirements......................................................................................................11
9. Development Objects (RICEFW)...............................................................................................11
10.Roles and Authorizations........................................................................................................... 11
11. Reports..................................................................................................................................... 12
12. Assumptions............................................................................................................................. 12

Process ID FI-02_FUNDS_CREATION_ALLOCATION

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Process Description VBSL Funds Creation and Allocation

Abbreviations:

Initials Description
SI System Integrator
FM Area Funds Management Area
GL General Ledger
WBS Work Breakdown Structure
TRA Trust Retention Account
PO Purchase Order i.e. Work Order for VBSL
SES Service Entry Sheet (Goods Receipt)
OSO Owner Support Office

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1. Business Process Description and Objectives

This document describes the proposed (TO-BE) TRA Agreement process of MSRDC. The
process flow described in this document is based on ‘AS-IS’ documents. The detailed
workflow of the To-Be process is mentioned in the ‘Process Flow’ Section of this document.

The content of this document forms the basis for system configuration and testing phase.

After a detailed department wise process evaluation of Finance, it is observed that VBSL will
have the Funds Generation and Allocation for various activities including Construction Cost,
Independent Engineer’s Cost, Consultant’s Cost etc.

VBSL project is proposed to be financed with the mix of Own Sources and Borrowed Sources
by MSRDC. To manage both the sources effectively, MSRDC will formalize the Trust
Retention Account (TRA) Agreement with the approval of Government of Maharashtra. For
Own Funds, MSRDC is likely to obtain them from the following sources:
1. Equity Contribution by Government of Maharashtra into VBSL
2. Royalty Exemption provided to EPC, in other words, the amounts shall be transferred
from the monthly RA Billing to Equity Account for the Royalty deductions
3. Interest waived during construction period by the Government of Maharashtra to the
VBSL Project
4. Any funding acquired by MSRDC for VBSL from other sources with the backup of
Government Guarantee

The TRA will advise the banking consortium or the banks which are selected to release the
debt component in the VBSL Project from time to time based on the equity funding that is
infused into the Receipt Account of the TRA Structure.

Funds Management function in SAP will facilitiate the Funds Creation and Allocation activities
in the TRA agreement of MSRDC for VBSL activities.

2. Current Scenario As Is Process (BPD)

Refer BPD Document Number : FI-03_BPD_VBSL_TRA Agreement_V1

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3. Process Flow Chart

Enterprise Structure:

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4. SAP Process Steps

Following steps are required to create a relationship between various master data associated
with Funds Creation and Allocation Process.

Step As is Process Step To Be Process Step To Be Transaction

System Code
Generation/Transfer of
1 Create Funds SAP FM5I
Fund in TRA Account
2 Create Funds Centre SAP FMSA
3 Create Commitment Items SAP FMCIA
4 Create Account Assignments in FM SAP FMDERIVER

5. Gap Analysis

GAP No. As is Process Step To Be Process Step Remark

No Gaps are identified.

6. Master Data Details

Sr. Description Codification Codification Remark

No. Required Pattern
Own/External 0100 – Equity Source
1 Fund Yes
Sources of funds 0200 – Borrowed Source
10001 ADMIN
10002 FINANCE
10003 ENGINEERING
Structure of the
10004 LEGAL
Funds
Funds 10005 EPC
2 Yes Responsibility
Centre 10006 AE
Areas in the form
10007 SI
of hierarchy
10008 ADVISORY
10009 OTHERS

3 Commitment Yes Classify budget 100010001 Conveyance and Travelling

Items and business Expenses
transactions 100010002 Utility Charges
affecting liquidity 100010003 Office Expenses
into revenue, 100010004 Personnel Expenses

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100010005 Statutory Expenses

100030001 Land Acquisition Expenses
100030002 Operations & Maintenance
100040001 Legal and Professional
Services
100050001 Engineering and
Construction Expenses
100060001 Engineering Consultancy
Expenses
100070001 Software Consulting
Expenses
100080001 Advisory Services
100090001 Toll Expenses
100090002 Advertisement Rebate
100020001 Receipts
100020002 DSRA
100020003 Interim Account
100020004 Concession Fee
expenditure, and 100020005 Statutory Dues
cash 100020006 EPC Contract Account
balance items. 100020007 IE Account
100020008 Auxiliary Account
100020009 Retention Account
100020010 Other Account
100020011 Utility Shifting
100020012 Other Capital
100020013 Revenue Account
100020014 O&M Reserve Account
100020015 MMRA Reserve
100020016 Opex Account
100020017 Interest Payment
100020018 Principal Payment
100020019 Surplus Account
100020020 Borrower Surplus Account
100020021 Royalty Adjustment
100020022 Equity
100020023 Borrowings
100020024 Fixed Assets
100020025 Current Liabilities
100020026 Current Assets

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7. Key Data Structure (KDS)

The design of this process is based on the following critical configuration and master data
structures.

Funds Management
In order to identify the funding sources and the pattern of financing for various requirements
of the VBSL project i.e. from the construction till the operations stage, it is proposed to use
SAP Funds Management with the master data of Funds, Funds Centre and Commitment
Items combination. Considering the available information, it is not intended to have a
budgetary check from the sources of funds perspective. In this context, following terms have
been explained to represent their relevance to the VBSL Project.

 FM Area: The Funds Management Area (FM Area) is the commercial organizational unit,
within which Budget Management is conducted. It structures the business as viewed from
Budget Management point of view.

IMG Path: SPRO → Enterprise Structure → Definition → Financial Accounting →

Maintain FM Area

SR Data type & code

. FM Area FM Area Description length
No
1 2000 VBSL Funds Management Area Alpha Numeric – 4

 Assignment of Responsibility Areas to Funds Centres

MSRDC can align its departments, functions and project elements to the Funds Centres
defined in the Funds Management in order to align its business operations with the
availability of funds at various points for specific business needs. Henceforth, all the other
master data objects in Finance and Project Systems like Cost Centre, Profit Centre and
WBS Element will have an assignment to the Funds Centre and similarly General Ledger

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Accounts will be aligned to a relevant Commitment Item either through master data
relationship or through a derivation rule. For instance, following table reflects some of the
combinations:

Cost Centre WBS Funds GL Commitment

Centre Item
1000040
1 10003
1000040
2 10003
1000060
1 10004
1000060
2 10004
VBSL/01/02/01/01 10005
VBSL/01/02/01/02 10005
VBSL/01/02/02/03 10005
Operation &
Maintenance 100050001

Conveyance
& Travelling
100010001
Expenses

Electricity
100010002
Expenses

 Budgeting in Funds Management

Budgeting is a process of fund allocation for various business needs in the enterprise.
Funds Management allows the organization to identify the source of funds and allocate
them to various funds centres for different business operations. SAP Funds Management
with the aid of the master data entities in FM Area, defined above, will facilitate the
budgeting process for MSRDC.

Budgeting can be done in SAP Funds Management either as year independent or year
dependent. The Year Independent process will not restrict the budget to a specific year
hence, the validation for availability of budget in a funds centre for a specific business
need is not performed till the overall limit is not exhausted.

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Typically, the budgeting will happen for the combination of Funds Centre and Commitment
Item. The assignment of Fund is an option for the organization if the budget needs to be
allocated exclusively from a specific fund.

For instance, MSRDC can allocate the budget for its Admin Department using the
Administration Funds Centre for various administration expenses.

The Year Independent Budgeting can be carried out as follows

Fund Funds Centre Commitment Item Amount

10001 100010001 2,50,000

10001 100010002 1,25,000
0100 10002 100020022 5,00,00,000
0200 10002 100020023 3,00,00,000

The Year Dependent Budgeting will be performed as shown below:

Year/Period Fund Funds Centre Commitment Amount

Item
2020/001 10001 100010001 50,000
2020/002 10001 100010001 10,000
2020/003 10001 100010001 15,000
2020/001 10001 100010002 30,000
2020/005 10001 100010002 50,000
2020/001 0100 10002 100020022 1,00,00,000
2020/006 0100 10002 100020022 2,00,00,000
2020/002 0200 10002 100020023 1,00,00,000
2020/007 0200 10002 100020023 2,00,00,000

 Actual and Commitment Updates (Postings) into Funds Management

SAP Funds Management is an integrated business process with other business operations
like Finance, Engineering and Procurement, Operations & Maintenance etc. Using the
Account Assignment Combinations as mentioned earlier, MSRDC can set up the budget
for its various activities in the VBSL Project. The Commitments are generated in SAP
during the creation of Purchase Order process.

VBSL Legal Entity creates its Purchase Orders in the construction phase using its WBS
Elements. Each WBS Element assigned in the PO will have a derivation of Funds Centre
and through General Ledger, the relevant commitment item is also derived. Then, on

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creation of PO, the commitment value is generated on the Account Assignment

combination of Funds Centre/Commitment Item equivalent to the value of PO.

Similarly, during the actual transaction update into financial accounting, say during SES
Approval or Invoice Posting, Funds Management is updated with the Actual Value on the
same Account Assignment where the commitment is generated during the PO Process.

When the transaction is originated from Financial Accounting, the Funds Centre and
Commitment Item in Funds Management are derived either from Cost Centre / Profit
Centre and General Ledger Account and updated into the respective combination as
actual values.

8. Data Migration requirements

There is no Data Migration Requirement for this process.

9. Development Objects (RICEFW)

Following are the Development Objects in this process.

Sr. Object Object Type Description F/R/I/C/E/W** FS Ref.*

No. No.
1 FI_R_74 Report Fund Utilization R FI_R_74
Report to Lendors
2 FI_R_75 Report Debt and Equity R FI_R_75
Funding Report

Functional Specification Reference

** F – Forms, R – Reports, I – Interfaces, C – Conversion, E – Enhancements, W – Workflow

10. Roles and Authorizations

Sr. Role Activity Description SAP Transaction Create/Change/

No Code Display
1 ZS:FI_FUND MANAGER Legal Entity FM5I, FMZ1, All

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Management FMRP_RFFMTO10X
ZS:FI_FUND_CENTER
2 Fund Utilization FM_SETS_FICTR1 All
MANAGER

11. Reports

Transaction Code Transaction Code Description

FMRP_RFFMTO10X Commitment and Actual Totals Records

Transaction Code and Fields:

Report FMRP_RFFMTO10X
Field Name Field Description
Fund Fund
Fund Ctr Fund Centre
Commt Item Commitment Item
Curr. Currency
Commts/Act. Commitment and Actuals

12. Assumptions

Following are the assumptions on which this document has been prepared:
1. As per MSRDC, the funding to VBSL project is based on the TRA (Trust Retention
Account) which is yet to be finalized.
2. The TRA for the NMSCE project has been considered to prepare this document since
MSRDC assumed the TRA process for VBSL and NMSCE will follow the same pattern,
except that, the number of banks participating in the funding will be limited for VBSL.
3. MSRDC will guide on TRA Documentation for VBSL.
4. As per RFP following are the critical requirements of the process:
a. Ability to manage entire lifecycle of funds
b. Maintaining Funding Details
c. Ability to maintain budgets by funding sources
d. Ability to fund projects from Multiple Awards
e. Ability to view commitments and actual spending against funds
5. Considering the funds sourcing and utilization tracking requirement, it is proposed to use
Funds Management functionality in SAP without budgetary check.

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