“STUDY OF FIXED ASSETS MODULE AND

ITS INTEGRATION IN ERP”

IN
KEC INTERNATIONAL LTD.
A LEADING MEMBER OF RPG GROUP!!

PRESENTED BY:
ROHIT MAHESHWARI
 COMPANY OVERVIEW
• Leading EPC company in the world
• End to end presence in every aspect of power supply
chain, transmission line, supply of towers & cables
• Global footprint-client base spread over 40 countries
• Strong presence in India,
South Asia, Middle East,
Africa and Central Asia
• Financial Results:
Sales: Rs. 39.1Bn
PAT: Rs.1.9Bn
 Importance of Management of Fixed
Assets and the compliance necessary
to maintain it

 How Integration of Fixed Assets in ERP

can be beneficial to the organisation
 FIXED ASSET MANAGEMENT
Extends asset life to Schedules preventive
avoid new capital measure to improve
purchases performance

Smoother
and faster WHY?
Audits
Improves
warranty
management and
Tracks equipment
streamline
according to regulatory
purchasing
requirements

Incorrect information and errors in fixed asset inventory data are a near universal
problem – resulting in significant and unnecessary tax overpayments of 8% to 20%
 WHAT DOES FAR CONTAIN?
 Description Tools and Dies
 Category Date of Purchase
 Bill Number
 Address of the vendor “Consumables,
 Original Cost of the Asset Tools Items List”
 Identification of the Assets
 Depreciation for the period
 Sale of Asset
 Accumulated Depreciation
 WDV as on reporting date
 Exchange Rate
 Transfer In-Out
KEC INTERNATIONAL LTD.
OVERALL SUMMARY
SCHEDULE V - FIXED ASSETS 2009-2010 FIG
ALL FIGURES IN LACS
NET
GROSS BLOCK DEPRECIATION ASSET

PARTICULARS As At Add. Acquired Dedu. As At As At Dedu. FOR AS AT AS AT

during during 31-Mar- THE 31-Mar- 31-Mar-
1-Apr-09 the the During 10 1-Apr-09 During YEAR 10 10
the the
year year year year

TANGIBLE ASSETS :

FREEHOLD LAND 1,819.40 - 9,660.55 - 11,479.95 - - - - 11,479.95

LEASEHOLD LAND 6,515.36 133.96 6.14 - 6,655.47 376.33 - 103.05 479.37 6,176.09

BUILDINGS 4,062.57 963.12 1,054.59 0.26 6,080.02 1,120.50 0.26 169.81 1,290.05 4,789.97

PLANT & MACHINERY 22,108.67 4,765.00 3,172.54 300.56 29,745.65 4,229.30 150.63 1,778.15 5,856.78 23,888.86

COMPUTER 621.37 276.27 22.20 13.68 906.15 266.56 12.23 106.06 360.39 545.76

FURNITURE & FIXTURE 785.81 287.64 28.96 121.82 980.58 219.63 57.15 92.27 254.74 725.84

ELECTRICAL INSTALLATION 188.42 71.40 29.01 14.64 274.19 34.78 2.95 14.59 46.42 227.77

VEHICLES 1,595.35 88.12 39.48 109.43 1,613.52 494.62 46.98 180.21 627.85 985.67

SUB TOTAL 37,696.96 6,585.51 14,013.46 560.40 57,735.52 6,741.71 270.21 2,444.14 8,915.60 48,819.92

INTANGIBLE ASSETS :

COMPUTER SOFTWARE'S 484.88 693.78 - 0.15 1,179 389 - 108 496 682

BRAND 24,000.00 - - - 24,000 4,800 - 1,200 6,000 18,000

GOODWILL 363.18 - - 363.18 - 291 363 73 - -

SUB TOTAL 24,848.06 693.78 - 363.33 25,178.50 5,479.12 363.33 1,380.23 6,496.02 18,682.48

GRAND TOTAL 62,545.01 7,279.29 14,013.46 923.73 82,914.02 12,220.83 633.55 3,824.36 15,411.62 67,502.40
OVERSEAS SUMMARY - ABUDHABI
FIXED ASSETS AS ON 31st MAY 10
NET
PARTICULARS GROSS BLOCK DEPRECIATION FUND ASSET

AS AT ADD. DEDU. AS AT AS AT DEDU. CHARGE AS AT AS AT

01-Apr-10 DURING DURING 31-May-10 01-Apr-09 DURING FOR 31-May-10 31-May-10

THE
YEAR THE YEAR THE YEAR THE YEAR

FREE HOLD LAND - - - - - - - - -

LEASEHOLD LAND - - - - - - - - -

BUILDINGS (Temp) 1,01,32,441 3,40,932 25 1,04,73,348 71,67,203 25 2,92,082 74,59,260 30,14,088

RAILWAY SIDINGS - - - - - - - - -

PLANT & MACHINERY 12,20,43,572 - 33,20,800 11,85,29,438 3,68,18,229 14,85,351 14,64,001 3,66,03,545 8,19,25,893

COMPUTERS 29,60,518 25,397 - 29,85,914 16,53,125 - 61,555 17,14,679 12,71,235

FURNITURE & FIXTURES 70,13,063 1,87,410 21,386 71,79,086 17,09,768 10,504 77,926 17,77,190 54,01,897

ELECTRICAL INSTALL - - - - - - - - -

VEHICLES 82,03,551 - 90,768 81,12,782 24,18,734 63,686 1,80,214 25,35,263 55,77,520

COMPUTER SOFTWARE - - - - - - - - -

TOTAL 15,03,53,144 5,53,738 34,32,980 14,72,80,569 4,97,67,059 15,59,566 20,75,777 5,00,89,937 9,71,90,633
KEC INTERNATIONAL LTD.
OVERSEAS SUMMARY
FIXED ASSETS AS ON 30 JUNE 10

NET
PARTICULAR GROSS BLOCK DEPRECIATION FUND

BLOCK

AS AT ADD. DEDU. AS AT AS AT DEDU. CHARGE AS AT AS AT

31-Mar-10 DURING DURING 30-Jun-10 31-Mar-10 DURING FOR 30-Jun-10 30-Jun-10

THE YEAR THE YEAR THE YEAR THE YEAR

TANGIBLE ATSSETS

FREE HOLD LAND - - - - - - - - -

LEASEHOLD LAND - - - - - - - - -

BUILDINGS (Temp) 89,488,541 3,113,372 25 92,601,888 84,472,779 25 741,227 85,213,981 7,387,907

RAILWAY SIDINGS - - - - - - - - -
PLANT &
MACHINERY 620,588,216 82,218 3,661,302 617,009,132 227,737,435 1,679,267 16,094,915 242,153,083 374,856,050

COMPUTERS 12,254,899 251,251 156,241 12,215,688 7,134,816 98,862 267,578 7,232,908 4,982,781
FURNITURE &
FIXTURES 26,807,668 400,242 21,386 27,205,121 10,387,441 10,504 320,600 10,697,537 16,507,585
ELECTRICAL
INSTALL - - - - - - - - -

VEHICLES 113,904,517 3,710,866 2,109,258 115,506,126 48,506,649 1,448,840 1,979,202 49,037,010 66,469,116
COMPUTER
SOFTWARE - - - - - - - - -

SUB TOTAL 863,043,842 7,557,949 5,948,211 864,537,956 378,239,119 3,237,498 19,403,522 394,334,518 470,203,437

INTANGIBLE
ASSETS
COMPUTER
SOFTWARE 645,618 12,244 - 657,862 241,339 - 16,503 257,842 296,094

BRAND - - - - - - - - -

GOODWILL - - - - - - - - -

SUB TOTAL 645,618 12,244 - 657,862 241,339 - 16,503 257,842 296,094

TOTAL 863,689,460 7,570,193 5,948,211 865,195,818 378,480,459 3,237,498 19,420,025 394,592,361 470,499,532
 Indian Rupees Transferor Currency Transferee Currency
Date upto
Org which
Date Trf dep. is Gross Depn Net Gross Depn Net Gross Depn
Description Net Value
of Date prov by Block Fund Value Block Fund Value Block Fund
Purc. transferor

Ethiopia to Algeria

Computer Laptop (KRP 1-Jul- 1-Apr- 31-Mar-

35,690 46,923
Nair) 09 10 10 5,785 29,905 8,417 1,364 7,053 56,000 9,077

Ethiopia to LOD (Saudi)

1-Jul- 30-Apr-
Tosiba Laptop 30-Apr-10 96,125 1,759
05 10 75,312 20,813 18,824 14,748 4,076 8,126 6,367
28-
HP Note book laptop 30-Apr-
Nov- 30-Apr-10 60,116 3,091
for Chockalingam-PM 10 23,550 36,566 13,895 5,443 8,452 5,082 1,991
07
Ethiopia to Afghan
20-
60Gb data storage drive 31- 31-May-
Aug- 7,612 5,247 5,247
for Mr.BS May-10 10 2,365 1,700 528 1,172 7,612 2,365
07

Abu To Saudi

COMPRESSOR MODEL 1-Apr- 9-May-

30-Apr-10 - -
391/120/00+PC 05 10 193,333 193,333 14,872 14,872 - 15,945 15,945

Egypt to HO

HP Compaq nx6120 1-Feb- 30-Apr-

30-Apr-10 58,750
Laptop 09 10 42,855 15,895 6,521 4,756 1,765

Ghana to Cameroon
1-Jul- 1-Jun- 31-May-
Toshiba Laptop 67,859 287,664
07 10 10 41,250 26,609 1,595 969 626 733,610 445,946
 ASSET MANAGEMENT CHALLENGES
• Burdensome controls due to Manual Processes
– Requires detailed reviews
– Many manual controls
– Extremely time consuming
– Reconciliation

• Incorrect profit & income tax

– Mismatch of depreciation between book and tax
• Continued depreciation on books for disposed assets

• Poor purchasing decisions

– Duplicate assets acquired
 Leverage, Expand, Improve, Support

• The ERP facilitates simple and automated asset entry, movement,

maintenance, valuation, deprecation and retirement while maintaining
strong internal controls to demonstrate policy, regulatory compliance.

Consolidate systems where possible

Integrate where it makes sense
Reduce manual steps
Reconciliation reports

Get Out of Your Comfort Zone – Minimize Excel Use!

 STEPS FOR INTEGRATION IN ERP
Helps Create New
ASSET CREATION
Asset in FA Module

Entry thru Accounts

ENTRY OF PURCHASE OF FIXED ASSET Payable module for
Steps to Integrate Fixed
Purchase of FA
Asset Master with
Accounts Payable
Module (through GL)
To Approve and Post
BATCH APPROVAL & POSTING
Entry in GL

Rate and date of

DEPRECIATION INFORMATION asset on which Dep.is
calculated

Calculation of
DEPRECIATION CALCULATION Depreciation
through FA Master
ASSET CREATION
 ENTRY FOR PURCHASE OF FA

AUTOMATIC
GENERATION
An entry of purchase of fixed asset is passed
through the accounts payable module and the
Batch which is generated is to be approved and
posted…..
 BATCH APPROVAL AND POSTING

The entry is now posted & Fixed Asset purchase entry is debited
to GL account ‘FDBUBT010.1060’.The effect is also reflected in
the Fixed Asset module as we have posted the same through
Fixed Assets Capitalization GL Post instead of Post Vouchers to
GL
DEPRECIATION CALCULATION

WDV
 DIVERSIFICATION OF ASSETS

FIXED ASSET

ASSET SPLIT ASSET DISPOSAL ASSET TRANSFER

Split of the Asset on the Basis Disposal of FA by A/C Module for Transfer of
of A, U, % Receivable Module FA from one location or
business Unit to another
ASSET SPLIT
ASSET DISPOSAL
 CAPABILITIES AND BENEFITS OF ERP!!

 Procurement History
 Accounts Receivable Information
 Improved Control and Compliance
 Ease of use
 Smoother and Faster Audits
 Lower Administrative Costs
 Importance of Regulatory Compliance for Fixed
Assets
 Tax planning by efficient utilization of assets
 Integration of assets all over the globe which
prevents financial risk management
 Financial reporting accuracy prevents financial
data discrepancies
SPECIAL THANKS TO:

INTERNAL GUIDE: PROF. LAXMI NAIDU

EXTERNAL GUIDE: MR. R.A.GUPTA