EXECUTIVE SUMMARY REVIEW OF DOS/FOXPRO SOFTWARE RUNNING AT A TEA ESTATE IN ASSAM AS COMPARED TO RDG TEAPAC MILLENIUM EDITION A CASE STUDY

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1 EXECUTIVE SUMMARY 1 REVIEW OF DOS/FOXPRO SOFTWARE RUNNING AT A TEA ESTATE IN ASSAM AS COMPARED TO RDG TEAPAC MILLENIUM EDITION A CASE STUDY Foxpro Software at an Assam Estate System is presently running under Foxpro for DOS not Windows and is obsolete. Risk at the time of replacement of old hardware. Census and labour housing information not available from system There is no separate module for field activities, sectional history and yield information etc. The Factory module is not integrated with the other modules used in a stand-alone mode One user name and password being used to enter the system and known to all users. Database tables are open and can be accessed by the users. Major security risk as far as data authenticity and integrity is concerned. Important MIS information like Leaf/Ha, Yield, Productivity etc not available from system. requisitions or LPOs can be processed in the Inventory system. System starts from GRN only GRN to be entered in the Stores module and party bill to be entered again in Accounts by journal entry duplication of work Stores updation to Accounts is Batch process (once a month) not real time system of exception reporting for Requisitions / GRNs/ LPOs/ Bills etc. Green leaf for manufacturing is re-entered in the system and is not linked with green leaf as per attendance. Reconciled manually. RDG Teapac An ERP Software for Tea Estates Running under a Windows network with Visual Basic front end and SQL server database Available - fully integrated with Wages and Rations with reports Separate module for Field activities including sectional history, yield, productivity etc Fully integrated with other modules Multi level password protection system with supervisor and user levels custom defined and separate rights for separate modules. Users cannot access database and make changes /modifications Para Ref 1 2 (a) 2(d) 2(e) 5,6, and 7 8 Available real time if data entry is up to date daily 11 Full inventory system covering requisitions, Purchase Orders, GRN, Issues, godown transfers, materials on loan etc. One time GRN entry updates the Purchase account and suppliers liability in the accounts Real time processing as per entry 23 Full reporting system exists for the same 26 t needed- Green leaf as per attendance is updated in the factory module for processing separate module to handle nursery operations Nursery module available 41 Single figure of Tea made and recovery in Factory module no break up for own garden/other garden/bought leaf gardens; Can have separate tea made and recovery as needed 39 and 40 detailed module for bought leaf operations only quantity entered in Factory module provision to record sectional history details of the estate and it s allied reports like section wise yield etc. Weakness in Internal Control System also exist e.g. Trial Balance did not agree for Jan 2008 proper budgeting module only one database file exists for entering mandays and amount which is kept open. Lack of proper audit trails no way of checking whether weekly/fortnightly wages are correctly updated in accounts module with debits and credits agreeing. Same observation for stores updation to accounts. Full bought leaf module with matrix for rates and liability statement generated Multiple years sectional history can be recorded in the system and used for query reports In built internal control checks which do not need 47E manual reconciliation and intervention Separate budget module Audit trails available for all automatic updations in the form of view reports and print outs 52

2 2 DETAILED REVIEW OF A FOXPRO SOFTWARE RUNNING AT A TEA ESTATE IN ASSAM AS COMPARED TO RDG TEAPAC MILLENIUM EDITION AN ERP SOFTWARE FOR TEA ESTATES GENERAL YES NO REMARKS 1 Does your present software run on a current technology Windows platform like Windows XP/Vista (or is it still running under DOS) with DOS supported software? Software is developed on FoxPro for DOS not Windows platform like Visual Basic/SQL Server. Platform is presently obsolete. Current hardware does not support DOS and in the event of replacement of hardware unlicensed Operating systems like Windows 95/98 etc will need to be used. Ultimately the Company will have to migrate to a new software which is compatible in a current Windows platform. 2 Does the present software run all the A following modules: Wages ( including Census, Housing and Rations) Only Wages Wages is covered. There is no module or information on Census and Labour Housing. Further, since there is no census module the number of dependants for ration purpose is merely entered in the employee master as numbers only e.g. child -2, adult 1 etc. This can also be changed by the users. B Inventory C Financial Accounting D Field There is no separate module and information on yield, productivity and other field parameters are not available E Manufacturing t integrated with the other modules ( stand alone) F Budgeting One file only 3 Is the software developed on the one time data entry concept? I.e. data once entered and captured in not needed to be re entered again in any other 4 Can I export or e mail reports from the system? SECURITY 5 Does the system allow for a multi level password protection? 6 Can I allow access to some modules and disallow access to the others? E.g. I can enter data in the wages module but not in the Manufacturing module 7 Can I allow access to some operations and disallow to the others e.g., I can add data but I can t edit data, I can view data but I can t add or edit or delete data? 8 Is the database secure and prevented from access by the users? There is a data base file where the account head wise mandays and amount can be entered month wise. This data is then linked to the expenditure statement in the accounts. There is no module to create the estate budget in a scientific manner starting from the crop, recovery and mandays. There are essentially four modules running Wages, Stores, Accounts and Factory. The Factory is a stand alone module and not linked to the others. There are cases of re-entry of data see comments in points 21 and 38 below provision found. Export may be possible. There is a single user name and password which is known to the entire estate. We found that there was no system of locking the database (.dbf files). The user who was showing us the system could freely enter the database and make changes if needed. There was no password lock or any other form of lock on the database leading to a situation of low security and high risk.

3 PAYROLL, CENSUS, WELFARE & HOUSING 9 Can I transfer workers from one paybook to another? 10 Does the system link the section no with the employee code at the time of plucking so that the sectional information can be extracted from the system without any further entry? 11 Can vital field information like leaf per hectare, yield per hectare, pluckers per hectare and Kgs per plucker be generated from the system on a real time basis without any further data entry? 12 Does the system cover labour housing information house wise? 13 If yes then is the Census Book also generated from the system? 14 Does the system control issue of welfare items like blankets, umbrellas, firewood etc to the workers and ensures that there is no duplicate issue of these items? 15 Do I have a system on linking activity codes/account codes to the factory operations so that I can compute factory mandays instantly without any calculation? 16 Is the weekly/fortnightly wages transferred to accounts through a wages auto journal without having to manually post the same? REMARKS It was explained that section number is not being entered in the system as the total green leaf for factory processing is separately entered in the Factory module from a separate green leaf register module to enter housing information The factory module is separate from the other modules. 3 INVENTORY 17 Is the inventory module integrated with the financial accounting 18 Can I have more than one godown (stores) in my inventory 19 Does the inventory module process both requisitions and Purchase orders in addition to GRNs and Issues? 20 Does the inventory module give me both quantities and value? 21 When I receive material vide a GRN is my Purchases account and the Suppliers liability account instantly updated in the accounts 22 When I issue materials from the stores is the issue rate computer generated? 23 Through the issue slip is the account code (the charging code) debited and updated instantly in the accounts 24 Can I get my stock balances (both quantity and value) at any point of time on a real time basis without having to run a batch process 25 Can I record materials given /received on loan to /from sister estates? t fully integrated only in part The module starts from the GRN. Further it was noted that in case the challan is received without rates the GRN is not entered in the system. The material may sometimes get issued also without being entered in the system as the bill with rate is not received by the garden in time. Creating an LPO first and processing it in the system would solve this problem and ensure tight control over rates. The material enters the Stores as a receipt but a separate journal entry is passed in the accounts module to update the liability account of the supplier. Hence there an additional entry to be passed in accounts for all suppliers bills leading to duplication of work. Also accuracy of this entry with the receipt in the Stores has to be verified each time to ensure that there is no error. Account code is given in the issue note but separate batch process update routine has to be run for this which is done once a month by the estate. from the stores module

4 26 Do I have a system of exception reporting? E.g. Purchase Orders pending, GRNs for which bills are pending, Purchase orders not fully received, Stocks below re ordering level etc? 27 Can I flag some items as Essential/Critical items and generate a separate stock report for these items as needed for management control? 28 Can I set up cost centres for different assets (e.g. vehicles, dryers, sections etc) and charge the expenses to these heads at the time of stores issue, cash/bank payment? FINANCIAL ACCOUNTING 29 Can I maintain party wise bill wise supplier s accounts? 30 Can I track supplier s balances bill by bill? 31 Can I make on account/ advance payment to suppliers? 32 Does the software compute the 3M (Men, Materials and Money) expense statement monthly? 33 Does this statement show the comparison with the budget and variance account head wise? 34 Can I book liabilities other than Stores directly in this FIELD AND MANUFACTURING 35 Can the system generate the factory report daily? 36 Can the system generate the green leaf report daily? 37 Can the system generate the sectional yield register for the period required without any re-entry of data? 38 In the manufacturing module is the green leaf updated from the workers attendance entry and it is not necessary to make any separate entry for this? 39 Can I process my made tea separately for own leaf, bought leaf and other garden leaf? 40 Do I get separate recovery ratios in all these cases from the system? 41 Do I have a separate module to handle nursery operations? E.g. planting, issued to sections, balances etc? 42 Do I have a module to handle bought leaf accounting? 43 Can I create a user defined matrix to set up the rate payable for bought leaf based on fine leaf count? 44 Can I generate the liability for bought leaf through the system on a real time basis? 45 Does the software have a system of recording the historical sectional history of the estate? 46 Is it possible to create user defined queries on this database and generate information as needed? E.g. sections within a particular yield range or sections with a particular type of prune within a particular yield range? There is a cost centre master which is not being used. It is in the inventory module Can maintain party wise but not bill wise By passing a journal entry We found that a lot of information in the Factory module was being entered from the manual handwritten Factory report. The system has an option for Green leaf chit but it was not working. There is no field module in the system at present Total green leaf for the day is punched separately into the system from a register. One made tea figure covers all categories own, bought and sister gardens. It may be available in the manual Factory report Maintained in Nursery Register Enter the bought leaf quantity in the Factory module but there is no matrix to compute payment, fixation of bought leaf rates etc. There is no field and sectional module 4

5 INTERNAL CONTROLS IN BUILT 5 47 Does the existing software have the following critical internal control systems built in ( some examples only): A B C D E Green leaf as per attendance will tally with green leaf as per sectional reports as well as green leaf for factory manufacture? Tea made as per dryers will reconcile in totality with unsorted, sorted, packed and dispatched? Factory mandays as per attendance will agree with factory mandays as per factory report? Total of GRNs as per inventory module will agree with total purchases as per accounts Trial Balance will agree month wise by proper system checks without manual intervention? There is no sectional module so this does not apply. Further green leaf is re entered in the factory module. We did not check whether this quantity reconciled with total green leaf as per plucking records. This is being done in the Factory module We could not verify this This needs to be reconciled manually as the GRN is entered in the Stores module and the Suppliers Liability is entered in the Accounts module by journal entry We took a print out of the Trial Balance for January 2008 on and found that the Trial Balance did not agree by Rs 92,52, The total debit was Rs 8,46,90, and total credit was Rs 9,39,43, leading us to believe that some updation process either stores to accounts or wages to accounts had not taken place properly. Copy of Trial Balance is with us if needed. The difference in the Trial Balance had not been detected by the estate till the date of our visit. BUDGETING 48 Is the budget (estimate) module integrated with the accounts I.e. after the budget is confirmed does the data get automatically updated in the accounts 49 Is it possible to lock the budget after it is final so that no unauthorized changes can be made? 50 Is there a provision to revise the budget mid year? 51 While preparing the budget can the user adjust the crop, recovery and productivity month by month in a matrix form so that the desired result can be achieved? MISCELLANEOUS 52 Whether there exists proper audit trails in the system to ensure that automatic system related updations can be checked by taking print outs and accuracy of the same can be verified? There is just a.dbf file for the budget which is open Data is entered in this file and then updated in the accounts. Database is open You can make changes to the.dbf file at any point of time so revisions are always possible. There is no security over the budget data There is no such provision in the budget file Did not find any print out to check the updation of wages to the accounts module and so were unable to check whether the updation had been done properly. Same for updation of stores information to accounts. In view of the non agreement of the Trial Balance as mentioned in para 47E above the same is all the more relevant and vital.