【正文】 nce FMIS only transfer reports, not detailed information. CONSOLIDATION PROCESS REQUIREMENT ? IAS report have some different grouping of accounts pared to PRC reports ? In the interim, CNPC requires reporting based on locations in addition to the “normal” reporting procedure along segment ? Disclosure items need to be produced and rolled up SYSTEM ISSUE ? Current FMIS aggregates report up the hierarchy and it is not possible to see or reconstruct the individual accounts, therefore it is not possible to regroup accounts at higher level. ? Currently FMIS reporting hierarchy follows a strict tree pattern with one entity reporting to only one parent. ? Current FMIS can not produce this data nor roll it up REPORTING PROCESS System Design for FMIS Modification 13 Overall approach and design principles Chapter 3 System Design for FMIS Modification 14 Design principles / goals ? The design has to be implementable prior to the IPO ? Modified FMIS must be able to produce all required reports with minimal manual work ? Avoid major changes in business process ? Avoid major changes in FMIS which needs long development time and/or high risk of destabilizing FMIS ? Marginal changes to FMIS is preferred to marginal change in business process ? Changes in business process or FMIS should have minimal dependency on shortterm improvement to IT infrastructure. ? Due to current limitations in telemunication, the amount of data that needs to be transferred should be minimized. ? To ease transition, the modified FMIS need to have data patibility with current FMIS The following principles have been followed in creating the design for the new system: System Design for FMIS Modification 15 Business process overview Chapter 4 System Design for FMIS Modification 16 Location Level 5 Segment Level 3 HQ Corp Level 1 Lgr Lgr Lgr+ Lgr+ IAS IAS PRC Segment A Segment B Elim Elim PRC Elim IAS Elim IAS Elim IAS Lgr+ Lgr+ IAS IAS Elim IAS Elim IAS IAS Different segment, different location Same segment, different location Same segment, same location Different segment, same location LEGEND Ledgers Reports Modified report/consldtn system Consolidation entry Consolidation file Data flow diagram of rollup process PRC PRC Lgr Lgr Notes: Lgr+ = ledger report plus some other special reports. System Design for FMIS Modification 17 Roll up and consolidation process chart Enter transactions for Level 6 HO Enter same segment, samelocation elimination entries Import reports from level 6 HO ledgers Create reports for Level 6 HO ledgers Receive reports amp。 Expenses not deductible for tax purposes ? Movement of allowance for doubtful accounts Balance at beginning of period, Provision, Deductions, Balance at end of period ? Movements in allowance for diminution in value of inventories Balance at beginning of period。P HuaBei Gamp。PetroChina Requirements and design of FMIS modifications FMIS enhancement project December 1999 Contents 1. Business requirements 3 2. Gap analysis 10 3. Overall approach and design principles 13 4. Business process overview 15 5. Overview of system changes 18 6. New data files and associated processes 24 7. System processes for consolidation and reporting 29 Appendix A Report formats 32 2 System Design for FMIS Modification System Design for FMIS Modification 3 Business requirements Chapter 1 System Design for FMIS Modification 4 To be able to do an IPO, PetroChina need to be able to produce certain key financial reports To produce these reports, some changes to FMIS needs to be implemented. Business requirement overview The FMIS system need to be able to produce the following reports: ? Annual consolidation reports as required by China Finance Ministry based on the PRC GAAP for jointstock pany. ? Quarterly consolidation of reports of the overall ListCo based on the IAS is required for publicly listed panies. ? Disclosure items are also required by IAS and PRC GAAP for jointstock pany. ? Some other information is required to support annual auditing. All the above reports (except the audit information) will need to be produced along the new PetroChina organization structure as described in the following page. The above reporting requirements are detailed in the next pages. System Design for FMIS Modification 5 PetroChina Level 1 PetroChina Level 2 Specialized Co/Business Group Level 3 Segment Level 4 Type Eamp。D China oil HQ Beijing Eamp。 IAS) All data listed in internal transaction reports, only different entity name ? Ine analysis report(IAS) Special deductions relating to exploration and production activities, Ine not subject to tax。 Deductions。 IAS supporting data file F1 Internal transaction data file T4 Internal Transaction P13 Export remaining internal transaction Elimination Entries Internal transaction amp。 disclosure requirement IAS ine statement definition IAS balance sheet definition IAS cash flow statement definition Statement of owner39。 IAS support data P20 Import disclosure amp。 Adjusted credit amount of one report item(account) = Consolidated credit amount of the report item(account) + Total credit amount of all adjustment entries 3. Produce the IAS report from the IAS adjusted temporary ledger report. This is done by creating the reports using the IAS adjusted temporary ledger report as the source. After the IAS report is created, it is remended that the report be stored for longterm record and archive. IAS reporting process is performed by applying IAS adjustment entries to the consolidated ledger report Consolidated Le