Hi Saurabh,
according to the Product Availability Matrix, SAP ERP 5.0 is based on SAP NetWeaver 6.40, while SAP ERP 6.0 EHP7 is based on SAP NetWeaver 7.40.
With that information, you should use the guide in attachment CUUC640_to_NW740.zip of SAP Note 928729 - Combined Upgrade & Unicode Conversion (CU&UC). Please note that the document references other SAP Notes that you may need to read as well.
For SAP on IBM i (formerly known as AS/400 or DB2/400), there is a special "in-place" Unicode conversion available if only Latin-1 languages (Western European, such as English, French, German, Spanish and so on) are installed. This special process can save some time and is described in SAP Note 800791.
Technically the Combined Upgrade & Unicode Concersion first upgrades to the target release, and then performs the Unicode conversion. You should keep that in mind, since sometimes the documentation has different procedures for different releases.
If you have never done this operation before and don't have a sandbox system to play with, you may want to consider hiring an experienced consultant for this activity.
Kind regards,
Christian Bartels.