In-Kingdom Total Value Add (IKTVA) Program Creating Value in the Kingdom IKTVA workshop - First Time Filers

Transcription

1 In-Kingdom Total Value Add (IKTVA) Program Creating Value in the Kingdom IKTVA workshop - First Time Filers

2 The In-Kingdom Total Value Add (IKTVA) Program The objective is to drive key activities towards localization and job creation, which will be assessed against the following metrics: A. Localized goods and services ($) B. Salaries paid to Saudis ($) C. Training & Development of Saudis ($) D. Supplier Development Spend ($) r. Local Research and Development ($) E. In relation to revenue (spend from Saudi Aramco) Supplier IKTVA Formula DEFINITION The IKTVA program drives, measures and monitors the addedvalue brought to the Kingdom by a supplier. % IKTVA = A+B+C+D+r E 100 Additional Info. Number of Saudi Employees Investment ($) Exports ($) Top OOK Suppliers Female Employment 2 Saudi Aramco: Company General Use

3 IKTVA Survey Worksheet IKTVA is a Saudi Aramo Strategic Imperative 3 years provided to create baseline Report both Saudi Aramco and Total KSA (including Saudi Aramco) 3 Saudi Aramco: Company General Use

4 General Instructions 1. All financial amounts should be reported in USD. 2. Amounts reported should correspond to the company s fiscal year end. 3. Assumptions and calculation methodologies utilized should be consistent with prior years and with recognized accounting standards. 4. Amounts should not be double counted. For example, if Training Costs are listed, these costs should not also be included in Goods and Services or Payroll. 5. For JVs and subsidiaries, incorporate Parent s share of operations into their own IKTVA calculation in general one consolidated submission per parent company Talk to us if you have questions or want to submit individually Intercompany transactions should be eliminated 6. Reports will be submitted annually 7. Create supporting documentations similar to that used in financial audits. 8. Use the right survey tool First time filer survey Repeat filers 4 Saudi Aramco: Company General Use

5 Company Information IKTVA is a Saudi Aramo Strategic Imperative Types of G&S Affiliates Included IKTVA Progress 5 Saudi Aramco: Company General Use Operating Locations

6 Category E Section 1.0: Revenue Includes revenue from Aramco Includes company-wide revenue including affiliates IK sourced OOK sourced Revenue Ratio $20 mil / $50 mil = 40% For partially owned entities of the company, partial credit is given Saudi Aramco Revenue: Includes indirect revenue through agents and EPC revenue Excludes partially owned subsidiaries and JVs Saudi Aramco revenue amounts should be confirmed with Saudi Aramco through IKTVASurveyinfo@aramco.com 6 Saudi Aramco: Company General Use

7 Category A Section 2.0 Goods and Services Goods & Services COGS or COS 7 Saudi Aramco: Company General Use

8 Category A Section 2.0 Goods and Services Goods & Services = IK COGS/COS + SG&A + R&D 8 Saudi Aramco: Company General Use

9 Category A Section 2.0 Goods and Services Exclude: Taxes, customs, duties, zakat, withholding taxes, iqama/visa fees Cost included in other sections Capital expenditures should be excluded from Section 8.0 Top IK Suppliers Include: Selling, marketing, and other administration and other operating cost Financing charges Insurance Expat benefits (if from IK provider) 9 Saudi Aramco: Company General Use

10 Section 8.0 Top in-kingdom Suppliers IKTVA is a Saudi Aramo Strategic Imperative > 70% 10 Saudi Aramco: Company General Use

11 Category A Section 2.0 Goods and Services IKTVA is a Saudi Aramo Strategic Imperative 11 Saudi Aramco: Company General Use

12 Category A Section 2.0 Goods and Services is 12 Saudi Aramco: Company General Use

13 Category A Section 2.0 Goods and Services IKTVA is a Saudi Aramo Strategic Imperative Sales Revenue Ratio (40%) Unless otherwise justifiable, Saudi Aramco Goods & Services can be estimated using a simple ratio. Challenges: Inventory fluctuations Length of supplier table 13 Saudi Aramco: Company General Use

14 Category B Section Saudi Payroll IKTVA is a Saudi Aramo Strategic Imperative Year End GOSI Sales Revenue Ratio (40%) Can include Saudi Expat compensation and headcount Unless otherwise justifiable, Saudi Aramco headcount and compensation can be estimated using the revenue ratio. 14 Saudi Aramco: Company General Use

15 Category C Section Training & Development IKTVA is a Saudi Aramo Strategic Imperative Can include IK and OOK costs if related to T+D of Saudis: Training fees Travel and accommodation Expats and outside consultants costs 15 Saudi Aramco: Company General Use

16 Category D Section 5.0 Supplier Development IKTVA is a Saudi Aramo Strategic Imperative Can include customer training & development costs related to skills/capabilities improvements Does not include installation, commissioning and other contract required development activities Can also include OOK cost 16 Saudi Aramco: Company General Use

17 Category R- Section 6.0 Research & Development Split IK/OOK Use international accounting standards to determine what qualifies as R&D 17 Saudi Aramco: Company General Use

18 Section 7.0- In-Kingdom Investment Highlighted in Supplier Profile 18 Saudi Aramco: Company General Use

19 Section 9.0 Top out of -Kingdom Suppliers 19 Saudi Aramco: Company General Use

20 Section 10.0 Capital Expenditures Can be completed going back 10 years at supplier s option 20 Saudi Aramco: Company General Use

21 Section 11.0 Asset Depreciation & Amortization 21 Saudi Aramco: Company General Use

22 Section 11.0 Asset Depreciation & Amortization 10 Years Section 2.0 Goods, Services, Depreciation and Amortization 22 Saudi Aramco: Company General Use

23 Section 12.0 Female Employment 23 Saudi Aramco: Company General Use

24 Approved Auditors Baker Tilly MKM & Co. CPA Bader Altamimi Tel: Cell: BDO/Dr. Mohamed Al-Amri & Co Rick Klauss Tel: Cell: P.O. Box 2590, Dammam Grant Thornton International /Al Dar Audit Bureau Abdullah Al Basri & Co Imad Adileh Tel: +966 (11) Fax: +966 (11) Mob: Ernst & Young Haider Khan Tel: +966 (11) Ext Mob: RSM Allied Accountants PricewaterhouseCoopers Mohammed Al Nader (Riyadh) Tel: +966 (11) Tel: +966 (11) Mob: : Aqeel Ahmad (Jeddah) M:+966 (0) T:+966(12) Ext Saudi Aramco: Company General Use Farouk Shaikh (Riyadh) Tel: +966 (11) (ext. 1770) Mob: Ali H Basri (Khobar) ali.basri@sa.pwc.com Telephone: (Ext. 3002) Mobile: Salman Siddiqui (Jeddah) salman.u.siddiqui@pwc.com Telephone: +966 (2) (ext. 2009) Mobile:

25 Thank you Contact Information 25 Saudi Aramco: Company General Use