Program 2018 iktva Supplier Workshop First Time Filers 1 Saudi - - PowerPoint PPT Presentation
Program 2018 iktva Supplier Workshop First Time Filers 1 Saudi Aramco: Company General Use iktva Overview iktva will work with Saudi Aramco vision is to enable a iktva is a Saudi Aramco iktva is a program, suppliers in a new
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Saudi Aramco: Company General Use
2018 iktva Supplier Workshop – First Time Filers
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Saudi Aramco: Company General Use
iktva Overview
2021 TARGETS ARE:
iktva is a program, not a metric iktva will work with suppliers in a new way for success iktva is a Saudi Aramco Strategic Imperative Saudi Aramco vision is to enable a globally competitive Saudi Industrial Base
70% Local Content Thousands of Jobs 30% Exports
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Saudi Aramco: Company General Use
Four Enablers Required to Achieve 70% iktva by 2021
through direct spend
supply-base (indirect spend)
for localization
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Major Suppliers SME Development Ecosystem Local Workforce Development
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Saudi Aramco: Company General Use
“A thriving economy provides opportunity for all… we will develop our investment tools to unlock our promising economic sectors, diversify our economy and create job opportunities.” HRH Deputy Crown Prince Mohammed bin Salman
The Kingdom’s Vision and Saudi Aramco’s Role
Saudi Jobs 70% Saudi Content 30% Exports
4 The iktva program is our value creating contribution to Vision 2030
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Saudi Aramco: Company General Use
iktva Development Timeline
iktva CONCEPTUALIZATION AND PROTOTYPING WITH SUPPLIERS
2014 2015 2016
TESTING iktva Survey WITH THE TOP 30 SUPPLIERS LAUNCHING iktva PROGRAM HOSTED BY HRH PRINCE OF EP iktva IS WIRED INTO CONTRACTS AND PROCUREMENT PROCESS iktva AWARD FOR THE BEST iktva SCORE BY SUPPLIER HOSTED BY HRH PRINCE OF EP
2017 2018
DEPRECIATION AND R&D ARE ADDED TO FORMULA EXPORT FACTOR INTRODUCED INTO FORMULA
2019
ENHANCEMENTS TO DEPRECIATION AND EXPAT COMPENSATION INTRODUCED
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Saudi Aramco: Company General Use
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Saudi Aramco: Company General Use
“The Company has a long term commercial interest in developing local supply chain capabilities and supporting industries. Therefore, the Company encourages the development of a strong local supplier community in its areas of
adding Saudi Arabian supply sources will be used preferentially when technically and commercially viable.”
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Saudi Aramco: Company General Use
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Saudi Aramco: Company General Use
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Saudi Aramco: Company General Use
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 ($)
r. Local Research and Development ($)
Supplier iktva Formula
% iktva =
𝑩+𝑪+𝑫+𝑬+𝒔 𝑭
+ 𝒀 X =
𝑭𝒚𝒒𝒑𝒔𝒖 𝑺𝒇𝒘𝒇𝒐𝒗𝒇 𝒃𝒕 𝒃 % 𝒑𝒈 𝑼𝒑𝒖𝒃𝒎 𝑺𝒇𝒘𝒇𝒐𝒗𝒇 𝟒𝟏% 𝑭𝒚𝒒𝒑𝒔𝒖 𝑼𝒃𝒔𝒉𝒇𝒖
* 10% points (max of 10%)
DEFINITION The iktva program drives, measures and monitors the “added- value” brought to the Kingdom by a supplier.
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Saudi Aramco: Company General Use
iktva Survey Worksheet
iktva is a Saudi Aramo Strategic Imperative
(including Saudi Aramco)
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Saudi Aramco: Company General Use
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
6. Reports will be submitted annually 7. Create supporting documentations similar to that used in financial audits. 8. Use the right survey tool
General Instructions
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Saudi Aramco: Company General Use
Company Information
iktva is a Saudi Aramo Strategic Imperative
Operating Locations Affiliates Included Types of G&S
iktva Progress
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Saudi Aramco: Company General Use
Page 1: Questions 2 & 3
Long-winded responses Best to be short and concise Instead
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Saudi Aramco: Company General Use
Category E – Section 1.0: Revenue
Revenue Ratio $20 mil / $50 mil = 40%
Includes revenue from Aramco
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Saudi Aramco: Company General Use
Category A – Section 2.0 – Goods and Services
Goods & Services = IK COGS/COS + SG&A + R&D Goods & Services ≠ COGS or COS
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Saudi Aramco: Company General Use
IK Goods and Services
Allowed Costs
Excluded Costs
withholding)
fees
uncollectible AR)
survey including expat benefits
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Saudi Aramco: Company General Use
Section 8.0 – Top in-Kingdom Suppliers
>
70%
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Saudi Aramco: Company General Use
Category A – Section 2.0 – Goods and Services
Page 2 Page 3
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Saudi Aramco: Company General Use
Category A – Section 2.0 – Goods and Services
is
Page 2 Page 6
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Saudi Aramco: Company General Use
Category A – Section 2.0 – Goods and Services
is
Section 9.0 - Labor Page 2 Page 4
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Saudi Aramco: Company General Use
Category A – Section 2.0 – Goods and Services
iktva is a Saudi Aramo Strategic Imperative
Revenue Ratio (40%)
Unless otherwise justifiable, Saudi Aramco Goods & Services is to be estimated using a simple ratio. Challenges:
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Saudi Aramco: Company General Use
Category B – Section 3.0 - Saudi Payroll
iktva is a Saudi Aramo Strategic Imperative
Unless otherwise justifiable, Saudi Aramco headcount and compensation is to be estimated using the revenue ratio. Can include Saudi Expat compensation and headcount Year End GOSI
Revenue Ratio (40%)
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Saudi Aramco: Company General Use
Section 9.0- Labor
Page 4
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Saudi Aramco: Company General Use
Category B – Section 3.0 - Saudi Payroll
Page 4 Page 2
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Saudi Aramco: Company General Use
Section 9.0 - Labor
Page 4 Page 2 Page 2
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Saudi Aramco: Company General Use
Category C – Section 4.0 - Training & Development
iktva is a Saudi Aramo Strategic Imperative
Can include IK and OOK costs if related to Training & Development of Saudis:
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Saudi Aramco: Company General Use
Category D – Section 5.0 – Supplier Development
iktva is a Saudi Aramo Strategic Imperative
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Saudi Aramco: Company General Use
Category R - Section 6.0 – Research & Development
technical knowledge and understanding.
production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use.
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Saudi Aramco: Company General Use
Section 10.0 – Capital Expenditures
Can be completed going back 10 years at supplier’s option
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Saudi Aramco: Company General Use
Section 7.0- In-Kingdom Investment
Page 2 Page 5
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Saudi Aramco: Company General Use
Section 11.0 – Asset Depreciation & Amortization
Page 5 Page 6
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Saudi Aramco: Company General Use
Section 11.0 – Asset Depreciation & Amortization
10 Years Section 2.0 Goods, Services, Depreciation and Amortization
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Saudi Aramco: Company General Use
Category A – Section 2.0 – Goods and Services
is
Page 6 Page 2
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Saudi Aramco: Company General Use
Section 12.0 – Supplier and Customer Development
Page 2 Page 7
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Saudi Aramco: Company General Use
Section 13.0 – Female Employment
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Saudi Aramco: Company General Use
Page 9 – Reconciliation Table
Page 9
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Saudi Aramco: Company General Use
Page 9 – Reconciliation Table
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Saudi Aramco: Company General Use
Page 9 – Reconciliation Table
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Saudi Aramco: Company General Use
Page 9 – Reconciliation Table
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Saudi Aramco: Company General Use
Page 9 – Reconciliation Table
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Saudi Aramco: Company General Use
Page 9 – Reconciliation Table
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Saudi Aramco: Company General Use
Saudi Aramco iktva Certification Unit Suppliers 3rd Party Certifier
Prepare Survey and Select Certification Firm Submit Survey to Saudi Aramco Prepare Certification Report Review Online Tools and Download Templates Review and Certify Survey Provide Management Representation Letter Confirm Revenue/Entities Review Survey and Prep Questions Receive Final iktva Score Respond to Enquiries Finalize and Prepare Executive Summary
iktva Survey Certification Process
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Saudi Aramco: Company General Use
Approved Auditors
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Saudi Aramco: Company General Use
Supplier Training and Support for iktva Certification 1
iktva presentations
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iktva survey template
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Iktva survey guidelines
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iktvasurveyinfo@Aramco.com
www.iktva.sa
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Saudi Aramco: Company General Use
Contact Information iktvasurveyinfo@Aramco.com