Financial 2017-04-26T07:29:57+00:00

Financial

‘Tabuk Agriculture’ (TADCO) is a ISO 9001: 2000 certified Company having its well established systems & procedures including financial systems matching with international standards.’
A fully computerized Accounting system operating under ORION ERP manages the Financial & Cost Accounting activities in the Company with full integration of various modules such as General Ledger, A/P & A/R, Fixed assets, Procurement, Sales, HRMS, EDTR, Agri-Costing, Budget preparation, Budgetary Control, Maintenance, Irrigation and various other sub-modules. Financial & Costing books are closed on a monthly basis not later than the 5th working day of succeeding month.
TADCO prepares the financial statements in Saudi Riyal based on the standard accounting principles in the kingdom of Saudi Arabia, taking into consideration the principle of historical costing, supply calibration, public exposure and requirements of the Saudi company regulations and company rules.
Income and expenses accomplishment based on accruals, Sales revenue and corresponding cost of sales registered in the books when products are sold and delivered to the customers.
Valuation of bought-out inventory like seeds, fertilizers, spare parts, consumables, oil &lube, diesel etc. are done based on the weighted average cost (WAC) while valuation of Crop Production and Agro-Industrial products is based on actual cost.
Five Product based Strategic Business Units (SBU) are established and currently operational under the Corporate Management which ensures autonomy in governance and application of expertise specific to each SBU. SBUs functions independently but depends on shared services from the Service Departments under Corporate Divisions. Corporate level Financial Reports are published as per statutory requirements.
The financial year match with Calendar (Gregorian) year, while the Cropping year of various Crops & Agro-Industrial Products under different SBUs are unique. Majority of the Crops are completed with in the financial year while a few are having cropping year overlapping between two financial years, the accumulated operational cost of which is reflected under WIP (Work In Progress) and shown under Current Assets. The Cost Accounting process of crops and products having a cropping year matching with financial year or having a cycle of 12 months operation are completed at the end of harvesting / completing production. Orchards & Grapes being a long term project operates under different Costing process during its pre-commercial & commercial stages.
All costs of fruit trees in the young stage that did not reach the maturity age are accumulated under a WIP (Work In Progress) and the revenue from pre-commercial production gets reduced from the WIP till maturity age. The WIP of undesired/uprooted blocks are written off from the WIP. When the fruit trees reach the maturity age and ready for commercial production, the corresponding WIP is capitalized and transferred to Fixed Assets and the annual depreciation arrived at based on the commercial life of the fruit tree blocks. Cost of production of Fruits from Commercial/Matured blocks comprises of annual operational cost + tree depreciation.
All Fixed Assets are registered in the Books of Accounts at landed cost, which includes additions, major repair and maintenance that increase its operational life and/or capacity. Depreciation of Fixed Assets are calculated based on ‘fixed premium’ / straight line method and the useful life for each type of Asset is adapted based on the standard matching with that of the one published by the Ministry of Income and ZAKAT as follows:

Fixed Asset Percentage
Agriculture equipment 10% ، 15%
Electrical generator and Pumps 10% ، 17%
Wells and agitators preparations 10% ، 7,5%
Buildings and constructions 4% – 20%
Vehicles 25%
Furniture 17%
Office and clinic equipments 17% ، 12.5%
Equipments & workshop machines 15% ، 10%
Seed processing plant 10%
Irrigation network for orchard project 10%
Cold storage 10%
Plastic houses 10%
Polystyrene box plant 10%
Olive Oil Mill 10%
Fruit trees 5.26% – 8.33%
Provision for Terminal Benefits of employees for the accumulated years in service till the date of preparing the financial statements are calculated and booked according to the work and labor rules in the kingdom. Paid vacation and ticket for vacation are also calculated and booked as expenses of the financial year.
The investments of the company in the stock & shares of other joint stock companies are registered in the financial books based on the historical costing, and the income from these investments are booked on accrual basis.
Reserves are appropriated from the Annual Net Income according to the Saudi Company Law and the basic rules of the Company.
The net financial results are subject for ZAKAT as per the standard rules & criteria issued by the Income & ZAKAT Ministry, and necessary provision is booked in the Financial books.
All transactions in foreign currency are registered according to the exchange rate prevailing at the time of transaction. All transactions in foreign currencies hanging for finalization at the end of fiscal year are revalidated using current exchange rate and provision created for loss or profit due to fluctuation in exchange rate.