Accountant Middle East - February 2013

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SETTING STANDARDS IN FINANCIAL AUDITING & ACCOUNTANCY

FEBRUARY 2013

EXCLUSIVE! RESETTING THE BUTTON

WHAT’S YOUR WORTH?

Mixed reaction to Sheikh Mohammed’s decree on compulsory inclusion of women on corporate boards

It’s a windfall for SURIHVVLRQDOV LQ ÀQDQFLDO services, new Robert Half ‘Salary Guide’ reveals

EYE ON ‘GENERATION C’

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ACCA repositions itself to appeal to today’s youth, ‘who are always connected and clicking’

FIGHTING OCCUPATIONAL FRAUDS How effective are external auditors at detecting scam risks in organisations?

HOW MANY ‘CAPITALS’ DO WE NEED? Kurt Ramin charges at the prototype of business reporting framework issued by International Integrated Reporting Council

THE IPO DEALMAKER

Prasanth Manghat, the CFO of NMC Healthcare, is known for successfully spearheading the company’s listing on the London Stock Exchange PUBLICATION LICENSED BY IMPZ

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Bring on tomorrow www.aig.com AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. Products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Not all products and services are available in every jurisdiction, and insurance coverage is governed by actual policy language. Certain products and services may be provided by independent third parties. Insurance products may be distributed through affiliated or unaffiliated entities. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds.

EDITOR'S AUDIT

7\ISPZOLY Dominic De Sousa .YV\W *66 Nadeem Hood 4HUHNPUN +PYLJ[VY Richard Judd richard@cpidubai.com +971 4 440 9126

Adding it all up IN  W HAT  may  be  a  sign  of  an  improving  job  market,  companies  are  jostling  for  Â–Š‡ ”‡‰‹‘Â?ǯ• Š‹‰ŠŽ› •Â?‹ŽŽ‡† ™‘”Â?‡”•ǥ ƒ……‘”†‹Â?‰ –‘ ƒ Â?‡™ ”‡’‘”– ˆ”‘Â? •–ƒˆĎ?‹Â?‰ Ď?‹”Â? Robert  Half. Â

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To  c rown  it  a ll,  t he  s ame  s tudy  r eveals  t hat  s alaries  i n  t he  UAE  for  r oles  i n  Ď?‹Â?ƒÂ?…‹ƒŽ •‡”˜‹…‡• ™‹ŽŽ Šƒ˜‡ –Š‡ Žƒ”‰‡•– ‹Â?…”‡ƒ•‡• ƒÂ?‘Â?‰ ƒŽŽ Ď?‹‡Ž†• Â”Â‡Â•Â‡ÂƒÂ”Â…ÂŠÂ‡Â†ÇĄ at  a n  average  of  5.6%.  T his  t herefore  presents  a  perfect  t ime  t o  c reate  a n  action  plan  for  t he  year  a head,  i n  a spects  of  your  c areer  t hat  you  would  l ike  to  achieve,  change  or  develop. Â

*VU[YPI\[VY Shane Phillips (+=,9;0:05. *VTTLYJPHS +PYLJ[VY Chris Stevenson chris@cpidubai.com +971 4 440 9138 796+<*;065 *09*<3(;065 7YVK\J[PVU 4HUHNLY James P Tharian james@cpidubai.com +971 4 440 9146 +H[HIHZL HUK *PYJ\SH[PVU 4HUHNLY Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 +,:0.5 /LHK VM +LZPNU Fahed Sabbagh fahed@cpidubai.com +971 4 440 9148 .YHWOPJ +LZPNULY Glenn Roxas glenn@cpidubai.com 7OV[VNYHWOLYZ Jay Colina Kader Pattambi +0.0;(3 :,9=0*,: +PNP[HS :LY]PJLZ 4HUHNLY Tristan Troy Maagma >LI +L]LSVWLY Abey Mascreen online@cpidubai.com +971 4 440 9100

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James  S ayer,  Robert  Half  Middle  E ast’s  Director  t ells  u s  t hat  even  t hough  Â…‘Â?’ƒÂ?‹‡• ƒ”‡ ”‡…”—‹–‹Â?‰ǥ …‘Â?’‡–‹–‹‘Â? ˆ‘” Œ‘„• Šƒ• Â?‡˜‡” „‡‡Â? Â?‘”‡ Ď?‹‡”…‡Ǥ This  i s  because  employers  a re  looking  for  business-­â€?savvy  i ndividuals  w ith  s trong  commercial  acumen,  not  only  t o  perform  t raditional  accounting  f unctions  but  a lso  t o  d rive  r evenue  g rowth.  As  such,  whether  you  are  looking  to  upping  your  game  or  need  some  g reat  salary  negotiation  t ips,  we’ve  got  it  all  covered  in  our  â€˜Survey  Special’  pages.  Meanwhile,  still  on  careers,  women  in  t he  UAE  have  a  reason  to  celebrate.  A s  t he  country  rung  in  t he  New  Year,  t he  Prime  Minister  and  Vice  President  of  t he  UAE,  His  Highness  Sheikh  Mohammed  bin  Rashid  A l  Maktoum  announced  a  declaration  to  make  representation  of  women  in  companies’  boards,  compulsory. Š‡‹Â?Š ‘ŠƒÂ?Â?‡†ǯ• †‡…”‡‡ …ƒÂ?‡ „ƒ”‡Ž› ƒ ™‡‡Â? ƒˆ–‡” –Š‡ ••‘…‹ƒ–‹‘Â? ‘ˆ Šƒ”–‡”‡† ‡”–‹Ď?‹‡† Accountants  (ACCA)  r eleased  a  s tudy  t itled;  â€˜ ‘Â?‡Â? ‹Â? ϔ‹Â?ƒÂ?…‡ǣ ƒ •’”‹Â?‰„‘ƒ”† –‘ …‘”’‘”ƒ–‡ „‘ƒ”† ’‘•‹–‹‘Â?•?’  which  shows  t hat  proportionally,  women  appear  more  s uccessful  i n  attaining  executive  r oles  Â™ÂŠÂ‡Â? –Š‡› Šƒ˜‡ ƒ Ď?‹Â?ƒÂ?…‹ƒŽ „ƒ…Â?‰”‘—Â?†Ǥ The  setting  aside  of  quotas  for  women  is  not  a  new  t hing,  w ith  a  number  of  other  countries  having  enforced  a  gender-­â€?diversity  requirement  for  corporate  board  membership.  In  our  â€˜Main  Features’  segment,  we  go  beyond  t his  historic  pronouncement,  to  gauge  t he  reaction  of  women  in  t he  senior  echelons  of  accountancy  ÂƒÂ?† Ď?‹Â?ƒÂ?…‡ ‹Â?†—•–”›Ǥ Finally,  did  you  k now  t hat  organisations  lose  an  estimated  $3.5  t rillion  to  f raud  each  year?  A nd,  did  you  also  k now  t hat  occupational  f raud  is  more  likely  to  be  detected  by  a  t ip  f rom  employees  t han  by  any  other  method?  With  many  companies  moving  fast  to  utilise  t he  services  of  external  auditors,  our  â€˜Point  Blank’  section  questions  t heir  reliability  as  an  organisation’s  primary  f raud  detection  method.  With  2013  momentum  starting  to  k ick  in,  we  continue  to  follow  t he  t rends,  feature  more  issues,  events  and  people  t hat  set  t he  pace  for  t his  diverse  industry. Â

6MMPJL .YVZ]LUVY )\ZPULZZ ;V^LY ;,*64 PO Box 13700 Dubai, UAE

1V`JL 5QLYP Editor, Accountant Middle East

Tel: +971 4 440 9100 Fax: +971 4 447 2409 SETTING STANDARDS IN FINANCIAL AUDITING & ACCOUNTANCY

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FEBRUARY 2013

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Printwell Printing Press

, THPS! joyce@cpidubai.com EXCLUSIVE! WHAT’S YOUR WORTH?

RESETTING THE BUTTON

It’s a windfall for SURIHVVLRQDOV LQ Ă€QDQFLDO services, new Robert Half ‘Salary Guide’ reveals

Mixed reaction to Sheikh Mohammed’s decree on compulsory inclusion of women on corporate boards

EYE ON ‘GENERATION C’ ACCA repositions itself to appeal to today’s youth, ‘who are always connected and clicking’

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Š Copyright 2013 CPI All rights reserved While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

FIGHTING OCCUPATIONAL FRAUDS How effective are external auditors at detecting scam risks in organisations?

HOW MANY ‘CAPITALS’ DO WE NEED? Kurt Ramin charges at the prototype of business reporting framework issued by International Integrated Reporting Council

IPO DEALMAKER

Prasanth Manghat, the CFO of NMC Healthcare, is known for successfully spearheading the company’s listing on the London Stock Exchange PUBLICATION LICENSED BY IMPZ

;^P[[LY! @AccountancyME -HJLIVVR! www.facebook.com/AccountancyME 3PURLK0U NYV\W! Accountant Middle East

www.accountancyme.com 3

CONTENTS FEBRUARY 2013

Main Features

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WOMEN IN FINANCE:

Resetting the button – Despite women’s advancement in education and workforce participation globally, there remains extreme gender imbalance on corporate boards.

22

PERSONALITY & PRACTICE:

50

COVER STORY:

Eye on ‘Generation C’ – ACCA UAE Advisory Committee Chairman Ahmad Darwish reveals how the professional body is repositioning itself to appeal to today’s youth, ‘who are always connected and clicking’.

IPO Dealmaker – Prasanth Manghat, the Group CFO of NMC Healthcare, talks about being honoured as ‘CFO of the Year’, after leading the company to list on the London Stock Exchange.

February 2013

50

NEWS & VIEWS:

Deloitte gets top honours in tax advisory – Deloitte Middle East East has been recognised for the fourth year in a row by International Tax Review’s ‘World Tax 2013’.

7

NEWS & VIEWS:

Profession Watch

CFOs face more regulation – Finance chiefs will face many challenges in the future, including global economic uncertainty and volatility, according to a new report authored by ACCA and IMA.

10

IN THE SPOTLIGHT:

Special Reports

Current Affairs 6

Stand out from the crowd – Professor Janek Ratnatunga on the importance of having a CMA – ϐ ǯ marketplace.

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44

INTEGRATED REPORTING:

56

CALCULATING MOVE:

How many ‘Capitals’ do we need? – Industry expert Kurt Ramin examines the values ϐ framework issued by the International Integrated Reporting Council.

Global mobility ‘failing’ – Deloitte study reveals companies’ strategies to move workforce across borders do not meet boardroom agendas.

72

SUSTAINABILITY ACCOUNTING:

ACCA urges ‘green’ business practices – Helping small entrepreneurs to be sustainable can make a huge difference to the environment, accounting association says.

ISLAMIC FINANCE:

DFM seeks counsel on Sukuk – Exchange ϐ draft report on standard for issuing, acquiring and trading Islamic bonds.

40

POINT BLANK:

64

TECH TALK:

Fighting occupational frauds – Rakesh ǡ ϐ ǡ assesses the ability of external auditors to detect scam risks in organisations. Inform. Align. Adapt – SAP’s Director of Business Analytics Paul Devlin examines different ways of fostering a culture of analytics in organisations.

74

INDUSTRY APPOINTMENTS:

Revolving door – Find out t he latest movement of professionals between roles, companies as well as new industry hires.

28 From the Experts 34 ROBERT HALF SURVEY:

Salaries in UAE on the rise – Recent survey done by staffing firm Robert Half reveals financial services will have the largest pay ϐ ǡ ͷǤ͸ΨǤ

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CORPORATE TREASURY:

Royal Act – This year brings enormous opportunities for treasurers in the region, Matthew Hurn reckons.

Interactions 3 EDITOR'S AUDIT

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NEWS & VIEWS

EMIRATES NBD, AUD SIGN INTERNSHIP DEAL DFM LAUNCHES iVESTOR SHABAB CARD

EMIR ATES N BD b ank r ecently s igned a n internship a ffiliation a greement w ith the A merican U niversity i n D ubai (AUD). The a greement c omes a s p art o f E mirates NBD’s C orporate S ocial R esponsibility Programme a nd a s a n e ffort b y AUD t o improve i ts c ollaboration w ith r egional employers a nd t o a ssist i n E mirates N BD’s recruitment n eeds. The a greement w as s igned b y S tella Mandehou, C areer S ervices M anager at AUD a nd R ehab A l H osani, S enior Manager, N ationalisation a nd B usiness Communications U nit, H uman R esources at E mirates N BD ( both p ictured). During t he s igning c eremony,Mandehou said: “ We l ook f orward t o c ontinuing a fruitful r elationship w ith E mirates N BD and s upplying t hem w ith t alented s tudents and g raduates.” The a greement a ims t o p romote academic e xcellence a nd i ntellectual creativity a mong s tudents b y i nforming them o f t he b est b anking p ractices a nd equipping t hem w ith p ractical t raining. “Emirates N BD w ill w elcome t he n ew and t alented AUD s tudents a nd p rovide them w ith t he o pportunity t o t est t heir interest i n a p articular f ield i n b anking before p ermanent c ommitments a re made,” A l H osani s aid. 6

February 2013

THE DUBAI Financial Market (DFM) has launched iVESTOR Shabab card for the youth in the UAE, aimed at promoting financial knowledge and responsible spending under parental control. The Shari’ah compliant card is customised for people under 21 years of age and represents the youth version of the iVESTOR card launched in 2010, a first of its kind initiative amongst stock exchanges across the world. iVESTOR Shabab entitles a cardholder to become an official DFM investor by receiving a dedicated Investor Number to trade on the market in the long term. It is also a pre-paid card which provides the flexibility to make retail and online purchases and payments globally via any merchant accepting VISA. The card has been widely welcomed when DFM showcased its key features to school and university students in the UAE.

Deloitte gets top honours in tax advisory DELOITTE MIDDLE East has been recognised for the fourth year in a row by International Tax Review’s ‘World Tax 2013’. Among the ‘Big Four’, the global Deloitte network received more tier one and two rankings combined than any other network. Deloitte member firms across the globe received the highest distinctions awarded by World Tax, which honours top international tax firms employing the most respected and capable

professionals in the field. World Tax 2013 commended Deloitte’s leading reputation, international network, highly knowledgeable professionals and complete tax services capabilities. “We are pleased to have Deloitte Middle East again recognised as a leader in tax. Our aim is to continually provide unparalleled services and international expertise to all our clients in the region and globally,” said Nauman Ahmed, partner in charge for Tax Advisory Services for Deloitte in the Middle East.

NEWS & VIEWS

CFOs FACE MORE REGULATION CFOs W ILL f ace many challenges in t he future, including g lobal economic uncertainty and volatility, ϐ prices, a nd t urbulent currency markets, along w ith a shift in economic power, according to a new report published by t he A ssociation of ϐ ȋ Ȍ Institute of Management Accountants ( IMA). “This comprehensive, g lobal s tudy highlights the challenges f aced by today’s CFOs. T he results of t his s tudy w ill help shape our joint research agenda a s we provide t hought ϐ professionals,” said R aef L awson, Vice P resident of Research at IMA ( pictured). T he report titled ‘The Changing Role of the CFO’ ϐ emerging priorities t hat w ill impact t he f uture role of t he CFO a nd c ites nine f uture key issues ϐ ǯ Ǥ

QNB NETS QR8.3BN PROFIT FINANCIAL INSTITUTION QNB Group announced its net profit for 2012 exceeded QR8.3 billion, up by 11.1% compared to 2011. According to the Group’s CEO Ali Shareef Al Emadi (pictured), the results, “the highest ever achieved by the lending institution, demonstrated once again its resilience and revenue-generating capacity, as well as outstanding success in expanding its core business activities.” Based on the strong financial results for 2012, and consistent with QNB Group’s aim of maximising returns to shareholders, the board

of directors recommended to the General Assembly the distribution of a cash dividend of 60% of the nominal share value (QR6.0 per share). The financial results for 2012 along with the profit distribution are subject to Qatar Central Bank (QCB) approval. The bank continues to place high emphasis on recruiting Qatari nationals and provide them with dedicated training programmes to further enhance their capabilities.

STATS FACT:

11.1%

RISE IN QNB's 2012 NET PROFITS, COMPARED TO 2011

‘What’s your next move?’ STANDARD CHARTERED recently held a joint seminar w ith t he Hong Kong Monetary Authority ( HKMA), to share with participants t he latest v iews and insights on t he Renminbi ( RMB) and its developments. Titled ‘The Renminbi: W hat’s your next move?’, t he event was an interactive platform for sharing expertise and knowledge about how t he R MB is affecting global and regional t rade and Hong Kong’s latest offering as a key offshore R MB hub. ϐ North A frica ( Mena) region and China are on t he r ise, and a mounting number of corporate are opting for settling trade in t he R MB to reduce costs and ϐ Ǥ “In t he UAE, Standard C hartered has been at t he forefront of supporting

the i ncreasing needs of our Corporate, SME a nd Financial Institutions clients with l inks t o C hina,” said Jonathan Morris, CEO, Standard C hartered UAE (pictured left.) “Over t he past few years, we have seen very encouraging development in

the offshore R MB business, including mounting R MB-­‐denominated t rade settlement, r ising dim sum bond issuance and an increasingly liquid CNH market,” added Ben Hung, CEO, Standard Chartered Hong Kong (pictured r ight). 7

NEWS & VIEWS

IMA REACTS TO PROPOSED CODE OF ETHICS

THE INSTITUTE of Management Accountants (IMA) has issued a public letter in reaction to proposed changes to code of ethics made by the International Ethics Standards Board for Accountants (IESBA). IESBA’s proposal describes t he c ircumstances in which a professional accountant is required ϐ response to suspected illegal acts committed by a client or employer. Drawing f rom IMA’s own Statement of Ethical Professional Practice, key recommendations made by IMA’s Committee on Ethics include: Ȉ ϐ Ȃ ǡ be communicated externally only if it involves a clear v iolation of the law. Ȉ suspecting things that perhaps t hey don’t have the background to f ully understand, and to report this externally w ithout it being a “clear v iolation of t he law” would be irresponsible and could potentially unfairly damage t he reputation of the organisation and set the accountant up for unnecessary potential legal actions. Ȉ ϐ ǡ should seek professional legal assistance to determine the best course of action, as different situations and jurisdictions may lead to varied recommended outcomes. “As t he foremost association serving accountants in business, IMA appreciates t he opportunity to provide input t hrough t his comment letter,” said Joshua S. Atlas, CMA, CFM, CFE, chair of IMA’s Committee on Ethics.” 8

February 2013

DELOITTE LAUNCHES NEW APP DELOITTE’S MIDDLE East ‘Point of View’, the quarterly thoughtleadership publication, has now been launched as an App on the tablet. This announcement comes timed with the release of the fall issue of the magazine, that tackles several issues: from the Arab Spring impacts on markets, to the developments in Libya, the challenges facing capital efficiency in the GCC and many more topics for business leaders in the Middle East. “Given the importance of communication nowadays, Apps on smartphones and tablets are becoming the norm for individuals who want to manage what they want to read of the latest developments in their areas of interest. We launched the ‘Middle East Point of View’ App for leaders in the Middle East region who are interested in accessing the viewpoints from experts on current hot topics in the MENA region,” said Rana Ghandour Salhab, talent and communications partner at Deloitte Middle East. The ‘Deloitte Middle East Point of View’ App, developed in collaboration with KnowledgeView, carries features such as dynamic channels, Disqus commenting, geo map locator and off-line browsing. It can be downloaded from the AppStore free of charge, found under ‘Deloitte Middle East Point of View magazine’ and through the following link: http://bit.ly/Q9WGAV.

NEWS & VIEWS

ECO-FRIENDLY CREDIT CARD NOW IN UAE FIRST GULF Bank (FGB) has launched the UAE’s first green Visa credit card in association with Masdar, Abu Dhabi’s renewable energy company. The First Gulf Bank Masdar Card allows members of the community to become more involved in different environmentally sustainable initiatives. The product falls in line within a series of socially geared products that FGB has developed recently. Offered in Infinite and Platinum premium categories, the new product is completely environmentally friendly and biodegradable. For every purchase made by the customer using the card, FGB will automatically contribute on behalf of the customer up to 0.6% of the transaction value towards a fund that will support environmental and sustainable projects all year round. Furthermore, the card offers an exclusive First Green Rewards loyalty programme. The programme allows cardholders to earn up to 1.5 First Green points for every dirham spent and can be redeemed against a variety of ecofriendly products or green merchants.

STATS FACT:

1.5

‘GREEN’ POINTS EARNED FOR EVERY DIRHAM SPENT USING THE GREEN VISA CREDIT CARD

IMA, Wiley release new Spotlight on banks at study system Euromoney meet THE INSTITUTE of Management Accountants (IMA) a nd g lobal publisher John Wiley & Sons have announced t he release of the new 2013 Wiley CMA Learning System (CMA L S) and Online Intensive Review product suite. T he suite i ncludes print and online educational materials designed t o prepare ϐ ϐ Management Accountant exam. ǯ ϐ programme i s a n advanced-­‐level a ssessment for accounting ϐ Ǥ ʹǦ ϐ ǡ ǡ ϐ Ǥ “ The CMA L earning System has been a premier s tudy product for management accounting professionals a nd I’m ϐ to t he academic, s tudent a nd corporate communities, while bringing new innovations to t he market,” said Jeff T homson, CMA, IMA president a nd CEO ( pictured).

OVER 3 00 h igh-­‐level local a nd i nternational financiers, i nvestors, policy m akers a nd regulators a re s et t o m eet in M anama, t o l ook a t t he role o f B ahrain’s f inancial sector i n t he c ountry’s economic p rogress a nd t he development o f t he G CC wealth m anagement i ndustry. The event dubbed Euromoney Conferences, i s scheduled for March 5 a nd co-­‐hosted by t he Bahrain Economic Development Board ( EDB). Richard Banks, r egional d irector for Euromoney Conferences ( pictured) said: “ We a re excited t o be back in Bahrain, partnering again w ith t he EDB, a fter a very successful event last year. T his year’s conference w ill look more closely at t he K ingdom’s economy a s well a s d iscuss the opportunities a nd challenges for t he g lobal a nd r egional ϐ Ǥ the d iscussions a nd a sk t he most pressing questions to our high c aliber line-­‐up of participants.” 9

IN THE SPOTLIGHT

STAND OUT FROM THE CROWD Professor Janek Ratnatunga, a leading Australian scholar in the field of management accountancy tells Joyce Njeri the importance of having a CMA – Australia qualification in today’s cutthroat business marketplace.

In today’s competitive job market, a credential next to one’s name can help their resume stand out. Why is it impor tant for accounting students to gain a CMA – Australia qualification? What does your programme offer to stand out from the crowd of other training providers?

set the course for the future -­‐ the financial world’s equivalent of being an architect and of designing a house to stand strong in all future conditions.

C omp a n ie s r e l y on q u a l i t y st rateg ic analysis to be able to conf idently char t a future c o u r s e . T h e m a n a g e m e n t accountant is one of the CEO and company’s board most valuable advisers in this regard – they g o b eyond t he numbers a nd bring t ogether the best intelligence; leading indicators from w it hin a nd out side t he bu siness . Wit hout this information and analysis, it’s akin to one f lying blind.”

Often people are confused as to the differences in the role of a financial accountant versus a management accountant. C an you shed s ome l ight on t his?

As a m anagement accountant you work h and-­‐in-­‐ glove w ith t he m anager of a business, providing them w ith b oth t he numbers a nd a ssessment of other forward leading indicators to help them

Take the analogy of a ship; the financial accountant is at the back of the ship studying the wake and telling the captain how the ship has passed through the water, while the

A.

10 February 2013

The CMA-­‐Australia programme is the only post-­‐graduate level management accounting ϐ Ǥ qualification in accounting to do t his programme.

Financial accountants look at what has happened in the past, according to an assessment of the numbers, as opposed to what will happen, according to numbers and other variables. Management accountants are forward looking.

IN THE SPOTLIGHT

As a management accountant you work hand-­in-­glove with the manager of a business, providing them with both the numbers and assessment of other forward leading indicators to help them set the course for the future. Is it correct to assume that those with ϐ ȋ Ȍ ϐ regulation a nd compliance, whilst t hose w ith ϐ ȋ Ȍ ϐ decision information to management?

management accountant is up the front of the ship and can see the iceberg ahead and informs t he c aptain (the C EO) o f t he c hallenges ahead. The management accountant is like a navigator within the business, advising the CEO, who is ultimately the one who leads and takes t he d ecisions. Professional bodies focusing on financial accounting issues pay only lip-­‐service to management accounting, which requires a totally d ifferent m indset.

This is by and large correct. Both roles are important. Regulatory accountants work in weeks and months; finance accountants work in years; management accountants work in minutes and seconds. If you need real time operational improvements that affect profitability, then you need to get a management accountant. Following t he g lobal f inancial c risis, t he m arket is tight, competition is fierce and there is very little money around which means you have to squeeze the most out of what you have. To be able to do that, you need real-­‐time insights Ǥ leading i ndicators, not l agging i ndicators. O nly a management accountant has the skills and Ǥ

)06.9(7/@ Professor Janek Ratnatunga is currently the Head of School and Dean of Commerce at the University of South Australia and has previously held academic leadership positions at Monash University (where he was Chair in Business Accounting), University of Melbourne and University of Canberra. He has worked in the profession as a Chartered Accountant with KPMG and has been a consultant to the World Bank on a number of international projects. He has undertaken a major consultancy for the Australian Department of Defence in the valuation of strategic capabilities. Professor Ratnatunga is also a leading authority on the business and accounting implications of global warming and carbon. He is the Editor of the Journal of Applied Management Accounting Research and in 2009 was a recipient of the prestigious American Accounting Association’s ‘Impact on Management Accounting Practice Award’.

11

IN THE SPOTLIGHT

I  don’t  want  to  simply  be  told  if  the  numbers  are  right  or  wrong.  I  want  to  know  what  it  means  for  business  planning.  The  management  accountant  i nterlinks  a ll  t he  d ifferent  elements  of  t he  business  a nd  g ives  you  a  t otal  picture.  T he  fact  t hey  a re  i nvolved  i n  t he  f unctional  a reas  of  the  business  means  they  can  tell  you  how  the  wheel  of  the  company  is  turning;  they  can  tell  you  what  the  numbers  mean  for  the  company,  not  just  what  it  means  for  the  budget.  Their  analysis  a nd  advice  i s  c ritical  f or  t he  s uccessful  operation  of  t he  business. ‘— Šƒ˜‡ ‡Â?„ƒ”Â?‡† ‘Â? ƒ Â?ƒŒ‘” ‡š’ƒÂ?•‹‘Â? plan,  opening  international  centres  that  ÂƒÂ”‡ ‘ˆˆ‡”‹Â?‰ ÇŚ —•–”ƒŽ‹ƒ ’”‘‰”ƒÂ?Â?‡• in  more  than  12  countries  including  the  Ǥ • ‘Â?‡ ‘ˆ –Š‡ ‰”‘™‹Â?‰ ’”‘ˆ‡••‹‘Â?ƒŽ “—ƒŽ‹ˆ‹…ƒ–‹‘Â?•ǥ ™Šƒ– †‘ ›‘— –Š‹Â?Â? ƒ„‘—– Â—Â•Â–Â”ÂƒÂŽÂ‹ÂƒÇŻÂ• ƒ……‘—Â?–‹Â?‰ ‡†—…ƒ–‹‘Â?ÇŤ Â? –Š‡ •ƒÂ?‡ Â?‘–‡ǥ ™Šƒ– ƒ”‡ ›‘—” ‡š’ƒÂ?•‹‘Â?• ’ŽƒÂ?• ‰Ž‘„ƒŽŽ› ƒÂ?† ‹Â? ’ƒ”–‹…—Žƒ” –Š‡ ‹††Ž‡ ÂƒÂ•Â–ÇŤ

– ‹• –”—‡ –Šƒ– —•–”ƒŽ‹ƒ ‹• ‘Â? ƒÂ? ‡š’ƒÂ?•‹‘Â? ’”‘‰”ƒÂ?Â?‡Ǥ —– ‹– ‹• ƒ …‘Â?–”‘ŽŽ‡† ‡š’ƒÂ?•‹‘Â?Ǥ ‡ work  only  through  universities  and  specialist  educational  establishments  like  the  Wisdom  Group  i n  D ubai.  ICMA  i s  actively  i nvolved  i n  t he  delivery  and  assessment  of  the  post-­â€?graduate  level  C MA  programme.  Most  other  professional  bodies  concentrate  on  assessment  only,  leaving  t he  t raining  t o  private  non-­â€?related  i nstitutions.  Australia’s  accounting  education  is  considered  â€˜world-­â€?class’  and  the  ICMA  w as  i nstrumental  i n  g etting  m anagement  accounting  recognised  as  a  much  needed  skill  for  migration  purposes.  In  the  Middle  East,  in  addition  to  the  UAE,  ICMA  has  a  programme  running  in  Lebanon  and  are  now  looking  at  launching  c ourses  i n  Egypt. Šƒ– Šƒ• „‡‡Â? –Š‡ ”‡•’‘Â?•‡ ”‡‰ƒ”†‹Â?‰ ‡Â?”‘ŽÂ?‡Â?– –‘ ›‘—” ’”‘‰”ƒÂ?Â?‡• ‹Â? –Š‡ ÇŤ ‹Â?†Ž› ‰‹˜‡ —• –Š‡ ‡šƒ…– Â?—Â?„‡” ‘ˆ •–—†‡Â?–• ™Š‘ Šƒ˜‡ †‘Â?‡ –Š‡ ÇŚ —•–”ƒŽ‹ƒ ’”‘‰”ƒÂ?Â?‡ or  a re  c urrently  pursuing  courses.  The  CMA-­â€?Australia  programme  in  Dubai  has  been  a  phenomenal  success.  We  run  the  course  twice  a  year  in  March  and  November,  and  limit  the  numbers  t o  4 0  p articipants  p er  programme.  We  just  completed  our  11th  intake.  This  means  there  are  at  least  250  CMA  members  in  Dubai. Â

12 February 2013

Australia’s accounting education is considered ‘world-­class’ and the ICMA was instrumental in getting management accounting recognised as a much needed skill for migration purposes. As  we  insist  that  students  have  an  accounting  degree  or  a  professional  qualification  in  ÂƒÂ……‘—Â?–‹Â?‰ ™‹–Š ƒ– Ž‡ƒ•– ͡nj›‡ƒ”• ‡š’‡”‹‡Â?…‡ǥ –Š‡ quality  of  p articipants  i s  of  t he  h ighest  c aliber. ‡ŽŽ —• Â?‘”‡ ƒ„‘—– –Š‡ ‡šƒÂ?•Ǥ Šƒ– ƒ”‡ –Š‡ ’”‡nj”‡“—‹•‹–‡• ”‡“—‹”‡† ˆ‘” ƒÂ?›‘Â?‡ ‹Â?–‡”‡•–‡† ‹Â? ’—”•—‹Â?‰ –Š‡ Â—Â•Â–Â”ÂƒÂŽÂ‹ÂƒÇŚ qualification.  What  is  the  certification  or  license  procedure  a fterwards? Licensing  is  a  very  American-­â€?centric  term.  Over  i n  t he  USA  e ven  i nterior  decorators,  bread  makers  and  dog  washers  need  to  be  â€˜licensed’.  This  is  not  the  case  in  the  UK  or  Australia.  Our  members  are  â€˜certified’  after  a  rigorous  training  and  assessment  process  at  the  post-­â€? graduate  level.  Many  universities  embed  the  CMA  programme  within  their  masters  in  accounting  or  MBA  programmes.  A s  I  s aid  b efore,  t he  pre-­â€?requisite  is  an  accounting  degree  or  a  professional  qualification  i n  accounting  w ith  at  least  5 -­â€?years  Â‡ÂšÂ’‡”‹‡Â?…‡Ǥ ‘•– …‘—”•‡ ’ƒ”–‹…‹’ƒÂ?–• Šƒ˜‡ ͳͲnjʹͲ ›‡ƒ”• ‘ˆ •‡Â?‹‘” Ž‡˜‡Ž ‡š’‡”‹‡Â?…‡Ǥ What  attracted  you  to  the  profession  of  management  accounting? The  fact  that  you  are  not  simply  waiting  for  things  to  happen  and  then  just  reporting  on  them,  which  is  essentially  what  financial  accountants  do.  It  was  the  forward  looking  focus  of  the  profession  and  the  task  of  creating  value  and  helping  to  set  a  strategic  course;  you  get  to  see  the  fruits  of  your  labour  in  that  you  get  to  see  your  advice  translated  into  actions  and  t hen  i nto  outcomes.  Helping  t o  r un  a  b etter  business,  t hat  i s  very  r ewarding. Â

TAKING STOCK

KPMG 2012 REVENUES HIT $23BN Growth seen across all service lines and industries, bolstered by strategic investments in key service areas, emerging markets and talent recruitment

6.3%

PERCENTAGE GROWTH OF KPMG’S TAX REVENUES FOR LAST FISCAL YEAR

Michael J. Andrew, Chairman of KPMG International

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PMG INTERNATIONAL has announced record-­high combined revenues of $23.03 billion for the fiscal year ending September 30, 2012, representing a 1.4% increase over the previous year. At a time of ongoing global economic challenges, ϐ ϐ ǯ ǡ Ǥ

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14 February 2013

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TAKING STOCK

KPMG recorded increased revenues across all functions with particularly strong growth generated in Financial Services, Industrial Markets and Infrastructure, Government and Healthcare. Dz ǡdz Ǥ Dz ǡ ǡ ϐ ̈́ͷͲ ǡ ̈́ͳͲͲ Ǥ ϐ ǡ Ǥdz

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PARTNERS AND STAFF AT KPMG’S CHINA FIRM

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WOMEN IN FINANCE

RESETTING THE

BUTTON

Despite women’s advancement in education and workforce participation globally, there remains extreme gender imbalance on corporate boards. Recently, the UAE government moved fast and announced a declaration to make representation of women in companies’ boards, compulsory. Joyce Njeri talks to women in senior roles in accountancy and finance to gauge their sentiments about the decree…

T

HISYEAR promises to be a dramatic one for women in corporate organisations in the UAE. As the country rung in the New Year, the Prime Minister and Vice President of the UAE -­ His Highness Sheikh Mohammed bin Rashid Al Maktoum -­ announced a declaration to make representation of women in companies’ boards, compulsory. “Today we have made a decision to make the representation of women in all the boards of directors of companies and government entities, compulsory,” Sheikh Mohammed announced on his social networking site, Twitter.

30%

PROPORTION OF EMIRATI WOMEN IN ACTIVE EMPLOYMENT 16 February 2013

titled; ‘ ϔ ǣ ǫ’, which shows that proportionally, women appear more successful in attaining executive roles when they have a ϐ Ǥ ϐ ǡ ϐ ϐ or a background is seen as catalysts for women getting onto t he boards of F TSE companies. While it is too early to tell exactly how Sheikh Mohammed’s pronouncement will impact the UAE, t he positive effects associated w ith women on corporate boards indicate the value of increased gender diversity.

In his pronouncement, the Prime Minister said that women had proved themselves in many workplaces and “today we want them to have a strong presence in decision-­‐making positions in our institutions,” he stated.

A decree like the one announced by the Dubai ruler is the most viable means for increasing board diversity and ultimately adding business ϐ Ǥ

( THSL WYVMLZZPVU Sheikh Mohammed’s decree came barely a week after the Association of Chartered ϐ ȋ Ȍ

Indeed, a report by the Credit Suisse Research Institute published in 2012 shows that companies with women on their boards performed better in challenging markets than those with all-­‐male on boards.

WOMEN IN FINANCE

03:36 - 09/12/12

HH Sheikh Mohammed @HHShkMohd

Today we have made a decision to make the representation of women, in all the boards of directors of companies & gov. entities, compulsory https://twitter.com/HHShkMohd/ status/277738509945679872

03:37 - 09/12/12

HH Sheikh Mohammed @HHShkMohd

Women have proved themselves in many workplaces & we want them to have a strong presence in decisionmaking positions in our institutions https://twitter.com/HHShkMohd/ status/277738773746417664

8\V[HZ MVY ^VTLU Statistics in the research which included data from 2,360 companies, shows shares of companies with a market capitalisation of more than $10 billion and with women board members outperformed comparable businesses with all-­‐male boards by 26 per cent worldwide over a period of 5 years [2007-­‐2012]. boards is not a new thing. In January 1, 2008, corporate board membership at all public limited ǡ 40% female board membership. Other countries number of women on companies’ boards include Spain, Iceland, Italy, France and Belgium. been passed and are awaiting implementation. Globally, despite women’s advancements in workforce participation as well as in education, there remains extreme gender imbalance on intended to remedy t he situation.

:[LW PU [OL YPNO[ KPYLJ[PVU While many factors indicate that women’s participation in the workforce is strong in the Middle East, they however remain behind when it comes to corporate board membership. According to the United Nations Statistics Division, women make up majority of university population in most of Middle Eastern c ountries. However, despite t heir h igh level of education, females are still under-­‐ represented i n l abour f orce. Figures show that Qatar has the region's second highest percentage of women in

While it is too early to tell exactly how Sheikh Mohammed’s pronouncement will impact the UAE, the positive effects associated with women on corporate boards indicate the value of increased gender diversity.

17

WOMEN IN FINANCE

While these high numbers of women getting a good education is in great contrast to the statistics in the workforce, a number of women who spoke exclusively to agree t hat Sheikh Maktoum’s pronouncement is a step in t he r ight direction. “It is a matter of pride that the UAE is among the very few nations in the world that has announced such a policy that will enhance women empowerment,” said Raja Easa Al Gurg, the President of Dubai Business Women Council. 7V^LYM\S (YHI I\ZPULZZ^VTLU Raja holds membership positions in various organisations in the country. She is the Deputy Chairperson of the board of directors, Dubai Healthcare City Authority, Managing Director of the Easa Saleh Al Gurg Group, and also a board member of the Dubai Chamber of Commerce & Industry ȋ Ȍ ǯ Ǥ “Within the various organisations that I have been associated with, it has been a collective responsibility to encourage greater woman participation in the economic sector. Therefore His Highness’ decree offers even more strength and power to our efforts and resolutions in this sphere,” she added. In 2006, Forbes International named Raja as the fourth most powerful Arab businesswoman, while last year she was a lso in t he list of t he ‘100 Most Powerful A rab Women’.

RAJA EASA AL GURG President of Dubai Business Women Council

higher education at 63% of the university population, and 93% literacy among women, however, t hey m ake u p j ust 1 2% o f t he l abour force and only 7% of legislators, senior officials a nd m anagers. Elsewhere in Lebanon, women make up 54% of university students, but only 26% of the labour force and 8% of legislators, senior officials a nd m anagers. 18 February 2013

“While education, commitment and strong leadership has now assured women a place in the world of business as decision makers, more needs to be done from the grassroots level and beyond to make t his v ision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Ruler of Dubai and UAE Vice-­‐President a reality.” “We live in a region where change and modernisation can only come gradually from within, but, c ultural constraints could be removed through education and public enlightenment,” she says. 6WWVY[\UP[PLZ PU LK\JH[PVU According to R aja, Emirati women’s participation in the workforce continues to grow with 30% of them being active participants. It is estimated that about 29% of women have a representative role in the business with around 7% of them being owners or partners.

WOMEN IN FINANCE

“Over the past 39 years, women in the UAE have ϐ investment and entrepreneurship. They have invested in trade, banking, real estate, tourism, industrial, and contracting, construction and services sectors. They also have invested Dh2.1 billion in the manufacturing sector,” the ministry’s report states. “We have the infrastructure and will to provide ǡ starting with a learning strategy for young women, which include changes in the school system. This should be in line with the demands and priorities of a dynamic workplace and corporate environment,” R aja says. *OHUNPUN WLYJLW[PVU VM ^VTLU She s ays t hat more emphasis should be on good Ǣ

Other countries that have also implemented quotas for the number of women on companies’ boards include Spain, Iceland, Italy, France, and Belgium. development of cognitive and communicative skills; critical thinking and leadership ability, “all of which will develop the women's self-­‐ ϐ Ǥdz “As a nation we should all work harder on changing the perception of women and their capabilities by having topics t aught in school t hat show how women can contribute something of value and become leaders of change.”

DR NAHLA AL QASSIMI Executive Board Member, Dubai World

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WOMEN IN FINANCE

ǡ ϐ background increases the likelihood of a woman obtaining a board seat. “I believe that women today can shape their destiny through knowledge enhancement or lifelong learning, active networking as well as mentoring. More women should be aware of the opportunities available to them in developing themselves. Furthermore, they should inspire change for a better f uture for t hem,” says Nahla. Dr Nahla i s a n executive board member at Dubai World, a global holding company that focuses on the strategic growth areas of transport, logistics, drydocks, maritime, investment and ϐ Ǥ /\YKSLZ [V JHYLLY WYVNYLZZPVU Serving on the boards of organisations can sometimes be hectic, owing to characteristics such as excessive travel, working beyond contract hours, among others. While some of these facts act as an impediment to many women with the motivation and ambition to reach top-­‐level management positions, Nahla says that the journey to excellence comes with ϐ Ǥ Dz ϐ ǡ need to balance the needs of the family with the demands of work life. But, you have to learn ϐ Ǥ travels regardless of the position she occupies in the workplace,” she says, adding, “Now it is time for Emirati women to prove themselves, demonstrating that they are capable of working professionally and effectively, be it within the workplace or t he boardroom.” KITTY SINAGA Finance Manager , MAM Foodco

A report from the UAE Ministry of Economy shows that in Dubai alone, the percentage of UAE women in the workforce was at 33% in 2010. A comparison of figures from 1986 shows a growth of 236%. Similarly, official figures from the ministry show that half of the small-­‐to-­‐medium enterprise sector in the UAE i s h andled b y w omen; f urther, 4 8 p er c ent of women business-­‐owners are also the sole ϐ Ǥ 20 February 2013

“There are some social barriers but women have to reach beyond. There is a will from the country’s leadership to break down stereotypes but the change must also come from within the workforce. T he fact t hat our nation a lways t reated women with utmost respect, care and support, makes it easier to surmount any challenge or barrier,” Dr Nahla adds. 5V WYLMLYLU[PHS [YLH[TLU[ According to Kitty Sinaga, the Finance Manager for Food & Beverage Company MAM Foodco, Sheikh Mohammed’s pronouncement is laudable as it will encourage women’s participation at the highest level of decision-­‐making unit.

WOMEN IN FINANCE

Globally, despite women’s advancements in workforce participation as well as in education, there remains extreme gender imbalance on corporate boards. „ƒ…Â?‰”‘—Â?† ‹Â? Ď?‹Â?ƒÂ?…‡ ƒÂ?† –Š‡ ’”‘’‘”–‹‘Â? ‹• ‡˜‡Â? higher  for  female  executive  directors,  at  65%.â€?  HELEN BRAND $IJFG &YFDVUJWF 0GmDFS ACCA

Dz ‡”•‘Â?ÂƒÂŽÂŽÂ›ÇĄ ƒÂ? Â?‘– ƒ „‹‰ ˆƒÂ? ‘ˆ ƒ”–‹Ď?‹…‹ƒŽ measures  to  help  determine  the  makeup  of  any  group/organisation,  as  these  measures  could  lead  to  abuses  and  preferential  treatments,  the  very  things  they  were  trying  to  combat  in  the  beginning,â€?  she  asserts.  Gender  diversity  has  been  on  t he  corporate  agenda  for  many  years  now,  and  yet,  as  one  example  of  diversity,  we  still  see  only  a  small  percentage  of  women  on  today’s  corporate  boards.  Kitty  observes  that  the  reason  may  be  due  to  â€œthe  size  of  t he  pool.â€?   â€œThere  are  fewer  women  than  men  in  the  corporate  world  to  begin  with.   There  seems  to  be  a  gradual  attrition,  natural  or  otherwise,  as  one  goes  up  the  ladder.   Perhaps  it’s  simply  the  case  of  anthropology:   the  option  of  staying  home  or  going  corporate  is  a  female  issue,  not  a  male  one,â€?  she  says.  3HUN\HNL VM [OL IVHYKYVVT Š‡ ”‡•‡ƒ”…Š •Š‘™• –Šƒ– –Š‡ Ď?‹Â?ƒÂ?…‡ function  is  seen  by  the  three  groups  interviewed  for  the  research  -­â€?  executive  search  consultants,  chairmen  and  women  who  have  made  it  to  the  board  -­â€?  to  be  more  facilitative  for  women’s  progress  to  t he  top  of  corporate  organisations. Helen  Brand,  chief  executive  of  ACCA  says:  â€œWhat  we  have  sought  to  understand  through  Â–Š‹• •–—†› ‹• ™Š› –Š‡ Ď?‹Â?ƒÂ?…‡ ˆ—Â?…–‹‘Â? ‹• •—…Š ƒ springboard  for  women.  We  are  seeing  a  time  of  change  when  it  comes  to  women’s  representation  in  the  boardroom  â€“  since  the  Davies  Report  of  Â•Â’”‹Â?‰ ʹͲͳͳǥ ™‡ Šƒ˜‡ •‡‡Â? ƒ ͡Ψ Â‹Â?Â…Â”Â‡ÂƒÂ•Â‡ÇĄ ‡“—ƒŽ to  the  entire  increase  over  the  previous  decade.  Our  report  shows  that  more  than  half  of  the  women  appointed  in  t his  period  have  a  f unctional Â

Š‡ ”‡•‡ƒ”…Š •ƒ›• –Šƒ– Ď?‹Â?ƒÂ?…‡ ‹• –Š‡ ŽƒÂ?‰—ƒ‰‡ of  the  boardroom  and  having  the  ability  to  Â…‘Â?Â?—Â?‹…ƒ–‡ Ď?‹Â?ƒÂ?…‹ƒŽ ‹Â?ˆ‘”Â?ƒ–‹‘Â? ‡•–ƒ„Ž‹•Š‡• and  builds  credibility.  Ironically,  K itty  does  not  t hink  having  it  would  g ive  women  access  to  t he  boardroom  conversation.  Dz – ™‘—Ž† Š‡Ž’ Č?Šƒ˜‹Â?‰ ƒ Ď?‹Â?ƒÂ?…‡ “—ƒŽ‹Ď?‹…ƒ–‹‘Â?Č?ÇĄ although  not  a  guarantee.   I  believe  that  it  is  because  ÂƒÂ– –Š‡ ‡Â?† ‘ˆ –Š‡ Â†ÂƒÂ›ÇĄ ‹– ƒŽŽ …‘Â?‡• †‘™Â? –‘ Ď?‹‰—”‡• ƒÂ?† Â?—Â?„‡”•Ǥ Ž•‘ǥ „‡Ž‹‡˜‡ –Šƒ– ‰‘‘† Ď?‹Â?ƒÂ?…‹ƒŽ ƒ…—Â?‡Â? gives  one  the  ability  to  decipher  key  information  ÂƒÂ?† ‰‡– –‘ –Š‡ Â?‡ƒ– ‘ˆ –Š‡ ‹••—‡ ”ƒ–Š‡” “—‹…Â?Ž›Ǥdz )V[[VT SPUL VM I\ZPULZZLZ ‹––› Šƒ• ™‘”Â?‡† ‹Â? ˜ƒ”‹‘—• Ď?‹Â?ƒÂ?Â…Â‡ÇŚÂ”Â‡ÂŽÂƒÂ–Â‡Â† ”‘Ž‡• across  industries,  including  hospitality,  real  estate,  service,  health  care  and  F&B.  She  holds  an  MBA  from  Oxford  University,  UK  and  BS  in  Economics  f rom  Duke  University,  US.  ÂŠÂ‡ •–”‘Â?‰Ž› ‘’‹Â?‹‘Â?ƒ–‡† Ď?‹Â?ƒÂ?…‡ ’”‘ˆ‡••‹‘Â? feels  t hat  women  should  not  be  g iven  preferential  treatment  when  facilitating  for  them  the  path  to  the  top  of  t he  corporation.  â€œObservably,  t he  i ssue  h as  progressively  g ained  more  traction  and  actions  are  being  taken,  to  different  degrees  of  artificiality,  to  facilitate  gender  diversity.  However,  corporations  should  not  treat  women  any  differently  from  how  they  would  treat  men  â€“  not  any  better,  not  any  worse.  Similar  opportunities,  similar  Â…‘Â?…‡••‹‘Â?•ǥdz •Š‡ “—‹’•Ǥ It  will  be  interesting  to  see  how  the  gender  Â“—‘–ƒ• ‹Â? –Š‡ ™‹ŽŽ ÂŠÂƒÂ˜Â‡ÇĄ „› Â?‘•– measures,  make  improvements  to  the  bottom  line  o f  l ocal  o rganisations.  *  Read  Part  II  of  t his  fascinating  r eport  in  our  March  i ssue. 21

PERSONALITY & PRACTICE

EYE ON ‘GENERATION C’ ACCA UAE Advisory Committee Chairman Ahmad Darwish tells Joyce Njeri how the professional body is repositioning itself to appeal to today’s youth, ‘who are always connected and clicking’

A

S THE most senior member of the committee advising the Association of Chartered Certified Accountants (ACCA) in the UAE, Ahmad Darwish’s passion for the profession is clear for all to see. Ahmad fervently travels the world promoting the activities, benefits and opportunities offered by the global body for professional accountants, to practitioners and students interested i n a c areer i n a ccountancy. “Recently I participated in the ACCA International Assembly held in the UK, as the first and only UAE national to attend the prestigious gathering, where heads of all the global offices met with the governing body of ACCA and were able to contribute to the wider strategy of the association,” Ahmad proudly s ays. ;YHUZMVYTH[PVU PU HJJV\U[HUJ` The assembly meets every year to chart the way forward and provide delegates with a platform to give their input on important issues of s trategic g lobal i mportance t o ACCA. In an interview with Accountant Middle East, Ahmad does not mince words when talking about the current transformation sweeping across accountancy and finance sectors, saying c hange i n t he i ndustry i s overdue. “The face of accounting has changed and its role in businesses has become much more complex,” he s ays, a dding “ More h as t o b e done 22 February 2013

PERSONALITY & PRACTICE

“More has to be done to rebuild investor trust, particularly after the global financial crisis and the aftermath of ugly events following WorldCom, Enron and Arthur Andersen scandals.” to rebuild investor trust, particularly after the global financial crisis and the aftermath of u gly e vents f ollowing WorldCom, E nron a nd Arthur A ndersen s candals.” “For an industry that stubbornly continues to operate the same way even after the turn of the century, it is incumbent upon us, as the major stake holders, to revamp and overhaul the profession, in order to ref lect the needs of today’s c hanging job m arket.” “We need t o s tart r ight f rom t he c lassroom. T his means changing the accountancy education curriculum to bridge the gap between the job skills and what is taught in the classroom. Currently, t he accounting c urricula a re l argely focused on preparing students for careers in public accounting, however, they also need to have a breadth and depth of knowledge of all areas of accountancy, with an understanding of a ll t he l inks i n t he f inance c hain.” -HZJPUH[PVU ^P[O U\TILYZ Ahmad works as Manager, Management Accounting, at DP World, a conglomerate of international marine terminal operations, logistics and related services. The Group is a subsidiary of Dubai World, a global holding company that focuses on the strategic growth areas of transport, logistics, drydocks, maritime, i nvestment a nd f inancial s ervices.

As the Chairman of the UAE’s ACCA Advisory Committee, Ahmad Darwish is tasked with the responsibility of representing members’ views to ACCA’s Global Council.

“I like working the numbers; I have had an interest i n d ata a nd s tatistics s ince m y e arly school days. As a young boy I was always fascinated by numbers that whenever I would solve a mathematical problem that initially seemed too hard a nut to crack, I would have that feeling of immense accomplishment,” he narrates. “The good thing about being an accountant is that one can work across all sectors of the economy, not just f inancial s ervices -­‐ i ncluding 23

PERSONALITY & PRACTICE

the public services, manufacturing, medical, education, media, g overnment a nd o ther s ervice functions of public s ector organisations. “Similarly, with the ACCA qualification recognised by employers around the world, there are many international opportunities within this profession,” he said. “I t ake g reat p ride a s a n E mirati n ational t hat our leader His Highness Sheik h Mohammed bin Rashid Al Mak toum has always inculcated the impor tance of education and acquisition of professional skills within our respective careers. So when I was through with my Undergraduate studies I sought to add m ore v alue t o m y s kills, a nd t hat i s w hen I decided to pursue accounting , through the ACCA, in the UK .” “Having the ACCA designation gives one an added edge over other qualifications. For instance, after the recent global financial meltdown, many accountants took up other roles w ithin t he s ector. C ompetition w as f ierce among graduates and professionals who were joining the ranks, as employers were looking for more than just the degree. They were looking f or t he necessary s kills a nd e xperience, including the general all round business interest a nd k nowledge, c ommercial awareness and also good communication skills, which I believe t he ACCA qualification provides.” “Accountants are increasingly having an impact on the direction of businesses, rather than just analysing data and presenting it to management. This new emphasis on strategic and advisory role means that it is now more important than ever for accountants to have a deep working knowledge of management and the general understanding of the business environment,” he s aid. <UP[LK I` ZOHYLK JVTTP[TLU[ As the Chairman of the UAE’s ACCA Advisory Committee, Ahmad is tasked with the responsibility of representing members’ views to ACCA’s Global Council to enable it to set and implement t he b ody’s d irection a nd s trategy. He h as b een w ith ACCA s ince i t w as e stablished in t he c ountry. “Upon the completion of my studies in the UK, I returned to the UAE and continued to be 24 February 2013

heavily involved in ACCA, by supporting and helping in the development and promotion of its qualification in the country. We opened a fully f ledged ACCA office i n D ubai, f rom w here we a lso s erve a ll t he o ther E mirates,” he s ays. Recently, the Faculty formed a members’ advisory committee and held an election, where Ahmad was elected as chairman, to steer t he b oard t o t he next g rowth phase. “ My r ole a s C hairman h as g iven me t hat a dded impetus to develop the profession here in the UAE as well as in the region. During the recent ACCA international assembly held in the UK, the international assembly delegates had the opportunity to meet with the International Accounting Standards Board (IASB) Chairman -­‐ Hans Hoogervorst, where we discussed the need f or t he I ASB a nd I slamic F inance i ndustry to work t ogether.” “As you are aware Islamic Finance is growing across the globe and therefore as experts in this field we have to act fast to ensure that we develop a guide that harmonises both Islamic and c onventional r eporting s tandards.”

PERSONALITY & PRACTICE

0ZSHTPJ HJJV\U[PUN Z[HUKHYKZ Recently, ACCA in collaboration with KPMG released a study that calls on the IASB to consider issuing guidance on the application of International Financial Reporting Standards (IFRS) when ϐ ϐ institutions and conventional banks. “The IASB should work with the Accounting and A uditing O rganisation f or I slamic F inancial Institutions (AAOIFI) a nd o ther leading I slamic finance standard setters and regulators globally to establish the gaps between IFRS and Islamic accounting standards and to review the needs of users. This should also include a review of terminology used in IFRS, and consider whether such sensitive terms as ‘interest’ – forbidden in all forms in Islamic banking-­‐ can be amended or added to,” the research s tates. According to Ahmad, ACCA is repositioning itself t o b ecome a d igital organisation, t o a lign with the needs of today’s generation, “which we l ike t o r efer t o a s t he ‘Generation C ’, a s [the youth] i s a lways c onnected a nd c licking.”

“For an industry that stubbornly continues to operate the same way even after the turn of the century, it is incumbent upon us, as the major stake holders, to revamp and overhaul the profession, in order to reflect the needs of today’s changing job market.” -L^ ,TPYH[P NYHK\H[LZ Ahmad also lamented about the relatively small number of Emirati graduates entering the accountancy employment market. In this regard, he revealed that ACCA has lined up programmes where officials will visit various colleges and universities, to reach out to Emirati youth. “We hope that letting top officials meet Emirati students can help the learners picture themselves more in accountancy. Local nationals are hungry for opportunities. In the past we have had graduates joining the government ranks in their numbers but we want t hem t o join t he private s ector a s well.” The outspoken ACCA C hairman d idn’t however, sugar-­‐coat their prospects. He admitted that many local nationals get intimidated by the sheer r equirements of t he s ubject. “Understanding accounting is vital for one’s job prospects; however, t his c ritical k nowledge requires dedication a nd h ard work,” he s ays. Acquiring ACCA membership is a rigorous process that requires one to undertake training and the ACCA qualification, which includes passing 14 exams, completing three years relevant practical work experience and also c ompleting a n online e thics module.

CAREER HIGHLIGHT: “The good thing about being an accountant is that one can work across all sectors of the economy, OPU KVTU JO mOBODJBM services,” Ahmad says.

“Despite its heavy requirements, ACCA programmes equip students with all these necessary skills required in today’s competitive j ob m arket,” A hmad a dds. “But this does not give graduates a straight employment ticket. One of the main difficulties students face is having the relevant experience that is needed to successfully enter that profession. Therefore 25

PERSONALITY & PRACTICE

CHANGING FACES: “The face of accounting has changed and its role in businesses has become much more complex,” Ahmad reckons.

gaining experience through volunteer work, networking, part time work or work placement gives one a good advantage that ref lects commitment to a career and demonstrates you have key employability skills,” h e a dvises.

Acknowledging t hat a ll c ertifications a vailable at the moment are foreign, he said there was urgent need t o h ave a n accredited professional certificate that provides Arab accountants with the highest qualifications and one that is recognised g lobally.

“The finance sector is vast and covers many areas i ncluding a ccountancy, b anking, actuary, audit and advisory, insurance, pensions, taxation, among others and there are many possible d irections s tudents c an t ake, w hether they w ant t o work f or one of t he big accountancy firms, or f or a h igh s treet f irm.”

At the moment, there is a certification that is awarded to professional accountants in the region. The Arab Certified Professional Accountant (ACPA) qualification was developed by the Arab Society of Certified Accountants (ASCA), in collaboration with a group of consultants from ACCA, European Commission, the Institute of Chartered Accountants of Scotland (ICAS), and the International Federation of Accountants (IFAC), a mong o thers.

8\HSPMPJH[PVU MVY (YHI WYVMLZZPVUHSZ The ACCA C hairman a lso r evealed t hat plans a re underway t o design a n accounting qualification that s uits t he needs of t he A rab s ociety.

“Currently, the accounting curricula are largely focused on preparing students for careers in public accounting, however, they also need to have a breadth and depth of knowledge of all areas of accountancy.”

26 February 2013

The ACPA curriculum consists of four subjects including business, accounting, auditing and regulations. “Discussions are ongoing to develop a curriculum for local and regional professional accountants. This will guarantee us the same respect accorded t o o ther p eers, w hen we c ome together t o push t he a genda of t he A rab World, during international forums that discuss important i ndustry m atters s uch a s s tandards, governance a nd e thics,” A hmad s aid.

ROBERT HALF SURVEY

WHAT’S YOUR

WORTH? Figures in newly released study by Robert Half show that salaries in the UAE are set to rise this year, with financial services expected to see strongest gains at 5.6%, higher than all the other fields researched. Joyce Njeri tries to add it all up in this thought-provoking interview with James Sayer, the Middle East Director of the global staffing firm…

After two tumultuous years that were character ised by e c o n o m i c and political instability in most countries in the Middle East and North Afr ica (Mena) region, obser vers say t h a t r e l a t i ve c a l m a n d st a b i li t y h a s returned, with some nations experiencing economic growth and a return of investor confidence. However, the revolutions put hir ing in the spotlight, and now governments are accelerating companies push to hire local people to fill positions that initially used to go to executives from overseas. While your new ‘Salar y Guide’ alludes to the fact that companies are increasing remuneration in an effort to attract and recruit top talent, are you confident that local hires meet the skills set required?

A.

While some governments in the ϐ efforts in attempts to hire local t a lent , t her e a r e s t i l l some ϐ Ǥ 28 February 2013

ǡ ϐ ǡ Ǥ ϐ ϐ ϐ Ǥ ϐ Ǧ Ǥ ǯ Ǧ Ǧ ϐ ϐ ϐ ǫ ǡ ǫ ǡ ϐ ʹͲͳ͵ Ǥ Ǥ Ǧ

ROBERT HALF SURVEY

ǯ Ǥ

ǡ ϐ ϐ ǫ ̵ ϐ ǡ ϐ ǡ ϐ Ǧ Ǧ ǡ Ǥ

CAREER GUIDE: i)BWJOH B mOBODJBM CBDLHSPVOE PS BU NJOJNVN B HPPE HSBTQ PG UIF SPMF mOBODF QMBZT XJUIJO BO PSHBOJTBUJPO XJMM BMXBZT IPME BO JOEJWJEVBM JO HPPE TUFBE w

ǡ ϐ ϐ Ǥ Ǥ ǡ ǡ ǡ ǡ Ǧ ϐ Ǥ ϐ Ǧ ϐ Ǥ ϐ ǡ ϐ ȋ Ȍ ϐ ϐ Ǥ

52%

PERCENTAGE OF CURRENT UK FTSE 100 CEOS WHO HAVE A FINANCIAL BACKGROUND

ͳͲͲ ǡ ͷʹΨ ϐ ǡ ͸͹Ψ Ǥ ̵ ǡ ǡ ϐ Ǧϐ Ǥ

ǡ Ǥ Ǥ ǫ as coming in too high may put off the employer ϐ ̵ ǡ Ǥ ǡ Ǥ ensure you receive competitive compensation as

“During a period of economic uncertainty, individuals with a strong financial background will see greater leadership opportunities than their non-­financial counterparts.”

29

ROBERT HALF SURVEY

Should you find yourself in a role where you feel you are underpaid, it is important that you first prove your value to the company and exceed expectations before revisiting salary discussions. Ǥ ǡ Ǥ ϐ ǡ ̵ Ǥ ǡ you're in the role, you're setting yourself up Ǥ

ǡ ǡ ǯ Ǥ ǡ ǯ Ǥ ǫ ǡ ǫ ϐ ǡ ϐ Ǥ Ǥ ǡ ϐ Ǥ ϐ Ǧ ϐ Ǥ Ǧϐ ϐ ϐ ǡ ϐ Ǥ ǡ Ǥ

30 February 2013

NEGOTIATIONS TIPS: i%VSJOH TBMBSZ UBMLT BO FNQMPZFS XJMM UZQJDBMMZ HP GPS UIF MPXFS mHVSF TP EPOhU RVPUF B OVNCFS UIBU ZPV XPVME OPU CF USVMZ IBQQZ JO BDDFQUJOH w +BNFT 4BZFS BEWJDFT

ǡ ǡ Ǥ ǡ ǫ Ǥ many companies continue this conservative approach, ensuring return on investment prior Ǥ

ǡ Ǥ ǯ ǫ ǡ Ǥ Ǥ

ROBERT HALF SURVEY

HIRE

AND HIGHER UAE-based financial leaders set to recruit permanent staff in Q1/H1 of 2013

M

ORE THAN eight in 10 (83%) UAE finance executives will be recruiting in both the first quarter and first half of 2013, according to specialist financial recruiter, Robert Half UAE. ͹ͷ Ȁ ǡ ϐ ϐ ͵ͳΨ ϐ ͷʹΨ ϐ Ǥ ͳʹΨ ϐ ͷΨ Ǥ ϐ Ǧ ϐ ϐ ͳͲ ȋ͵͹ΨȌ ϐ ͶͺΨ ϐ Ǥ ǡ ʹͳΨ ͷͻΨ Ǥ ǡ ϐ Ǥ ͳͲ ȋͺ͹ΨȌ ϐ ϐ ϐ ϐ Ȁ ϐ Ǥ ǡ ͳͲ ȋͺͻΨȌ ǡ Ȁ Ǥ

32 February 2013

75 CFOS/FDS IN DUBAI AND ABU DHABI WERE ASKED, “WHAT ARE YOUR COMPANY'S HIRING PLANS FOR PERMANENT ACCOUNTING AND FINANCE PROFESSIONALS IN THE FIRST QUARTER/ FIRST HALF OF 2013?” THEIR RESPONSES:

Q1

Q1

EXPANDING adding new positions

31%

35%

MAINTAINING only filling vacated positions

52%

48%

FREEZING not filling vacated positions and not creating new ones

12%

12%

5%

5%

100%

100%

Jan - Mar

REDUCING eliminating positions

Jan - Mar

ROBERT HALF SURVEY

0TWYV]PUN LMÄJPLUJPLZ ǡ ǡ ǣ Dz ǡ Ǥ ǡ ǡ Ǧ ǡ ǡ Ǥdz Dz ǡ ϐ ϐ ǡdz Ǥ :[YVUN JVUÄKLUJL SL]LSZ ϐ ͳͲ ȋͺͳΨȌ ϐ ǯ ͻʹΨ ϐ ǯ Ǥ

ͳʹ ʹ ʹͲͳʹ ǡ ϐ Ǥ ǣ Dz ǡ ϐ Ǥ ϐ Ǥdz ()6<; -05(5*0(3 /0905. 05+,? Ǧ Robert Half Financial Hiring Index ϐ Ǥ ͹ͷ ϐ Ǥ ʹǡͳ͹ͻ ϐ ǡ ǡ ǡ ǡ ǡ ǡ ǡ ǡ

ǡ ǡ ǡ ǡ ǡ Ǥ

33

ROBERT HALF SURVEY

SALARIES IN UAE

ON THE RISE

Robert Half salary guide shows financial services expected to see the strongest gains; technology and HR to follow

S

TARTING SALARIES in the UAE for roles in financial services in this year will have the largest increases among all fields researched, at an average of 5.6%, according to the newly released Salary Guide from Robert Half. Technology and human resources professionals are expected to see base compensation r ise 5.3%, respectively, whereas t he average increase across professional occupations is 5.0%. ACCORDING TO THE 2013 SALARY GUIDE, AVERAGE 2013 SALARY INCREASES, BY SPECIALISM INCLUDE:

34 February 2013

Financial services

5.6%

Technology

5.3%

Human resources

5.3%

Finance & accounting

4.8%

Legal

4.1%

Average

5.0%

James Sayer, Director, Robert Half Middle East said, “While it may not be the double digit salary rises we witnessed a few years back, companies are increasing remuneration in an effort to attract, recruit and retain top talent. The wave of regulatory change that has swept across the global economy has resulted in a shortage of skilled professionals in compliance, risk and regulatory as well as IT security. Many companies are turning to expatriate recruitment to help fill the gap, whereas others are raising salaries and benefits to attract highly skilled local candidates t o t heir o rganisations. ”Following is an overview of hiring trends identified i n t he 2013 S alary Guide: -PUHUJL HUK HJJV\U[PUN Recruitment for finance and accounting professionals c ontinues t o g ain momentum, a nd it i s e xpected t o r emain buoyant t hroughout t he year. Finance leaders now look for business-­‐ savvy individuals with strong commercial acumen, not only to perform traditional accounting functions but also to drive revenue growth while partnering with other

ROBERT HALF SURVEY

departments. Companies that want to tighten controls on s pending a nd f ind a lternative w ays to generate i ncome s treams c ovet t he f inancial insight t hese i ndividuals provide. -PUHUJPHS :LY]PJLZ The financial services sector continues to evolve and adjust to the recent global banking inquiries with new regulations and a focus on product profitability dominating most executives’ a gendas. Much of t he h iring r evolves around business-­‐critical roles, with a mix of mid-­‐ a nd s enior-­‐level t alent s eeing t he g reatest opportunity. Companies under pressure to do more with less expect employees to be both specialists and generalists, demonstrating high-­‐level experience and knowledge across multiple a reas. /\THU 9LZV\YJLZ As hiring increases across departments and throughout organisations, recruiting HR professionals is slowly following suit, with rising workloads and business growth or expansion prompting the need to increase headcount. C ompanies a re looking f or bi-­‐lingual HR generalists, although as organisations continue to mirror western HR departments, there is more desire for specialists to create a performance-­‐led c ulture. ;LJOUVSVN` Technology professionals remain in demand within the UAE as organisations win projects

“While it may not be the double digit salary rises we witnessed a few years back, companies are increasing remuneration in an effort to attract, recruit and retain top talent.” and need the requisite talent to manage rising workloads and business demands. E-­‐commerce has emerged as a strong growth area across the UAE, with estimates as high as 300% annual growth driving the need for Java and .NET developers and security professionals. More companies are moving towards cloud technologies as they enhance their IT security and compliance processes, increasing demand for security managers, architects a nd engineers.

5.0%

EXPECTED RISE OF AVERAGE BASE SALARIES ACROSS THE UAE

3LNHS Renewed business activity and ongoing regulatory requirements create demand for specialised in-­‐house counsel. Corporate legal departments seek associates not only to handle legal a nd r egulatory m atters but a lso t o support the organisation’s business objectives by identifying new opportunities. Many multinational organisations look for regional counsel to be based in the UAE whereas these roles used to exist within the European or American operations.

ROLES ANTICIPATING THE HIGHEST YEAR-ON-YEAR INCREASES INCLUDE:

Role

Base annual salary range (US$)

Compliance director

$76,500 - $110,500

7.5%

IT security engineer

$105,500 - $160,500

7.2%

Credit risk analyst (financial services)

$54,500 - $79,750

7.0%

IT security analyst

$78,500 - $108,250

6.9%

Solutions architect (16+ years experience)

$154,750 - $212,000

6.9%

Head of compliance (financial services)

$143,750 - $314,500

6.6%

Tax director

$102,500 - $166,500

6.5%

% Change over 2012

35

ISLAMIC FINANCE

DFM SEEKS COUNSEL

ON SUKUK

Exchange invites finance professionals to give feedback on its draft report on standard for issuing, acquiring and trading Islamic bonds

D

UBAI FINANCIAL Market (DFM) has launched the draft of its “Standard for Issuing, Acquiring, and Trading Sukuk” on its website, www.dfm.ae. The exchange invited various Islamic Finance professionals to counsel and provide feedback on t he f irst of its k ind c omprehensive Standard. The consultation period will be concluded on February 28 2013, ahead of a hearing session to be held early March 2013 and eventually issuing t he s tandard l ater i n t he s ame month. The ‘Standard ‘thoroughly explains various types of Sukuk such as; Sukuk of ownership of tangible assets, Sukuk of usufructs, Sukuk of lease of services, Mudaraba, Musharaka and Salam Sukuk, in addition to the general Shari’ah principles that govern issuance, owning and trading Sukuk, and identifying the forbidden financial instruments including; bonds, stocks of companies whose primary activity i s prohibited a nd f inancial derivatives. )YPKNPUN [OL NHWZ Abdul J alil Yousef D arwish, C hairman o f D ubai Financial Market (PJSC) said: “The future of Sukuk in the coming years looks prosperous as the Islamic Financial Services continue to gain m omentum.”

$292BN

EXPECTED RISE IN TOTAL VALUE OF SUKUK IN 2016, FROM $70BN IN 2011 36 February 2013

“This trend is expected to further amplify due to the improvement in economic circumstances and the introduction of the appropriate standard which bridges all gaps. Amid mounting demand f or S hari’ah c ompliant products, the Sukuk provides the proper alternative to traditional bonds. Therefore, the DFM has taken the initiative to create this

“The future of Sukuk in the coming years looks prosperous as the Islamic Financial Services continue to gain momentum.” Abdul Jalil Yousef Darwish, Chairman of Dubai Financial Market

ISLAMIC FINANCE

Amid mounting demand for Shari’ah compliant products, the Sukuk provides the proper alternative to traditional bonds. standard, drafted by our Shari’a and Fatwa Supervisory Board after thoroughly revising available standards and Fatwas issued by reliable b odies,” added A bdul Jalil. -PYZ[ :OHYP»HO JVTWSPHU[ L_JOHUNL Despite t he f act t hat Sukuk h ave m ade quantum leaps in terms of variety, volume and revenue, there are certain challenges facing them, such as the absence of an integrated secondary market due to the relatively limited number of Sukuk i ssuances c ompared t o t he c onventional instruments, in addition to the lack of a new Shari’ah s tandard f or Sukuk. “We aspire to tackle this challenge with the launch of DFM Sukuk Standard which will support the issuance of Sukuk, facilitate owning and trading of Sukuk and promote innovation in Shari’a compliant instruments,” he s aid. Essa K azim, Managing D irector a nd C EO, D ubai Financial Market said: “This development DFM GENERAL INDEX 2012

1800.0 1700.0 1600.0 1500.0 1400.0 1300.0 1200.0 1100.0

02 /0 1/ 20 12 02 /0 2/ 20 12 02 /0 3/ 20 12 02 /0 4/ 20 12 02 /0 5/ 20 12 02 /0 6/ 20 12 02 /0 7/ 20 12 02 /0 8/ 20 12 02 /0 9/ 20 12 02 /1 0/ 20 12 02 /1 1/ 20 12 02 /1 2/ 20 12

1000.0

37

ISLAMIC FINANCE

DISTRIBUTION OF TRADED VALUE BY SECTOR 2012

4%

0% 0%

6%

Real Estate & Construction 48%

6%

Banking Financial & Investment Services Services

8%

Telecommunication Transportation Insurance

10%

Consumer Staples 18%

Industrial

reflects  DFM’s  leading  and  continuous  role  in  developing  t he  f inancial  m arkets  i n  t he  UAE  a nd  across  t he  r egion  t hrough  v arious  i nitiatives.â€?  â€œAs  t he  f irst  S hari’ah  c ompliant  e xchange  i n  t he  world,  we  are  looking  forward  to  efficiently  collaborate  with  the  experts  and  Shari’ah  scholars  during  the  consultation  period  to  create  a  comprehensive  standard  which  will  eventually  play  a  crucial  role  in  the  expansion  and  prosperity  of  t he  I slamic  F inance  s ector.  We  are  c onfident  t hat  t his  new  s tandard  a long  w ith  the  â€˜DFM  Standard  of  Acquiring  and  Trading  in  Shares’  issued  by  DFM  in  2007  after  it  went  public,  will  further  encourage  the  growth  of  this  s ector,â€?  he  added.  The  total  value  of  Sukuk  is  expected  to  soar  to  $292  billion  i n  2016  f rom  $70  billion  i n  2011.  +-4 7LYMVYTHUJL The  Dubai  Financial  Market  General  Index  increased  by  19.9%  to  1622.5  points  at  the  end  of  2012  compared  to  1353.4  points  at  the  end  of  2011.  At  the  sectoral  level,  indexes  of  seven  out  of  the  nine  sectors  represented  on  DFM  ended  the  year  in  the  green,  with  the  Services  sector  increasing  the  most  by  144%,  followed  by  the  Industrial  and  Real  Estate  &  Construction  sectors  by  4 4.6%,  a nd  42.5%  r espectively.  38 February 2013

i"T UIF mSTU 4IBSJ BI compliant exchange in the world, DFM is looking GPSXBSE UP FGmDJFOUMZ collaborate with the experts BOE 4IBSJ BI TDIPMBST w - Essa Kazim, Managing Director and CEO, Dubai Financial Market

The  Banking  sector  down  by  4.5%,  and  the  Consumer  Staples  sector  index  did  not  change  during  t he  year.  The  market  capitalisation  increased  at  the  end  of  2012  by  1.0%  amounting  to  AED181.9  billion  compared  to  AED180.1  billion  at  the  end  of  previous  year.  The  value  of  shares Â

ISLAMIC FINANCE

TRADING ACTIVITIES IN 2012 BY NATIONALITY

Value of Stocks Bought - AED

Value of Stocks Sold - AED

Net Investment AED

Arab

11,999,431,361

12,053,426,121

(53,994,759)

GCC

2,981,771,798

3,060,715,754

(78,943,957)

Others

7,470,235,461

6,876,139,801

594,095,660

Total Non UAE

22,451,438,621

21,990,281,676

461,156,944

UAE

26,136,636,482

26,597,793,427

(461,156,944)

Grand Total

48,588,075,103

48,588,075,103

0

Value of Stocks Bought - AED

Value of Stocks Sold - AED

Net Investment AED

Institutions

11,290,765,546

10,183,220,706

1,107,544,840

Individuals

37,297,309,557

38,404,854,397

(1,107,544,840)

Grand Total

48,588,075,103

48,588,075,103

0

TRADING ACTIVITIES IN 2012 BY TYPE OF INVESTOR

traded during 2012 reached AED48.6 billion, compared to AED32.1 billion recorded during 2011, a n i ncrease by 51.4%. The number of shares traded went up by 60.8% to reach 40.5 billion shares during the year, compared to 25.2 billion shares traded during the previous year. The number of transactions executed during 2012 up by 39.7% to reach 621.4 thousands compared to 444.8 thousand deals carried out during the previous y ear. As for the sectors’ contribution to trading volumes, the Real Estate and Construction sector r anked f irst i n t erms of t he t raded v alue, to reach AED23.2 billion, or 47.7% of the total traded v alue i n t he m arket. The Banking sector ranked second at AED8.9 billion or 18.2%, followed by the Financial & Investment S ervices s ector w ith A ED5.1 billion or 10.5%, the Services sector with AED4.1 billion or 8 .4%, t he Telecommunication a nd t he

Transportation sectors with AED2.83 billion or 5.8%, for each, the Insurance sector with AED1.7 billion or 3.5%, whilst other sectors shared the rest of trading volumes, as shown in b elow c hart. The value of stocks bought by foreign investors during 2012 r eached A ED22.5 billion comprising 46.2% of the total traded value. The value of stocks sold by foreign investors during the same period reached AED22 billion comprising 45.3% of the total value traded. Accordingly, DFM net foreign investment in-­‐ flow r eached A ED461.2 m illion. On the other hand, the value of stocks bought by institutional investors during this year reached AED11.3 billion comprising 23.2% of the total traded value. The value of stocks sold by institutional investors during the same period reached AED10.2 billion which constitutes 21% of the total value traded. Net institutional investment in-­‐flow into DFM amounted t o A ED1.1 billion. 39

POINT BLANK

FIGHTING OCCUPATIONAL

FRAUDS Rakesh Pardasani, a partner at RSM Dahman audit firm, assesses the ability of external auditors to detect corruption in organisations

O RAKESH PARDASANI PARTNER, RSM DAHMAN AUDIT FIRM

F ALL the occupational frauds busted in organisations each year, external audit detects only 3% of them worldwide, according to a global fraud study report.

ǫ ȋ Ȍ ǡ ǯ Ǥ

The research titled; ‘Report to the Nations on Occupational Fraud and Abuseǯ ϐ ϐ ǡ ͺͲΨ Ǥ ǡ ϐ Ǥ

ǡ Ȁ Ǧ Ǥ ǫ Ǥ Ǥ

ǫ ǡ ǫ ǯ Ǥ )\Z[PUN [OL MYH\KZ[LY»Z WHY[`

ͳͶΨ Ǥ ǡ ǡ ͸ͺΨ Ǥ ǡ ǯ ǫ ǡ ǯ Ǥ ǯ ͳͶΨ Ǥ

ǡ ǯ ǫ ǫ Ǥ 40 February 2013

Ǯ ǯ Ͷ͵Ψ Ǥ ǡ ǡ Ǯ ǯ ǡ ͳͶǤ͸Ψ Ǥ Ǯ ǯ ǡ Ǥ Ǥ ǡ Ǥ ǡ ǡ Ǯ ǯ Ǯ ǯ Ǥ ǫ ͷͳΨ

POINT BLANK

INITIAL DETECTION OF OCCUPATIONAL FRAUDS

40.2%

Management Review

DETECTION METHOD

Tip

43.3%

14.6% 15.4%

Internal Audit

14.4% 13.9%

By Accident

7.0%

2012

8.3%

Account Reconcilliation

4.8% 6.1%

Document Examination

4.1% 5.2%

External Audit

2010

3.3% 4.6%

Notified by Police

1.8%

Surveillance/Monitoring

3.0%

1.9% 2.6%

Confession

1.5% 1.0%

IT Controls

1.1% 0.8%

Other

1.1%

0%

10%

20%

30%

40%

50%

PERCENT OF CASES

Ǥ ǡ Ǥ ͳǡ͵ͺͺ Ȃ ʹͲͳͲ ʹͲͳͳǤ Ǥ ǡ ǡ ǡ ǡ Ǥ -VYTHS YLWVY[PUN TLJOHUPZT Ǯ ǯ ǫ ǡ Ǥ ǯ Ǥ Ǥ ǡ ǡ ǡ Ǥ Ǥ Ȁ Ǥ ǡ Ǥ Ǥ

Ǥ ǯ ǡ Ǥ ǡ ϐ ǡ ǡ ϐ Ǥ ǡ ǡ ǡ Ǥ ǡ ǡ ǯ ǡ Ǥ

An organisation needs to have an integrated strategy for fraud prevention and control, in order to draw all the elements of the strategy together, to form a holistic circle of measures to counter fraud.

41

POINT BLANK

SETTING THE TONE

ANTI FRAUD POLICIES

CODE OF ETHICS

PROACTIVE

FRAUD RISK ASSESSMENT

CONTROLS MONITORING

REACTIVE

FRAUD RESPONSE PLAN

3P[[SL RUV^SLKNL VU THUHNPUN SVZZLZ ǡ ǡ ǫ ǫ

ǡ ǡ Ǥ Ǥ

ǡ Ǥ ǡ Ǥ ǡ ǡ Ǥ

Ǥ

Ǥ Ǯ ǯ Ǥ ǯ Ǣ Ǥ

ǡ Ǥ ϐ Ǥ Ǥ Ǥ Ǥ ǡ ǡ Ǥ Ǧ ǡ Ǥ (U PU[LNYH[LK Z[YH[LN` ȋ Ȍǡ Ǥ Ǥ 42 February 2013

COMMUNICATION & TRAINING

POINT BLANK

*PYJ\T]LU[PUN JVU[YVSZ ǡ Ȁ Ǥ ǡ Ǥ ǡ ǯ Ǥ Ǥ

Ǥ Ǥ ͵͵Ψ ǡ Ǥ Ǥ ǡ ǡ Ǥ

While some regional differences exist, for the most part, occupational fraud seems to operate similarly whether it occurs in Europe, Asia, South America or the United States. Ǥ Ǥ Ǣ ǡ ǡ Ǥ 5V Z`Z[LT PZ MVVS WYVVM Ǥ Ǥ ǡ Ǥ Ǥ ǡ Ǥ ǡ Ǥ ǡ ǡ Ǥ Ǥ ǡ ǡ Ǥ Ǣ ǡ ǡ Ǥ Ǧ ǡ Ǥ Ǧ ǡ ǡ ǡ Ǥ 43

INTEGRATED REPORTING

HOW MANY

CAPITALS DO WE NEED? Industry expert Kurt Ramin examines the values identified in the prototype of business reporting framework issued by the International Integrated Reporting Council

T

HE FIRST step towards the development of an integrated business repor ting framework was the publication of the ‘Discussion Paper’ in 2011 resulting in a release of a prototype framework in November 2012.

KURT RAMIN FORMER PARTNER AT PWC, NEW YORK AND AND DIRECTOR, IFRS FOUNDATION, LONDON

The further timetable calls for a draf t framework to be issued by April 2013, followed b y a f inal ‘ version 1 .0’ i n D ecember 2013. The International Integrated Reporting Council (IIRC) is also planning to publish subsidiary papers on a range of topics during early 2013. These topics are likely to include connectivit y, the business model, the capitals, the concepts of value and materialit y. +PZJ\ZZPVU 7HWLY HUK -YHTL^VYR The Discussion Paper seeks to build on existing developments in reporting such as the international convergence

Integrated Reports are here to stay. However, to be useful, the business report has to be presented in a simple and understandable format.

44 February 2013

of accounting standards, sustainabilit y guidance published by organisations such as the Global Reporting Initiative (GRI), and the IASB's IFRS Practice Statement “Management Commentary” (with lots of content from PwC’s Value Reporting). The core of the discussion paper, a 29 page document, focuses on key definitions, outline of Integrated Reporting (IR) building blocks and outlining the future direction of the project. Designed as an initial exposure of the project, 214 responses and comments from a wide s takeholder g roup were r eceived. The 51 page prototype framework was published November 26, 2012. It contains the following g uidance: The fundamental concepts underpinning IR revolve around the various capitals that the organisation uses and affects, the organisation’s business model, and the creation of value over time. These concepts, which are discussed in Chapter 2, and the reporting requirements and guidance in Chapters 3–5 are mutually reinforcing. An organisation’s business model is the vehicle through which it creates value. That value is embodied in the capitals that it uses and affects. (see IIRC [November 26, 2012], p. 2). www.theiirc.org

INTEGRATED REPORTING

;OL :P_ *HWP[HSZ In the glossary of prototype framework, ‘Capitals’ are defined as “Stores of value on which all organisations depend for their success as inputs, in one form or another, to their business model, through which they are increased, decreased or transformed. The capitals identified in this framework are: financial, manufactured, human, intellectual, natural, a nd s ocial a nd r elationship.” The capitals are sometimes also referred to as “resources a nd r elationships”. ;OYLL :PTWSL *HWP[HSZ The prototype framework states that the categorisation and description of the aforementioned six capitals continues to be considered. W hile it i s l ikely t he c ategorisation will remain unchanged, it is also likely that the descriptions will be refined (see IIRC [November 26, 2012], p . 11). However, I suggest, t hat Business reporting would ϐ combined into t he following t hree categories, for easy reference called t he t hree P ’s. i. People Activities Capital (Human Capital and Social and Relationship Capital) ii. Physical Infrastructure Capital ( Manufactured Capital and Natural Capital) iii. Product (service) Supply Chain Capital (a new category, usually the carrier and driver of Intellectual and F inancial Capital) Intellectual Capital (IC, Value) is a component and attribute in all three categories (3 P’s) and should act as a bridge between reporting financial and Non-­‐Financial information. The IIRC prototype paper states, that, very similar to Intellectual Capital, not all capitals an organisation uses or that it affects are owned by it. T hey m ay b e owned by others, or m ay not be owned at all in a legal sense (for example, access to unpolluted air). On a wider scale, the boundaries of Intellectual Capital are beyond control of the organisation. (see IIRC [November 26, 2012], p . 13).

this regard, presentation a nd a better integration of t he Cash F low Statement w ith t he other parts ϐ work by t he I ASB a nd FASB a nd documented in a discussion paper in 2010. The simplified capital categorisation would link the three capitals identified closer to the input/output model of the business model for integrated reporting (see IIRC [November 26, 2012], p 13). Tracking, valuation and describing attributes (currently mostly in disclosures) should be aligned to each of the 3 P’s and a great deal of duplication and mapping in data collection for reporting could be avoided. (for example GRI information on people: “combine all people information such as salaries, bonus payments, stock options and awards, direct travel expense, employee commuting, memberships, benefits, pension expense, training and education expense, diversity and equal opportunity information, equal remuneration men a nd women, health a nd s afety i nformation, collective b argaining, c hild l abour i nformation, indigenous r ights i nformation, e tc.”. A segmentation on people reporting, for instance men/women employees, part-­‐time/full-­‐time, highly paid/lower paid, in a standard taxonomy would be helpful to make t he data comparable.) Obviously, currently used performance measurements, ratios, matrixes and KPI’s can and should b e a ligned t o t he t hree c ategories of capital (three P ’s). FIGURE 1: BUSINESS MODEL FOR INTEGRATED REPORTING

Financial Capital c an be seen a s a n offsetting a nd reconciling Cash Statement to owners, funders and other s takeholders, including t ax authorities and other contract related legal commitments. In 45

INTEGRATED REPORTING

6YNHUPZPUN +H[H Since  the  introduction  of  the  term  "data  warehousing"  i n  1990,  c ompanies  h ave  e xplored  ways  they  can  capture,  store  and  manipulate  data  for  analysis  and  decision  support.  At  the  same  time,  many  companies  have  been  instituting  enterprise  resource  planning  (ERP)  software  to  coordinate  the  common  functions  of  a n  enterprise.  The  web  has  changed  the  picture  again  in  that  very  large  amounts  of  data  are  being  produced  and  software  systems  can  be  downloaded  and  used  from  the  â€œcloudâ€?.  Taxonomies  using  eXtensible  Business  Reporting  Language  (XBRL)  are  being  built  to  organise  data,  transport  it  and  to  reduce  mapping.  This  will  force  new  approaches  in  data  v alidation  a nd  a ssurance. ?)93 L?[LUZPISL )\ZPULZZ 9LWVY[PUN 3HUN\HNL In  t he  Integrated  Reporting  Prototype  Framework,  XBRL  is  mentioned  under  â€œConnectivity  of  Informationâ€?  and  â€œUse  of  Technologyâ€?  (see  IIRC  [November  26,  2012],  pp  22  and  45.  XBRL  (eXtensible  Business  Reporting  Language)  is  a  dialect  of  eXtensible  Markup  Language  (XML),  the  universally  preferred  language  for  transmitting  information  via  the  Internet.  XBRL  improves  the  way  information  is  created,  processed,  distributed  and  analyzed  by  providing  standardised  definitions,  l abels,  c alculations,  r eferences  a nd  contexts  a pplicable  t o  i ndividual  numbers  a nd  narrative  text.  Two  beneficial  characteristics  of  XBRL  that  improve  connectivity  are:   Consistent  s emantic  d efinitions  o f,  a nd  e xplicit  relationships  between  components  of  an  integrated  r eport. Currently,  the  use  of  XBRL  is  largely  restricted  to  transmit  financial  information.  However,  as  a  technology  -­â€?  and  as  its  name  suggests  -­â€?  XBRL  is  highly  extensible  and  adaptable.  It  can  be  applied  for  general  business  reporting  and  there  are  a  number  of  global  initiatives Â

An organisation’s business model is the vehicle through which it creates value. That value is embodied in the capitals that it uses and affects.

46 February 2013

looking  to  leverage  XBRL  for  non-­â€?financial  reporting,  for  instance,  environmental,  social  and  governance  reporting.  Besides  financial  reporting,  XBRL  taxonomies  (example,  IFRS  taxonomy),  taxonomies  are  now  available  for  GRI  a nd  c limate  c hange  d ata.  XBRL  has  great  powers  in  the  transportation  and  organisation  of  information,  but  it  has  limited  utilities  in  tracking  data  and  information  of  moving  objects. ;YHJRPUN 4HWWPUN VM 0UMVYTH[PVU VU 7ÂşZ How  can  we  track  and  map  objects  and  data  on  the  3  P ’s  t o  enhance  r eporting  on  t heir  e xistence  and  v alidation?  People:  Technology  now  makes  it  possible  to  track  people  and  locate  them  anywhere  in  the  world.  Numerous  applications  and  system  enhancements  are  reported  every  day.  LinkedIn,  the  business  people  network,  claims  to  be  close  to  a  membership  of  200  million  people  being  connected.   There  are  now  global  time  tracking,  payroll  and  expense  report  systems  in  place,  allowing  data  to  be  more  comparable  a nd  c onsistent. Physical  Infrastructure:  ESRI,  Google  maps,  picture  recognition  and  RFID,  etc.  enable  a  clear  identification  and  tracking  of  physical  infrastructure.  I ncreased  u se  of  t echnology  a nd  location  b ased  i nformation  by  t he  public  s ector  and  governments  would  enhance  transparency  of  t he  volume  a nd  u se  of  Natural  C apital.  Products:  Object  tracking  of  products  is  probably  the  most  advanced  of  the  three  P’s.  Several  industry  sectors  and  supply  chains  have  already  integrated  their  product  numbers  and  Â‹Â†Â‡Â?–‹Ď?‹…ƒ–‹‘Â? ˆ‡ƒ–—”‡•Ǥ ‘” ‹Â?•–ƒÂ?…‡ǥ Â?ƒœ‘Â? ƒÂ?† eBay  have  huge  databases  of  product  information. The  global  car  industry  would  be  one  of  the  best  examples  to  test  the  system  for  the  segmentation  into  the  three  capitals.  The  industry  is  an  employer  of  large  numbers  of  people;  car  production  needs  physical  infrastructure  and  natural  capital  and  has  a  good  tracking  mechanism  throughout  the  product  s upply  c hain.  The  sector  has  an  important  market  share,  competition  a nd  i nfluence  on  f inancial  f lows  a nd  capital  (leasing,  consumer  finance,  currency  hedges,  etc).  Through  the  use  of  telematics Â

INTEGRATED REPORTING

FIGURE 2: ASSURANCE: INTERNAL CONTROL – INTEGRATED FRAMEWORK (COSO)

FINANCIAL / NON FINANCIAL External Financial Reporting

External NonFinancial Reporting

Annual Financial Statements

Internal Control Report

INTERNAL / EXTERNAL

Interim Financial Statements

Sustainability Report Supply Chain / Custody of Assets

Earnings releases

Internal Financial Reporting

Internal NonFinancial Reporting

Divisional Financial Statements

Staff / Asset utilization

Cash flow / budget

Customer satisfaction surveys

Bank covenant calculations

Key risk indicator dashboards

CHARACTERISTICS Used to meet external stakeholder and regulatory requirements Prepare in accordance with external standards May be rewquired by regulators, contracts, agreements

Used in managing the business and decision making Established by management and board

Board reporting

(telecommunications a nd i nformatics) t racking with GPS functionality is at the core of future systems for the car industry. Unfortunately, as of November 27, 2012 the IR Pilot Programme Business Network of 8 0 c ompanies does not yet include a t ypical c ar c ompany. (U PU[LNYH[LK HWWYVHJO& Approaches and expenses for the assurance of financial and non-­‐financial reports are even more divergent than the reporting of it. There is a huge variation on audit fees by type of industry and internationally, still reflecting international auditing d ifferences. For the audit of the financial statements of Deutsche Bank, which employed 100,000 people globally in 2011, external expenses for audit and related fees for 2011 amounted to 76 million euros. The audit and related fees for Beiersdorf (“Nivea”), which employed 19,000 people globally and is valued at 50 % of Deutsche Bank (December 2012), external audit related expenses amounted to only 1.5 million euros f or 2011. Beiersdorf is able to track their products on a ǡ ϐ supply chain (Deutsche Bank) is not as t ransparent, in particular on an international scale. Ironically, due to a larger amount of information presented, assurance expenses for reports on sustainability

Ǧϐ ϐ most companies performing self-­‐assessment or other k inds of assurance. Good internal control is fundamental to any successful audit. In 1992 the Commission of Sponsoring Organisations of the Treadway Commission (COSO) released its first paper on internal control, enterprise risk management and fraud deterrence. The original framework has g ained broad acceptance a nd i s now w idely used a round t he g lobe. In December 2011 COSO presented an updated version “Internal Control – Integrated Framework” w ith e xposure during 2012. COSO anticipates releasing the final update to its internal c ontrol f ramework i n t he f irst quarter of 2013. A graphical presentation of the COSO assurance model i s presented i n F igure 2 . On September 11, 2012 the International Federation of Accountants (IFAC) released a new publication “Evaluating and Improving Internal C ontrol i n O rganisations”. At t he s ame t ime t here i s movement t o i mprove the Auditor’s Report. (IFAC’s Exposure Draft “Improving the Auditors Report”, June 2012). Views vary over the appropriate content and structure f or r eports, a nd p articularly over t he 47

INTEGRATED REPORTING

issue of “auditor commentary.” However, there seems t o b e a greement t hat a n i ntegrated audit opinion (single opinion) has to provide more detail than the current “boilerplate” language provided. The auditor’s report should reflect the auditors understanding of the company, its strategy a nd overall p erformance. An approach to greater auditor specificity is embedded in AccountAbility’s AA1000 AS (Assurance Standard) for sustainability reports. It r equires t he auditor t o c omment a nd report on 15 c heck p oints. Clearly, creating a data driven reporting structure would simplify and strengthen the assurance for a t ruly i ntegrated business r eport. .V]LYUHUJL 9PZR HUK *VTWSPHUJL Governance is probably one of the most important ingredients of steering a particular business model to success over the longer term. The tone at the top and vision, either by one individual or a team of expert board members or employees/contractors, has far-­‐ reaching effects on the attitude towards risks and dealing with opportunities and exploiting them. Governance issues, therefore, form a large p art of t he I IRC P rototype F ramework. The level of political risk influences decisions where organisations start to place, to continue and expand certain objects. Taxation and compliance with local control frameworks, fraud a nd c orruption levels a nd other l aws play an important other role, besides workforce availability a nd e ducation. L egacy t ax s ystems, especially on the determination of income, often lead to a de-­‐concentration from the original business model. To achieve better Validation, we need to separate objects and value. Recently, the International Valuation Standards Council (IVSC) has made great s trides to establish s tandards to be applied on a global basis, but the committee’s efforts

There seems to be agreement that an integrated audit opinion (single opinion) has to provide more detail than the current “boilerplate” language provided.

48 February 2013

deserve more attention to put the standards further ahead in the forefront of valuation and ϐ than what is c urrently outlined in t he prototype framework. (see IIRC [November 26, 2012] pp. 17-­‐19). Sir David Tweedie, former Chairman of the I ASB, is now heading up t he I VSC. T his should provide t he power to make t he progress needed. Legal differences hinder the implementation of best governance and compliance practices (for example as promulgated by the OECD). Only a few international business entities are able to balance political risk on a global scale. These organisations could serve as a model for a common governance format of an Integrated Business R eport. 3VVRPUN HOLHK Integrated Reports are here to stay. However, to be useful, the business report has to be presented in a simple and understandable format. A capital orientation to describe past and future performance could be a helpful way moving forward. People, Physical Infrastructure and Products (three P’s) relate well t o t he pillars of I ntellectual C apital: Human Assets, Structural Capital and Relational Capital. Along those lines we can track objects, value t hem c onsistently a nd place m anagement commentaries and segmented information on them, w here necessary a nd m aterial. In Business Reporting, we need to use more technology to track objects and build taxonomies to make the reports comparable. I always said convergence of standards and valuation techniques (for example US GAAP and I FRS) w ill only h appen t hrough t he f urther use of t echnology. T his w ill r educe t he need f or local adjustments, language translations and interpretation. In the longer term, a paradigm shift will have an effect on education, market valuations, taxation and the worldwide adoption of a new Model Business Report describing t he entities c urrent, p ast a nd f uture activities and environmental involvements in an i ntegrated f ashion. *To find out more about on the concept Objects x Value, see Ramin/Reiman: IFRS and XBRL: How t o improve Business Reporting through Technology and Object Tracking, Wiley, January 2013, 736 p ages.

INTEGRATED REPORTING

DELOITTE RELEASES KEY REPORT

Statistics show the audit firm’s global aggregate community investments up $165.1 million in 2012 financial year

D

ELOITTE HAS released its first integrated report dubbed ‘2012 Global Report’, in a new digital for mat.

The information includes annual report focusing on Deloitte’s business, along with sustainability and the Global Reporting Initiative (GRI) framework as integral aspects. “Our performance is not just about numbers. Rather, it is about the stories behind those numbers – the strength of our client relationships, depth of our commitment to quality and innovation and the breadth of our service and industry capabilities – that fuel our performance,” said Omar Fahoum, chairman and chief executive of Deloitte Middle East. “As such, the 2012 Global Report sheds light on our commitment to our clients, our people and our communities in both the Middle East and worldwide.”

$165.1M DELOITTE’S GLOBAL AGGREGATE COMMUNITY INVESTMENTS IN FY 2012

0U]LZ[ PU OPNO NYV^[O THYRL[Z The 2012 Global Report covers key milestones in the past year, such as the launching of Deloitte Digital, a global service line launched in May 2012. In addition, the report sheds light on the importance of strategic markets, whereby Deloitte recognised and continues to invest in high-­‐growth opportunities, in 11 markets, including the Middle East. Deloitte in the Middle East’s commitment to impacting the societies in which it lives and works Ǥ ϐ ǡ ϐ ǯ delivery of an employability mandate in Saudi

In 2012 financial year, Deloitte’s global aggregate community investments were $165.1 million. Of which, $74.1 million were in the form of donations and $81.8 million in volunteer and pro bono work.

Arabia, through the formation of Job Placement Centres, attracting career seekers and helping them ϐ Ǥ ǡ of its determination to address high regional youth unemployment rates, Deloitte Middle East’s ‘Be Entrepreneurial’ regional achievements to date, were highlighted.

ʹͲͳʹ ϐ ǡ ǯ community investments were $165.1 million. Of which, $74.1 million were in the form of donations and $81.8 million in volunteer and pro bono work. In addition, in order to manage community investment ǡ ϐ valued at $9.2 million in FY 2012. 5L[^VYR»Z OPNOLZ[ YL]LU\L L]LY A total of 993,593 hours of volunteer and pro bono work hours were logged by Deloitte professionals globally. Of which, 197,876 hours were comprised of pro bono work, 377,486 hours of skills-­‐based volunteering and 308,231 hours of t raditional volunteering. ϐ ̈́͵ͳǤ͵ ϐ ͵ͳ ʹͲͳʹǡ marking the network’s highest revenue ever. ϐ ǡ ǡ and retaining top talent as a key driver of the expansion of business activity. In FY2012, the Network hired 51,400 professionals; its total workforce now exceeds 193,000 professionals worldwide and the organisation is well on its way to achieving its growth goal of 250,000 professionals by FY2015. In the Middle East, alongside the admission of 40 partners, principals and directors, Deloitte also hired 400 Arab and international professionals, as part of its strategy for growth in the region. “The Global Report showcases leading edge design and technologies that demonstrate a distinctive approach to engaging the external marketplace and our stakeholders,” Omar added. 49

MOVERS & SHAKERS

IPO DEALMAKER

On the evening of 12-12-12, Prasanth Manghat, the Group CFO of NMC Healthcare, was honoured with ‘CFO of the Year’ medal, during the Middle East ICAEW Accountancy and Finance Excellence Awards. He tells Joyce Njeri the recognition did not come easy, having been instrumental in the rigorous journey to the historic listing of his company on the London Stock Exchange…

P

RASANTH MANGHAT is a man on fire. Barely a year after joining NMC Healthcare as the Chief Financial Officer, he led the company to its successful listing in the premium segment of the London Stock Exchange, and also gone on to achieve the highest finance honours within the industry. ϐ ȋ Ȍǡ ǡ Ǧ Ǯ ǯǤ

PRACTICAL CONCERN: “We needed to raise the funds to enable us to implement our exciting growth plans which included developing new and existing facilities and funding future growth opportunities.”

50 February 2013

1V\YUL` [V 076 ǡ Ǧ Ǧ ǡ ϐ Ǧ Ǥ Dz ǡdz ϐ ϐ Ǥ ǡ ͉ͳͳ͹ ȋ ͸ͺͺǤͷ Ȍ

ȋ Ȍǡ ϐ Ǧ Ǥ Dz ʹͲͳͳ ϐ ʹͲͳͳǤ

ʹͲͳͳ ϐ ͳͲͲ ǡ ǡdz Ǥ 0TWSLTLU[PUN NYV^[O WSHUZ

Accountant Middle East, ǯ Ǯ ǯ Ǥ Dz Ǥ ǡ Ǥ ʹͲͲͻ ʹͲͳͳ ǡdz Ǥ

MOVERS & SHAKERS

£117M

REVENUE RAISED BY NMC HEALTHCARE FROM ITS IPO AT THE LONDON STOCK EXCHANGE 51

MOVERS & SHAKERS

Last year, NMC Healthcare raised ยฃ117 million (Dh688.5 million) from an initial public offering (IPO), becoming the first Abu Dhabi-ยญ based company to trade shares on the premium segment of the London Stock Exchange. วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อดอฒอณอณ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ศ ศ ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย วค -\UKPUN MVY L_WHUZPVU ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย อทอทวคอน ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อดอณอฒ ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ศ ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วฆย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ศ ย ย ย ย ศ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย วฆย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วควณ วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อ อณอทอฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อดอฒอณอดวค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อทวก อดอฒอณอด ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค >PKL UL[^VYR VM OVZWP[HSZ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อณอปอนอทวก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค 52 February 2013

วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อตอบ ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย

ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วฒย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วณวค วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วควณ วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย

MOVERS & SHAKERS

Ǥ Ǥ ǡdz Ǥ ;PTLS` KPZJSVZ\YL VM ÄUHUJLZ ǡ ǡ Ǥ

ǡ Ǣ Dz Ǥ ʹͷͲ ʹͲͳʹǤdz Dz ϐ Ǥdz

The CFO has to bring a forward looking and pro-­active stance to managing the corporate finances. Post-­ the global financial crisis, the biggest challenge for any business has been the ability to negotiate uncertainties. Dz ǡ Ǥ ǡ ǡ ϐ Ǥ Ǥ ʹͲͳ͵ ǥ Ǥdz )\ZPULZZ -PUHUJL ;LHT VM [OL @LHY

Ǥ Ǯ ǯ ǡ Ǯ ǯǡ ǡ ǡ ǯ ϐ Ǥ ǯ Ǥ Dz Ǯ ǯǤ ǡ Ǥ Ǥ ǡ ǡ Ǥ ǡdz Ǥ

ON AN IPO AND A PRAYER: “I am a God fearing man and I believe in his divine direction.”

Dz ǡ Ǥ ǡ Ǥ Ǥ Ǥ 53

MOVERS & SHAKERS

ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย อณอฒอฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย วค 9V\[PUL VWLYH[PVUHS TH[[LYZ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วควณ วฒ ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ฬถ ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วควณ วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วข ฬต ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกฬต ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค

As Charles Darwin said; โ Those who learned to collaborate and improvise most effectively have prevailed,โ and this is definitely true for a CFO. It is challenging to collaborate and maintain independence, but a successful CFO has to balance both.

54 February 2013

CFO OF THE YEAR: โ Our advisors for the IPO felt I had a good chance of winning the award and put in the nomination.โ

ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย ย ย ย ย วค ฬถ ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย วควณ ( UL^ KPTLUZPVU ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก วฒย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วคฬถ วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ฯ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย วค วค ย ย ย ย ย วฏย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วฏย ย ย ย ย วซ วฒ ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วค ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วก ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย ย วกวณ ย ย ย ย ย ย ย ย ย ย ย วค

ROBERTT HALF ROBER HALF FINANC FINANCEE AND AND Job title CFO

ACCOUNTING ACCOU NTING SALARI SALARIES ES (in (in USD) USD)

Size of business S/M

Assistant Treasurer Finance Manager

Tax Director Tax Manager Senior Tax Associate Senior Financial Analyst Financial Analyst Compliance Director Compliance Manager Compliance Officer

-

-

S/M

-

-

-

-

S/M

-

-

-

-

S/M

-

-

Large

-

-

S/M

-

-

Large

-

-

S/M

-

-

Large

-

-

S/M

-

-

Large

-

-

S/M

-

-

Large

-

-

S/M

-

-

Large

-

-

S/M

-

-

Large

Large

-

-

Large Large

S/M

-

-

Large

S/M

-

-

S/M

Large

-

-

S/M Large Large S/M

Senior Finance Associate

-

-

Large

Financial Controller Assistant Financial Controller

-

-

S/M

Treasurer

-

-

S/M Large

Chief Accountant

% Change

-

Large

Finance Director

-

-

-

roberthalf.ae 2013 Salary Guide |

10

CALCULATING MOVE

GLOBAL MOBILITY

‘FAILING’ Deloitte study reveals companies’ strategies to move workforce across borders do not meet boardroom agendas

O

RGANISATIONS ARE aware of both the requirements and the current limitations of their global mobility programmes; however they are not translating that awareness into improvement and change, according to a new report by Deloitte. This is based on the latest annual survey of almost 200 human resources, talent and global mobility professionals from companies around the world, entitled; Strategic Moves. Findings in this study are particularly relevant t o M iddle E ast c ompanies m oving i nto regionalisation structures, and international markets to compete effectively in these new markets and succeed in attracting and deploying e mployees a nd l eaders t o m eet t heir business o bjectives. 5L_[ NLULYH[PVU VM SLHKLYZ Brett Walsh, Global Human Capital leader, DTTL, says: “ The survey results show t hat organisations recognise t he need for a global, mobile workforce to support their business strategies. However, despite a keen awareness of worldwide mobility issues, there is slow progress to make the relevant improvements. Where organisations are t aking steps, t hey appear to be a ligning t heir international mobility strategies w ith f unctional

70%

OF BUSINESS AND HR RESPONDENTS BELIEVE THAT GLOBAL MOBILITY IN THEIR ORGANISATIONS IS UNDERPERFORMING 56 February 2013

needs, rather than also focusing on developing the next generation of global leaders with international experience required to run the global organisations of t he f uture.” According to the report, a mere 2% of organisations see their global mobility functions as world class, and only 12% perform assessments of t heir mobility practices and make clear links back to improvement efforts t hey need to make. T he Deloitte survey a lso highlights t hat 70% of business and HR stakeholders believe that global mobility in their organisations is underperforming and needs improvement. “As more and more companies expand their operations globally, and many companies based in the Middle East begin to operate across the region, the challenge to source the right talent and meet client needs is evidently growing. ϐ international experience to assume leadership ǡdz ϐ Zaatari, director, Human Resources, Deloitte Middle East.

In a globally connected world, companies both in the Middle East and across the globe are readdressing their mobility strategies

CALCULATING MOVE

“In many Middle Eastern countries, particularly in t he GCC, it is integral t hat strategies to improve global mobility are put into place, to ensure the right expertise is being offered to clients when needed,” she added. :[YH[LNPJ I\ZPULZZ PZZ\LZ Organisations recognise global mobility as an important tool to support the top strategic business issues and support the business in addressing the top three strategy issues: emerging geographical markets, such as the Middle East (100%), increasing globalisation (99%), and increasing competition (98%). However, on average, less than 30% are using mobility to completely address t hose issues. “In a globally connected world, companies both in the Middle East and across the globe are readdressing their mobility strategies. In fact, one t hird of t he organisations surveyed say t hey are planning on reviewing their global mobility strategies in the next 12 months, including reviewing the alignment with business issues and goals,” said Zaatari.

“In many Middle Eastern countries, particularly in the GCC, it is integral that strategies to improve global mobility are put into place, to ensure the right expertise is being offered to clients when needed.” Survey respondents were asked whether they felt global mobility was a purely administrative function, a strategic value-­‐add, or both. Those in business HR roles were most likely to see it as strategic (42%). However, in stark contrast, those tasked with high-­‐level talent and reward responsibilities and the ability to elevate global mobility to the realm of strategy – were most likely to see it as just administrative (42%). 5LLK MVY ZLY]PJL PTWYV]LTLU[ There is a widespread recognition of the need to improve the services that mobility teams provide; however the vast majority of organisations surveyed (88%) are undertaking only a limited assessment of the services that are currently being offered. In order to align global mobility strategies with business’ issues and goals in the longer term, global mobility will need to support business more effectively by providing global workforce management, where they manage an organisation’s global supply and demand of skills and t alent. T his w ill require t he mobility f unction to acquire new skills and c apabilities. Brett Walsh concludes: “If positioned appropriately, by adding global workforce management capabilities to its suite of services, global mobility can be the key player in solving an organisation’s long-­‐term skill supply-­‐and-­‐demand talent gaps. This will require a departure from the current model and a strong vision of the future. “Organisations need to make two types of investments in order to achieve this. Firstly, they need to invest in their wider functional HR capabilities such as integrated HR, talent and global mobility technologies to facilitate global standard reporting across various employee metrics. Secondly, this initial investment will then allow them to invest ahead of the talent demand curve to create the required supply of talent to meet their future organisation growth aspirations.” 57

CALCULATING MOVE

LIVING DANGEROUSLY Lack of life skills, frequent job changes a risk for future leaders, new research authored by Ashridge Business School, suggests

2

AVERAGE NUMBER OF YEARS THAT TODAY’S GRADUATES ARE LIKELY TO SERVE AT ONE JOB POST

N

EW RESEARCH by Ashr idge Business School (ABS) reveals that frequent job changes and a lack of life skills poses greater risk for future leaders, as lack of adequate experience at workplaces hinders them from making effective business decisions. Retention  was  a lso  highlighted  as  a  major  concern  for  managers  of  â€˜Generation  Y ’  employees. Based  on  a  global  Arabic  and  English  language  survey  of  2,900  managers  and  graduates,  and  100  in-­â€?depth  interviews,  t he  report  t itled;  Culture  Shock!  Generation  Y  and  their  managers  around  the  world’,  analyses  the  relationship  between  â€˜Gen  Y’  graduates  (aged  under  30),  and  their  leaders.  The  study  draws  comparisons  between  â€˜Gen  Y’  and  managers  in  the  Middle  East,  UK,  Europe,  India,  Malaysia  and  China,  revealing  the  young  graduates  are  similar  across  the  world,  but  the  gulf  between  t hem  and  t heir  managers  differs. ‡› ”‡•‡ƒ”…Š Ď?‹Â?†‹Â?‰•ǣ 3HJR VM :RPSSZ Frequent  job  changes  and  lack  of  life  skills  mean  that  managers  are  seriously  concerned  t hat  f uture  leaders  are  not  gaining  real  in-­â€?depth  experience.  Managers  feel  strongly  that  today’s  graduates Â

Today’s graduates are regarded as highly knowledgeable, digitally integrated, globally and socially aware, unconventional and very confident, and all of these characteristics need to be managed and developed.

58 February 2013

Managers feel strongly that today’s graduates lack adequate ‘life skills’ compared with the previous generations, new research suggests.

lack  adequate  â€˜life  skills’  compared  with  the  previous  generations,  and  recommend  that  they  get  work  experience,  and  develop  t heir  emotional  intelligence,  communication  and  people  skills. 9L[LU[PVU 0ZZ\LZ Another  key  area  of  concern  for  managers  revealed  by  t he  research  is  employee  retention.  Graduates  want  a  varied  c areer,  have  little  patience  and  w ill  leave  a  job  quickly  if  it  doesn’t  meet  their  own  personal  ideals.  â€˜Gen  Y’  tend  to  stay  in  a  job  for  only  two  years.  Middle  Eastern  graduates  were  second  most  loyal  of  those  surveyed,  with  75%  intending  to  stay  in  their  current  role  for  two  years  and  g raduates  f rom  t he  UK  least  loyal  w ith  only  57%  planning  to  stay  for  t his  t ime. 4PKKSL ,HZ[ *\S[\YL A  rapidly  changing  culture  and  society  in  the  Middle  East  has  a  major  impact  on  the  relationship  between  â€˜Gen  Y’  and  their  managers,  where  cultural  history  was  found  to  impact  â€˜Gen  Y’s’  expectation  of  promotion,  of  women  in  management  and  of  the  business  sector  in  which  to  work  in  particular. Âş.LU @Âť *OHYHJ[LYPZ[PJZ Today’s  graduates  are  regarded  as  highly  knowledgeable,  digitally  integrated,  globally  and Â

CALCULATING MOVE

9,*644,5+(;065: -69 º.,5 @»! ϐ Ǥ Develop people/communication/soft skills and work on developing emotional intelligence. Review how others perceive you and adapt where necessary. Spend time watching and learning in your early roles. Don’t be afraid to ask for help. Respect experience and look to gain as much as possible yourself. Help support and develop managers where you have key strengths they are missing. Show a strong work ethic and commitment to success; you w ill be appreciated. 9,*644,5+(;065: -69 4(5(.,9:! Recruit for culture and work ethic as priorities Set boundaries for behaviour and expectations early on Develop missing skills early – mostly soft skills but also include hard skills like languages, budgeting, risk-­‐assessment and analysis Provide quality coaching and mentoring that really works – look at two-­‐ way mentoring to support senior staff as well as young staff. Provide challenging work with scaffolding to support young people. Mix boring tasks with interesting ones but explain the need for the boring activities. Provide public appreciation for excellent work by ‘Gen Y’.

ǡ ϐ ǡ and all of these characteristics need to be managed and developed. Although managers admire the intelligence and energy of young professionals, they dislike graduates’ pursuit of fame and ǡ Ǧ ǡ Ǧ ϐ of teamwork and respect. Motivation also proves a bigger problem for managers in the Middle East than the other regions surveyed. 4PZTH[JOLK ,_WLJ[H[PVUZ A mismatch of expectations between managers and graduates is a pressing issue. For example, 29% managers in the Middle East claim that managing graduate expectations is their overriding concern. Graduates have high expectations of responsibility, progression and challenging, interesting work where t hey c an make changes, whereas managers expect excellent skills, teamwork and adaptation to the organisation. They do not ‘ live t o work’, i nstead, t hey ‘ work t o ǯǤ ϐ likely t o do work at home t han t heir managers. Rory Hendrickz, Director of Ashridge Business School in the Middle East, commented:

“Generation Y has grown up with social media and mobile phones, and against a background of rapid changes in technology and shifting political and cultural norms. Today’s young professionals in the Middle East have different priorities from previous generations. ‘Gen Y’ is already radically altering the employment landscape g lobally, a nd a new, g rowing workforce will soon be stepping up and challenging traditional models w ithin companies. “By c apitalising on t he unique contributions and strengths of this generation, a better workforce as a whole can be created in this region. All generations need to review their differences ϐ Ǧ both managers and Gen Y need to adapt to the changing world of work,” Rory added.

‘Generation Y’ is already radically altering the employment landscape globally, and a new, growing workforce will soon be stepping up and challenging traditional models within companies.

59

TAX WATCH

TAX BREAK New research details how the UAE helps consumers benefit from low consumption levies

T

2%

HE UAE helps consumers with the lowest level of consumption and sales taxes in the world, according to new research by UHY, an international accounting and consultancy network.

PROPORTION THAT GOVERNMENT TAKES FROM THE TOTAL PRICE OF THE BASKET OF GOODS THROUGH TAXES

UHY tax professionals studied data from 22 countries* across its international network, including all members of the G8 and the developing BRIC (Brazil, Russia, India and China) economies. UHY calculated the percentage of the total price of a representative basket of goods and services that was made up of taxes and duties.

AVERAGE % OF PRICE THAT IS TAX – ALL COUNTRIES

Loaf of bread

6.01

( ^LSJVTL TV]L Rajiv Saxena of UHY Dubai and member of UHY International says; “With well below average consumption and sales taxes, the UAE’s consumer economy gets a very welcome helping hand from the government. Low consumption and sales taxes ϐ and help keep goods affordable for consumers.”

Newspaper

9.14

Child’s T-shirt

10.95

Cinema ticket

11.09

International Flight

11.14

Restaurant Meal

11.21

MP3 Download

11.24

Fruit Smoothie

11.45

On average, European governments are responsible for 15.5% of the price of UHY’s basket of goods and services. This compares to an average of 13.8% for all countries, 12.3% in G8 countries, and 8.2% in the Ǧ ϐ Ǥ

Box of chocolates

11.47

Professional Service

12.04

Electricity Bill

13.08

iPad

14.85

Physical album

15.2

Bottle of Wine

22.77

Litre of Petrol

36.22

Cigarettes

51.25

38%

Percentage of the total price of UHY’s basket of goods that is tax, by country (including excise duties and consumption taxes)

Basket of items

ITEM

The UAE government takes 2% of the total price of the basket of goods through taxes.

TABLE 2:

TABLE 1:

40%

28.7%

35% 30%

5.3%

4.8%

3.9%

5%

2.0%

10%

18.2%

16.9%

16.0%

15.8%

15.4%

15.3%

14.8%

14.7%

13.8%

13.1%

12.9%

12.7%

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12.0%

11.8%

20%

14.5%

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60 February 2013

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UHY says that low levels of indirect taxes will help businesses from the UAE compete in an increasingly international marketplace.

TAX WATCH

)HZRL[ VM NVVKZ The UAE only charges consumption or sales taxes on two items in UHY’s basket of 22 goods and services: ϐ Ǥ For example, 10.5% of the price of an international ϐ ǡ the global average of 11.1%. Cigarettes attract the highest consumption taxes in the whole study, with governments being responsible for an average of 48.5% of the total price of a packet, however, the UAE charges no taxes on cigarettes. UHY says that low levels of indirect taxes will help businesses from the UAE compete in an increasingly international marketplace. Rajiv says: “Rising sales and consumption taxes put a lot of pressure on business’ bottom lines. In order to compete on price and to keep customers shopping, some businesses may opt to absorb sales ǡ ϐ repeatedly. This hasn’t been the case yet in the UAE, which has really helped businesses here.” “With the rising dominance of e-­‐commerce, especially in retail, businesses are competing internationally. Having low levels of sales taxes will help businesses from the UAE compete for customers from countries with high sales taxes.” 9PZL VM L JVTTLYJL UHY adds that the study shows that some countries’ tax systems have struggled to catch up with the rise of e-­‐commerce.

The UK, the Netherlands, and France have all increased their sales taxes recently, with France planning further rises in 2013. “European economies have ‘zig-­‐zagged’ over the past few years, limping into growth and slumping back into decline. Struggling with huge budget ϐ ǡ and sales taxes. This has severely discouraged the consumer spending that could support a stronger recovery,” Rajiv says. ,\YVWL I\YKLULK I` OPNO [H_LZ The UK, the Netherlands, and France have all increased their sales taxes recently – the UK raised VAT from 15% to 20% with two changes in the space of just two years. France plans further rises in 2013. At the other end of the scale from the UAE, Brazil’s indirect taxes were some of the highest in the study. Brazil’s government was responsible for 28.7% of the cost of the basket. Diego Moreira, Executive Director of UHY Moreira-­‐ Auditores in Brazil, and member of UHY, says: “Direct taxes on individuals in Brazil are very low, but this means the tax burden falls heavily on businesses instead, through taxes on employment and sales taxes that can depress consumer spending.”

*Taxes may vary between states in some countries. For the US, China, Australia, and Canada, taxes are specific to Michigan, Beijing, Perth, and Toronto

“High indirect taxes can discourage spending and put pressure on business’ margins. Indirect taxes in Brazil are also highly complicated, which can make it hard for consumers to understand how the tax system operates. This will add to business compliance costs too.”

**Nigeria, UAE, Malaysia do not levy taxes on fuel

TABLE 3: Percentage of the total price of a bottle of wine that is tax, by country 64.6%

“The UAE is exceptional in its low level of indirect and direct taxation. Normally countries will have low direct taxes or low indirect taxes, but not both. The consumption and sales taxes that are used in the UAE are limited to goods that the government may want to discourage the use of,” Rajiv says.

70%

19.4%

19.3%

17.4%

16.7%

16.4%

16.2%

16.0%

14.6%

9.1%

36.4%

35.0%

33.1%

31.0%

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UHY adds that European governments levy some of the highest sales and income taxes in the world.

8.3%

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16.7%

30%

22.8%

40%

Rajiv adds: “New technologies and globalisation have caused plenty of problems for unwieldy and complex tax systems. Tax systems can be very slow to react to the rise of new ways of doing business, and can leave traditional businesses – like physical stores – at a disadvantage.”

30.0%

50%

44.3%

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In several countries, including India, the US, Italy, and Malaysia, sales taxes were levied on physical CDs but not on the MP3 versions of the same albums.

61

Audit firm strengthens its Middle East strategy advisory practice with the acquisition of the top consulting firm

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TECHNOLOGY TALK

INFORM. ALIGN. ADAPT.

SAP’s Director of Business Analytics Paul Devlin examines different ways of fostering a culture of analytics in organisations, to aid in the decision-making process

A

S EINSTEIN is famously quoted as saying, “the definition of insanity is doing the same thing over and over again and expecting a different result”.

PAUL DEVLIN DIRECTOR – BUSINESS ANALYTICS, SAP

Yet, as I travel across the Middle East and ϐ ǡ same pattern, time and again. Data is silo’d, companies c an only look i n t he r ear v iew m irror ǡ decision based on data and therefore plays a tactical r ole i n decision making i n t he company. 7SHUUPUN HUK I\KNL[PUN ǡ Ǥ and year end reporting takes weeks instead of a few days. The process of planning and Ǧ Ǥ ǡ Dz dz Ǥ make the transition from tactical to strategic ǡ makes, based on data? ǡ Ǥ gone f rom years t o months. To make things even more challenging, organisations are also dealing with an ǡ

64 February 2013

adoption of mobile devices and social media, heightened risk, and increasing compliance Ǥ ǡ Ǥ ǡ ecosystem. So, where do we s tart? )\ZPULZZ (UHS`[PJZ :VS\[PVUZ ǡ to more information than ever before. Gartner, the world’s leading information technology research and advisory company, states that by 2014, 50 per cent of employees in a typical organisation will have access to some kind of analytic system. This rises to 75 per cent by 2020. The good news is that companies are seeing Ǥ ̈́ͳͲǤ͸͸

TECHNOLOGY TALK

Ǥ ǫ 0UMVYT ǡ Ǥ getting information where and when it’s needed to whatever level of detail that is necessary to solve t he problem. Users need enterprise s ystems Ǧ Ǧ Ǥ ȋ Ȍ ϐ Ǥ Ǧ ǡ ʹͷͲ Ǥ ǡ plot the locations of the parking tickets. The ǡ Ǥ ǡ information on where parking was allowed on ǡ is a llowed or prohibited. T he company c reated a

map-­‐based dashboard t o show where t he t ickets ǡ them a nd t he managers’ names. ǡ way t o have a proactive conversation w ith t heir Ǥ (SPNU

ǡ Ǥ ǡ ǡ Ǥ ǡ the company. Maintaining alignment across an enterprise in ǡ Ǥ

Companies need to quickly adapt to a changing market while keeping an eye on risks throughout the business. The need to be resilient in the face of change is a requirement for enterprises today.

65

TECHNOLOGY TALK

More and more companies have been investing ǡ Ǥ ǯ ǡ ǡ Ǧ compliance. Therefore, the company doesn’t have someone who can both create a vendor and p ay a vendor.

ȋ Ȍǡ ȋ Ȍ ϐ Ǥ tools to a llow g reater collaboration on t he plan to Ǥ ǡ ϐ ϐ Ǥ (KHW[ Ǥ Ǥ As we have seen over the last decade or so, the companies that have been the most resilient to – a s well a s t hose t hat have been able t o adapt t o changes in the market – are the ones that have Ǥ

Maintaining alignment across an enterprise in a world of constant mergers and acquisitions, divestures and a variety of other outside pressures is challenging when you are managing all of this on a bunch of Excel spreadsheets.

66 February 2013

(JOPL]L YLTHYRHISL YLZ\S[Z Ǧ making process by making them easier to deploy, smarter and available at critical Ǥ Ǧ memory database technology to power all of barrier t o r elevant i nformation.

ǡ Dz dz Ǥ that crosses the entire platform, so that we can have access to information anywhere, whether ǡ Ǥ Ǧ Ǧ ǡ Ǥ ǡ to be able to have a variety of deployment Ǥ Ǧ options for fast, affordable deployments that ǯ ϐ Ǥ ǯ Ǥ Ǧ Ǥ ǯ ǯ ϐ Ǥ ǡ Ǥ this control and collaboration, across all the disciplines of his organisation, he can plot ǡ Ǥ ǡ ϐ strategic i n t he boardroom.

SUBSCRIBE NOW TO THE REGION'S FIRST MIDDLE EASTERN FOCUSED ACCOUNTANCY MAGAZINE. Complimentary subscription for any accountants currently working or studying in the UAE. Every month we will bring you the latest news, expert opinion, interviews with regional influencers and policy makers, as well as CPD advice, job opportunities and moves. Accountant ME will also feature regular articles and reports on auditing, legislation, management advisory services, ethics, professional development and practice management.

To subscribe visit

accountancyme.com/subscribe Contact us today for more information about this brand new title. SALES Christopher Stevenson Tel 04 440 9138 Email chris@cpidubai.com

EDITORIAL Joyce Njeri Tel 04 440 9140 Email joyce@cpidubai.com

CAREER DEVELOPMENT

EMIRATI YOUTH URGED TO PURSUE ACCOUNTING There is optimism that more investors or businesses opening in the region will provide openings for labour in the sector

T

HE INTEGRATION of local nationals into the private sector is an experience that must be explored by young Emirati graduates searching for a different perspective and mindset, delegates and students attending this year’s Emirati Youth Forum event, have been told. ϐ ǡ ȋ Ȍ Ͷ͵ǡͲͲͲ ʹǤʹ ǡ ͶͻͷǡͲͲͲ Ǥ ϐ ǡ Ǥ /PNOS` WHPK JHYLLYZ ǡ Accountant Middle East ȋ Ȍ ǡ ǡ ϐ Ǥ

“It is important for the youth to take responsibility for making their own choices and to be encouraged to consider jobs that will be personally meaningful and fulfilling.” -­ Chris Stevenson, Commercial Director, Accountant Middle East magazine

68 February 2013

Dz Ǯ ǯ ǡ ϐ ǡdz Ǥ ǡ ǡ Ǥ Dz ǡ ǯ ǡdz ǡ ʹ͹Ǧ Ǧ

CAREER DEVELOPMENT

Ǥ ǡ ǡ Ǥ Dz Ǥ ǡdz Ǥ 0U[LYHJ[P]L UL[^VYRPUN ZLZZPVUZ ϐ Ǥ ǡ ǡ Ǥ Dz Ǥ ǡdz Ǧ ǯ ǡ ǯ ǯ Ǥ Dz Ǥ ǯ Ǯ ǡdz Ǥ ;H^KOLLM JHYLLY MHPY ǡ ǡ ǡ ǯ Ǥ ǡ ǡ Ǥ ǡ ǯ ǡ ȋ Ȍ ϐ

“My advice to the Emirati youth is to identify their career goals before they decide to join the public sector or the private sector. Their decisions should not be based on stereotypes.” -­ Mawya Al Qaissieh, 27-­year-­old Emirati ǡ Ǯ ʹͲͳ͵ǯ Ǥ

ǯ ǡ Ǯ ǯ Ǯ ǯǤ ǯ ǡ ǡ ǡ ǡ Ǧ ϐ ǡ ǡ Ȁ Ǥ ;HPSVYLK JHYLLY N\PKHUJL ǯ Ǯ ʹͲͳ͵ǯǡ ǡ ǡ ǣ Dz Ǥdz 69

CAREER DEVELOPMENT

Dz Ǧ Ǧ Ǥ ǡ Ǥdz ϐ ǡ ǡ

“First Gulf Bank is going beyond traditional Emiratisation efforts to actively increase the numbers of UAE Nationals employed in the banking sector.” -­ Abdulrahman Saqr, Senior Vice President of HR and Head of Emiratisation, First Gulf Bank

͵ͻ Ǥ ͳͺǦ Ǧ ǡ Ǥ Ǧ Ǥ

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70 February 2013

CORPORATE TREASURY

ROYAL ACT This year brings enormous opportunities for treasurers in the region, Matthew Hurn reckons

T

HE ASSOCIATION of Corporate Treasurers (ACT) has started the year on a high note, following the incorporation of the body by Royal Charter.

MATTHEW HURN EXECUTIVE DIRECTOR - TREASURY, MUBADALA DEVELOPMENT COMPANY

I believe 2013 w ill be a l andmark year, a s t his i s a wonderful achievement a nd i s t estimony t o 33 years of h ard work, effort a nd loyalty shown by all its s tudents, members a nd professional s taff. My w ish f or 2013 i s f or t reasurers i n t he M iddle East to come together to promote professional treasury management throughout the region’s business environment. >PKLU [OLPY PUÅ\LUJL I see immense opportunities for professional treasurers to widen their influence in their respective organisations – gaining status both inside and outside the boardroom -­‐ by offering their skills, technical knowledge and professional d iscretion t o shape a nd d rive t heir organisations t owards t he next g rowth phase. While the achievements of ACT members and students are to be celebrated, 2013 promises to bring real challenges for the professional treasurer. It w ill b e a c ritical year i n r egulatory terms. The real question however is whether the regulatory environment will be seamless between what is expected (even demanded by the G20), what the regulators deliver and how any new r ules w ill work i n practice. The ACT’s hope i s t hat politicians a nd r egulators recognise the burdens on the real economy

(*; 56> Don’t miss out, subscribe to the ACT Middle East network today and be kept informed of upcoming events, training courses and news. Visit http://www.treasurers.org/actmiddleeast/register

and business competitiveness. This is a global issue for corporates irrespective of where they a re b ased. ,MMLJ[P]L IHSHUJL ZOLL[ In the year ahead, we will see OTC [over-­‐ the-­‐counter] derivatives become a big deal: whether in respect to their availability or not, their reporting requirements and the likely attendant r ise of c ollateral r equirements. Treasurers will continue to search out reliable consistent sources of funding, whether from the capital markets, releasing capital from inside our businesses or more effective b alance sheet m anagement a nd measurement. Banks shouldn’t be entirely discounted however. With the right credit and the right story there is funding available, especially where government-­‐backed schemes for domestic or export f unding a re b eing heavily promoted. (^HYLULZZ VM WYVMLZZPVU The risk markets may also see some interesting changes as treasurers need to find better, less capital intensive ways of hedging that might not involve financial exchange – natural hedging or even taking the r isk a rgument t o s takeholders a nd a sking what and how much risk they want the business t o m anage. Finally, a s awareness of t he t reasury profession grows in the Gulf and as ACT Middle East increases t he number of c ourses offered locally, I a lso s ee t he opportunity f or s enior t reasurers to s ecure t he f uture of our organisations. It is our duty as professionals to ensure that our team members are fully trained and competent in all aspects of treasury management so that they can advise in the boardroom i n y ears t o c ome. 71

SUSTAINABILITY ACCOUNTING

ACCA URGES

‘GREEN’ BUSINESS PRACTICES

Helping small entrepreneurs to be sustainable can make a huge difference to the environment, accounting association says

29%

PROPORTION OF SMEs IN THE EU WHICH HAVE INTRODUCED MEASURES TO SAVE ENERGY

P

OLICY MAKERS, regulators and finance professionals must help small businesses adopt sustainable business practices – since their huge environmental impact is currently being overlooked, says ACCA (the Association of Chartered Certified Accountants). Despite representing more than 90% of global businesses and accounting, on average, for 50% of gross domestic product and 63% of employment ϐ ǡ SMEs have been marginalised in the debate about sustainable business practices and have been slow to adopt environment-­‐related improvements. For instance in the EU, only 29% of SMEs have introduced measures to save energy or raw materials (compared with 46% of large enterprises) and only 4% have a comprehensive ϐ Ǥ ,U]PYVUTLU[HSS` MYPLUKS` In its new policy paper titled; ‘Embedding Sustainability in SMEs’, ACCA’s Global Forum for SMEs has called on a number of groups

72 February 2013

to take action to help smaller businesses to enable them become more efficient and environmentally f riendly. Ǧ ϐ will need to be adopted, if these efforts are to gain ϐ Ȃ taking into account not only the differences between large companies and SMEs, but also the differences between micro, small and medium-­‐ sized enterprises, says the report. As many small businesses are run by owner-­‐ Ȃ Ȃ Ȃ Ǥ is why it is important that governments and business-­‐support professionals ensure that SMEs are aware of the quick gains they can make through ϐ ǡ ϐ assistance and incentives that may be available for those which commit to cutting emissions or which reduce waste. º;OPUR ZTHSS ÄYZ[» businesses with sustainable practices have access

SUSTAINABILITY ACCOUNTING

to large and potentially lucrative public sector supply chains. While small business owners need to become more proactive and strategic when it comes to adopting sustainable business practices, regulators also Ǯ ϐ ǯ it comes to developing regulations which are aimed at encouraging such practices, such as sustainability reporting. groups involved. ϐ reporting, which are to committing the business publicly to taking action; assessing the business’ impact; setting targets for reducing impact; acting to reduce impact and publishing the business’ policies and actions. 3VJHS HJJLZZ [V RUV^SLKNL Accountants are urged to work with local environmental-­‐sustainability experts in order to gain local access to credible knowledge; to review the environmental sustainability of their own business, and then use that valuable experience

SMEs have been marginalised in the debate about sustainable business practices and have been slow to adopt environment-­related improvements. to have rounded, relevant conversations, based on genuine experience, with their clients. urged to become more proactive in the SME sustainability debate, providing members with the right tools and resources to help them develop in this direction. Mark Gold, chairman of ACCA’s Global Forum for SMEs said: “All too often, small business is overlooked when it comes to environmental and sustainability issues. But in terms of economic activity, employment and waste, small businesses make a huge impact and it is critical that they and those who advise and regulate them, recognise this and begin to take steps to tackle waste, promote ϐ forefront of their thinking.” 73

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Ahmed Badawi joins t he Grant ϐ as an Audit Partner. over 19 years w ith Ǯ Ͷǯ ǡ Ǥ ǡ Ǥ

ǡ Ǥ Ǧ ϐ ǡ Ǥ

Simi Nehra has Partner at Grant Thornton UAE. His ͳͶ ǡ ϐ ϐ Ǥ Ǥ ϐ ϐ Ǥ

ǡ Jeremy Newman Ǧ Ǥ ʹͲͳͳ

74 February 2013

ǡ Ǥ ϐ ϐ ͳ͸ Ǥ

Mahasen Tammy joins t he Grant Thornton UAE ϐ Ǥ

ǡ ǡ ǡ ϐ ϐ Ǥ Ǥ

Chris Divito has

ȋ ȌǤ ǯ Ǥ ͳͷ ǯ ǡ Ǥ ϐ Ǥ ǡ Ǥ ȋ Ȍ Ǥ

Steve Hankins has joined t he ϐ Ǥ ϐ ǡ ʹͳǦ ǡ Ǧ Ǥ Ǥ

has a ppointed Mohamed Mahran a s Ǥ ǡ ͳͶ ǡ Ú Ǥ Ȃ ǡ Ǥ

Ahmed Gomaa joins the Grant ϐ Ǥ ǡ ǡ Ǥ

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