ICV Certification - Powering Industrial Growth

khaleej times Thursday, January 27, 2022

ICV Certification Powering Industrial Growth KHALEEJ TIMES ADVERTISING SUPPLEMENT

AN INDEX FOR TECH READINESS The UAE aims to be at the forefront of the development of advanced technologies through its adoption of supportive ecosystems such as the Smart Industry Readiness Index (SIRI) Muhammad Ali Bandial ali@khaleejtimes.com

A

new Smart Industry Readiness Index (SIRI) will identify industrial players’ technology expertise and support the adoption of advanced technologies and Fourth Industrial Revolution applications, ensuring high-quality products and services as well as sustainable and secure supply chains. The index was adopted by the Ministry of Industry and Advanced Technology (MoIAT) at the recent Global Manufacturing and Industrialisation Summit 2021 (GMIS).

SIRI is a concrete indicator of technological capability, and will serve to further the goals of the UAE’s National In-Country Value (ICV) program. The program has ensured the successful registration of local suppliers, underscoring the government’s decision to prioritise procurement procedures and diversify the UAE’s economy.

Sarah bint Yousif Al Amiri, Minister of State for Advanced Technology, said: “We are proud today to announce the adoption of the Smart Industry Readiness Index, which was adopted by the World Economic Forum as a global standard for unifying 4IR concepts. We are also pleased to announce the completion of the first phase of the program

Sarah bint Yousif Al Amiri Minister of State for Advanced Technology that consisted of 70 companies.”

The Smart Industry Readiness Index will help companies understand their current digital maturity, providing them with high-level recommendations so they can take the next step on their digitalisation journey as well as contribute to increasing their awareness of 4IR applications. In the long run, the index will drive the UAE’s manufacturing sector to consider the efficiency and productivity benefits of adopting industry 4.0 solutions.

Under the ambit of ‘Projects of the 50’, the Smart Industry Readiness Index has been adopted as a key cornerstone

of ‘UAE Industry 4.0’, the Fourth Industrial Revolution program, to accelerate the integration of advanced technologies in the industrial sector. It is hoped that by the end of the first half of 2022, the ministry will have evaluated 200 industrial companies.

Minister Al Amiri added: “The information and data collected will contribute to understanding the path towards Industry 4.0, along with identifying the necessary programs that will circumvent challenges, alleviate risk and provide the right incentives for technology adoption. We understand the challenges that are associated with adopting

We are proud today to announce the adoption of the Smart Industry Readiness Index, which was adopted by the World Economic Forum as a global standard for unifying 4IR concepts.

We are also pleased to announce the completion of the first phase of the program that consisted of 70 companies.” technology, and we are working closely with the key industrial players to ensure that the ecosystem enables technological advancements.”

The National ICV program assists in cultivating the UAE as an optimum

.

environment for the development and adoption of advanced technologies. It also supports the objectives to raise industrial productivity by 30 per cent and add about Dh25 billion to the national economy over the next decade.

Thursday, January 27, 2022 khaleej times

II

ICV CERTIFICATION

KHALEEJ TIMES ADVERTISING SUPPLEMENT

POWERING INDUSTRIAL GROWTH

Raising the bar The key objective of the program is to nurture and develop new industries within the UAE and stimulate foreign investment in line with the nation’s goals of diversification

B

uilding on from its earlier success in 2017, the In-Country Value Program (ICV) has now been relaunched at the federal level in line with the ‘Projects of the 50’, achieving great success, for the UAE. Early achievements include redirecting Dh88 billion into the UAE’s industrial sector and creating 2,000 jobs for Emiratis, but the program has since been expanded and developed to scale these benefits across the economy.

In September, the program was named among the UAE’s ‘Projects of the 50’ and placed under the supervision of the Ministry of Industry and Advanced Technology (MoIAT). The move has further contributed to increased demand for local goods and services and has promoted local capabilities, while attracting foreign direct investment in the UAE’s industrial sector.

In early December, the National Committee for the National In-Country Value Program, formed by the UAE Cabinet, held an inaugural meeting to discuss the development of detailed criteria and guidelines for its implementation at the federal level. The meeting examined how large national companies could respond to the program.

The committee, which includes the Ministry of Industry and Advanced Technology (MoIAT), several federal and local authorities, and national companies, reviewed the program’s developments and key performance indicators for the year to date.

Chaired by Omar Suwaina Al Suwaidi, Undersecretary of MoIAT, the committee also appointed a technical committee evaluate the economic and industrial impact of companies that recently joined the program. It discussed proposing new incentives, benefits and opportunities to encourage more companies to seek ICV certification, while proposing aware-

Omar Suwaina Al Suwaidi Undersecretary UAE Ministry of Industry and Advanced Technology ness-raising workshops in cooperation with its members, and considered ways to stimulate the adoption of advanced technology.

“Launching the National ICV program among the ‘Projects of the 50’ falls in line with the strategic goals of the National Strategy for Industry and Advanced Technology. These goals encompass empowering and incentivising the UAE’s industrial sector, improving its performance and strengthening partnerships and collaboration within the private sector. Under the program, 42 per cent of government spending will be redirected to the UAE-based companies by 2025,” said Al Suwaidi.

“The ICV program is expected to reach numerous milestones in that time, including increasing the internal demand for local products and services from Dh33 billion currently to Dh55 billion, while encouraging local manufacturers to diversify and develop their production to meet that demand. Developing their business models and production methods will also help them meet ICV certification criteria, thus enhancing their chances of partnering with global entities seeking to leverage this opportunity,” he added.

In September this year, the MoIAT signed separate memoranda of understanding (MoU) with Etisalat, Emirates Steel and TAQA, the Abu Dhabi National

ICV is a way of doing business Efficio Consulting Strategic ICV planning and development is becoming a business requirement – Efficio Consulting Middle East on how they support organizations of all sizes on their ICV journey

We work with National Champions and also SMEs to strategically grow their ICV scores and maximize business benefits.”

Adam Forgacs Principal Efficio Consulting

ADNOC currently supplies over two-thirds of the UAE’s industrial energy needs, supporting and enabling the growth of local industries.

Launching the National ICV program among the ‘Projects of the 50’ falls in line with the strategic goals of the National Strategy for Industry and Advanced Technology. These goals encompass empowering and incentivising the UAE’s industrial sector, improving its performance and strengthening partnerships and collaboration within the private sector. Under the program, 42 per cent of government spending will be redirected to the UAE-based companies by 2025.”

Energy Company, as the first three large national companies joining the National ICV Program. By joining the program, the trio will now prioritise local ICV-cer-

tified suppliers above other entities bidding for commercial contracts.

The move is part of the UAE’s wider National Strategy for Industry and Advanced Technology, which seeks to increase the national industrial sector’s contribution to GDP to Dh300bn by 2031 by supporting companies that produce goods and services in the emirates to fortify local supply chains.

As part of the country’s efforts to extend the ICV program at the federal level, the MoIAT signed MoUs with Etihad Rail, EDGE Group and Sharjah Investment and Development Authority (Shurooq), which became the second set of companies to commit to the program.

Al Suwaidi stressed that the new set of MoUs represent a big boost to the program following the first set signed last September. “It is a further testament to the opportunities the program offers partners and suppliers alike, which are supported by the Abu Dhabi Department of Economic Development, ADNOC and Aldar, among others.”

He noted that the National ICV Program is a key initiative that complements other initiatives aimed at devel-

The ICV program is expected to reach numerous milestones in that time, including increasing the internal demand for local products and services from Dh33 billion currently to Dh55 billion, while encouraging local manufacturers to diversify and develop their production to meet that demand.” oping the industrial sector. Most notable is UAE Industry 4.0, which aims to accelerate the adoption of the applications of the Fourth Industrial Revolution, and financing solutions offered by the Emirates Development Bank and Etihad Credit Insurance.

The National ICV Program aims to See Next Page

Through the great leadership of national champions such as MoIAT and ADNOC, the UAE is now advancing its journey towards supporting the UAE industry.”

David Mooney Vice President Efficio Consulting Middle East

“In-Country Value (ICV) creates benefits beyond regulatory compliance — it can reduce a company’s costs through local sourcing, improve the security and quality of supply, reduce lead times, increase sustainability, and enable knowledge transfer and upskilling of the workforce to future-proof the business”, say top leaders at Efficio Consulting, Middle East and Africa. “As such, ICV should not be seen as a burden or a nice to have, but as an integral part of business strategy and planning.”

Efficio Consulting, one of the largest global ICV specialist, procurement and supply chain consultancy, is working with clients across the Middle East, Africa, and other regions to realise the benefits of localisation. Adam Forgacs, the Head of Efficio’s dedicated ICV Centre of Excellence explains: “We have been working on ICV projects with organisations across the globe, and specifically in the UAE and Saudi Arabia, for over 15 years. What we have realised is that to make ICV successful and impactful, it is critical to implement it gradually and strategically in business operations.”

Efficio has developed a holistic ICV service offering that goes beyond the auditing of ICV performance and takes clients on an ICV development journey to maximise benefits: “The initial step is always to measure the as-is ICV contribution of a company — we achieve this through the in-depth analysis and mapping of our client’s spend and supply chain data, after which we develop a detailed baseline insights report and prepare our clients for their ICV audit to enable regulatory and bidding require-

ments. This is followed by defining ICV improvement opportunities and developing an ICV Improvement Plan — we use Efficio’s global strategic sourcing experience and our extensive local vendor database to identify opportunities for local sourcing, Emiratisation, workforce development, and wider capacity building in the supply chain. Once the opportunities are defined, we enable our clients to realise associated benefits through embedding ICV requirements into their business and procurement strategies, policies, and processes, and jointly execute the ICV development plans. We measure real-time ICV growth impact through our eFlow digital analytics and procurement platform, and provide regular training to secure long term sustainable benefits.”

Efficio has been working on ICV programs with several clients in the region: “We launched our ICV development work in the region in 2015 in the Kingdom of Saudi Arabia, where we supported the development of the national ICV measurement and development methodology. We have since been engaged with a wide range of petrochemical, telecommunications, mining, financial services, and other clients — often through multi-year partnerships — to develop and implement bespoke ICV development programs. Through the great leadership of national champions such as MoIAT and ADNOC, the UAE is now advancing its journey towards supporting the UAE industry, and this is creating tremendous opportunities for local companies to drive benefits through ICV,” says David Mooney, Vice

President, Efficio International Limited.

Asked if this program is relevant only for tier 1 large companies, Adam Forgacs says no: “ICV gives a comparative edge, when bidding with national companies, therefore, other small and medium-sized enterprises will have to start their ICV journey as well, initially from a baselining and certification perspective. However, as the ICV ecosystem matures, ICV development planning is becoming more and more relevant. Suppliers will be required to demonstrate a commitment to grow their national contribution over time — therefore, it is important to identify opportunities and establish a robust improvement plan today.”

Efficio is one of the world’s largest ICV specialist, procurement and supply chain consultancy. Efficio provides services in ICV development, strategic sourcing and cost reduction, capital projects procurement, procurement operating model development, digital procurement solutions and automation, and supply chain optimization globally.

Headquartered in the UK, Efficio has 13 offices worldwide, including offices in Abu Dhabi, Dubai and Riyadh, with over 600 procurement professionals.

For more information, reach out to Wiam Marhoum Head of Business Development MENA wiam.marhoum@efficioconsulting.com

khaleej times Thursday, January 27, 2022

ICV CERTIFICATION

KHALEEJ TIMES ADVERTISING SUPPLEMENT

POWERING INDUSTRIAL GROWTH

III

Stay a step ahead Since the adoption of ICV program at the Federal Level, certified suppliers shall benefit based on the expansion of content achieved by them

From Previous Page

support the local industrial sector and redirect public and private-sector expenditure to the local economy, specifically to UAE-based National ICV-certified suppliers.

While participation in the program is optional, certified suppliers will get priority when contracts and purchases are awarded. They will also qualify for development funding provided by the Emirates Development Bank.

The newest addition to MoIAT’s National ICV program is Tawazun Economic Council, the UAE defence and security industry and engineering and R&D programs enabler. Al Suwaidi pointed out that adding companies such as Tawazun Economic Council will enhance the program’s ability to achieve its goal of delivering comprehensive and sustainable development in the UAE’s industrial sector.

The UAE has now climbed five places in the 2021 United Nation’s Industrial Organisation’s Competitive Industrial Performance Index from its 2020 rank.

According to Al Suwaidi, the ministry has identified 21 independent companies that will issue the National ICV certificate after evaluating the value of suppliers’ domestic spending on manufacturing, products and services, the volume of investment capital in

CERTIFYING BODIES The following bodies are authorised by the Ministry of Industry and Advanced Technology to conduct a technical review on requests for In-Country Value (ICV) certification submitted by suppliers, and to issue certificates pertaining to the Ministry’s requirements: ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦ ♦

Al Raqamiya Management Consulting Firm ARC Associates Ardent Advisory and Accounting LLC Assist Plus for Accounting and Auditing Services Bakertilly MKM Chartered Accountants Crowe Deloitte & Touche (Middle East) Ernst & Young Evas International Chartered Accountants Focus Chartered Accountants Grant Thornton Auditing and Accounting HLB Hamt Chartered Accountants Hamid Al Kaabi Accounts Audit Kreston Menon Chartered Accountants Mayur Batra Group Mazars Chartered Accountants PKF - United Arab Emirates Protiviti RAI Audit Talal Abu-Ghazaleh & Co. International Zayed Chartered Accountant

the country, spending on salaries and expenses, the volume of exports, and other aspects.

Participants will receive priority during the award of contracts and procurements. The requirements of the certificate will help develop the operations of local suppliers.

Furthermore, the program aims to achieve several other objectives, such as expanding value chains, developing new industries and services, stimulating and attracting investments, diversifying the economy, increasing GDP, and creating job opportunities in the private sector.

Be proactive, secure your ICV Certificate As one of the certifying bodies to implement the ICV program in the UAE, Deloitte advises that it will be beneficial for all companies to join the initiative Businesses looking for longterm growth in the UAE should consider being a part of the InCountry Value (ICV) Program introduced by the Ministry of Industry and Advanced Technologies, says Padmanabha Acharya, UAE Audit and Assurance Leader, Deloitte Middle East.

“This is a strategic initiative of the UAE government and is aimed at strengthening the industrial economy in coming years. Firms of all sizes can benefit from the competitive advantage that this program will bring. I think companies would benefit from being proactive and obtaining their ICV now, rather than only acting when it is required during the tender process ,” says Acharya.

An ICV Certificate may be obtained by any company inside or outside the UAE, in accordance with the ICV guidelines. As part of the National ICV Program, tier 1 suppliers (the ones who directly provide goods or services to the partners of the program) may be required to declare their ICV score as this is an integral part

of their tender evaluation and award process. Tier 2 and below suppliers may also be required to provide their ICV certificate to ensure competitiveness in their tenders with Tier 1 suppliers.

Deloitte is among the 21 certifying bodies to implement the ICV program for the Ministry of Industry and Advanced Technology (MoIAT). The program’s strategic partners comprise a cluster of government entities and leading national companies in diverse fields, including the program’s implementers, such as the Abu Dhabi Department of Economic Development (ADDED), Abu Dhabi National Oil Company (ADNOC), and Aldar Properties.

More government sectors and federal firms are becoming a part of this initiative, making the ICV

NATIONAL ICV FORMULA SERVICE PROVIDERS

NATIONAL ICV FORMULA GOODS MANUFACTURERS

Third-Party Spend Investment Emiratisation Expat Contribution

Padmanabha Acharya UAE Audit and Assurance Leader Deloitte Middle East

Manufacturing Cost Investment Emiratisation Expat Contribution

score increasingly a requirement.

The core principles of this program are to boost the contribution of local industries to the national GDP of the UAE and improve the productivity and substitutability of the UAE’s industrial sector.

As of now, participating entities include the Department of Economic Development, ADNOC, Aldar, Mubadala, Etisalat, EDGE, Etihad Rail, Emirates Nuclear Energy Corporation, Shurooq, TAQA, EGA and ESI. “The ICV program has a cascading effect wherein certain best practices will become a norm and benefit the economy on the whole.

The key objectives of the program include strategic expansion of supply chains and the development of new local industries and services. This will in turn stimulate and attract foreign investments, increase exports and add to the diversification of the economy. All while creating valuable job opportunities in the private sector, enhance spending on R&D and advanced technology and increase the private sector’s contribution to national GDP. Over the years, this initiative will add more depth to the economy and also allow firms to become more competitive,” adds Acharya.

There are several aspects that are key to securing ICV Certification, including local expenditure on manufacturing, local products and services, investments, and the hiring and development of Emiratis.

The goal is to support the national industry and redirect expenditure on procuring goods and services into the national economy.

Typically, companies take about three to six weeks to understand the requirements of the program and furnish financial and other pertinent information based on the ICV template. “I strongly encourage businesses to be proactive rather than reactive and enroll for the ICV program now. Many firms come knocking at the doors of auditors at the time of preparing for a tender process.

This should change. Firms should look at their ICV certification and resulting scoring as ways to improve their business, which will ultimately add to their credentials and drive competitiveness in coming year.”

The UAE government plans to redirect about 42 per cent of its spending towards locally based companies by 2025 and by year 2031, this is expected to increase to 50 per cent, hence adding more depth to the local market and making it more competitive for large as well as small and medium firms.

The increase in government spending is aligned with the expected rise in local demand.

Industry estimates suggest internal demand for products and services is expected to increase from Dh33 billion at present to about Dh55 million by 2025.

“This is an opportunity for the UAE-based companies to strengthen their industrial base and have an In-Country Value (ICV) certification now to be able to benefit from a burgeoning manufacturing and services sector,” says Peeyush Joardar, CEO, MBG Corporate Services.

The ICV program is one of the pillars of the National Strategy for Industry and Advanced Technology. It aims to support industry by redirecting the procurement practices of government and national companies to local suppliers who hold the program’s certificate, which can be attained by achieving certain criteria. Since the adoption of ICV program by the Federal Government, certified suppliers are at an advantage during the award of tenders and contracts based on their ICV score.

“The ICV program was started

by Abu Dhabi National Oil Company (ADNOC) in early 2018 and it was later adopted by the ADNOC group of companies. In late 2019, the program was expanded

Peeyush Joardar CEO MBG Corporate Services to cover government and semigovernment entities.

In September 2021, the Ministry of Industry and Advanced Technology (MoIAT) announced its expansion to the federal level in the UAE. Hence the ICV certification process is governed by MoIAT. “The ICV score constitute major vendor selection criteria for supply of good and services and is part of the procurement policy of for each and every company and national companies prefer to deal with suppliers having ICV certification, whether they are tier 1 or tier 2 suppliers,” said Joardar.

This means, companies in the UAE are now keen to expand the procurement of goods and services and thereby reduce dependence on foreign supply chains and allowing better control over quality and logistics. This has arguably been one of the key learnings during the pandemic.

Local content and manufacturing does not only add value to an economy, but makes it more efficient as well.

“A firm with a good ICV score will get the first right of refusal when participating in contracts and tenders. Further expanding

the UAE’s industrial base through ICV certification provide suppliers with many competitive advantages, including provision of financing,” says Joardar.

Mass adoption of the ICV program will also promote knowledge transfer, self-sufficiency, business continuity and expands the variety of local supply options along with showcasing products and services to international audience and encourage partnership with international companies looking for competitive advantage of joint supply.

MBG Corporate Services was approved as one of the ICV certifying bodies in April 2019. It has offices in Abu Dhabi, Dubai, and Sharjah.

MBG has helped many companies in acquire ICV certification. The process of certification usually takes about 10 to 12 working days from the date of receiving complete set of documents/ information’s, and the certification is valid for 14 months from the date of the audit report. The main challenges for companies are understanding the process and getting all the required paperwork and financials in place. At MBG, we make our clients understand the ICV template, acquaint them with guidelines applicable to their nature of business, educate them on the importance of having suppliers who have ICV scores, eligible and ineligible expenses involved, help them to organise their documents.

MBG stands out for its competence in educating and guiding the suppliers on how to improve their ICV score as per the AUP guidelines issued by the committee. “We advise clients on way forward based on their business model, organisation structure, supply chain complexities, procurement policy, HR policy, outsourced policy etc. along with detailed analysis of their financials to identify the local content element in their operations. This way we are doing some sort of micro analysis before devising a process for our clients,” notes Joardar.

Thursday, January 27, 2022 khaleej times

IV

ICV CERTIFICATION

KHALEEJ TIMES ADVERTISING SUPPLEMENT

POWERING INDUSTRIAL GROWTH

Building on Regional Reputation

Yousif Alkhanjari Managing Partner Assist Plus Accounting and Auditing Services

Muhammad Aaliyan Managing Partner Assist Plus Accounting and Auditing Services

In conversation with Yousif Alkhanjari, Managing Partner, Assist Plus Accounting and Auditing Services Assist Plus is a UAE based company, headquartered in Abu Dhabi, with a branch office in Dubai. The company was created to provide value-added financial services to clients across the whole UAE. Over the years, it has managed to establish itself as a company of stold and regional reputation.

Building on milestone achievements, we are one of the Federal Tax Authority agencies in the region.

We are proud to have been selected in 2020 as one of the accounting firms in the UAE to conduct the assessment for potential government and semigovernment clients and issue the national in-country ICV certificate to the private sector companies. This, for me, is a place of responsibility and community trust that I hold the highest regard for. I am delighted with how we are progressing; with the our offices in Abu Dhabi and Dubai,” said Yousif Alkhanjari, Managing Partner, Assist Plus. “Further into the future, we are eyeing to expand in Saudi Arabia and Oman. So the scope of growth is immeasurable, and I am positive of what times ahead hold.”

Speaking about the significance of ICV certification, Alkhanjari, collectively with Assist Plus’s ICV Partner, Muhammad Aaliyan, described the “ICV or the In-Country Value Program as a catalyst for stimulating economic growth and social productivity. It is designed to gain optimal value, accelerate growth and develop our people.

The main aim of ICV is to enable the country to

create value within its ecosystem. It started three and half years back, pioneered by ADNOC. As a huge conglomerate, ADNOC was able to attract international partners to their projects. The foundational idea of ICV is to see how we can move a proportion of these investments to stay within the country. Today, the UAE Ministry of Industry and Advanced Technology is tasked to ensure national implementation of the program. So basically, to make it simpler, what they are trying to do is to see how can the local suppliers, along with the public sector, which is the government and the semi-government entities how can they have a big percentage of their spending retained within the country.”

“The program itself actually steers into five main pillars — one is the supply chain management to be within UAE, recruiting the expatriate within the UAE, increasing the Emiratisation percentage within the private sector – this is part of the national wide strategic objectives, increasing total revenue from outside the UAE and lastly, strengthening the investment element. Through investment, we are trying to encourage and promote the local companies or even the international companies coming to UAE to be investing in UAE, whether it is property, plots or manufacturing in one of the free zones. This is also one of the essential elements that the program promotes in order to have direct foreign investment within the UAE,” he elaborated.

ICV is indeed a means to empower the country and its economy by investing in its resources. “The intent is to make UAE self-sufficient and even more progressive. We build from what we have, and as we empower our industries, I anticipate that export will soon become the fourth pillar of the program leading to further growth of the economy. So the future is bright with ICV,” concluded Alkhanjari.

Certified Success Vijay Mohan, Managing Partner, Evas International talks about the importance of the ICV certification process in the National In-Country Value program Evas International are a team of auditors, tax and business advisors with over 15 years of experience in the UAE and GCC region.

The company caters to a broad spectrum of clientele and offers services ranging from audits, business process reviews, data analysis, CFO services and bookkeeping, to compliance, corporate advisory and so on. Furthermore, Evas International is also an FTA approved tax agent and a certifying body for the ‘National In-Country Value Program’.

The ICV Certification process Talking about ICV certification, Mohan said that the process is quite straight forward, with the preliminary requirement for an entity to have audited financial statements issued in accordance with International Financial Reporting Standards (IFRS). He adds that based on the financial statements, and in adherence to the supplier guidelines issued by the MoIAT, the company must fill in the supplier template. After that, the entity can consult and engage a certifying body to carry out the score evaluation process and issue the certificate. Mohan informed that the certificate will be valid for a period of 14 months from the date of issue of the audit report and can be submitted to all the implementing agencies of the National In-Country Value Program.

Significance of the ICV Certification Speaking about its significance, Mohan mentions that in March 2021, the UAE launched Operation 300Bn, an ambitious

Vijay Mohan Managing Partner Evas International 10-year program, which aims to boost the GDP contribution of the country’s industrial sector from the current Dh133 billion to Dh300 billion by 2031.

In order to lead this strategy and roll out initiatives in support of over 13,500 SMEs in the sector, the UAE has established the Ministry of Industry and Advanced Technology (MoIAT).

Presently, MoIAT has two critical campaigns under its wing, which are ‘Make it in the Emirates’ and the ‘National ICV Program’. The latter program, since its inception back in 2018, has been focused on three key areas: diversification of the country’s GDP, creating opportunities for talent in the private sector and strengthening critical parts of the supply chain by re-directing procurement to suppliers within the country.

Mohan notes that the program has several participating entities, which are the key implementers. These entities, in the tender evaluation process, give the bidding companies the option to produce their ICV certifi-

cate, and the ICV score is given a weightage in the overall evaluation. As a result, more and more businesses over the last couple of years, have been applying for the certification, in order to participate and win contracts from these participating entities. He further adds that these entities also tend to direct their procurement from companies that are ICV certified, since this helps improve their own score.

Aligning with the UAE Energy Strategy 2050 Mohan highlights that the UAE is spearheading the laudable strategy of increasing the contribution of clean energy in the total energy mix and reducing the carbon footprint of power generation to 30 per cent by 2050. This eventually, contributes towards the world’s sustainability measures and goals. He concludes by urging companies applying for ICV certification to have a peripheral vision, understand the program’s essence and contribute to the transformation of UAE’s economy.

Streamlining Business Performance The ICV program helps companies grow responsibly by streamlining their investment decisions Suneeti Ahuja-Kohli

The National ICV Program facilitates diversification of the economy by attracting foreign direct investment in the domestic industrial sector.

At Crowe UAE, the senior leaders believe that it also enhances the competitiveness of companies, besides bringing the much-appreciated discipline to the financial ecosystems of private companies.

“The ICV program is creating value for the economy and expanding it by allowing the money to circulate within the economy. It is pushing suppliers to procure goods from the local market, and encouraging players to set up industries locally,” said Umesh Narayanappa, Partner at Crowe UAE. ADVANTAGES OF ICV PROGRAM The scale and scope of this program has been expanding with time. Last year, the UAE’s Ministry of Industry and Advanced Technology and the Ministry of Finance implemented the ICV program for the procurement policies of all 45 federal government entities, including ministries, federal authorities and institutions. Twelve national companies also require ICV scores and certificates from all their suppliers. The ICV program is notably a part of ‘Projects of the 50’ initiative, which will allow it to expand its coverage more over the coming years.

This essentially means tier one firms in the UAE will give preference to suppliers with ICV scores and certificates for sourcing of products and services.

The ICV program is helping shift the procurement strategy from overseas to the local market. But this program isn’t just about securing a certificate or a score. The ICV program is designed to become an integral part of businesses by streamlining a company’s investment decisions, hiring strategies, procurement processes, and supply chain mechanism. The benefits of such exercises are immense and will be visible to companies in just a few years.”

Zayd Khalid Maniar International Liaison Partner Crowe UAE There are several merits of this program that are being realised. Certified small and medium enterprises, for instance, are able to streamline their business practices and grow well with the expansion of the local economy.

“The ICV program is helping shift the procurement strategy from overseas to the local market. But this program isn’t just about securing a certificate or a score. The ICV program is designed to become an integral part of businesses by streamlining a company’s investment decisions, hiring strategies, procurement processes, and supply chain mechanism.

The benefits of such exercises are immense and will be visible to companies in just a few years,” said Narayanappa.

THE IDEAL FIT Crowe is among the leading firms providing audit, tax, and advisory services in the UAE and the region for over four decades.

The company is among the handful ICVcertifying bodies in the UAE and has helped several hundreds of companies in implementing the program.

“We started providing ICV-related services in June 2019, and in the last 30 months, we have helped the government and private sector firms across industries, including oil and gas, trading, hospitality, education, construction, and

contracting companies. These include firms based in the UAE as well as outside the country,” added Zayd Maniar, International Liaison Partner.

“Clients should start preparing for this certification from day one of the financial year and focus on embedding the right processes into their business for a sustained growth,” said Maniar. He further added that Crowe helps its clients audit financial reports, prepare and achieve certification, and also provides guidance along the way by knowledge sharing.

We notice many companies taking various action towards the ICV program and improving the ICV score and benefitting from the ICV program. Many of such actions include: ♦ Hiring and training of Emirati nationals. ♦ Procurement of goods / services from local vendors particularly from local vendors with a better ICV score. ♦ Encourage suppliers to obtain the ICV certificate and improve the score. ♦ Encourage suppliers based outside the UAE to establish their operations in UAE. ♦ Make necessary updates to ERP / accounting system to extract supplier wise cost reconciling to the financial statements.

Umesh Narayanappa Partner Crowe UAE ♦ Local investments in fixed assets and expand the operations. ♦ Having all the resources under the visa of the company and process salary through WPS only. ♦ Maintaining relevant documents for export of goods/ services (with value addition) and collection of amount from outside the country.

In order to achieve that, companies are required to make committed efforts to improve the ICV score by contributing towards achievement of objective of the ICV program.

The criteria for the ICV program is uniform for all firms, big and small, private or government. “A small company that is, say, two-day old can also apply for this program. The program allows companies that are less than nine months old to get the certificate based on management accounts.

“Many start up companies with hardly a week’s maturity and with a very limited transactions have come to us for certification. With the ICV certificate, they are able to register themselves with the participating entities / customers and start participating in the tenders,” said Narayanappa.

Crowe UAE is a member of Crowe Global, one of the top 10 accountancy networks in the world.

The scale and scope of this program has been expanding with time. Last year, the UAE’s Ministry of Industry and Advanced Technology and the Ministry of Finance implemented the ICV program for the procurement policies of all 45 federal government entities, including ministries, federal authorities and institutions. Twelve national companies also require ICV scores and certificates from all their suppliers. The ICV program is notably a part of ‘Projects of the 50’ initiative, which will allow it to expand its coverage more over the coming years.”

Crowe UAE has assisted several entities in implementing ICV program through providing necessary guidance on updating the policies and procedures to incorporate the principles of National ICV program.

Companies can also refer to the FAQs on ICV program prepared by Crowe for the benefit of companies in implementation of ICV program (www.crowe.com/ae/ services/audit/faq-on-national-in-country-value-program).

For more information, contact Crowe UAE Abu Dhabi: 3701, Floor 37, Addax – C1 Tower, Al Reem Island ADGM: 2426, Floor 24, Al Sila Tower, Al Maryah Island, Abu Dhabi Global Market Square P.O. Box: 109460 Tel: +971 2 6781130

Dubai: Level 21, The Prism, Business Bay P.O. Box: 6747 www.crowe.ae