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Presenting partner

ISSUE 100 strategic SME partner

BUSINESS CHAMPION An SME masterclass with NBAD’s Abdulla Al Otaiba

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CELEBRATING THE SME SECTOR WITH PRESENTING PARTNER NBAD


SME ADVISOR ISSUE 100

EDITORIAL COMMITTEE SME Advisor is delighted to announce that during 2014 we will be working with some of the leading names in the SME space key figures who have kindly agreed to take part in our new Editorial Committee. This panel will play a vital role in channeling the feature content of our magazine and ensuring that we are more topical than ever - analyzing and discussing the ‘real world’ issues of tangible value to our readership and bringing industry-leading expertise across the publication and its raft of prestigious related events. We are delighted to introduce the following SME personalities:

Alexandar Mathew Williams Alexandar Mathew Williams is presently the Director of Strategy and Policy at Dubai SME, a government agency of the Department of Economic Development (DED) tasked with the development of Entrepreneurship and Small & Medium Enterprises (SMEs) in Dubai. He has logged more than 20 years’ experience in public policy and strategic programme development focusing on micro-economic, business and SME development. Anas Halabi Anas is Managing Partner at Prediam Partners, an independent investment CFXKUQT[ƂTOHQEWUGFQP real estate, hospitality and related ventures that he co-founded. Prediam has successfully assisted in setting up, UVTWEVWTKPICPFƂPCPEKPIPWOGTQWUTGIKQPCN and international projects and startups, including an innovative application for Muslim travelers, an aggregator website for tourists in the UAE, an income producing hospitality portfolio in Dubai and a boutique hotel development in Beirut. Mona Tavassoli With over a decade of work experience, Mona Tavassoli is the Founder of Mom Souq (www.momsouq.com), an online community and bazaar for mothers residing in the UAE, through which mothers can network with each other, share advice and their experiences. As an extension, with the aim of continually providing support to working mothers in this region, Mona launched a new platform - Mompreneurs Middle East (www. mompreneurs.me).

Laudy Lahdo Laudy Lahdo is currently the General Manager of Servcorp, an Australian-based global provider of QHƂEGUQNWVKQPUKP the Middle East region. She joined the company in 2003, after her move from Australia to the United Arab Emirates and as General Manager, has helped grow the EQORCP[HTQOLWUVQPGQHƂEGKP&WDCKoU Emirates Towers to 11 branches spread across the UAE, Bahrain, Qatar, Kuwait, Lebanon and Turkey. Servcorp provides both small and medium sized enterprises (SMEs), as well as multinationals, with the best locations, facilities, and technology and business support services in over 140 locations worldwide. Simon Hodges Simon has more than 30 years of experience working for international companies at Board level. He has spent over 10 years in the UAE and was previously Corporate Director of Administration of The ,WOGKTCJ)TQWR5GPKQT'ZGEWVKXG1HƂEGT of Dubai Holding Insurance Services LLC and Head of Governance for ADNEC. He also completed a two-year assignment as head of the health funding project for the Government of Dubai. Since 2011 he has been mentoring business owners from Dubai to enable them to create and then manage effective organisations that support business growth. Hazel Jackson Hazel has built an impressive reputation and successful multimillion dollar business – biz-group FZ LLCduring the past 19

years based in Dubai. Nearly two decades ago, and with just US$700 in her pocket, Hazel founded biz-group, which she has developed from a small training company into an organisation of 42 professionals servicing the Middle East’s corporate training, team building and business strategy needs. Passionate about impacting performance, biz-group’s success is a testament to Hazel’s entrepreneurial spirit. Kay Braganza A seasoned public relations professional and successful GPVTGRTGPGWTYKVJĆ‚XG years of experience in the industry and an extremely commendable portfolio, Kay Braganza decided to pursue her love PR and start up her own agency four years ago. Here, she aims to cater to the demand of CĆƒGZKDNGCPFCVTWN[DGURQMG24UGTXKEG which strives to make a lasting difference to companies of all sizes. A recognized and respected expert in the PR world, her RTQĆ‚EKGPE[KPVJGĆ‚GNFURGCMUHQTKVUGNH after working in it for nine years and having dealt with reputed clients such as Sony Gulf, Nokia, Mom Souq, and Clarion Events amongst many others. Nadine Halabi Nadine Halabi has been the Coordinator of the Dubai Business Women Council since August 2011. Since then, she has been managing the overall operations of the exclusive Council, coordinating the high RTQĆ‚NGDQCTFOGODGTUKVUUVCMGJQNFGTUCPF members in line with the values, visions and missions as set out by its President, Mrs. Raja Al Gurg. Prior to her joining the DBWC, she worked at an events management and PR CIGPE[KP$CJTCKPYJGTGUJGĆƒQWTKUJGFKPC senior role as Deputy General Manager.


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MANAGEMENT Dominic De Sousa Chairman Nadeem Hood Group CEO Georgina O’Hara Group COO EDITORIAL Group Director of Editorial Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Group Managing Editor Melanie Mingas melanie.mingas@cpimediagroup.com +971 4 440 9152 Sub Editor Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 ADVERTISING Group Director of Sales Carol Owen carol.owen@cpimediagroup.com +971 4 440 9110 Commercial Director - Business Division Chris Stevenson chris.stevenson@cpimediagroup.com +971 4 440 9138 Media Sales Executive Ibrahim Parwaz ibrahim.parwaz@ cpimediagroup.com +971 4 440 9161 Media Sales Executive Emma Hughes emma.hughes@ cpimediagroup.com +971 4 440 9120 Event Sponsorship Manager Gill Fairclough gill.fairclough@ cpimediagroup.com +971 4 440 9120 MARKETING Head of Marketing and Events Julia Jagiello julia.jagiello@cpimediagroup.com +971 04 440 9131

FROM THE EDITOR A POWERFUL NEW ALLY IN THE SME SPACE It’s entirely appropriate that in this, the 100th issue of SME Advisor, we can proudly announce that National Bank of Abu Dhabi (NBAD) is joining us as Presenting Partner. Perhaps more than any QVJGTĆ‚PCPEKCNGPVKV[KPVJGTGIKQPVJKUKUVJGDCPMVJCVJCUFTKXGPHQTYCTFVJG5/'ECWUGCPFVTWN[ has the in-house expertise and resources to empathise with, encourage - and properly advise aspirational businesses. It’s also extremely clear in its remit of seeing the importance of providing UGEQPFCT[CPFVGTVKCT[Ć‚PCPEGQPGQHVJGnHQTIQVVGPoVQRKEUQH5/'NKHGKPVJGTGIKQPDWV perhaps the single most important route to enabling growth, as a business heads from successful start-up to maturity. This new alliance also comes at a time when there are many dramatic developments on the horizon for the SME community. The relationship with NBAD will prove a powerful catalyst in helping SME Advisor fully analyse the implications these are sure to have for the sector. Let’s take a look at three of the factors currently making their way into the world of the SME. Firstly, The Department of Economic Development (DED) has announced that from May 15, there will be a new 120-day business licence, which allows entrepreneurs to start their businesses immediately and complete the rest of the licensing requirements, which includes approvals from other government authorities, within a 120-day period. So the reality is that if you thought you knew the competitors in your marketplace, guess again. Plus if you were thinking that you wanted VQUVCTVCDWUKPGUUDWVYCPVGFVQTQNNQWVVJGDWUKPGUUVGORNCVGCPFnCUUGUUVJGOCTMGVoNKVGTCNN[ from Day One - now you can. Then, the new Companies Law 2013 will be on the stature books, and business owners can expect to see the weight of its recommendations regarding areas such as Corporate Governance making a critical difference whenever company behaviour is called into question. (eg, “What did your business do to ensure proper and correct use of materials, etc.?â€?). Finally, if ever proof was needed that an SME has to be nimble and quick to adapt, it’s the fact that currently, there is more and more talk about a potential thaw in global relations with Iran. If we see some (or indeed all) of the CISADA sanctions being eased, how many SMEs would have any idea how to make a start leveraging what could be thousands of fresh opportunities? To navigate potential developments like these, it pays to have powerful commercial allies, and an entity like NBAD has evolved - and been comprehensively tried and tested - throughout VJGXCTKQWUIGQRQNKVKECNCPFĆ‚PCPEKCNVTGPFUKPVJGTGIKQP+COUWTG[QWYKNNLQKPOGKPYCTON[ welcoming them on board. Enjoy this issue of SME Advisor.

DESIGN Head of Design Glenn Roxas Senior Graphic Designer Froilan Cosgafa IV Production Manager James Tharian Distribution Manager Rochelle Almeida Data Manager Rajeesh Melath Printed by Al Ghurair Printing & Publishing LLC

Paul Godfrey Senior Editor Talk to us: E-mail:paul.godfrey@cpimediagroup.com

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PRESENTING PARTNER

i>`"vwVi PO Box 13700, Dubai, UAE Tel: +971 (0) 4 440 9100 Fax: +971 (0) 4 447 2409 Š Copyright 2014 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.

STRATEGIC SME PARTNER

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CONTENTS

Connectivity is recognised as a key opportunity for the SME sector, offering companies the chance to extend their marketing reach from local to global, to reap the rewards of unprecedented market intelligence

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p28

THE BITCOIN IS A HIGHLIQUIDITY, VIRTUAL CURRENCY THAT HAS BEEN SPECIFICALLY DEVELOPED TO ENABLE EXCEPTIONAL TRANSPARENCY OF DEALINGS AND FULLY ENCRYPTED TRANSFER AND EXCHANGE p40

The UAE economy is set to grow with significant pace in 2014 due to an overall positive outlook for sustainable growth, and with investors’ confidence building momentum p44

Exporting can be a profitable way of expanding your business, spreading your risks and reducing your dependence on the local market p48

03 EDITORIAL COMMITTEE SME personalities bringing industry-leading expertise across the publication and its raft of prestigious events. 05 EDITOR’S NOTE Paul Godfrey on a powerful new ally in the SME space. 08 SHOPTALK News and developments impacting SMEs in the region. 12 FINANCE FOCUS 7KHODWHVWŵQDQFLQJRSSRUWXQLWLHVIRU 60(VDQGDOOLHGŵQDQFLDOVHUYLFHV 16 SME ABOUT TOWN Key events attended by SME owners and managers.


SME ADVISOR ISSUE 100

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SHOPTALK

DED RAISES CREDIT CARD PAYMENT LIMIT The Department of Economic Development (DED) has raised the limit of credit card payments for business licensing transactions from AED 50, 000 to AED 100, 000. This is applicable to transactions completed through the smart application (app) ‘Business in Dubai’ and DED’s website,  www. dubaided.gov.ae. Credit card payments on the app and DED’s website are processed through the Dubai Government e-payment gateway (e-gate). This change is in line with the Dubai Smart Government initiative and the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to transform Dubai

Mohammed Shaal Al Saadi, Chief Executive 1HƂEGTQHVJG$WUKPGUU4GIKUVTCVKQP.KEGPUKPI UGEVQTKP&'&

into the smartest city in the world. With the limit raised on credit card payments, DED has taken another significant step in enhancing the ease of doing business in Dubai and demonstrating its commitment to Dubai Smart Government. Businessmen and investors will now find it more convenient to make payments and complete their transactions electronically. Mohammed Shaal Al Saadi, Chief Executive Officer of the Business Registration & Licensing (BRL)

sector in DED, said: “DED is focused on facilitating processes for investors in coordination with other authorities concerned in the Emirate. We seek to ensure that strategies are translated into applications and business procedures and trade licences in Dubai are aligned with best practices, which is a key factor in business competitiveness and sustainability.” “We are proud to be transforming to a smarter way of serving our customers and thereby upholding the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum. This will provide us an additional competitive edge and bring us to the forefront of globally adopted technologies,” the CEO said. The Smart Dubai initiative aims to transform Dubai into the smartest city in the world through 100 targeted initiatives and 1,000 smart services, which will improve quality of living in Dubai. The initiative will focus on six areas – smart economy, smart living, smart transportation, smart governance, smart environment, and smart generation– largely based on three main themes, which are Communication, Integrity and Co-operation.

‘SMART’ TRADE LICENCE RENEWAL The trade licence renewal process is all set to go ‘smart’ starting April 14, 2014 as revealed by the Department of Economic Development (DED). This initiative comes in line with Dubai’s vision to become the smartest city in the world. Investors can have their trade licences renewed either through the smart application ‘Business in Dubai’ on iPhones, iPads and Android devices or by logging on to DED’s website, www.dubaided. gov.ae. The DED service centres across Dubai will also continue to

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provide trade licence renewal services but all DED branches will stop manual processing of such transactions effective April 14, 2014. With the trade licence renewal process going smart, DED has taken another VLJQL¿FDQWVWHSLQHQKDQFLQJ the ease of doing business in Dubai and demonstrating its commitment to Dubai Smart Government. Businessmen and investors will now be able to save considerable amount of time and effort as their trade licences can be renewed with the push of a button.

Mohammed Shaal Al Saadi, Chief Executive Officer of the Business Registration & Licensing sector in DED, said customers can now choose to renew their licences through the smart application or at the service centres that are fully equipped to take care of investor needs. “We are very proud to announce this transformation to a smarter way of serving our customers and thereby demonstrate our commitment to the vision of His Highness Sheikh

Mohammed Bin Rashid Al Maktoum. This will provide us an additional competitive edge and bring us to the forefront of globally adopted technologies,” the CEO said. “DED has a network of service centres conveniently located in various parts of the city. Meanwhile, we will also continue to bring more services to the smart services platform as we are committed to Dubai’s vision of sustainable economic development and integrating the latest technology in our service delivery,” added Al Saadi.

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SHOPTALK

During the conference

EIGHTH CYCLE OF MRM AWARD LAUNCHED At the opening of the International Conference for the launch of the eighth cycle of the Mohammed Bin Rashid Al Maktoum Business Award 2014, His Excellency Mohammed Ahmed Bin Abdul Aziz Al Shehhi, Undersecretary, UAE Ministry of Economy, stated that innovation excellence is key to our

quest and is leading our movement towards a knowledge economy. He further stressed that the Mohammed bin Rashid Al Maktoum Business Award, which has now gone GCC-wide, is one step towards FXOWLYDWLQJDXQL¿HGDSSURDFKWR innovation. He also informed that as an integral part of the vision and destiny of the Gulf, the UAE is working to remove obstacles to growth and encourages sharing best practice across the GCC region. HE Al Shehhi welcomed the start of the eighth cycle of the Mohammed bin Rashid Al Maktoum Business Award

organised by Dubai Chamber and with it a new push to embed business excellence across the region for which everyone has to play his role in creating a world-class economy, he said adding that the international conference will provide the impetus to achieve the targeted goals of economic growth and prosperity in the GCC region. Wishing all participating organisations best of luck at this 8th cycle of the all-inspiring Award, HE Al Shehhi lauded Dubai Chamber’s efforts in initiating the Award and for continuously promoting a culture of excellence amongst the business community not only in the UAE but the rest of the GCC region. In his keynote address, HE Hisham Al Shirawi, 2nd Vice Chairman, Dubai Chamber, said that this latest cycle of the Award, and its complementary Business Performance Programme, is now open to all privately owned businesses across the GCC as business excellence and the quest for innovation and global competitive advantage will have no borders within the GCC region. He further added that GCC Chambers will also have a role to play in this transformation process of encouraging innovation and the creation of competitive advantages as well as supporting the concept of a single innovative market.

ZURICH INSURANCE AND DUBAI SME JOIN HANDS Dubai SME and global insurer Zurich have signed a MoU which will see them offer insurance advice and risk management insights to the Dubai SME100 companies. The initiative aims to increase awareness and understanding of the crucial role of risk management and insurance in the growth of an SME. As part of the MoU, Zurich will organise joint seminars with Nexus – Dubai SME’s broker partner – on key topics of insurance and risk management targeted at

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SMEs. Zurich will also provide bespoke insurance advice – covering both general and life insurance – which will help WKH60(¿UPVVDIHJXDUG their businesses. 7KH0R8LVVLJQL¿FDQWLQ that many SMEs in Dubai and across the wider region are failing to get adequate insurance cover or undertake risk assessments. As a result, the SMEs are unnecessarily exposed to unforeseen risks that could threaten the very existence of their business – risks that could be

mitigated by partnering with an insurance company and getting adequate cover. “Our SMEs need to understand and appreciate better the role of insurance and risk management in their business security and sustainability,” commented Abdul Baset Al Janahi, CEO of Dubai SME. “Dubai SME is therefore pleased to partner with Zurich and related stakeholders to increase awareness on insurance as a long term security and investment strategy.”

“SMEs play a key role within the economy and so we are delighted to be supporting Dubai SME by providing insurance advice and risk insights,” said Brian Reilly, CEO of Zurich’s General Insurance business in the Middle East. “We don’t just provide insurance cover. We act as a partner with SMEs to ensure that their business continuity plans can be executed during any unforeseen eventuality that may affect the operation of its business.”

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SHOPTALK

DUBAI SMEâ&#x20AC;&#x2122;S MOU WITH TAYLOR WESSING In a move to raise awareness and impart knowledge to Dubai SME100 companies in the areas of Intellectual Property management and fundraising in capital markets, Dubai SME has signed a Memorandum of Understanding (MoU) with the LQWHUQDWLRQDOODZÂżUP7D\ORU:HVVLQJ $VSDUWRIWKH0R87D\ORU:HVVLQJ and Dubai SME will organise joint seminars on key topics such as intellectual property and IPOs on 1DVGDT'XEDL,QDGGLWLRQWKH\ZLOO also offer one-on-one advisory sessions to the Dubai SME100 companies â&#x20AC;&#x201C; providing a high level of feedback on JDSVDQGUHFRPPHQGDWLRQV Intellectual Property management and fund-raising are complex subjects, which the Dubai SME100 companies have indicated they would like to be educated, particularly around legal due diligence, corporate governance and

the regulatory requirements locally DQGLQWHUQDWLRQDOO\LQWKHVHDUHDV Abdul Baset Al Janahi, Chief ([HFXWLYH2IÂżFHURI'XEDL60(VDLG that the development of the Dubai and UAE economy, and the emerging opportunities and trends demand that local SMEs deepen their awareness of Intellectual Property management issues as a means to innovate for IXUWKHUJURZWK Âł:LWKUHVSHFWWRDFFHVVWRÂżQDQFH

our top SMEs should also explore the possibility of raising funds in the capital markets, not just through SULYDWHHTXLW\RUEDQN¿QDQFLQJ:H have the trading platform through Nasdaq Dubai, and our growth SMEs should tap this opportunity to raise QHZ¿QDQFLQJVWUHDPVDQGEXLOG JOREDOEUDQGVWKRXJK,32V,WZLOODOVR make Dubai the destination to raise equity capital for good quality SME EXVLQHVVHV'XEDL60(LVWKHUHIRUH SOHDVHGWRSDUWQHUZLWK7D\ORU :HVVLQJLQWKHVHWZRFULWLFDODUHDVDV major corporate strategies for SME GHYHORSPHQW´$O-DQDKLDGGHG %HQ&RQVWDQFH3DUWQHURI7D\ORU :HVVLQJœV'XEDLRI¿FHVDLG ³7D\ORU:HVVLQJLVYHU\SOHDVHGWR EHLQSDUWQHUVKLSZLWK'XEDL60( Collaborating with the SMEs in Dubai LVDQH[FLWLQJSURMHFWIRUXV7KH60( sector in Dubai is clearly a thriving and dynamic segment of the economy and one, as a professional advisory ¿UPZHLQWHUDFWZLWKUHJXODUO\ :HKRSHWKDWRIIHULQJLQWHUQDWLRQDO standard advice to SMEs will help SME100 companies to develop further and attract funding to take them to WKHQH[WVWDJHRIWKHLUJURZWKF\FOH´

SMEs RECEIVE RECOGNITION FOR STRONG EXPORT PERFORMANCE In an exclusive ceremony, Dubai Chamber of Commerce and Industry honoured four companies as SME Exporters of the Month extending from October 2013 WR-DQXDU\7KLVFDPH DVSDUWRIWKH&KDPEHUÂśV initiative to encourage strong export performance among LWVPHPEHUV His Excellency Hisham Al Shirawi, 2nd Vice Chairman, Dubai Chamber, congratulated the representatives of the four companies including Ronesca Middle East FZCO, Kimoha Entrepreneurs /LPLWHG)DU]DQD7UDGLQJ and Atarfil Middle East as

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he presented them with a certificate of recognition and an SME Exporter of the 0RQWKWURSK\ +($O6KLUDZLVDLG â&#x20AC;&#x153;Coming in line with 'XEDL&KDPEHUÂśV strategic objectives of creating a favourable business environment and supporting the development of business in Dubai, the SME Exporter of the Month recognition encourages a conducive business environment in the Emirate while contributing to VWUHQJWKHQLQJ'XEDLÂśV SRVLWLRQDVWKHZRUOGÂśVWKLUG ODUJHVWUHH[SRUWFHQWUH´

The  winners 7KHKRQRXUZHQWWR Ronesca Middle East FZCO in recognition of its distinguished export performance for achieving the highest export value during October 2013 while Kimoha Entrepreneurs Limited was honoured for achieving the highest number of markets exported to during 1RYHPEHU $OVR)DU]DQD7UDGLQJ emerged as the company with the outstanding export performance in terms of the highest number of FHUWL¿FDWHVRIRULJLQIRU the month of December

ZKLOH$WDUÂżO0LGGOH East was recognised for its distinguished export performance as a recent start-up company with the highest export value during -DQXDU\ 7RSRIILFLDOVRIWKH recipient companies expressed their gratitude to Dubai Chamber for the VXSSRUWSURYLGHGWRWKHP 7KH\VDLGWKDWWKH60( Exporter of the Month recognition encourages positive and healthy competition which yields benefits to their company and helps to increase the overall competitiveness of 'XEDLEXVLQHVVHV

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FINANCE FOCUS

EY HIGHLIGHTS GCC GROWTH POTENTIAL According to EYâ&#x20AC;&#x2122;s latest RapidGrowth Markets (RGM) Forecast report, growth remains robust across the GCC. Qatarâ&#x20AC;&#x2122;s economy is predicted to grow by 6.0 per cent, Saudi Arabia by 4.3 per cent and the UAE by 4.1 per cent in 2014. Bassam Hage, MENA Markets Leader, EY, said: â&#x20AC;&#x153;Economic growth across the GCC remains robust, with the region re-emerging as an influential global hub for trade between Asia, Europe, Africa and North America. The key challenge for the GCC remains continuing to diversify its economies and invest in its growing non-oil sectors.â&#x20AC;? In Saudi Arabia, GDP is expected to grow by 4.3 per cent in 2014 and 2015, with non-oil growth expected to average 4.7 per cent across 20142017. While this reflects a slight slowdown from the 2010â&#x20AC;&#x201C;2012 period, growth remains strong in the non-oil sector and will continue to support Saudi Arabia in diversifying its economy.

Bassam Hage, MENA Markets Leader, EY

The economic outlook in Qatar also remains positive, with growth set to increase by an average of 6.0 per cent across 2014 to 2017. Growth in the non-oil sector in particular is predicted to increase in excess of 10 per cent this year and a rapidly expanding population continues to boost domestic consumption. This growth has been largely generated by infrastructure funding which is set to drive spending on tourism, hospitality, and construction. Major infrastructure projects include the Doha metro and Hamad

International Airport. Economic growth in the UAE is set to increase by an average of 4.3 per cent over the next four years. This will be largely attributed to Dubaiâ&#x20AC;&#x2122;s successful bid to host the World Expo 2020. Confidence remains high in the UAE and EY has upgraded its growth forecast for the country in the medium term. Though the benefits of hosting the event will be concentrated mainly in Dubai, EY predicts ancillary growth in other Emirates as a result. The successful bid is predicted to stimulate growth in the nonoil sector, including increased spending on construction, tourism and hospitality. â&#x20AC;&#x153;Emerging markets remain center stage both for the potential they offer and the challenges they pose. Businesses and governments are taking a fresh look at opportunities that can shape the future of their markets and people. Businesses seeking to establish, expand or maintain interests in emerging markets, should raise their sights to the longer term, and the serious prospect that their global position will be determined by these markets,â&#x20AC;? concluded Bassam.

NEW FINANCIAL TRAINING SESSIONS Innoverto FZ LLC, a UAEbased corporate training and events management company, announced a new partnership with the International Association of Financial Management (INTERFIMA). INTERFIMA is a nonprofit organisation that aims to share knowledge and add value to the financial markets, through ongoing professional education and training. The partnership will HQDEOHÂżQDQFHSURIHVVLRQDOV

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throughout the GCC, and broader Middle East region, to access a wide list of training courses and LQGXVWU\VSHFLÂżFHYHQWV delivered by international industry experts. Anastasios Avranas, Co-Founder and CEO of INTERFIMA, said: â&#x20AC;&#x153;INTERFIMA is committed to advancing global ÂżQDQFLDOSUDFWLFHVDQG we are very excited to be working with Innoverto to deliver a carefully selected UDQJHRIÂżQDQFLDOWUDLQLQJ

and events. Our community includes members from leading organisations across 19 countries (and DOOÂżYHFRQWLQHQWV DQGZH are delighted to now be welcoming participants from the Gulf regionâ&#x20AC;&#x2122;s leading organisations and ÂżQDQFLDOLQVWLWXWLRQV´ The first session is scheduled to take place in Dubai, UAE, on October 15 and 16, 2014. It will focus on the Foreign Account Tax Compliance Act (FATCA) â&#x20AC;&#x201C; an extremely

important and timely topic for the industry. Christianna Tsiterou, Co-Founder and Managing Partner of Innoverto, said: â&#x20AC;&#x153;This partnership further enhances Innovertoâ&#x20AC;&#x2122;s continuous commitment to providing high quality, timely and informative training and events to the GCC and broader Middle East Market. We are delighted to be working with INTERFIMA and their truly distinguished speaker and member base.â&#x20AC;?

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FINANCE FOCUS

ICMA MAKES UPDATES TO CMA EXAM ,&0$Š ,QVWLWXWHRI&HUWL¿HG Management Accountants), the FHUWL¿FDWLRQGLYLVLRQRI,0$Š (Institute of Management $FFRXQWDQWV KDVXSGDWHGWKHH[DP IRULWV&0$Š &HUWL¿HG0DQDJHPHQW $FFRXQWDQW FUHGHQWLDOVWRLQFOXGH FRQWHQWUHODWHGWR¿QDQFLDOUHSRUWLQJ DQGVWUDWHJLFSODQQLQJVNLOOVWKDWDUH LQFUHDVLQJO\LPSRUWDQWIRUPDQDJHPHQW DFFRXQWDQWVDVWKHLUUROHVHYROYH 7KHUHYLVLRQVDUHEDVHGRQDUHFHQW -RE$QDO\VLV6WXG\WKDWSROOHG&)2V FRQWUROOHUVDQGRWKHUDFFRXQWLQJ ¿QDQFHSURIHVVLRQDOVIURPWKH0LGGOH (DVWDQGDURXQGWKHZRUOG 7KHVWXG\UHYHDOHGWKDWWKHWKUHH PRVWLPSRUWDQWVXEMHFWDUHDVIRU PDQDJHPHQWDFFRXQWDQWVDUH¿QDQFLDO

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FINANCE FOCUS

IMAâ&#x20AC;&#x2122;S TWO NEW LOCATIONS IMAÂŽ (Institute of Management Accountants) announced the opening RIWZRLQWHUQDWLRQDORIÂżFHVLQ6KDQJKDL and Cairo. The locations are the latest to join IMAâ&#x20AC;&#x2122;s growing list of global branches, which includes Zurich, Dubai and Beijing. 7KHQHZRIÂżFHVUHĂ&#x20AC;HFW,0$ÂśV LQFUHDVLQJLQWHUQDWLRQDOLQĂ&#x20AC;XHQFHDQG highlight the important role managerial accountants play in the global economy. According to IMAâ&#x20AC;&#x2122;s Annual Report, two-thirds of all candidates currently pursuing the CMAÂŽ &HUWLÂżHG0DQDJHPHQW$FFRXQWDQW  accounting credential are from the $VLD3DFLÂżFDQG0LGGOH(DVW$IULFD regions. In addition, the CMA is the

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*OREDO)XQG,9ZLOOVHHN WRLQYHVWLQLQIRUPDWLRQ WHFKQRORJ\VWDUWXSV¹ including Internet, computer hardware and software, and FRPPXQLFDWLRQV¹DVZHOO as startups in the area of healthcare technology and clean tech. ³:HDUHEUHDNLQJQHZ JURXQGLQWKH0LGGOH(DVW ZLWKWKH)HQR[*OREDO)XQG ,9´VDLG%UHQW7UDLGPDQ *HQHUDO3DUWQHUDW)HQR[ ³,NQRZRIQRRWKHUWLPH WKDWD6LOLFRQ9DOOH\9&KDV used capital from Middle (DVWLQYHVWRUVWRSURPRWH entrepreneurship in the ORFDOUHJLRQ´ Meanwhile, Kamal Hassan, )HQR[*HQHUDO3DUWQHUDQG 3UHVLGHQWRI,QQRYDWLRQ DGYLVHGWKDWWKHQXPEHU

RIEXVLQHVVHVVHHNLQJ9& IXQGLQJLQWKH0LGGOH(DVW is small compared to regions where the startup culture is PRUHPDWXUH³)HQR[VHHV the huge opportunity for JURZWKLQWKH0(1$UHJLRQ and so we are offering IXQGLQJDQGH[SHUWLVHWRD few best-in-class regional VWDUWXSVZKRZHEHOLHYH ZLOOSURYLGHVLJQL¿FDQW ORQJWHUPJDLQ´KHVDLG ³+RZHYHUE\DOVRLQYHVWLQJ in more mature companies IURP6LOLFRQ9DOOH\DQG $VLDWKHIXQGZLOOGLYHUVLI\ WKHLQYHVWRUVœSRUWIROLRDQG create a greater return for LQYHVWRUV´ )HQR[KDVDWUDFNUHFRUGRI LQYHVWLQJLQJOREDOEXVLQHVVHV from all around the world, KDYLQJPDQDJHGIXQGVWKDW

focus on entrepreneurial GHYHORSPHQWLQ6RXWK.RUHD 6LQJDSRUH-DSDQ,QGRQHVLD and China. ,QQRYDWLRQKDVEHHQ DYLVLEOHDQGYRFDOVXSSRUWHU of the entrepreneurial HFRV\VWHPLQWKH8$(,Q addition to establishing i360accelerator for early stage startups, founder Kamal Hassan is a Managing 'LUHFWRUIRUWKH7851VHHG accelerator established by DP World, and has himself LQYHVWHGLQVWDUWXSV IURPWKH0LGGOH(DVWDQG elsewhere. Ten per cent of the fund 86PLOOLRQ KDVDOUHDG\ EHHQFRPPLWWHG)HQR[ 9HQWXUH&DSLWDOLVFXUUHQWO\ qualifying additional LQYHVWRUVIRUWKHIXQG

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DBWCâ&#x20AC;&#x2122;S LATEST NETWORK MAJLIS Dubai Business Women Council (DBWC) recently held its monthly Network Majlis event at Dubai Chamber of Commerce and Industry under the theme â&#x20AC;&#x153;Mental Toughness and High Performanceâ&#x20AC;?. Leila Rezaiguia, Co-Founder and Managing Partner at Kompass, an innovative consultancy that specialises in enabling performance excellence for individuals, organisations and educational institutions to ensure business and career success, facilitated the half day workshop. The interactive workshop offered valuable insights into what Mental Toughness is (a personality trait which determines, in some part how individuals perform when exposed to stressors, pressure and challenge, irrespective of the prevailing situation). â&#x20AC;&#x153;Our business world is complex and as the UAE and the rest of the world evolves, this will carry on getting more complex. As a woman in business it is important to understand what mental toughness is and how you can enhance your own personal skills to adapt to

During the session

H[WHUQDOLQĂ&#x20AC;XHQFHV´VDLG5DMD$O*XUJ President of DBWC. â&#x20AC;&#x153;Although we canâ&#x20AC;&#x2122;t change the complexity and the turbulence in the business environment, we can turn challenges into opportunities by having the skillset to tackle issues head-on. We are extremely excited to share this great workshop with our members today as itâ&#x20AC;&#x2122;s our vision to aid in the growth of every business women in the UAE.â&#x20AC;? â&#x20AC;&#x153;We are honoured to facilitate todayâ&#x20AC;&#x2122;s session on Mental Toughness and High Performance among a group of enthusiastic business women alongside the DBWC. We work with individuals, entrepreneurs, kids, parents, teams and

sporting teams to help them understand mental toughness and how to develop skills and knowledge to enhance their performance, well-being and behaviour in life and in the workplace,â&#x20AC;? added Leila. *HQQ\*KDQLPHK&(2RI3L6OLFHDOVR made a special appearance at the April Networking Majlis event during which VKHVKDUHGVRPHRIKHULQVLJKWVRQ6RFLDO (QWUHSUHQHXUVKLSDQG,QQRYDWLYH6RFLDO 5HVSRQVLELOLW\*HQQ\FDSWLYDWHGWKH DXGLHQFHZLWKDTXLFNWDONDERXW3L6OLFH WKHÂżUVWHYHUFURZGOHQGLQJSODWIRUPLQ the MENA region, the many challenges of social entrepreneurship from a female perspective and the lessons learnt from navigating through all of them.

DAFZAâ&#x20AC;&#x2122;S NEW INITIATIVE Dubai Airport Freezone Authority (DAFZA) has recently announced that it will attract local talent and increase Emiratisation to exceed 72 per cent by the end of 2014. Yousuf Ali Behzad, Executive Director of Human Capital & Marketing at DAFZA, said, â&#x20AC;&#x153;It is always a pleasure to witness how talented young Emiratis are and we believe in their ability to grow and develop within the Freezone

16

and across the UAE. The exhibition gives us a chance to meet with young talents and to discuss with them potential job opportunities with the Freezone.â&#x20AC;? DAFZA invests in talented UAE nationals by providing them with excellent education, training and career opportunities. Annually, a large number of Emirati students from UAEâ&#x20AC;&#x2122;s private and public universities are given an opportunity to intern with

DAFZA for two to three months as part of their career development plan. â&#x20AC;&#x153;We are always keen on supporting young UAE talents and we have excellent students who intern in our various departments and are able to UHFHLYHÂżUVWKDQGH[SHULHQFH to working in a real-life environment,â&#x20AC;? said Behzad. The internship programme at DAFZA gives young Emirati nationals an opportunity to experience

actual work environment which translates into a very high success rate for full time employment with the Freezone. Dubai Airport Freezone offers the ideal work environment for aspiring young Emiratis with career growth and development opportunities. Employees are given job training opportunities and are consistently recognised and awarded for their hard work and dedication.

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BIZ-ABILITY PARTNERS WITH RIGHT SELECTION biz-ability, a provider of experiential business leadership training and development programmes, and a division of biz-group, has signed a strategic training partnership with motivational event organiser Right Selection. Under the agreement, biz-ability will be the exclusive training partner at a series of business guru seminars managed by Right Selection. Hazel Jackson, CEO of biz-

group, said: â&#x20AC;&#x153;At biz-ability we are passionate about maximising peopleâ&#x20AC;&#x2122;s performance through training and development and are constantly on the lookout for proven leadership development programmes that we can adapt for our market.

This partnership allows us to work with Right Selectionâ&#x20AC;&#x2122;s exceptional pool of business leadership talent and introduce a localised, hands-on training module to their events.â&#x20AC;? Gautam Ganglani, Managing Director, Right Selection, said: â&#x20AC;&#x153;We recognise the unique business culture that prevails in many companies in the Middle East. By bringing bizability onboard as the exclusive training partner at our workshops, we will provide local insight to international programmes for the benefit of all participants. We have an inspirational calendar of workshops planned this year, bringing some of the worldâ&#x20AC;&#x2122;s brightest business minds to the region. We look forward to incorporating biz-abilityâ&#x20AC;&#x2122;s input and expertise into these.â&#x20AC;?

TEJAR DUBAIâ&#x20AC;&#x2122;S BUSINESS MAJLIS Tejar Dubai â&#x20AC;&#x201C; an initiative powered by the Dubai Chamber of Commerce and Industry â&#x20AC;&#x201C; organised a Business Majlis recently. The Tejar Dubai Business Majlis proved to be the perfect platform for young participants to share innovative business ideas and tips with established Emirati businessmen while also learning from their success stories. Held at the Chamber premises, the event was attended by a batch of ÂżQDOLVWVRIWKHSURJUDPPH as well as aspiring entrepreneurs. Since its launch last year, the Tejar Dubai programme has eight commercial projects being run by young Emirati entrepreneurs who have been selected and trained to enter the world of business. His Excellency Hisham Al Shirawi, 2nd Vice-Chairman of Dubai Chamber and Chairman of the Panel of

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During the Tejar Dubai Business Majlis

Experts Committee of Tejar Dubai, said: â&#x20AC;&#x153;We realise the importance of coming up with a creative idea which is not an easy task. Hence, the panel of experts committee, made up of prominent Dubai business leaders and CEOs, consider the clarity, transparency and the economic feasibility of the idea to withstand the tests of the marketplace. Also, the idea is judged on the model developed by Dubai Chamber in line with best

global business practices and standards.â&#x20AC;? Essa Ali Al Zaabi, Senior Vice-President, Institutional Support Sector, Dubai Chamber and General Coordinator of Tejar Dubai, informed about the success of the initiative which he said has eight candidates, selected out of the 300, who have started implementing their creative business ideas under the programme. Al Zaabi further informed that the initiative has thus far

organised over 60 meetings with aspiring entrepreneurs as well as more than 10 workshops on different topics which directly EHQHÂżWHGDERXW\RXQJ Emiratis. The Tejar Dubai initiative, launched by Dubai Chamber ODVW\HDULVWKHÂżUVWLQWKH UAE to offer a specialised programme and platform for youth to help them establish their own small-to-mediumsized businesses. It aims WRÂżQGDQGWUDLQFUHDWLYH and commercially-minded youth to help them turn their business ideas into a reality. Not only does the initiative provide youth with access to an extensive development programme, including classroom learning, onsite training, mentoring and business advice, but candidates also get networking opportunities with local and international business leaders and access to investment capital.

17


SME ABOUT TOWN

JUST FALAFELâ&#x20AC;&#x2122;S NEW APPOINTMENT Fast food operator Just Falafel announced the appointment of Sarah Cocker as Head of Investor Relations. Sarah will develop and implement the JURXS¶V¿QDQFLDOFRPPXQLFDWLRQVWUDWHJ\ XVLQJKHU\HDUVRIJOREDOEURDGFDVWLQJ DQGLQYHVWPHQWEDQNLQJH[SHULHQFH+HU EURDGLQWHUQDWLRQDOEXVLQHVVEDFNJURXQG ZLOOUHLQIRUFHDQGVXSSRUWWKHFRPSDQ\¶V HQWU\LQWRFRXQWULHV 6DUDKKDVSUHYLRXVO\ZRUNHGIRU %DQTXH3DULEDV,0'6FKRRORI %XVLQHVVDQGPDMRUEURDGFDVWLQJ QHWZRUNVVXFKDV&1%&&%& %6.<%DQG$UDELDQ5DGLR1HWZRUN WKURXJKRXWKHUFDUHHU+HUH[WHQVLYH H[SHULHQFHZLOOKHOSKHUHQVXUH-XVW Falafel remains at the forefront of investor communication and FRPSOLDQFHPHHWLQJORFDODQGJOREDO UHJXODWRU\EHQFKPDUNV )DGL0DODV-XVW)DODIHO¶V&(2 VDLG³$VWURQJFRUUHODWLRQEHWZHHQ Just Falafel and the investment FRPPXQLW\LVDVLJQL¿FDQWIDFWRU WRZDUGVWKHJURZWKRIWKHEXVLQHVV DQGWKLVLVZKHUH6DUDK¶VH[SHUWLVH FRPHVLQ%DFNHGE\KHUFRQVLGHUDEOH NQRZOHGJHRI¿QDQFLDOPDUNHWV

Sarah Cocker, Head of Investor Relations, Just Falafel

DQGFRPPXQLFDWLRQVNLOOV6DUDKLV GH¿QLWHO\DQDVVHWWRWKHEUDQGZKRZLOO create and look after the interest of our investors. Her career has given her an understanding of the cultural practices LQPDQ\FRQWLQHQWVZKLFKLVDOLJQHGWR ZKHUHZHVHHWKHEUDQGLVJRLQJ´ ,QDVSDQRIWKUHH\HDUV-XVW)DODIHO has grown from four locations to the LQWHUQDWLRQDOO\DFFODLPHGUHVWDXUDQW FKDLQWKDWLWLVWRGD\-XVW)DODIHO UHFHQWO\RSHQHGLWV¿UVWUHVWDXUDQWLQ 6\GQH\$XVWUDOLDZKLFKZLOOEHIROORZHG E\PDMRUH[SDQVLRQLQ1RUWK$PHULFD ZLWK¿YHUHVWDXUDQWVRSHQLQJWKLV\HDU

CORPORATE GOVERNANCE WITHIN FAMILY BUSINESSES 7KH'XEDL&KDPEHURI &RPPHUFHDQG,QGXVWU\LQ DVVRFLDWLRQZLWK7DPD\\D] KHOGDZRUNVKRSIRUIDPLO\ EXVLQHVVHV7KHVHVVLRQ Governance Challenges for )DPLO\2ZQHG%XVLQHVVHV highlighted the importance of corporate governance. The workshop featured -RKQ0HUULJDQ3DUWQHU 7DPD\\D]ZKRLVDKLJKO\ H[SHULHQFHGSUDFWLWLRQHU and passionate advocate of corporate governance. -RKQ0HUULJDQVDLG ³7KHLPSRUWDQFHRIIDPLO\

18

EXVLQHVVHVWRVHFXUHWKH IXWXUHJURZWKRI'XEDLDQG WKHZLGHU8$(HFRQRP\ FDQQRWEHRYHUHVWLPDWHG As a practitioner and adviser to a wide range RIIDPLO\EXVLQHVVHV, am delighted to see an increasing awareness and adoption of good corporate JRYHUQDQFHDVDNH\HQDEOHU for that success. This HYHQWSURPRWHGE\'XEDL &KDPEHULVIXUWKHUHYLGHQFH of the desire to address the SUDFWLFDOFKDOOHQJHVDQG¿QG VXVWDLQDEOHVROXWLRQVWKDW

DUHXQLTXHWRIDPLO\UXQ EXVLQHVVHV´ )XUWKHUPRUH-HKDG.D]LP 'LUHFWRU/HJDO6HUYLFHV 'XEDL&KDPEHUVWDWHGWKDW IDPLO\RZQHGEXVLQHVVHV SOD\DQLPSRUWDQWUROHLQ WKHJURZWKRIWKHHFRQRP\ +RZHYHUWKH\IDFHDQXPEHU RIXQLTXHFKDOOHQJHVZKLFKLI QRWDGGUHVVHGDSSURSULDWHO\ FDQGUDVWLFDOO\LPSDFWWKH IDPLO\¶VOHJDF\ With a proper governance framework and guidelines to cope with risk involved in a IDPLO\EXVLQHVVRZQHUVFDQ

EHIXOO\SUHSDUHGWRIDFHDQ\ FKDOOHQJHVFRPLQJWKHLUZD\ and focus on enhancing their EXVLQHVV¶VFRPSHWLWLYHQHVVLQ the marketplace. The workshop was DWWHQGHGE\'XEDL&KDPEHU PHPEHUVIDPLO\EXVLQHVV RZQHUVDQGH[HFXWLYHV PDQDJHUVLQKRXVHODZ\HUV and legal and management consultants focused on FRUSRUDWHJRYHUQDQFH EXLOGLQJWKHIDPLO\FKDUWHU risk management and implementing and planning RIDIDPLO\EXVLQHVV

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Dubai SME and Microsoftâ&#x20AC;&#x2122;s joint seminar on cloud computing

DUBAI SME AND MICROSOFTâ&#x20AC;&#x2122;S SEMINAR Dubai SME and Microsoft held a joint seminar to raise awareness on how SMEs can improve and grow their businesses by embracing cloud computing. The seminar highlighted that cloud computing is a powerful tool that can help businesses increase their efficiency and productivity.

The seminar titled â&#x20AC;&#x2DC;Improve your Business by Moving to the Cloudâ&#x20AC;&#x2122; was aimed to help Dubai SME companies learn about adopting state-of-the-art IT solutions. The attendees were briefed on how the cloud-based wave of IT adoption creates the potential for far-reaching innovation and business growth. Cloud enables companies of any size access to capabilities and services that previously were available to only larger enterprises. For SMEs, cloud-based IT can help them leverage an already connected

community of consumers and businesses of unprecedented size. Building on the findings of a recent report by the Boston Consulting Group â&#x20AC;&#x2DC;Ahead of the Curve: Lessons on Technology and Growth from Small Business Leadersâ&#x20AC;&#x2122;, the seminar highlighted how technology innovation and specifically, cloud technology, can help accelerate SME growth and enhance their competitiveness. The report also revealed that only six per cent of SMEs surveyed had online ordering capabilities. The survey therefore points to opportunities for SMEs to upgrade their operations by enhancing their ICT adoption for better performance. Abdul Baset Al Janahi, CEO of Dubai SME said: â&#x20AC;&#x153;I am pleased that Dubai SME is partnering with Microsoft to run capability development seminars for the SME100 companies. Our top SMEs will truly benefit from this seminar to increase their awareness of cloud computing. I urge all SMEs to seriously consider adopting the cloud, to improve the growth and performance of their company. I also look forward to the continuous partnership with Microsoft.â&#x20AC;?

BAYT.COMâ&#x20AC;&#x2122;S HR INITIATIVE As part of its Thought Leadership Series, Bayt. com recently organised a thought-provoking HR event at the Dubai World Trade Centre within Careers UAE. The session attracted top professionals ZRUNLQJLQ+5ÂżHOGV within leading UAE-based companies across various industry sectors. The event featured speakers from top global companies who shared their knowledge, insights and experiences in recruiting

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best talent in the UAE. It also featured several discussions, including â&#x20AC;&#x2DC;How we successfully globalise our cultureâ&#x20AC;&#x2122;, presented by Ernest W. Marshall Jr., Vice-President â&#x20AC;&#x201C; HR, GE Aviation, and â&#x20AC;&#x2DC;How can companies in the UAE attract top executive talent to the UAE?â&#x20AC;&#x2122;, presented by Toby Simpson, Managing Director of Gulf Recruitment Group. During the session

Key topics covered during the event included:

Â&#x2021;:KDWVNLOOVFUHGHQWLDOV and experience are highly in demand in the current recruitment arena? Â&#x2021;+RZKDVWHFKQRORJ\ changed the way we source, attract and screen talent in the UAE? Â&#x2021;:KDWFDUHHUOHYHOVDQG job roles will be most in demand? Â&#x2021;:KDWDUHWKHODWHVW strategies to attract and retain top talent in the UAE? Â&#x2021;:KDWLVWKHKLULQJ expectancy in the UAE in the short and intermediate term?

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BUSINESS BANKING

LOOKING TO THE FUTURE WHAT ARE THE FACTORS DETERMINING THE OUTLOOK FOR THE SME SECTOR AS WE ENTER Q2? HOW WELL ARE THE UNDERLYING ECONOMIC TRENDS LIKELY TO SUPPORT THE EFFORTS OF ENTREPRENEURS - AND WHAT ARE THE PENDING LEGISLATIVE ELEMENTS THAT BUSINESSES SHOULD COST IN TO THE EQUATION? SME ADVISOR ASSESSED THE LANDSCAPE AND THEN SPOKE TO ABDULLA AL OTAIBA, SENIOR MANAGING DIRECTOR & GROUP HEAD OF RETAIL AND COMMERCIAL GULF, NBAD, FOR HIS VIEWS ON HOW A LEADING BANK SEES THE FINANCIAL LANDSCAPE AND ITS OPPORTUNITIES AND IMPERATIVES FOR AN SME IN 2014.

20

)LUVWWKLQJV¿UVW2QHRIWKHPRVW WUXVWHGDVVHVVPHQWVRIHFRQRPLFWUHQGV QDWLRQE\QDWLRQLVSURYLGHGE\WKH ,QWHUQDWLRQDO0RQHWDU\)XQG ,0) ,WV YLHZLVWKDWWKURXJKRXWWKHUHPDLQGHU RIWKH8$(HFRQRP\LVVHWWR JURZZLWKVLJQL¿FDQWSDFHGXHWRDQ RYHUDOOSRVLWLYHRXWORRNIRUVXVWDLQDEOH JURZWKDQGZLWKLQYHVWRUV¶FRQ¿GHQFH EXLOGLQJPRPHQWXP,QGHHGWKH,0) KDVSUHGLFWHGD*'3JURZWKUDWH RISHUFHQWZKLFKLVVXSSRUWHG QRWOHDVWE\$EX'KDEL¶VEXR\DQWRLO DQGJDVLQGXVWU\DQGLWVFRQVLGHUDEOH UDIWRILQIUDVWUXFWXUHDQGLQGXVWULDO LQYHVWPHQW7KH,0)DOVRREVHUYHV WKDWWKLVJURZWKLVOLNHO\WREHIXUWKHU HQKDQFHGE\WKHUHFHQW([SRZLQ ZKLFKFRXOGSRWHQWLDOO\VXSHUFKDUJHWKH SULYDWHVHFWRUHQWHUSULVHVXSSO\FKDLQ E\DVPXFKDVSHUFHQWDOEHLWZLWK WKHWUHQGQRWSHDNLQJXQWLO 7KLVKHDOWK\SLFWXUHZDV¿UVWGH¿QHG ,Q-XQHZKHQDQXPEHURIJOREDO UDWLQJVDJHQFLHVXSJUDGHGWKH8$(¶V FODVVL¿FDWLRQIURPDµIURQWLHU¶PDUNHW WRDQµHPHUJLQJ¶PDUNHW$VDUHVXOW E\-XQHWKHWKUHH8$(LQGLFHV QDPHO\WKH$EX'KDEL6HFXULWLHV ([FKDQJH $'; WKH'XEDL)LQDQFLDO 0DUNHW ')0 DQG1$6'$4'XEDLDUH GXHWREHLQFRUSRUDWHGLQWRWKH06&,¶V HPHUJLQJPDUNHWVLQGH[&RQVHUYDWLYH HVWLPDWHVVXJJHVWWKDWWKDWWKLVZLOO DWWUDFWRYHU86PLOOLRQLQWRWKH VWRFNH[FKDQJHV $FFRUGLQJWRUHVHDUFKE\'XEDL 60(DERXWHLJKWSHUFHQWRIWKH8$(¶V 60(VDVSLUHWR,32VWDWXVDWVRPH SRLQWLQWKHQH[W¿YH\HDUVDOWKRXJK ,32FRQYHUVLRQUDWHVVXJJHVWLWLVOLNHO\ WKDWRQO\DVPDOOIUDFWLRQZLOODFKLHYH WKLVJRDO:KDWNLQGRISODWIRUPZRXOG FXUUHQWVWRFNPDUNHWSHUIRUPDQFH SURYLGH"7KH8$(VWRFNH[FKDQJH SHUIRUPDQFHLQWKHSDVW\HDULVQRWDEOH

ZLWKWKH$';HQGLQJZLWKD WRWDORIDOPRVW86ELOOLRQLQVKDUH H[FKDQJHYDOXHSRVWLQJDVLJQL¿FDQW YROXPHJURZWKRIFRPSDUHG ZLWK7KHUHDOLW\LVWKDWVRFLR SROLWLFDOWXUPRLOLQWKHZLGHUUHJLRQLV GULYLQJWUDGLQJYROXPHVZLWKLQYHVWRUV VHHNLQJDVDIHKDYHQ,QWKH ')0ZDVWKHVHFRQGEHVWSHUIRUPLQJ H[FKDQJHJOREDOO\DQGLQ-DQXDU\ LWDFKLHYHGDQHZ¿YH\HDUKLJK WRSRLQWVUHFRYHULQJEDFNWRWKH -DQXDU\SHDN 7KH8$(¶VVWRFNPDUNHWUHJXODWRU WKH6HFXULWLHVDQG&RPPRGLWLHV $XWKRULW\FRQWLQXHVWRLPSOHPHQW HYHUKLJKHUVWDQGDUGVRIUHJXODWLRQ VLQFHLWVLQFHSWLRQLQZKLOVW HQVXULQJLQYHVWRUFRQ¿GHQFHEXW DOVRDFWLQJQRWWRKLQGHUFDSLWDO PDUNHWDFWLYLW\ORFDOO\$FFRUGLQJWR %ORRPEHUJ$EX'KDELDQG'XEDL KDYHFRPSOHWHGGXHGLOLJHQFHRQD SRWHQWLDOPHUJHURIWKH$';DQG')0 ZKLFKZLOOHQVXUHDPRUHHI¿FLHQW DQGQDWLRQDODSSURDFKWRWKHJOREDO LQYHVWRUFRPPXQLW\ 7KHUHLVDOVRWKHDGGHGLQFHQWLYH IRU,32KXQJU\60(VLQWKDWLQRUGHU WRDWWUDFWIXUWKHUHTXLW\IURPWKH LQWHUQDWLRQDOLQYHVWPHQWFRPPXQLW\ LQFOXGLQJODUJH¿QDQFLDOLQVWLWXWLRQV WKHUHLVJURZLQJPRPHQWXPIRUPRYHV WROLIWWKHOLPLWRIIRUHLJQRZQHUVKLSRQ 8$(VKDUHV7KLVZRXOGEHHVSHFLDOO\ SHUWLQHQWIRUEXVLQHVVHVLQWKHWUDGH VHFWRUZKRDOUHDG\KDYHDVXEVWDQWLDO QHWZRUNRISRWHQWLDORYHUVHDVLQYHVWRUV DQGFRXOGH[SHULHQFHGUDPDWLFVKDUH LVVXHWDNHXS+RZHYHUGHVSLWHD JRRGGHDORIDQWLFLSDWLRQWKHUHLV QRWKLQJWRWKLVHIIHFWOLVWHGLQWKH'UDIW &RPSDQLHV/DZDQGLQVWHDGLW LVH[SHFWHGWKDWWKHVHZLOOEHVSHFL¿HG LQWKHQHZ)RUHLJQ,QYHVWPHQW/DZ FXUUHQWO\SHQGLQJ¿UVWGUDIW 

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I DON’T BELIEVE THAT ANY BUSINESS IS COMPREHENSIVELY INNOVATIVE, BUT WE CERTAINLY TRY TO LEAD THE MARKET IN TERMS OF OUR UNDERSTANDING OF THE SME SECTOR AND OUR ABILITY TO WORK WITH BUSINESSES IN A WAY THAT FULLY UNDERSTANDS AND APPRECIATES THEIR NEEDS. www.smeadvisor.com

Abdulla Al Otaiba, Senior Managing Director & Group Head of Retail and Commercial Gulf, NBAD

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BUSINESS BANKING

The  legislative  background On April 14, a new Federal Law was announced which could provide a powerful boost to SMEs, given the epic potential for an increase in government procurement in the wake of the Expo 2020 win. UAE President His Highness Sheikh Khalifa Bin Zayed Al Nahyan issued Federal Law No.2 of 2014 for small and medium enterprises, stating that 10 per cent of the contracts from government entities will be awarded to SMEs - and they will also be exempted from certain customs taxes as well as being offered a range of other attractive incentives. Sultan Bin Saeed Al Mansouri, the UAEâ&#x20AC;&#x2122;s Minister of Economy, said â&#x20AC;&#x153;the SME law is in line with the vision of the leadership to create an appropriate business environment for UAE nationals to increase their presence in the business sector and enhance their role in supporting the sustainable development of the countryâ&#x20AC;?. The law also states that products made by local SMEs should be given adequate space in any exhibitions abroad in which the UAE participates - and SMEs are also exempted from customs tax on equipment, raw materials and intermediate goods used for production purposes. Corporate  Governance  -­  todayâ&#x20AC;&#x2122;s   guidelines,  tomorrowâ&#x20AC;&#x2122;s  law? It is expected that in May 2014, the Draft Companies Law 2013 will be UDWLÂżHGDQGIRUPDOO\HQWHUWKHVWDWXWH books. In a move that is likely to positively impact the perception of the UAE corporate scene as a whole, the Draft Companies Law 2013 contains numerous provisions in relation to Corporate Governance, an increasingly topical theme following WKHÂżQDQFLDOFULVLV7KHFRQFHSWRI â&#x20AC;&#x2DC;Social Responsibilityâ&#x20AC;&#x2122; has also been LQWURGXFHGIRUWKHÂżUVWWLPHEXWIXUWKHU regulations are needed to establish what role this introduction is intended to play in the wider framework. The Corporate Governance initiatives outlined have already

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attracted a level of debate as to their relevance to the SME community, as opposed to larger corporates. For example, while publicly-listed entities are required to conduct annual Governance audits (and the composition of the audit team LVFOHDUO\VSHFLÂżHGLQFOXGLQJWKH appointment of a specially-tasked non-executive director), there are no VSHFLÂżFSURYLVLRQVIRU60(V Notwithstanding, there is a clear definition - for businesses generally - of 17 operational areas requiring correct management supervision and the creation of Governance criteria, and these are in essence similar to the â&#x20AC;&#x2DC;nine pillarsâ&#x20AC;&#x2122; which are the subject of a white paper from Dubai SME, â&#x20AC;&#x2DC;The Corporate Governance Code for Small and Medium Enterprisesâ&#x20AC;&#x2122;. It is likely that these will be regarded as a â&#x20AC;&#x2DC;textbookâ&#x20AC;&#x2122; model for correct SME behaviour, DQGLQGHHGOHDGLQJODZÂżUPVEHOLHYH that their execution - or not - could VLJQLÂżFDQWO\LPSDFWWKHRXWFRPHRI legal disputes involving SMEs. SME  Advisor  100th  Issue   landmark  comment 7KHÂżQDQFLDOSHUVSHFWLYHDYLHZIURP Abdulla Al Otaiba, Senior Managing Director & Group Head of Retail and Commercial Gulf, NBAD To understand fully how these various economic and legal factors LQĂ&#x20AC;XHQFHWKH60(PDUNHWDQG perhaps most vitally impact the opportunity for an SME to attract funding and empower growth, we spoke to a leading market expert from the nationâ&#x20AC;&#x2122;s largest bank, the National Bank of Abu Dhabi (NBAD). Abdulla Al Otaiba is Senior Managing Director & Group Head of Retail and Commercial Gulf, NBAD. On a daily basis, he tackles the issues central to the key sectors of SME, mid-market and multinational business. We thought there would be no better way to celebrate our 100th issue of SME Advisor than by getting his valuable input on the trends and changing landscapes that corporates are encountering here in Q2, 2014.

What  do  you  believe  NBAD  is  doing   GLĚ&#x2020;HUHQWO\IURPLWVFRPSHWLWRUV LQWKH60(VSDFH"'R\RXIHHOLWLV FRPSUHKHQVLYHO\LQQRYDWLYH" â&#x20AC;&#x153;I donâ&#x20AC;&#x2122;t believe that any business is comprehensively innovative, but we certainly try to lead the market in terms of our understanding of the SME sector and our ability to work with businesses in a way that fully understands and appreciates their needs. Weâ&#x20AC;&#x2122;re very much committed to SMEs, and I would like every SME RZQHUWRNQRZRQHVLPSOHPHVVDJH â&#x20AC;&#x153;weâ&#x20AC;&#x2122;re here to stayâ&#x20AC;?. As the largest bank in the UAE, with the most fullydeveloped business offer in each key sector, we have the experience and the market understanding to work with your business and draw out its strengths.â&#x20AC;? *LYHQWKDWWKHPLGPDUNHWDQG PXOWLQDWLRQDOSOD\HUVDFFRXQWIRU RQO\ÂżYHSHUFHQWRIEXVLQHVVHV EXWDPDVVLYHRIWKHQDWLRQDO *'3GR\RXVHHWKHPEHFRPLQJDQ LQFUHDVLQJO\LPSRUWDQWHOHPHQWLQ WKHHFRQRPLFPL[" â&#x20AC;&#x153;Actually, I see them setting a template and an example for other sectors to follow. I believe we will see smaller businesses adapt more of the capability and sophisticated working practices of these larger companies, especially since we now have more and more emphasis on aspects such as Corporate Governance and Best Practice.

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Are  SMEs  starting  to  look  further   DÂżHOGIRUEXVLQHVVRUDUHWKH\VWLOO largely  GCC-­focused? â&#x20AC;&#x153;Yes, they are now starting to look IXUWKHUDÂżHOGEXWUHDOO\RQO\MXVW starting. As I mentioned, with the role of technology, there is really no such thing as the purely local business, because you can reach a global audience for the same cost as supplying goods to the corner store. This is increasingly opening all kinds of fresh possibilities.â&#x20AC;?

These values are becoming far more widespread. Then, there is the role of technology: already we are seeing that there is no such thing as the strictly local, small-scale business. It is also likely that as the economy continues to build, we will have more emphasis on the role of the IPO, and there will be a good many smaller businesses aspiring to growth and public ownership. So, I think that really, it isnâ&#x20AC;&#x2122;t a case of one VHFWRUDJDLQVWDQRWKHUEXWRIĂ&#x20AC;XLG progress between them.â&#x20AC;? Are  SMEs  looking  for  secondary   DQGWHUWLDU\ÂżQDQFHDFRUHSDUWRI your  business?  If  your  business  is   in  this  market,  why  choose  a  bank   rather  than  a  VC? â&#x20AC;&#x153;This is a very important and lucrative market for us â&#x20AC;&#x201C; the company that has SURYHGLWVHOIWKURXJKWKHGLIÂżFXOWHDUO\ \HDUVDQGLVQRZUHDG\IRUÂżQDQFHG growth. We will work alongside a business of this kind and share the expertise in growth strategies that weâ&#x20AC;&#x2122;ve built up over the years, giving the SME access to our expert teams. â&#x20AC;&#x153;As to the type of partner you should choose, a good deal depends on whether you want to be committed to a given exit strategy at an early stage in the businessâ&#x20AC;&#x2122; growth, or whether you want the more simple partnership with a risk lender. This again will depend on your appetite for risk and your medium and longer-term plans for the business.â&#x20AC;?

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Are  we  starting  to  see  the  rise  of   WKHÂľWHFKQR60(ÂśVRSRSXODULQ 6LQJDSRUHIRUH[DPSOH" â&#x20AC;&#x153;Yes, we are starting to see something of this trend here, as we increasingly become an innovative economy. Internationally, companies of this kind have shown that they can achieve volatile growth, because they can often attract a diverse investment base.â&#x20AC;? How  do  you  see  your  main   objectives  for  developing  the   EDQNDQGLWVFRPPHUFLDORĚ&#x2020;HUWR businesses  in  the  next  few  years? â&#x20AC;&#x153;I think that we will play a closer role in working with our customers, helping them develop their strategy - and we will become much more accessible. Successful people are the people who look into the future. The days when banks talk about branches and queues are numbered; thatâ&#x20AC;&#x2122;s not the future, the future is giving the customer really convenient access through online mediums;- smart phones, tablets and every interactive device. At the moment, WKLVLVRQHDUHDZKHUHWKHÂżQDQFLDOVHUYLFHV sector is really falling behind. Just look at retailers, for example: they can sell items like clothing over the internet, where you would think that checking actual look and ÂżWZRXOGQHFHVVLWDWHYLVLWLQJWKHVWRUH But they do it - and if they can, surely we should be able to do so.â&#x20AC;? Do  you  play  a  â&#x20AC;&#x2DC;developmentâ&#x20AC;&#x2122;  role   with  your  customers,  helping   them  with  issues  such  as  risk   management  and  corporate   governance  -­  all  those  regulatory   areas  that  the  spotlight  is  just   starting  to  fall  on  here  in  the  GCC?

â&#x20AC;&#x153;The honest answer is that we work with our customers in the ways that are relevant for a bank. Many of these other areas are the territory of government and government agencies. Having said that, we have a vested interest in growing our economy; grow with it and our clients. Furthermore, we have a strong sense of social responsibility. So, we invest in initiatives that are aligned with developing the economic strength of the nation, across key business segments.â&#x20AC;? What  is  your  view  of  businesses   ZKRREWDLQÂżQDQFHIURPGLĚ&#x2020;HUHQW sources,  or  who  have  a  number  of   banking  relationships? â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s a wise thing for a company to have multiple banking partners. This spreads the risk for both the borrower and the lender. It also means you can play to the different strengths of different institutions. However, itâ&#x20AC;&#x2122;s not a good idea WRJRWRH[WUHPHVMXVWDV\RXZDQWPRUH than one bank, donâ&#x20AC;&#x2122;t have 50, either!â&#x20AC;? What  are  the  top  three  indicators   that  you  look  for  from  an  SME   EHIRUHRĚ&#x2020;HULQJÂżQDQFH" â&#x20AC;&#x153;We look for â&#x20AC;&#x201C; Â&#x2021;'HGLFDWLRQDQGJRRGFKDUDFWHURQWKH part of the owner - what do we know about this personâ&#x20AC;&#x2122;s business behaviour, reputation and, indeed, commitment? Â&#x2021;$VRXQGDQGZRUNDEOHEXVLQHVVPRGHO - is it sustainable? Â&#x2021;)LQDOO\ÂąFDVKĂ&#x20AC;RZFDVKĂ&#x20AC;RZFDVK Ă&#x20AC;RZ&DVKĂ&#x20AC;RZLVNLQJEHFDXVHLWÂśV the key to so many things - from being able to meet repayments, through to VHFXULQJWKHORQJHYLW\DQGĂ&#x20AC;H[LELOLW\ of the business. Previously, many banks used to look at asset value, but this is too uncertain a determinant of VXFFHVV\RXPLJKWEHDEOHWRUHÂżQDQFH assets, but this can be costly and timeFRQVXPLQJ&DVKĂ&#x20AC;RZUHYHDOVDWDJODQFH if the business can not only meet its obligations but leverage growth through taking on healthy amounts of debt.â&#x20AC;? For an online version, please visit: www.smeadvisor.com/2014/04/lookingto-the-future/

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BUSINESS INNOVATION

‘GET CONNECTED’

A DAY OF POWERFUL AND PRACTICAL MESSAGES FOR THE SME SECTOR Etisalat - leading telecoms provider in the Middle East and Africa - joined forces with SME Advisor magazine to host a landmark day for the region’s SMEs.

April 16, 2014 - a date when more than 200 attendees, all representatives of the UAE’s vibrant SME community, EHQH¿WHGIURP(WLVDODW¶VXQULYDOOHG expertise in understanding the digital revolution - and heard how businesses can ‘get connected’ in order to boost sales and win competitive edge. 10 keynote speakers - comprising champions of the SME sector, thought leaders and key Etisalat VIPs - tackled the practical, relevant topics that SMEs can learn from, giving fresh, clear guidelines that businesses can take away and start applying straight away. The topics were carefully selected to make a critical difference to business performance and empower businesses to have the well-informed, spot-on knowledge to supercharge their levels of connectivity. It was a powerful, practical dialogue that took place in the 5-Star setting of the Shangri-La Hotel, Sheikh Zayed Road, Dubai. An  alliance  to  tackle  classic   SME  challenges The event brought together the technical leadership and innovation of Etisalat with the market standing and resonance of the leading publication for the SME space, SME  Advisor. Connectivity is recognised as a key opportunity for the SME sector, offering companies the chance to extend their marketing reach from local to global, to reap the rewards of unprecedented market intelligence - and perhaps most importantly, to get full replicability of data across all the company’s devices, empowering sales and delivering

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BUSINESS INNOVATION

CONNECTIVITY IS RECOGNISED AS A KEY OPPORTUNITY FOR THE SME SECTOR, OFFERING COMPANIES THE CHANCE TO EXTEND THEIR MARKETING REACH FROM LOCAL TO GLOBAL, TO REAP THE REWARDS OF UNPRECEDENTED MARKET INTELLIGENCE

During the event

Steve Gardiner, Vice President, SME Marketing, Etisalat

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marketing that’s properly tailored to customer behaviour. Yet so often these messages get lost in transmission and SMEs end up working with uncertain objectives and inadequate market information. This is where ‘Get Connected’ proved so useful: giving clear, informative data from experts who could explain the priorities simply and with a full understanding of the SME context. So, event highlights included a superb presentation from Steve Gardiner, Vice President, SME Marketing, Etisalat, explaining how the region’s foremost telecoms provider is encouraging take-up of services that enable an SME to play a rich and vital role in the digital revolution – and supercharge their business performance as a result. He reviewed factors such as effective market segmentation (ensuring that the right product is sold to the right customer at the right price), the importance of thinking ahead to anticipate future needs, and the role of Bring Your Own device culture (BYOD) in leveraging staff productivity. Then, Hazel Jackson, founder & CEO, Biz-Group, spoke on the value of Connectivity in delivering a set of ‘daily metrics’ for CEOs and directors to use, giving a snapshot view of company performance. Her talk - titled ‘Get connected: steps to supercharge business performance’ will be remembered as being not only persuasive and highly interactive, but as one of the best-received of the day.

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BUSINESS INNOVATION

GET CONNECTEDâ&#x20AC;&#x2122; PROVED A HUGE SUCCESS AT COMMUNICATING THE SIMPLE (BUT OFTEN NEGLECTED MESSAGE) THAT SMES STAND TO GAIN SUBSTANTIALLY IF THEY BECOME FULLY PART OF THE DIGITAL MIX

The insightful panel discussion

Another speaker to seize the audienceâ&#x20AC;&#x2122;s imagination was John Merrigan, Managing Director, Tamayyaz, addressing the complex and very relevant topics of Corporate Governance and Best Practice. He argued the digital revolution had effectively increased the need for companies to achieve compliance since they could no longer claim lack of awareness - and that they now had all the resources to implement good JRYHUQDQFHDWWKHLUÂżQJHUWLSV%XWKRZ should a business start and what were the ÂżUVWFULWHULDWRLPSOHPHQW")ROORZLQJDQ almost exclusively interactive format, his paper engaged and informed the audience about a dangerously broad topic, on which SMEs often have only limited awareness. 0HDQZKLOH1HLO3HWFK)RXQGHUDQG Chairman, Virtuzone, presented 10 case studies - drawn from real-life examples of company formation - about the different facets of connectivity and the lessons learned from having paused to assess what really needs to be done in order to deliver effective results. His paper, â&#x20AC;&#x2DC;The digital countdown: you have 10 days to Get Connectedâ&#x20AC;&#x2122; struck a chord with many members of the audience and was a chastening reminder to keep our ultimate goals uppermost in mind. One of the main highlights of the event was a panel discussion involving John 0HUULJDQ0DUN)LVKHU 93+HDGRI Corporate Communications, NASDAQ 'XEDL 5LFKDUG6FKRÂżHOG 0DQDJLQJ Director, RKS Strategic Marketing & Communications), and Randa El Hemeiri RZQHURI3HWLW%RXW&KRXQXUVHU\DQG founder of Potentiel).

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Randa explained the progressive ways of using new media to provide remedial tools for children with learning disabilities, while emphasizing that they should only be used as a supplement to one-to-one human interaction and teaching. John Merrigan found, in contrast, that the digital revolution required greater uptake of new media and a higher percentage of senior staff to exchange views and take a transparent view of governance criteria. This, of course, required time, and Richard 6FKRÂżHOGH[SODLQHGKRZDFULWLFDOSDUW of his work involved communicating the LPSRUWDQFHRIPDNLQJDÂżUPHYHU\GD\ commitment to social media and effective digital marketing. This view was shared E\0DUN)LVKHUZKRH[SODLQHGKRZPDQ\ businesses underestimate the importance of positive new media communications as they head for IPO - and how laying the foundations of the new share issue with positive messaging could reap massive rewards further along the road to becoming a mature public entity. â&#x20AC;&#x2DC;Get Connectedâ&#x20AC;&#x2122; proved a huge success DWFRPPXQLFDWLQJWKHVLPSOH EXWRIWHQ neglected message) that SMEs stand to gain substantially if they become fully part of the digital mix - and do so right now. â&#x20AC;&#x2DC;Get Connectedâ&#x20AC;&#x2122; was part one in the all-new Business Connect series, a thought-leadership events programme celebrating the new and mutually productive partnership between Etisalat and SME  Advisor magazine. For an online version, please visit: www.smeadvisor.com/2014/05/getconnected/

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BUSINESS INNOVATION

DON’T WASTE IT - SHARE IT!

SME OWNERS AND DIRECTORS FACE A DIFFICULT DILEMMA WHEN IT COMES TO EMPOWERING STAFF WITH DATA AND USING MODERN TECHNOLOGY TO BEST ADVANTAGE - WHILE THE DELIVERY OF DATA AT POINT OF SALE BOOSTS PERFORMANCE, IT TYPICALLY INVOLVES MORE COST. WE LOOK AT SOME OF THE ISSUES INVOLVED AND SPEAK TO BISHAN GHOSH, MANAGER, SME PROPOSITIONS, ETISALAT, AND STEVE GARDINER, VICE PRESIDENT, SME MARKETING, ETISALAT.

 Bishan  Ghosh,   Manager,  SME   Propositions,  Etisalat

 Steve  Gardiner,   Vice  President,  SME   Marketing,  Etisalat

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In November 2013, Dubai SME posted the results of one of the most detailed surveys ever undertaken about business behaviour and performance in the UAE. It showed that 78 per cent of business executives in the UAE are mobile, and that no less than 81 per cent of SME owners believe that greater mobility is key to enhanced performance in the future. The reality is that the ‘digital revolution’ has awakened businesses to many new ways of working, and these can make a substantial impact not only on the revenue accrued, but on operating

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BUSINESS INNOVATION

profitability. A classic example is the availability of customer and accounts data across the mobile devices carried by the sales force ‘in the field’. This enables business opportunities to be closed quickly and succinctly without reverting to a higher authority ‘back at base’ (which could break continuity with the prospect and open dangerous competitor opportunities). It also ensures that the sales representative is fully aware of buying habits and can offer appropriate services proactively. Another rapidly-developing trend is the use of daily metrics by all the

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business’ decision-makers, taking a snapshot of business performance and addressing the more ‘sluggish’ areas straight away. This in itself depends on the total availability of data - any ‘rounding up’ of data will mean that it’s old before the discussion can be held. The ability to have open access and sharing of brand new data is vital in preparing the roadmap of where the business is heading. As Hazel Jackson, CEO & Founder of the leading training and development company in the region – biz-group, and a regular fixture

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BUSINESS INNOVATION

WHILE IT’S IMPORTANT FOR EMPLOYEES TO STAY ONLINE AND CONNECTED, IT’S PREFERABLE FOR THIS TO BE ACHIEVED IN A WAY THAT BALANCES COST WITH EFFICIENCY.

in the SME community, comments: “Traditionally, you viewed data that had been processed by one department and then delivered to another. It was typically looking at what had already happened so you were constantly running the business in retrospect. But the point is to have instant availability of fresh data, so you can see at a glance where the business is heading and take appropriate action immediately.” This kind of data sharing and open access is the ‘holy grail’ of the digital revolution - but the problem is that traditionally it comes at a cost. In the days when voice communications are at bargain prices, data can still be labourintensive for telecoms providers to SURFHVVDQGWKLVLVUHÀHFWHGLQWKHIDFW that providing for a number of staff to be ‘connected’ can result in substantial monthly bills. Moreover, the reality is that while some staff will be using very little of the available data package, others won’t KDYHHQRXJK:KLFKPHDQVLQHI¿FLHQW allocation of resources and wastage of company budgets. While it’s important for employees to stay online and connected, it’s preferable for this to be

30

achieved in a way that balances cost ZLWKHI¿FLHQF\ Moreover, from a management standpoint, it’s also helpful to be able to get a clear picture of who is using what - which can release better synergies within the team. The problem is that having the traditional individual packages doesn’t give managers the ability to be clear about work allocation, so the vital link - which would enable ZRUNWRJHWGRQHHI¿FLHQWO\ZLWKRXW duplication - is missing. Is there a solution which can both save costs and work as a powerful and productive management tool? 7KHEHQH¿WVRIGDWDVKDULQJ Bishan Ghosh, Manager, SME Propositions, Etisalat, spoke to SME Advisor about the challenges of building a strong level of connectivity into the business mix. “How do you maximise the role of data in your company and ensure productivity in a way that makes good commercial sense for your SME? There’s a kind of inherent contradiction, because we all want to get mobile and have valuable data available for key personnel - but the cost of mobile data is still perceived as high. Take a look at the statistics: in the UAE, a very low

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BUSINESS INNOVATION

WHAT WEâ&#x20AC;&#x2122;RE PROVIDING HERE IS JUST ONE PART OF A NEW PORTFOLIO OF PROPOSITIONS THAT WE ARE CURRENTLY UNRAVELLING, DESIGNED SPECIFICALLY FOR THE SME MARKET, BASED ON OUR CORE VALUE OF â&#x20AC;&#x2DC;SUPPORTING SMESâ&#x20AC;&#x2122;.

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percentage of tablets are â&#x20AC;&#x2DC;connectedâ&#x20AC;&#x2122;. This is very revealing, because the WDEOHWLVSHUFHLYHGDVWKHGHÂżQLWLYH mobile device - but people rely heavily RQZLÂżFRQQHFWLRQVIRUWKHLUGDWD access. Even in the United States which you could call the â&#x20AC;&#x2DC;spiritual homeâ&#x20AC;&#x2122; of the digital revolution - that VWDWLVWLFLVVWLOOQRWVLJQLÂżFDQWO\KLJK â&#x20AC;&#x153;At Etisalat, weâ&#x20AC;&#x2122;ve given this situation a good deal of thought and come up with an idea that is something of a breakthrough for businesses wanting connectivity on a budget. Itâ&#x20AC;&#x2122;s this: data share. The company buys a very affordable amount of data and then each user simply â&#x20AC;&#x2DC;plugs inâ&#x20AC;&#x2122;. This can cost as little as AED249 per month (for 5GB), which will let you have three people VKDUHWKHGDWDIRUDÂż[HGSULFHRI only AED35 each. Weâ&#x20AC;&#x2122;ve called this package Business DataShare, and you can see the kind of savings it will be possible to make, over and above the usual arrangement. There are several different options, going up to a very substantial package for heavy data users - 30GB for AED599, with up to eight people sharing for AED75 each. â&#x20AC;&#x153;The idea here is to reduce cost and optimize communication. You can

buy more in order to share more. Of course, everything is completely secure and the great thing is that it works on the basis of there being a primary account that is then shared with your employees. So there is very strong management control and youâ&#x20AC;&#x2122;re really well-placed to promote synergy in your team - knowing who does what and the patterns of usage they prefer. <RXÂśOODOVREHDEOHWRGHÂżQHSHRSOHÂśV responsibilities more effectively - and all for a very affordable cost.â&#x20AC;? Steve Gardiner, Vice President, SME Marketing, Etisalat, adds: â&#x20AC;&#x153;what weâ&#x20AC;&#x2122;re providing here is just one part of a new portfolio of propositions that we are currently unravelling, designed VSHFLÂżFDOO\IRUWKH60(PDUNHWEDVHG on our core value of â&#x20AC;&#x2DC;Supporting SMEsâ&#x20AC;&#x2122;. â&#x20AC;&#x153;This is a highly cost effective and HIÂżFLHQWPHWKRGIRU60(VWREHWWHU manage their workforce and their associated costs, with the additional EHQHÂżWRIFRPSOHWHWUDQVSDUHQF\WR usage across the team, which in turn should result in improved business performance.â&#x20AC;? For an online version, please visit: www.smeadvisor.com/2014/05/dont-wasteit-share-it/

31


MOVERS & SHAKERS

SHAPING THE WORLD Vikram Shroff is no stranger to the world of private sector entrepreneurship: as a Director at Regal group - one of the UAE’s EHVWNQRZQGLYHUVLŵHG businesses - he’s established a powerful and LQŶXHQWLDOUHSXWDWLRQDVD formidable and ethicallydriven SME champion. SME Advisor highights the views of a seasoned expert whose skills not only supercharge the businesses he’s pioneered but have led to a strong appreciation of the unique climate for SMEs across the GCC nations… 32

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MOVERS & SHAKERS

What do you see as the prime factors currently influencing the SME sector in the region? â&#x20AC;&#x153;This is an interesting question, because it seems to me that one of the most important elements is often overlooked. One of the prime factors is the role of Government itself, and if we look at states like Qatar and the UAE, we can see that their governments recognise how important the SME sector actually is. If we look around the world at those nations where the SME space is most developed, we see repeatedly that a supportive government is the catalyst. Singapore is a classic example. Here in the GCC, itâ&#x20AC;&#x2122;s proving to be the awareness and encouraging attitude of governments that is driving the expansion of SMEs. For example, there are so many government-backed initiatives , not to mention a very healthy and encouraging attitude to entrepreneurship courses and training.â&#x20AC;?

What do you believe are the key elements that make a business an attractive investment proposition? â&#x20AC;&#x153;There are two factors that are especially important. The first is innovation. Innovation is what is going to take an SME to the next level. Itâ&#x20AC;&#x2122;s what distinguishes the best from the also-rans, and what really attracts not only investors, but - just as significantly - customers. Every SME owner or Director needs to ask whether their business offers a solution that is comprehensively different from that offered by anyone else. â&#x20AC;&#x153;The next aspect is cashflow. Itâ&#x20AC;&#x2122;s the presence of strong cashflow that, perhaps more than anything else, will leverage a favourable decision from a risk partner or investor. For example, banks used to be assetbased in terms of their lending criteria, but now they are very much

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cashflow focused. The reality is that even if you have assets, they will have to be refinanced before they can help you meet your financial obligations. Whereas with good cashflow you can not only meet your current outgoings, but leverage substantial further borrowings. Cashflow is king.â&#x20AC;?

Do you see more SMEs looking to do business internationally, outside the region - or is the GCC still the primary focus? â&#x20AC;&#x153;The reality is that I donâ&#x20AC;&#x2122;t see the majority of businesses looking outside the GCC; the SME sector is still very much GCC-focused. This may change in time, but not at the present.â&#x20AC;?

Is there one particular style of business in the SME space that you see moving ahead of the rest? Âł<HVGHÂżQLWHO\LQWKHDUHDRI6HUYLFHV thereâ&#x20AC;&#x2122;s dramatic growth here. It may well be because in the developed, cosmopolitan hubs we live in, the pace of life is so fast and people need service providers to save them time. Lifestyle pressure is so intense, and a service business with a strong, innovative concept can attract a lot of interest.â&#x20AC;?

Do you see increasing adoption of the principles of Corporate Governance/Best Practice among SMEs? â&#x20AC;&#x153;The reality is that many SMEs simply donâ&#x20AC;&#x2122;t care about Governance and Best Practice issues - theyâ&#x20AC;&#x2122;re too busy growing and getting on with their lives! But this is a short-termist view, because you canâ&#x20AC;&#x2122;t have all the exciting things, like Mergers & Acquisitions activity,

33


MOVERS & SHAKERS

IF WE LOOK AROUND THE WORLD AT THOSE NATIONS WHERE THE SME SPACE IS MOST DEVELOPED, WE SEE REPEATEDLY THAT A SUPPORTIVE GOVERNMENT IS THE CATALYST.

Vikram Shroff, Director, Regal group

growth of an international network, or eligibility for an IPO, without paying very good attention to the raft of ethical and compliance issues. The moral of the story is, if you don’t get your house in order now, you’re really limiting what you will be able to achieve later on.”

What led to your commitment to developing the Entrepreneurs’ Organisation (EO)? “An individual can shape the world - as we’ve seen so many times! Understanding what drives and characterizes the individual entrepreneur is a very important process that we can all benefit from, and I wanted people to be able to get closer to classic entrepreneurs from every walk of business life. The Entrepreneurs’ Organisation (EO) really facilitates that process. Yet it also plays another important role: no-one is an island, and the EO makes it easier for entrepreneurs to communicate with each other, crossfertilising their ideas and talents. Plus, it does so on an international basis, bringing in a very wide pool of leaders from across the globe.”

In your own business life, is there one decision that you’d like to reverse if you could?

34

“I think we all have a regret of that kind, and for me it was that I got a bit too defensive in my business practices during the recession. I should have used the opportunity to get ahead of the competition a little more, but I held back. As the great industrialist Henry Ford said: “There’s no better time to make your money than when everyone else is losing theirs.”

What do you see as some of the classic lessons that SME owners/ directors can learn from the CEOs that the EO represents? “You have to be prepared to learn from everybody - another peer can always teach you something new. Peer-to-peer learning is very important and can save you a vast amount of time in terms of wrong directions and mistakes. No matter how successful you are, there is always something new to learn, and the EO gives you a better number of opportunities to do precisely that. If you feel that you already know everything there is to know about your business, you may be right, but on the other hand, you may learn something that completely transforms your ability to deliver growth and performance.” For an online version, please visit: www.smeadvisor.com/2014/05/shapingthe-world/

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MOVERS & SHAKERS

SPOTLIGHT ON SUCCESS

THE WORLD OF DABO AND CO. Statistics indicate that most 60(VIDLOZLWKLQWKHŵUVWWKUHH \HDUVRIH[LVWHQFH([SHUWV DOVRVXJJHVWWKDW\RXU60( LVSUREDEO\KHUHWRVWD\ RQO\DIWHULWKDVVXFFHVVIXOO\ FURVVHGLWVVHYHQWK\HDURI EXVLQHVV+HUHZHKLJKOLJKW DG\QDPLFEXVLQHVVWKDWKDV QRWRQO\EHDWHQDOORGGV WRVXFFHHGRYHUQHDUO\WHQ \HDUVEXWKDVDOVREHFRPHD OHDGHULQLWVŵHOGŎSRVLWLRQHG HQYLDEO\DWWKHYHU\WRSRI WKHLQGXVWU\,QDQH[FOXVLYH LQWHUYLHZZLWKFRIRXQGHUV /XF\DQG&DPLOODGő$ERZH OHDUQWWKHVHFUHWVEHKLQGWKH VXFFHVVRI'$%2 &2

Co-founders Lucy and Camilla d’Abo

36

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MOVERS & SHAKERS

DABO & CO. has established itself as one of the leading integrated communications agencies in the region. At the forefront of this success are two vibrant, inspiring and powerful personalities – Lucy and Camilla d’Abo. When SME Advisor had the opportunity to meet the two co-founders and sisters, here’s the power dialogue that followed…

How did it all come about? What was your inspiration behind this idea? Lucy: “Both Camilla and I had previous experience of working within this industry – so we were always attracted to this field. There was a point where we wanted to create something much better, something which wasn’t already available in the industry, and that meant starting an independent agency.” Camilla: “At the very outset, we had the vision of creating an agency that would deliver an integrated offering. What does that mean? It means our agency is fully equipped to provide your business with a 360 degree approach to PR, events and digital marketing. We identified this gap and capitalised on it, and that was how DABO & CO was formed. We started in 2004 and have had a fantastic journey ever since.”

What were initial challenges you faced? Camilla: “I think every SME, irrespective of what industry it is in, has to face immense challenges. You have to build the foundations of the business, go through all the legal and set-up procedures, manage the operations, recruit your team, and ensure you’ve built a creative environment, and so on. The key to success lies in being able to manage

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37


MOVERS & SHAKERS

IF YOU ARE TRULY PASSIONATE ABOUT YOUR BUSINESS IDEA OR CONCEPT, DON’T GIVE UP!

all these elements successfully. In addition, building a reputation for our business and creating a line of trust with our clients was a major challenge.” Lucy: “Being mentally prepared when starting out your business is also a crucial aspect. For those that think creating a business from scratch is fairly easy, I would say be prepared as it’s a massive commitment. Having said that, if you are indeed passionate and determined about starting your business, there is nothing that you can’t overcome.”

Tell us a little about your company and the kind of services it offers. Camilla: “Our agency is built on three prime disciplines – public relations, event management and digital marketing. We promise our clients a highly personalised and bespoke approach from start to finish. Clients can rest assured that our team is an extension of their business!”

How do you differentiate yourself from other agencies in this industry? Lucy: “We have coined a phrase which we believe summarises what we are all about. It says ‘we create campaigns and experiences that people love to talk about’. Our integrated approach is something that makes us completely different from other agencies and gives us a sustainable competitive advantage.”

What are the primary values that you’ve embedded as part of your company culture? Lucy: “We have four values: Ideas that Inspire, Entrepreneurial Spirit, All in the

38

Finesse, and Sharing is Caring. These values are at the core of our company VWUDWHJ\DQGUHÀHFWLQHYHU\WKLQJWKDW we do. For example, ‘All in the Finesse’ means that all our projects, whether it’s a major event for 500 people or a 200word press release, are completed with equal attention, accuracy and perfection.” Camilla: “We hold an Oscar-themed Awards at the end of each year where the team actually votes for one another across different categories. So, it’s a fantastic way of inculcating peer-topeer recognition into the company culture. We also hold an internal ‘Lunch and Learn’ session for our staff members where they get to meet and interact with world-class experts.

Is there any particular industry sector that you have specialised expertise in? Are there sectors that you haven’t yet tapped and would like to in the future? Camilla: “I think our key strength is our consumer-communications and we have a strong footprint in hospitality, fashion, automotive and ¿QDQFH,QWHUPVRILQGXVWULHVWKDW we would like to tap into, or further explore, I would say education, healthcare and technology.”

Being in a position that your agency is today, do you carefully select the clients that you want to work with? Or are you open to clients as they come? Lucy:³:HDUHGH¿QLWHO\VHOHFWLYH with the clients that we want to work with and add to our portfolio. This is primarily because it’s so important that we understand our client’s values and vice versa. We want to be aligned with the long-term vision and strategy

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MOVERS & SHAKERS

RIDQ\FRPSDQ\ZHZRUNZLWK2QFH ZHWDNHDFOLHQWRQERDUGWKH\DUHRXU FRPSOHWHUHVSRQVLELOLW\DQGWKLVLV VRPHWKLQJZHWDNHYHU\VHULRXVO\´

How do you measure the effectiveness of your PR strategies? Camilla: â&#x20AC;&#x153;We encourage clients to have pre-campaign and post-campaign metrics in place that will help them HYDOXDWHWKHHIIHFWLYHQHVVDQGHIÂżFLHQF\ RIDQ\35RUPDUNHWLQJLQLWLDWLYH%XW ZHGRDOVRWDNHLQWRFRQVLGHUDWLRQ that different brands have different REMHFWLYHVYDU\LQJIURPUHSXWDWLRQDQG relationship-building to sales building DQGFRPPHUFLDOVXFFHVV´

Do you encourage CSR initiatives building organically likeable companies? Lucy:³2IFRXUVH&65LVVXFKDQ important element of the business HFRV\VWHPWRGD\2XUPRVWVXFFHVVIXO &65FDPSDLJQZDVRQHZHGLGIRU%0: LQ:HœYHDOVRZRUNHGZLWK'XEDL &DUHV'+$DQGPDQ\RWKHUV¹RIWHQ HQDEOLQJWKHPWRHI¿FLHQWO\VSUHDGWKHLU VRFLDOPHVVDJHWRWKHLUWDUJHWDXGLHQFHV´

At the initial stages of startup, how easy of difficult was the getting finance process? Camilla: â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;ve invested our own IXQGVLQWRRXUEXVLQHVV:HKDYHQÂśW ORRNHGDWH[WHUQDOÂżQDQFHRSWLRQVDQG ZHIHHOWKDWKDVZRUNHGYHU\ZHOOIRUXV VRIDU´ Lucy: â&#x20AC;&#x153;When we started, there wasnâ&#x20AC;&#x2122;t DORWRIDWWHQWLRQJLYHQWR60(VÂą SDUWLFXODUO\LQWHUPVRIVHFXULQJÂżQDQFH +RZHYHUWRGD\WKHUHDUHVRPDQ\ funding sources available to startups

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and entrepreneurs, itâ&#x20AC;&#x2122;s wonderful to see WKHNLQGRIVXSSRUW\RXFDQJHW´

How difficult is being a woman entrepreneur? Do you think it poses additional challenges? Lucy:³<RXNQRZWKHIXQQ\WKLQJ LVZHœYHEHHQDVNHGWKLVTXHVWLRQD ORWRIWLPHVEXWLQUHDOLW\ZHUHDOO\ KDYHQRFRPSODLQWV%HLQJZRPHQ entrepreneurs has been our strength DQGKDVZRUNHGSRVLWLYHO\IRUXV There are an increasing number of LQLWLDWLYHVLQWKHFRXQWU\WKDWDUH GHGLFDWHGWRIHPDOHHPSRZHUPHQW ,KDYHWRVD\WKHJRYHUQPHQWKHUH LVYHU\VXSSRUWLYHRIZRPHQLQ business, which is something we are H[WUHPHO\SURXGRI´

Whatâ&#x20AC;&#x2122;s your personal leadership mantra? Lucy:Âł,WÂśVDOODERXWWKHWHDP :HDUHFRPSOHWHO\GULYHQE\RXU WHDP&DPLOODDQG,UHDOLVHWKDW RXUFRPSDQ\LVLQFRPSOHWHZLWKRXW HDFKDQGHYHU\VWDIIPHPEHUZH KDYHWRGD\,WÂśVUHDOO\WKHLUKDUG ZRUNDQGGHGLFDWLRQWKDWKDV empowered us to raise the bar ZLWKLQRXUDJHQF\´

Camilla: â&#x20AC;&#x153;We aspire to be the leading LQWHJUDWHGFRPPXQLFDWLRQVDJHQF\ LQWKH0LGGOH(DVW&XUUHQWO\DOORXU energies our focused on doing what we NQRZKRZWRGREHVWDQGQRWGLOXWHWKH HVVHQFHRIZKDWZHGR,QWKHIXWXUH KRZHYHUH[SDQVLRQLVDSRVVLELOLW\´

Finally, what is your message for aspiring entrepreneurs in the region? Lucy:Âł,I\RXDUHWUXO\SDVVLRQDWH DERXW\RXUEXVLQHVVLGHDRUFRQFHSW GRQÂśWJLYHXS3UHSDUH\RXUVHOIIRUWKH realities of business and be prepared WRIDFHWKRVHKHDGRQ$OZD\V UHPHPEHUWKDWFDVKĂ&#x20AC;RZLVNLQJÂąGR KLUHDQDFFRXQWDQWWKDWFDQHQVXUH\RX DUHRQWKHULJKWWUDFNÂżQDQFLDOO\´ Camilla:Âł,I\RXDUHORRNLQJWRVWDUW DEXVLQHVVPDNHVXUHWKDWLWÂśVLQDQ LQGXVWU\WKDW\RXDUHNQRZOHGJHDEOH about and have had prior experience LQ7KLVDGGVFUHGLELOLW\WR\RXU EXVLQHVVDQGJLYHV\RXDFRPSHWLWLYH HGJHRYHURWKHUV´

If you were to describe DABO & CO in three words, what would they be? Lucy:³$K)DQWDVWLFTXHVWLRQ, ZRXOGVD\ZHDUHG\QDPLFSURDFWLYH DQGFROODERUDWLYH´

What is your vision for the next five years?

For an online version, please visit: www.smeadvisor.com/2014/05/spotlighton-success/

39


GETTING FINANCE

BIT BY BIT: BITCOINS MAY REVOLUTIONISE THE CURRENCY SCENE OF THE COUNTRY... IF YOU WAIT A ‘BIT’ THE BITCOIN IS A HIGH-LIQUIDITY, VIRTUAL CURRENCY THAT HAS BEEN SPECIFICALLY DEVELOPED TO ENABLE EXCEPTIONAL TRANSPARENCY OF DEALINGS AND FULLY ENCRYPTED TRANSFER AND EXCHANGE. YET IT’S CURRENTLY PROVOKING A GOOD DEAL OF CONTROVERSY AND HUGELY MIXED RECEPTION. THE REALITY IS THAT BITCOIN COULD BE A SIGNIFICANT TOOL FOR ASPIRATIONAL SMES - BUT DO YOU CURRENTLY KNOW HOW IT WORKS AND THE ADVANTAGES IT COULD BRING? ASSOCIATE EDITOR ZENIFER KHALEEL INVESTIGATES…

40

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GETTING FINANCE

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41


GETTING FINANCE

THE USP OF THE BITCOIN IS THAT IS A CHEAPER ALTERNATIVE FOR MONEY TRANSFER AS COMPARED TO CONVENTIONAL MONEY EXCHANGE CONCEPTS

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British philosopher and economist, John Stuart Mill stated that â&#x20AC;&#x153;Money is a machine for doing quickly and commodiously what would be done, though less quickly and commodiously, without itâ&#x20AC;?. ,QDELGWRHDVHÂżQDQFLDO transactions worldwide, the Bitcoin was introduced in 2009 by Satoshi Nakamoto. This digital, decentralized currency relies on peer-to-peer networking and cryptography to maintain its integrity. It can be purchased in exchange for real money from online traders. Its proponents argue that Bitcoin has many properties that could make it an ideal currency for mainstream consumers and merchants. It has high liquidity which in turn leads to low transaction costs and quick payments across the internet. The USP of the Bitcoin is that is a cheaper alternative for money transfer as compared to conventional money exchange concepts. Retailers are charged up to three per cent for Bitcoin exchange while money transferors can levy fees as high as nine per cent. Another distinguishing feature is the ease of transactions. You can send bitcoin from your computer, tablet, smart phone (or any other device) to any part of the world, be it day or night Bitcoin is based on technology that, by its very nature, is designed to surpass the geographic reach of EDQNVDQGFXVWRPHUV2QWKHĂ&#x20AC;LSVLGH the speed and anonymity with which transactions can be done could make Bitcoin more susceptible to nefarious activities. It can also increase the occurrence of system crashes leading to defective transactions. The concept still has to catch on in the Gulf region and the UAE in particular. The majority of remitters here are from India, Pakistan and Bangladesh - typically â&#x20AC;&#x2DC;blue collarâ&#x20AC;&#x2122; remitters who prefer to send money physically at exchange houses rather than online. This is because they are not adept with the technology of online transactions and the cryptography concept involved.

Almer Agmyren, Managing Director of Rex Real Estate and an MSc graduate in Economics, feels WKDWWKH%LWFRLQZLOOÂżQGDIRRWKROG in the region only when the right â&#x20AC;&#x2DC;critical massâ&#x20AC;&#x2122; has been attained. â&#x20AC;&#x153;The expression â&#x20AC;&#x2DC;critical massâ&#x20AC;&#x2122; pertains to the amount of users of the system that makes other potential users feel secure about the Bitcoin currency and thereby begin to use it. â&#x20AC;&#x153; he explains. â&#x20AC;&#x153;My informed guess is that this will happen quite soon. The main advantages of the Bitcoin are lesser costs and the speed with which transactions can be conducted. As internet is omnipresent and the technological knowhow is advancing by the day in this region, it wonâ&#x20AC;&#x2122;t be long before it becomes a normal and accepted medium of transactionâ&#x20AC;? he adds. On the contrary, K.V Shamsudheen, Director of Barjeel Geojit Securities LLC is of the opinion that this digital currency revolution will take some time coming: â&#x20AC;&#x153;The Bitcoin will create an impact only when it has support of a regulatory authority at the central level. As of now, no central bank is ready to regulate digital currency. 3UHVHQWĂ&#x20AC;XFWXDWLRQRIWKH%LWFRLQLVXS to 25 per cent. This poses a big risk to wide acceptance. So it will take long time for the concept to be accepted in this part of the world.â&#x20AC;? Accounting  for  the  bit With no banks, cash or cards involved, managing Bitcoin transactions is a personal affair. The transactions are validated through fully transparent accounting ledger software and secured by rigorous computational work by network peers. This means you have complete control over your own Bitcoins without having to undergo transaction processes or incur fees for different services. Likewise, the supply and distribution rate of Bitcoins is predetermined and limited. It is nearly impossible to print fake Bitcoins and place them in circulation as it has a unique encryption code

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GETTING FINANCE

BITCOIN IS A QUICK AND SECURE WAY OF EXCHANGING VALUE BETWEEN TWO PARTIES WHICH COULD SURVIVE LONG INTO THE FUTURE

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for each user. Bitcoin is also a fully transparent and yet anonymous payment system. Every single transaction from the beginning is publicly available for viewing, with balances of each account. However, you donâ&#x20AC;&#x2122;t need to associate your name with your Bitcoins the way you do with a bank account or credit card. Now we come to the integral premise: How will the accounting department record this digital â&#x20AC;&#x2DC;avatarâ&#x20AC;&#x2122;? Ideally, the companyâ&#x20AC;&#x2122;s accounting department would create an internal company coin. This coin would be convertible to Bitcoin or whichever Crypto currency is prevalent, but would only be used internally. They would then distribute this coin according to the annual budget. Once the books are closed for the fiscal year, all coins would have to be converted to Bitcoin to mark to market for the last time, and that coin would be closed. Then the cycle begins again. This method guarantees internal transaction integrity, transparency and accountability. It also leads to less transaction errors, real time financials and a drastically cheaper method of accounting. On the other hand, there are risks and complications associated with this accounting process. Invariably, companies arenâ&#x20AC;&#x2122;t going to have the technology to create their own coin. They also canâ&#x20AC;&#x2122;t do their own mining, since this removes the operational credibility. Additionally, this method also leaks information that the company might not want to share. Finally thereâ&#x20AC;&#x2122;s the sheer complexity of it all. Qualified accountants who are well abreast with the concept of cryptography and digital currency have to be employed for the process. A â&#x20AC;&#x2DC;bitâ&#x20AC;&#x2122; of redemption The biggest dent in the rise of the Bitcoin is the lack of a regulating authority or a governing body to control its operations. Recent scandals and few disruptions in exchange process are the other obstacles in its popularity. Under

current circumstances, the heavy fluctuation and unstable condition visible now, poses a difficult situation to maintain accounts on digital currency. In its recent guidelines, the IRS has compared the Bitcoin to stock, bond, or piece of real estate whose value fluctuates over time and implied that it should therefore be subject to a capital gains tax when sold. Fortunately, volatility does not DIIHFWWKHPDLQEHQHÂżWVRI%LWFRLQDV a payment system to transfer money from point A to point B. It is possible for businesses to convert Bitcoin payments to their local currency LQVWDQWO\DOORZLQJWKHPWRSURÂżWIURP the advantages of Bitcoin without EHLQJVXEMHFWHGWRSULFHĂ&#x20AC;XFWXDWLRQV With such solutions and incentives, it is possible that Bitcoin will mature and develop to a degree where price volatility will become limited. Bitcoin is a quick and secure way of exchanging value between two parties which could survive long into the future. It is secure by itself, but it is currently unregulated - and thus worrying to the investor. The service a bitcoin provides in terms of ease of transaction and accountability is far greater than the problems surrounding it. As virtual cash, it is a useful and secure system and hopefully in the future it can garner the attention of financial institutions and governments to make it more reliable and safe for every user. Demand dictates which technological innovations succeed and which fail, and this is certainly the case for the Bitcoin currency. There would have to be a secure and stable payment system in place with the Central Bank to enable the Bitcoin system to prevail in the country. As we are witnessing a generation which thrives on every amenity in the digital form, it wouldnâ&#x20AC;&#x2122;t be long before the Bitcoin becomes part of our daily monetary transaction norms. For an online version, please visit: www.smeadvisor.com/2014/05/bit-by-bit/

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GETTING FINANCE

A TIME FOR GROWTH 2014 SET TO BE A DEFINING PERIOD FOR UAE CAPITAL MARKETS

2013 ended with a fresh spirit of optimism in the region, buoyed by Dubaiâ&#x20AC;&#x2122;s winning the coveted title of host for the 2020 Expo. Yet how is this being translated into actual investment performance - and is the market showing a strong growth platform for the SME and Enterprise sectors? On current form, the reality is that investors are indeed QRZPRUHFRQŵGHQWWR deploy cash into the market, with expectations of robust medium and long term returns. To get the latest market intelligence, we spoke to Simi Nehra, Partner at Grant Thornton UAE. 44

The UAE economy is set to grow with VLJQL¿FDQWSDFHLQGXHWRDQ RYHUDOOSRVLWLYHRXWORRNIRUVXVWDLQDEOH JURZWKDQGZLWKLQYHVWRUV¶FRQ¿GHQFH EXLOGLQJPRPHQWXP 7KHFRXQWU\LVSDUWLFXODUO\QRWHGIRU KDYLQJWKHG\QDPLVPRIWKHZHVWZKLOVW PDLQWDLQLQJWKHFXOWXUHRIWKHHDVW7KH ,0)KDVSUHGLFWHGD*'3JURZWK UDWHRISHUFHQWZKLFKLVVXSSRUWHGE\ $EX'KDEL¶VEXR\DQWRLODQGJDVLQGXVWU\ DQGLWVVLJQL¿FDQWLQIUDVWUXFWXUHDQG LQGXVWULDOLQYHVWPHQWVSXUUHGRQE\ DUHERXQGLQJ'XEDLHFRQRP\IXUWKHU HQKDQFHGE\WKHUHFHQW([SRZLQ Equity  Capital  Markets   ,Q-XQHWKH8$(¶VFODVVL¿FDWLRQ ZDVXSJUDGHGIURPDIURQWLHUPDUNHWWR DQHPHUJLQJPDUNHWDVDUHVXOWLQ0D\ WKHWKUHH8$(LQGLFHVQDPHO\WKH $EX'KDEL6HFXULWLHV([FKDQJH $'; 

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GETTING FINANCE

4.5% - IMF’S GDP GROWTH RATE OF UAE FOR THE YEAR 2014

THE UAE’S STOCK MARKET REGULATOR, THE SECURITIES AND COMMODITIES AUTHORITY, CONTINUES TO IMPROVE AND IMPLEMENT HIGHER STANDARDS OF REGULATION SINCE ITS INCEPTION IN 2002.

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the Dubai Financial Market (DFM) and Nasdaq Dubai, are expected to be incorporated into the MSCI’s emerging markets index. Commentators have opined that this will attract over US$270 million into the stock exchanges. The UAE stock exchange performance in the past year is notable, with the ADX ending 2013 with a total of almost US$23 billion in share exchange value, SRVWLQJDVLJQL¿FDQWYROXPHJURZWK of 282 per cent compared with 2012. Socio-political turmoil in the wider region is driving trading volumes with investors seeking a safe haven. This is positively affecting real estate and stock values in the UAE. Moreover, the index opened at 2,631 in 2013, and closed 63 per cent higher at 4,290. In 2013, the DFM was the second best performing exchange globally and LQ-DQXDU\LWDFKLHYHGDQHZ¿YH

year high to 3,819 points recovering back to the January 2008 peak. ,QLWLDO3XEOLF2̆HULQJV A strong pipeline of issuers looking to launch IPOs regionally is expected in the next 18 months; Grant Thornton (GT) provides IPO readiness assessments and acts as a sponsor to companies seeking to list, and GT expects to see several UAE local family groups evaluating listing opportunities in the effort to seek capital injections DQGWRUDLVHWKHLUSUR¿OHUHJLRQDOO\ A well-known Abu Dhabi bank expects six companies to go public in 2014 which is estimated to raise US$2 billion. In 2013, the only sizable local IPO was Damac Properties, however its management opted to list on the London Stock Exchange being valued at US$2.65 billion post offering.

45


GETTING FINANCE

IN LINE WITH THE INITIATIVE OF HIS HIGHNESS SHEIKH MOHAMMAD BIN RASHID AL MAKTOUM, DUBAI IS LEADING THE WAY TO BECOME A GLOBAL HUB FOR ISLAMIC FINANCE. 7KHODVWVLJQL¿FDQW,32ZKLFKZDV YDOXHGRYHU86ELOOLRQZKLFKZDV WLPHVRYHUVXEVFULEHGZDVWKH SRUWRSHUDWRU'3:RUOG/WGUDLVLQJ $4.96 billion in November 2007. $IWHUDVHYHQ\HDUUHWUHDWLWLVZLGHO\ DQWLFLSDWHGWKDWWKHUHZLOOEHDUHWXUQ WRWKLVNLQGRI,32DFWLYLW\ Bourse  Consolidation 7KH8$(¶VVWRFNPDUNHWUHJXODWRUWKH 6HFXULWLHVDQG&RPPRGLWLHV$XWKRULW\ FRQWLQXHVWRLPSURYHDQGLPSOHPHQW KLJKHUVWDQGDUGVRIUHJXODWLRQVLQFH LWVLQFHSWLRQLQZKLOVWHQVXULQJ LQYHVWRUFRQ¿GHQFHEXWDOVRDFWLQJQRW WRKLQGHUFDSLWDOPDUNHWDFWLYLW\ORFDOO\ $FFRUGLQJWR%ORRPEHUJ$EX 'KDELDQG'XEDLKDYHFRPSOHWHGGXH GLOLJHQFHRQDSRWHQWLDOPHUJHURIWKH $';DQG')0ZKLFKZLOOHQVXUHD PRUHHI¿FLHQWDQGQDWLRQDODSSURDFKWR WKHJOREDOLQYHVWRUFRPPXQLW\ Also, there is motivation from 8$(OLVWHGFRPSDQLHVWROLIWIRUHLJQ RZQHUVKLSOLPLWVRQWKHLUVKDUHV Under UAE rules, investors from RXWVLGHWKH8$(RU*&&DUHSHUPLWWHG WREX\XSWRSHUFHQWRIWKHLUVKDUHV ,QRUGHUWRDWWUDFWIXUWKHUHTXLW\ from the international investment FRPPXQLW\LQFOXGLQJODUJH¿QDQFLDO LQVWLWXWLRQVWKHUHLVDFDOOLQJWROLIW WKHOLPLWRIIRUHLJQRZQHUVKLSRQ8$( VKDUHV7KHWUHQGWRLQFUHDVHOLPLWVLV QRWLFHDEOHIRUH[DPSOHLQ4 ZHUHWZRPDMRU8$(OLVWHGEDQNVDQG DOLVWHGUHDOHVWDWHGHYHORSHUZKRKDYH DSSURYHGLQFUHDVHGIRUHLJQRZQHUVKLS OLPLWVIURPORZHUOHYHOVWRSHU FHQWRIWKHLUVKDUHFDSLWDO

46

Debt  Capital  Markets   1HZERQGUXOHVDUHH[SHFWHGWR give further stimulus to UAE debt VHFXULWLHVLQ$FFRUGLQJWR,)5D 7KRPVRQ5HXWHUVXQLWERQGLVVXDQFH IURPWKHUHJLRQLVH[SHFWHGWRÃ&#x20AC;RXULVK GXHWRVLJQL¿FDQWLQIUDVWUXFWXUH LQYHVWPHQWDQGUH¿QDQFLQJ 7KH8$(ZKLFKKDVWKHODUJHVW SRUWIROLRRIRXWVWDQGLQJGHEWVHFXULWLHV LQWKH*&&KDVLVVXHGQHZUXOHVIRU WKHLVVXDQFHDQGWUDGLQJRIFRYHUHG ERQGV ERQGVZKLFKKDYHDSUHIHUHQWLDO FODLPRQWKHDVVHWVLQWKHHYHQWRID GHIDXOW 7KLVLVDZHOFRPHGLQLWLDWLYH for the development of the UAEâ&#x20AC;&#x2122;s debt PDUNHWDQGZLOODOORZIRUDQHZVRXUFH RIIXQGLQJIRUFRPPHUFLDOEDQNV Islamic  Financial  Markets ,QOLQHZLWKWKHLQLWLDWLYHRI+LV +LJKQHVV6KHLNK0RKDPPDG %LQ5DVKLG$O0DNWRXP'XEDLLV OHDGLQJWKHZD\WREHFRPHDJOREDO KXEIRU,VODPLF¿QDQFHZLWKWKHDLP WRGULYH,VODPLFEDQNLQJDQG,VODPLF FDSLWDOPDUNHWDFWLYLW\LQWKH8$( DQGZLGHUUHJLRQ 6RIDULQ(PDDU3URSHUWLHV has dual listed a US$500 million VXNXNLVVXHGLQRQ1DVGDT Dubai, providing further momentum WRWKH'XEDL¶VUHVROYHWREHFRPHD JOREDOVXNXNFHQWUH)XUWKHUPRUH 8$(EDVHG*(06(GXFDWLRQ FHOHEUDWHGWKHOLVWLQJRID86 PLOOLRQVXNXNRQ1DVGDT'XEDL 7KHQH[WWZR\HDUVDUHVHWWREH DGH¿QLQJSHULRGIRU8$(FDSLWDO PDUNHWVZLWKH[SHFWDWLRQVRI LQFUHDVHGUHJLRQDODQGLQWHUQDWLRQDO LQYHVWPHQWLQWRWKH8$(JURZWK LQERWKGHEWDQGHTXLW\VHFXULW\ YDOXDWLRQVLQFUHDVHGWUDGLQJ volumes and a return to a more IUHTXHQWDQGVXFFHVVIXO,32OLVWLQJV period. Undoubtedly investors DUHQRZPRUHFRQ¿GHQWWRGHSOR\ FDVKRQWKHVLGHOLQHVLQWRWKH8$( PDUNHWVZLWKH[SHFWDWLRQVRIUREXVW medium and long term returns.

Simi Nehra is the Corporate Finance Partner at Grant Thornton UAE. He has over 15 years of H[SHULHQFHLQŵQDQFLDO DGYLVRU\VHUYLFHVLQFOXGLQJ expertise in corporate ŵQDQFHGXHGLOLJHQFH EXVLQHVVYDOXDWLRQV M&A and debt advisory. 6LPLKDVOHGVHYHUDO advisory mandates in the 0LGGOH(DVWDQG1RUWK $IULFDUHJLRQVSDQQLQJ DYDULHW\RILQGXVWULHV +HKDVDOVRSURYLGHG WUDQVDFWLRQVXSSRUWWR KLJKSURŵOH,32VRQWKH 8$(ŵQDQFLDOPDUNHWVDQG advisory services to UAE JRYHUQPHQWHQWLWLHV Simi is a Chartered $FFRXQWDQW $&$ DQG a Corporate Finance &) GHVLJQDWHIURPWKH ,QVWLWXWHRI&KDUWHUHG $FFRXQWDQWV(QJODQGDQG :DOHVDQGKROGVD%$IURP WKH0DQFKHVWHU6FKRRORI $FFRXQWLQJDQG)LQDQFH

For an online version, please visit: www.smeadvisor.com/2014/05/a-time-forgrowth/

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GETTING FINANCE

EXPORTING YOUR NEXT STEP TO GROWTH

In this era of globalisation, national borders are fast disappearing with trade being the engine for growth. One crucial aspect of trade is the exporting of goods and services.

Aparna Shivpuri Arya is a Senior Correspondent for SME Advisor Magazine. In the following feature, this expert economist offers a detailed analysis.

48

In simple terms, export means selling goods and services across national border. But, why do companies take to exporting? One obvious answer that stands out is â&#x20AC;&#x201C; growth. Exports can and are used as a growth strategy by many firms to expand their scope from domestic to foreign markets. According to Barringer & Greening, (1998), international expansion is an especially important decision for small and mediumsized enterprises (SMEs) who traditionally have a small financial base, a domestic focus and a limited geographic scope. Why  export? Exporting can be a profitable way of expanding your business, spreading

your risks and reducing your dependence on the local market. Austrade research shows that, on average, exporting companies are more profitable than their nonexporting counterparts. The report further elaborates that by going overseas, a firm can become more efficient and increase productivity. Exporting companies have better growth prospects, highly skilled and productive staff and tend to adapt technology and best practice techniques faster. By selling into another market, whether directly or through agents, a firm can add consumers, which can lead to higher sales volume. This in turn could lead to an expansion in the production capacity.

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GETTING FINANCE

EXPORT IS QUITE POPULAR WITH SMES, AS A MEANS OF EXPANSION. COMPARED TO FDI, EXPORTING IS A RELATIVELY EASY AND FAST WAY TO ENTER FOREIGN MARKETS WITH LOW COMMITMENT AND LOW RISK.

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Export is quite popular with SMEs, as a means of expansion. Compared to FDI, exporting is a relatively easy and fast way to enter foreign markets with low commitment and low risk. In exporting, an SME does not have to make substantial resource commitments to a foreign market as it would if it made a foreign investment. Third, exporting is an easy way of entering a new market, in comparison to setting up a foreign subsidiary. It is also a faster way, since the SME can use its existing production facilities to cater to a new market. It can also withdraw at any time if the importing country becomes economically or politically unstable. Thus, exporting can give companies access to new markets, new revenue

streams and the option to spread their risks. It is also possible that because of exporting, a business can become agile and responsive. More so it can also lead to economies of scale for the company, with the cost of production going down. To begin with, it might help to brainstorm about the tradeoffs related with expanding internationally. While on one hand it might reduce your dependence on the domestic market, but it might need additional staff and funding. According to Tasdeer, the export promotion arm of Qatar Development Bank, exporting offers a number of advantages to a firm. First, it leads to an increases in sales and profits.

49


GETTING FINANCE

EXPORTING SMES FACE THE RISK OF SALES NOT MEETING THE PROJECTIONS, FACING GREATER COMPETITION THAN ANTICIPATED, SLOW RECOVERY OF PAYMENTS, REPATRIATION OF PROFITS, FLUCTUATIONS IN EXCHANGE RATES AND CONTRACTUAL ISSUES.

STEPS TO EXPORTING

Analyse Market Opportunity

Access Product Potential

Continuous Integration and Reassessment of Steps

Evaluate Control Operations

Implement Marketing Strategy

Organise Operational Team

Second, it could increase a companyâ&#x20AC;&#x2122;s share in global market, at the same time reducing the dependence on the domestic market. Third, by tapping global markets, firms are no longer held captive to economic changes, varying consumer demands and seasonal fluctuations. Fourth, exporting enhances a firmâ&#x20AC;&#x2122;s competitive advantage, with exposure to new technologies, methods and processes. Direct advantages: Â&#x2021;2SSRUWXQLW\WRH[SDQGPDUNHWVKDUH Â&#x2021;,QFUHDVHSURGXFWLRQLIXQGHUXWLOLVHG in the domestic market Â&#x2021;'HFUHDVHGHSHQGHQFHRQGRPHVWLF market Â&#x2021;/HDGWRLQQRYDWLRQDQG technological advancement How  to  export? There are two methods that a

50

Establish Market Entry Mode

Develop Strategic Marketing Plan

Make a Firm Commitment

Allocate Necessary Resources

Identify Technical Issues

company can use, when it comes to exporting: 1. ,QGLUHFWH[SRUWLQJÂąWKLVPHWKRG involves using intermediaries. The types of indirect exporting methods are: Â&#x2021;)LOOLQJRUGHUVIURPGRPHVWLFEX\HUV who then export the product Â&#x2021;([SRUWLQJWKURXJKDQH[SRUW management company Â&#x2021;)UDQFKLVLQJ Â&#x2021;:KROHVDOHFRPSDQ\

The advantage of this process is that it leads to faster market access, and a lesser financial commitment than setting up a branch. But at the same time, the company has little control over the distribution, sales and marketing and a wrong choice of market or distributor can lead to problems.

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ns Configuratio ace! sp for any IT

Adaptable: Our solutions can be adapted to fit any IT configuration at any time â&#x20AC;&#x201D; from small IT to data centers! Vendor-neutral enclosures, for example, come in different depths, heights, and widths so you can deploy your IT in whatever space you have available â&#x20AC;&#x201D; from small IT or non-dedicated spaces to even large data centers.

ur d manage yo Monitor an ere! rom anywh IT spaces f Manageable: Local and remote management are simplified with â&#x20AC;&#x153;out-of-the-boxâ&#x20AC;? UPS outlet control, integrated monitoring of the local environment, and FOFSHZVTBHFSFQPSUJOH.BOBHFBCJMJUZPWFSUIFOFUXPSL and robust reporting capabilities help you prevent IT problems and quickly resolve them when they do occur â&#x20AC;&#x201D; from anywhere! Whatâ&#x20AC;&#x2122;s more, our life cycle services ensure optimal operations.

Easy-to-deploy IT physical infrastructure Solution guides make it easy to determine what you need to solve todayâ&#x20AC;&#x2122;s challenges. The core of our system, vendor-neutral enclosures and rack PDUs, makes deployment incredibly headache-free. Easily adjustable components, integrated baying brackets, pre-installed leveling feet, and cable management accessories with tool-less mounting facilitate simple and fast installation.

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Integrated InfraStruxureâ&#x201E;˘ solutions include everything for your IT physical infrastructure deployment: backup power and power distribution, cooling, enclosures, and management software. Adaptable solutions scale from the smallest IT spaces up to multi-megawatt data centers.

Download our Top 3 Solutions Guide within the next 45 days and enter to WIN a Samsung Galaxy Noteâ&#x201E;˘ 3! Visit: www.apc.com/promo Key Code: Q Call: +9714-7099690 (Arabic) / +9714-7099691 (English) Fax +97147099-650 Š2014 Schneider Electric. All Rights Reserved. Schneider Electric, APC, InfraStruxure, and Business-wise, Future-driven are trademarks owned by Schneider Electric Industries SAS or JUTBGGJMJBUFEDPNQBOJFT"MMPUIFSUSBEFNBSLTBSFUIFQSPQFSUZPGUIFJSSFTQFDUJWFPXOFSTtXXXTDIOFJEFSFMFDUSJDDPNt@.&@$@/PUF


GETTING FINANCE

BEFORE A COMPANY MAKES A DECISION TO EXPORT, IT NEEDS TO MAKE SURE THAT IT HAS RESEARCHED THE MARKET THOROUGHLY AND HAS CHOSEN A BUSINESS MODEL THAT WILL WORK BEST.

2. Direct exporting â&#x20AC;&#x201C; this method involves setting up an office or branch in the concerned market. This method has the advantage of giving more control to the domestic company over distribution, marketing and sales, though it can lead to higher start-up costs and make the company more vulnerable to market fluctuations.

Challenges Before a company makes a decision to export, it needs to make sure that it has researched the market thoroughly and has chosen a business model that will work best. It is also essential to understand the legal and tax structure of the market for foreign businesses. Many SMEs enter a new market without proper background research on these issues, which increases their chances of failure. It is also imperative for the SME to understand the competitors in the market. Sometimes an SME doesnâ&#x20AC;&#x2122;t have the tools to study the payment mechanisms, the prices being charged, quality and so forth. While exporting SMEs face the risk of sales not meeting the projections, facing greater competition than anticipated, slow

52

recovery of payments, repatriation of SURÂżWVĂ&#x20AC;XFWXDWLRQVLQH[FKDQJHUDWHV and contractual issues. Research done by various organisations show that there is a clear split between those companies that study a market and make an informed decision to go through a formal channel and those that go in without any background work. On the other hand, there are companies that are reactive and just get into a market accidentally, without any proper research/study into the market dynamics. To conclude, there is no denying that exports is one of the most promising growth strategy for companies, especially SMEs. It does come with its set of risks but handled in the proper way, with research and support of a professional organisation, it can EHQHÂżWDFRPSDQ\LPPHQVHO\

For an online version, please visit: www.smeadvisor.com/2014/05/exportingyour-next-step-to-growth/

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GETTING FINANCE

COSTING IT IN...

54

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GETTING FINANCE

WE ALL SURELY AGREE THAT THE PRIME MOTIVATOR FOR DOING BUSINESS IS PROFIT. TRADITIONALLY, PROFIT HAS TWO CRUCIAL ELEMENTS â&#x20AC;&#x201C; REVENUE AND COST. IN FACT, THE STANDARD EQUATION TO ASCERTAIN THE PROFIT OF YOUR BUSINESS IS PROFIT = TOTAL REVENUES â&#x20AC;&#x201C; TOTAL COSTS

Without an accurate measure of your costs or revenues, it is impossible to ascertain where your business stands. This is where the concept of FRVWDFFRXQWLQJFDQSOD\DVLJQL¿FDQW role in managing your SME. While

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it is highly recommended for every SME to hire an experienced and TXDOL¿HGDFFRXQWDQWKDYLQJDEDVLF understanding of how costs work can be of tremendous help in the day-today operations of a business.

55


GETTING FINANCE

The  basics  of  cost  accounting   ,QVLPSOHZRUGVFRVWDFFRXQWLQJ FDQEHGH¿QHGDVWKHSURFHVVRI identifying, measuring, classifying, analysing and controlling costs ZLWKLQ\RXUEXVLQHVVLQRUGHUWRPDNH management decisions. Very often, costs and management decisions are LQH[WULFDEO\LQWHUZRYHQ 7KH¿UVWVWHSWRXQGHUVWDQGLQJFRVW

accounting is to grasp the different W\SHVRIFRVWV&RVWVDUHRIWHQFODVVLÂżHG GLIIHUHQWO\XQGHUYDULRXVGHÂżQLWLRQV$ JRRGZD\RIGLYLGLQJFRVWVLVDFFRUGLQJ to the prestigious Chartered Institute RI0DQDJHPHQW$FFRXQWLQJ &,0$  guidelines i.e. based on nature, purpose, responsibility and behaviour. &RVWVFDQEHEURDGO\FODVVLÂżHGLQWRWKH IROORZLQJFDWHJRULHV

CLASSIFIED BY:

TYPE OF COST

Nature

Material, labour, expenses

Purpose

Inventory (direct, indirect, functional costs, product and RGTKQFEQUVU FGEKUKQPOCMKPI Ć&#x201A;ZGFCPFXCTKCDNGEQUVU  and control (controllable and uncontrollable costs)

Behaviour

Fixed and variable costs Understanding  cost  accounting To keep things simple, four of the very EDVLFFRVWVFDQEHGHÂżQHGDVWKHIROORZV Direct  costs: These costs are those that can be easily assigned to a particular product, or production department. Indirect  costs: These costs are the exact opposite of direct costs i.e. they canâ&#x20AC;&#x2122;t be assigned to a particular product or production department. Fixed  costs: These are costs that GRQRWFKDQJHZLWKDQ\PRYHPHQWV in the production levels or activity ZLWKLQDEXVLQHVV$JUHDWH[DPSOH of this is your annual rent. Variable  costs:  These costs change ZLWKFKDQJHVLQSURGXFWLRQOHYHOV)RU example, the number of aluminium tins used in the manufacturing plant of canned food.

COST ACCOUNTING CAN BE DEFINED AS THE PROCESS OF IDENTIFYING, MEASURING, CLASSIFYING, ANALYSING AND CONTROLLING COSTS WITHIN YOUR BUSINESS

TOTAL COST CAN THEN BE CALCULATED AS: Total cost = direct cost + indirect cost (overhead) Direct cost = Direct material + direct labour + direct expenses Indirect cost =indirect materials + indirect labour + indirect expenses

56

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GETTING FINANCE

Â&#x2021;$FWLYLW\EDVHGFRVWLQJ $%&  ABC costing can be used for both job costing and process costing analysis. You use ABC costing to assign costs to your product PRUHVSHFLÂżFDOO\$%&FRVWLQJDQDO\VHV the activities that cause you to incur costs; you then connect the cost to the activity. USEFUL TO KNOW rVariance:#XCTKCPEGKUCFKHHGTGPEG DGVYGGP[QWTRNCPPGFQTDWFIGVGF EQUVCPF[QWTCEVWCNTGUWNVU# HCXQWTCDNGXCTKCPEGQEEWTUYJGP [QWTCEVWCNEQUVUCTGNGUUVJCP[QWT DWFIGVGFQTRNCPPGFEQUV#P WPHCXQWTCDNGXCTKCPEGKUYJGPCEVWCN EQUVUCTGJKIJGTVJCPRNCPPGF râ&#x20AC;&#x2DC;Inventoriableâ&#x20AC;&#x2122; costs:6JGUG CTGEQUVUVJCVCTGFKTGEVN[TGNCVGF VQVJGRTQFWEV2TQFWEVKQPEQUVU CTGnKPXGPVQTKCDNGoEQUVUHQTC OCPWHCEVWTGT+H[QWCTGCTGVCKNGT [QWTEQUVVQRWTEJCUGKPXGPVQT[KU CNUQCPnKPXGPVQTKCDNGo1VJGTEQUVU [QWKPEWTHQTIQQFUCTGKPENWFGF UWEJCUUJKRRKPICPFUVQTCIGEQUVU Source: Cost Accounting for Dummies by Kenneth Boyd

After an overview of these basic costs, itâ&#x20AC;&#x2122;s now crucial to understand the different ways of costing. Kenneth Boyd offers a detailed explanation in the online version of his Cost  Accounting   for  Dummies: Â&#x2021;-REFRVWLQJ This method of costing assumes that every customer job is different. Plumbers and carpenters are good examples of businesses that use cost accounting. Because every job is different, each customer job is assigned material, labour, and overhead costs. Â&#x2021;3URFHVVFRVWLQJ Companies use process costing when partially completed units are moved from one production area to another. Process costing assumes that the products you produce are similar or even identical.

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The  acid  test   While it may all seem easy and straightforward in theory, the real acid test is when you implement a cost system into your business. In her online article &RVW$FFRXQWLQJ3UDFWLFHVLQWKH6HUYLFH ,QGXVWU\, Erika Waters shares the experience of a company in the service industry, â&#x20AC;&#x153;Cost accounting can help service companies develop a better picture of the UHVRXUFHLQĂ&#x20AC;RZVDQGRXWĂ&#x20AC;RZVE\PRUH accurately connecting costs with outputs. For example, cost accounting in the service industry will reveal to managers which employees cost the least per job and are WKHUHIRUHWKHPRVWHIÂżFLHQWZRUNHUV Making the switch to cost accounting has KHOSHGVRPHVHUYLFHÂżUPVORZHUFRVWVDQG achieve higher productivity. Under a cost accounting system, it might become clear WKDWHPSOR\HHVDUHSDUWLFXODUO\HIÂżFLHQW at certain tasks. By assigning employees to the task at which they are the most HIÂżFLHQWDPDQDJHUFDQJUHDWO\LQFUHDVH

the productivity of his division. â&#x20AC;&#x153;On the other hand, cost accounting requires a great deal of resources, observation and time. In the restaurant context, a waiter is often doing several tasks at once for several different tables. As such, it would require non-stop observation and recording to determine exactly how much time he is spending on a single table. Further, because cost accounting was developed for PDQXIDFWXULQJÂżUPVLWGRHVQRWDOZD\VÂżW the service industry perfectly. There are often very few direct costs in the service industry. It is easy to determine how much wax is used to produce one crayon. %XWLWLVPXFKPRUHGLIÂżFXOWWRGHWHUPLQH what portion of a waiterâ&#x20AC;&#x2122;s shift is used to serve a single table.â&#x20AC;? The  advantages  â&#x20AC;&#x201C;  supercharge   business  performance   7KHUHDUHVHYHUDOEHQHÂżWVRILPSOHPHQWLQJ a cost system within your business: - Aids in the evaluation of product pricing - Helps with information for purchasing orders, sales quotations, and other important processes within the product cycle - Enables you to easily single out nonSURÂżWDEOHDFWLYLWLHV - Allows for comparisons of operations over different time periods, product lines, company locations, and so on - Sets the scene for future expansion strategies or import-export ventures - Provides the value of inventory your business has at any given time (which is then useful for insurance, succession planning, IPO, exit strategy, etc.) - Gives shareholders, investors, or any other interest groups, an insight into the SRWHQWLDOSURÂżWDELOLW\RIWKHEXVLQHVV - Offers useful information which helps decide departmental budgets and staff pay, incentives, and bonuses - Highlights if an activity should be outsourced and is better done in-house Itâ&#x20AC;&#x2122;s quite easy to see that cost accounting can be a powerful in the armoury of an SME owner.Put it into practice today and reap the rewards! For an online version, please visit: www.smeadvisor.com/2014/05/costing-it-in/

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LEGAL

UAE ANTICOMMERCIAL FRAUD LAW: GOOD NEWS AND BAD As a new law aimed at combating counterfeit goods and other forms of commercial fraud passes through the UAEâ&#x20AC;&#x2122;s Federal National Council (FNC), it is arousing a good deal of interest - as indeed its KLJKSURĹľOH subject matter would suggest. Rob Deans, Partner, Clyde & Co, and Harriet Balloch, Senior Associate, Clyde & Co, review the progress so farâ&#x20AC;Ś 58

The draft Anti-Commercial Fraud /DZZDVÂżUVWLQWURGXFHGLQHDUO\ and, although it contains a number of positive new measures, there are a number of provisions which have given rise to cause for concern. The passage of the draft Law through the FNC (which LVDQHOHFWHGIRUPRI3DUOLDPHQWDU\ DGYLVRU\ERG\ LVDNH\VWDJHLQWKH legislative process and it brings the draft Law one step closer to being enacted. Some  positive  news   for  brand  owners 7KHUHLVFXUUHQWO\OLPLWHGLQIRUPDWLRQ as to the extent to which the draft Anti-Commercial Fraud Law has been amended during its passage through the FNC. However, it appears that the draft /DZDVDSSURYHGE\WKH)1&LVOLNHO\WR include the following positive provisions for brand owners: Â&#x2021;7KHHVWDEOLVKPHQWRIDVLQJOHERG\ with the role of combating trade in counterfeit goods across all emirates in the UAE. Under the current regime, brand owners must deal with counterfeit JRRGVE\ZRUNLQJWKURXJKLQGHSHQGHQW DXWKRULWLHVLQHDFKRIWKHFRXQWU\ÂśVVHYHQ emirates. This requires brand owners to deal with multiple authorities in cases where infringing goods are being sold in more than one emirate. A structure

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LEGAL

THE DRAFT ANTI-COMMERCIAL FRAUD LAW WAS FIRST INTRODUCED IN EARLY 2013 AND, ALTHOUGH IT CONTAINS A NUMBER OF POSITIVE NEW MEASURES, THERE ARE A NUMBER OF PROVISIONS WHICH HAVE GIVEN RISE TO CAUSE FOR CONCERN. which enables brand owners to deal with a single cross-emirate enforcement body LVOLNHO\WREHPXFKPRUHHI¿FLHQWDQG effective than the current structure. Â&#x2021;,QFUHDVHGSHQDOWLHVIRUGHDOLQJ in counterfeit goods. The draft Anti- =Commercial Fraud Law LQFOXGHVDVLJQL¿FDQWLQFUHDVHLQWKH SHQDOWLHVZKLFKPD\EHLPSRVHGRQ those dealing in counterfeit goods. ,QFHUWDLQOLPLWHGFDVHVVXFKDV GHDOLQJLQSKDUPDFHXWLFDODQGIRRG SURGXFWVD¿QHRIXSWR$('PLOOLRQ DSSUR[LPDWHO\86' PD\ EHLPSRVHGWRJHWKHUZLWKDWZR\HDU LPSULVRQPHQWVHQWHQFH+RZHYHUDV LQGLFDWHGEHORZFRQFHUQVGRUHPDLQ DVWRWKHOHYHORISHQDOWLHVZKLFK PD\EHLPSRVHGLQWKHPDMRULW\RI infringement cases. Â&#x2021;7KHFRVWRIWKHGHVWUXFWLRQRI FRXQWHUIHLWJRRGVEHLQJSDLGE\WKH LPSRUWHURIFRXQWHUIHLWJRRGV7KLVLV SRVLWLYHQHZVIRUEUDQGRZQHUVLQFDVHV ZKHUHWKHLPSRUWHUFDQEHLGHQWL¿HG Â&#x2021;$QREOLJDWLRQRQLQIULQJHUVWRGLVFORVH to the authorities all information and documents relating to their dealings in counterfeit goods. The inclusion of this obligation in the draft AntiCommercial Fraud Law may encourage the authorities not only to seize stocks RIFRXQWHUIHLWJRRGVEXWDOVRWRREWDLQ FRSLHVRILQIRUPDWLRQDVWRWKHVRXUFH of the goods and the scale of the infringing activity.

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59


LEGAL

THE DRAFT ANTICOMMERCIAL FRAUD LAW COVERS LOOKALIKE GOODS, IN ADDITION TO THOSE BEARING A TRADE MARK WHICH IS IDENTICAL TO A REGISTERED MARK. Â&#x2021;$SURKLELWLRQRQWKHSRVVHVVLRQ RIFRXQWHUIHLWJRRGV7KLVSURYLVLRQ VKRXOGEHDXVHIXOWRROZKHUH FRXQWHUIHLWJRRGVDUHKHOGE\WUDGHUV EXWZKHUHWKHUHLVQRFOHDUHYLGHQFHRI DQLQWHQWLRQWRVHOO+RZHYHULWUHPDLQV WREHVHHQZKHWKHUWKLVSURYLVLRQZRXOG DOVREHXVHGWRVHL]HFRXQWHUIHLWJRRGV KHOGE\SULYDWHLQGLYLGXDOV Â&#x2021;&RQ¿UPDWLRQWKDWWKHGUDIW/DZ DSSOLHVWRLQIULQJHUVRSHUDWLQJ ZLWKLQWKH8$(¶VIUHH]RQHV6XFKD SURYLVLRQZRXOGDSSHDUXQQHFHVVDU\ JLYHQWKDW8$(ODZVDOUHDG\DSSO\ DXWRPDWLFDOO\WRWKHHQWLUHW\RIWKH FRXQWU\¶VMXULVGLFWLRQLQFOXGLQJLWVIUHH ]RQHV ZLWKWKHH[FHSWLRQRIWKH',)& IUHH]RQH +RZHYHUWKHHQIRUFHPHQW RILQWHOOHFWXDOSURSHUW\ULJKWVZLWKLQ WKH8$(¶VPDQ\IUHH]RQHVFDQSURYH SUREOHPDWLF$FFRUGLQJO\PDQ\EUDQG RZQHUVZLOOZHOFRPHWKHFODULW\WKDW WKLVSURYLVLRQEULQJV Areas  of  concern +RZHYHUWKHUHDUHDOVRDUHDVRI FRQFHUQIRUEUDQGRZQHUVDULVLQJIURP DQHDUO\GUDIWRIWKH$QWL&RPPHUFLDO )UDXG/DZZKLFKPD\QRWKDYHEHHQ DGGUHVVHGE\WKH)1&7KHVHLQFOXGH Â&#x2021;/HJLWLPLVLQJWKHSUDFWLFHRIUH H[SRUWLQJFRXQWHUIHLWJRRGVUDWKHU WKDQVHL]LQJDQGGHVWUR\LQJWKHP7KH VLQJOHELJJHVWFRQFHUQIRUEUDQGRZQHUV ZLWKWKHGUDIW$QWL&RPPHUFLDO)UDXG /DZLVDSURYLVLRQZKLFKHPSRZHUV WKHDXWKRULWLHVWRUHTXLUHLPSRUWHUV WRUHWXUQFRXQWHUIHLWJRRGVWRWKHLU

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FRXQWU\RIRULJLQ7KLVSURYLVLRQDSSHDUV WRKDYHEHHQXQWRXFKHGDVWKHGUDIW /DZSDVVHGWKURXJKWKH)1&DQGLW UHPDLQVDPDMRUFRQFHUQIRUEUDQG RZQHUVLQWKDWFRXQWHUIHLWJRRGVPD\ EHUHH[SRUWHGIURPWKH8$(DQGWKHQ ¿QGWKHLUZD\EDFNRQWRWKHPDUNHWLQ WKH8$(RUHOVHZKHUH7KHUHDUHDOVR IXUWKHUFRQFHUQVZLWKWKLVSURYLVLRQ LQWKDWLILWLVLQWHUSUHWHGE\WKH8$( &RXUWVDVDJHQHUDOULJKWWRDOORZ FRXQWHUIHLWJRRGVWREHUHH[SRUWHGWKHQ WKLVZRXOGDSSHDUWRFRQÃ&#x20AC;LFWZLWKWKH 8$(¶VREOLJDWLRQVXQGHUWKH$JUHHPHQW RQ7UDGH5HODWHG$VSHFWVRI,QWHOOHFWXDO 3URSHUW\5LJKWV 75,3V ZKLFKUHVWULFWV WKHUHH[SRUWDWLRQRIFRXQWHUIHLWJRRGV LQDQXQDOWHUHGVWDWHRWKHUWKDQLQ H[FHSWLRQDOFLUFXPVWDQFHV Â&#x2021;7KHH[WHQWWRZKLFKWKHGUDIW$QWL &RPPHUFLDO)UDXG/DZFRYHUVORRNDOLNH JRRGVLQDGGLWLRQWRWKRVHEHDULQJ DWUDGHPDUNZKLFKLVLGHQWLFDOWRD UHJLVWHUHGPDUN$QHDUO\GUDIWRI WKH/DZUHVWULFWHGPDQ\RILWVNH\ SURYLVLRQVWRWKHXQDXWKRULVHGXVHRI LGHQWLFDOWUDGHPDUNVEXWQRWJRRGV EHDULQJFRQIXVLQJO\VLPLODUPDUNVDQG RWKHUIRUPVRIORRNDOLNHV,WLVXQFOHDUDW WKLVVWDJHWKHH[WHQWWRZKLFKWKHGUDIW /DZPD\KDYHEHHQDPHQGHGWRH[WHQG LWVVFRSHWRORRNDOLNHV Â&#x2021;/RZSHQDOWLHVIRUGHDOLQJLQFRXQWHUIHLW JRRGV$OWKRXJKLQVRPHOLPLWHGFDVHVD SHQDOW\RID86'¿QHSOXVWZR \HDUVLPSULVRQPHQWPD\EHLPSRVHGLQ PDQ\FDVHVLQYROYLQJFRXQWHUIHLWJRRGV WKHPD[LPXPSXQLVKPHQWDSSHDUV WREHOLPLWHGWRDPD[LPXPRIDWHQWK RIWKLVDPRXQW86'SOXVRQH \HDULPSULVRQPHQWUHJDUGOHVVRIWKH TXDQWLWLHVRIFRXQWHUIHLWJRRGVLQYROYHG 7KLVZDVWKHSRVLWLRQLQDQHDUO\GUDIW RIWKH$QWL&RPPHUFLDO)UDXG/DZ DQGLWUHPDLQVWREHVHHQZKHWKHUWKLV SURYLVLRQKDVEHHQDPHQGHGWRDOORZIRU SHQDOWLHVZLWKDKLJKHUGHWHUUHQWYDOXH WREHLPSRVHG Â&#x2021;$OORZLQJVHL]HGFRXQWHUIHLWJRRGVWR EHUHOHDVHGXQOHVVDFRXUWRUGHUKDV EHHQLVVXHGZLWKLQGD\VFRQ¿UPLQJ WKHVHL]XUH7KLVSURYLVLRQZKLFK ZDVLQFOXGHGLQDQHDUO\GUDIWRIWKH $QWL&RPPHUFLDO)UDXG/DZFRXOG SRWHQWLDOO\UHTXLUHEUDQGRZQHUVWR

PDNHH[SHQVLYHDSSOLFDWLRQVWR&RXUWLQ FDVHVZKLFKSUHYLRXVO\ZRXOGKDYHEHHQ KDQGOHGTXLFNO\DQGHI¿FLHQWO\WKURXJK DQDGPLQLVWUDWLYHDFWLRQ7KHH[WHQW WRZKLFKWKLVSURYLVLRQPD\KDYHEHHQ DPHQGHGGXULQJWKHGUDIW/DZ¶VSDVVDJH WKURXJKWKH)1&LVFXUUHQWO\XQFOHDU 1H[WVWHSV¿QDOLVDWLRQDQG HQDFWPHQWRIWKHGUDIW/DZ ,QRUGHUWREHHQDFWHGWKHGUDIW $QWL&RPPHUFLDO)UDXG/DZKDVWREH VLJQHGLQWRODZE\WKH8$(3UHVLGHQW +LV+LJKQHVV6KHLNK.KDOLID%LQ=D\HG $O1DK\DQDQGSXEOLVKHGLQWKH8$( 2I¿FLDO*D]HWWH%HIRUHWKLVWKHGUDIW /DZVKRXOGSDVVEDFNWR0LQLVWHULDO OHYHOZKHUHIXUWKHUDPHQGPHQWVPD\ EHLQWURGXFHG$FFRUGLQJO\DOWKRXJK FXUUHQWUHSRUWVLQGLFDWHWKDWWKHGUDIW /DZZLOOFRPHLQWRIRUFHZLWKLQWKH QH[WVL[PRQWKVLWLVSRVVLEOHWKDWWKLV SURFHVVPD\EHGHOD\HGSDUWLFXODUO\LI IXUWKHUFKDQJHVDUHPDGHWRWKHGUDIW /DZ7KLVKDVEHHQWKHFDVHZLWKRWKHU 8$(ODZVVXFKDVWKHGUDIW&RPSDQLHV /DZZKLFKSDVVHGWKURXJKWKH)1&LQ 0D\EXWZKLFKKDVQRW\HWEHHQ HQDFWHG Further information If you would like further information on any issue raised in this update please contact: Rob Deans, Partner E: rob.deans@clydeco.com Harriet Balloch, Senior Associate E: harriet.balloch@clydeco.com Clyde & Co LLP PO Box 7001 Level 15, Rolex Tower Sheikh Zayed Road Dubai, United Arab Emirates T: +971 4 384 4000 F: +971 4 384 4004 Clyde & Co accepts no responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this summary.

For an online version, please visit: www.smeadvisor.com/2014/05/uae-anticommercial-fraud-law/

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INDUSTRY WATCH

EMPLOYEE ENGAGEMENT SURVEY HIGHLIGHTS KEY TRENDS Recent research by Bayt.com revealed that more than 80 per cent of employees in the Middle East and North Africa (MENA) region claimed to feel very engaged at work.

Bayt.com conducted a poll called â&#x20AC;&#x2DC;Employee Engagement in the MENAâ&#x20AC;&#x2122; which reported valuable insights on employee engagement in the region. It revealed that 57.1 per cent employees believed that their companyâ&#x20AC;&#x2122;s management made job satisfaction a top priority. Engaged employees are willing to go the extra mile for their company, driven by passion and a profound connection that motivates them to desire success. The majority of poll respondents (70.5 per cent) said that their manager valued the skills and the contributions they made to the company, while poor performance was addressed by 80.4 per cent of poll-takersâ&#x20AC;&#x2122; companies. For the most part, senior management across the board was held accountable for achieving goals, according to 64 per cent of respondents â&#x20AC;&#x201C; though 76.4 per cent strongly believed that it was the employees that endured the weight of achieving goals. Furthermore, 65.4 per cent of employee respondents stated that they have all of the resources that they need to do a good job. On the other hand, 34.6 per cent claimed to need

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resources that would help their job performance improve. According to 70 per cent of poll respondents, communications channels were open in their companies. The majority (60.6 per cent) strongly agreed that their company measured job performance in a way that was fair to all staff, ZLWKDQDGGLWLRQDOÂżIWK SHU cent) somewhat agreeing to the same statement. Just more than half (52.2 per cent) said that they â&#x20AC;&#x2DC;alwaysâ&#x20AC;&#x2122; received feedback to help improve their performance, while 34.2 per cent stated that feedback is given ÂľVRPHWLPHVÂś$OPRVWKDOI SHU cent) of regional professionals have regular career discussions with their manager, whereas 32.3 per cent have the same on an irregular basis. Nine in 10 (88.7 per cent) claimed to have a good understanding of the mission and goals of their RUJDQLVDWLRQDQGSHUFHQW understood how their work directly contributed to the companyâ&#x20AC;&#x2122;s overall VXFFHVV7KHPDMRULW\ SHUFHQW  are involved in decisions that impact their work.

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INDUSTRY WATCH

CONSUMER CONFIDENCE ON THE RISE

Quarterly survey shows increase of four points in &RQVXPHU&RQŵGHQFH ,QGH[IRU4RI

Consumers in Dubai see their personal financial situation improving and brighter job prospects on the road ahead as per the latest findings of the quarterly consumer confidence survey conducted by the Department of Economic Development (DED) in Dubai. Overall the Consumer Confidence Index increased by four points during the first quarter of 2014 to reach 143 points. While job security and increasing utility bills remain major concerns, 92 per cent of the consumers are optimistic about the job situation and 91 per cent about their personal finance over the next 12 months. The state of economy in Dubai was also rated as good or excellent by 91 per cent of the survey respondents with increase in rental/property prices and the tourism boom chiefly driving positive perceptions. Consumers who believe that the state of economy will improve in the next 12 months have increased to 95 per cent from 93 per cent recorded in the final quarter of 2013. The growing confidence is further reflected in the decrease in the percentage of people who believe that Dubai economy is under the impact of recession, from 24 per cent in Q4 2013 to 14 per cent in Q1

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2014. Meanwhile, the percentage of consumers who believe that the economy will recover in next 12 months increased from 63 to 77 between the two quarters. Consumer perception on the current job scenario shows an improvement in Q1 2014 as 79 per cent rated job prospects as excellent/ good compared to 75 per cent in Q4 2013. The percentage of consumers who see better job prospects in the next 12 months remained consistent at 92 per cent with 37 per cent seeing excellent prospects and 55 per cent rating them ‘good.’ Among locals almost 21 per cent rate current job prospects as excellent while 12 per cent of the expatriates have similar sentiments. Locals also have a more positive view on the current state of personal finance compared to expatriates. Consumers who see current state of personal finance as ‘excellent’ have increased to 81 per cent during Q1 2014 from 77 per cent in Q4 2013. Growing confidence in personal finance is also encouraging more consumers to exercise options with their spare cash. Around half of the respondents plan to spend their spare cash into holidays or savings and 38 per cent are likely to make these transactions in the next 12 months. Nearly two-third of the consumers

feel it is a good time to buy things they need or want and the percentage of such consumers increased during 77 in Q1 2014 from 70 in Q4 2013. Majority of the consumers (79 per cent) cover essential living expenses but lack of job opportunities and salary levels falling short of expectations are among the concerns expressed. A ‘Consumer Confidence Index’ provides a single indicator of consumer sentiment towards the current economic situation as well as intentions and expectations for the future and ability to track consumer confidence over a period of time. The Consumer Confidence Index is based on responses to three questions regarding perceptions of local job prospects, personal finances and whether it is good to buy things that people need and want, all over the next 12 months. Responses vary from Excellent or Good to Not so good or Bad. Conducted in each quarter, the survey gathers feedbacks from 2,000 respondents, equally divided between the four quarters of the year. The respondents come from all major residential communities across Dubai and cover males and females as well as nationals and expatriates, aged 18 to 59.

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INDUSTRY WATCH

IN FOCUS: FEMALE ENTREPRENEURSHIP IN MIDDLE EAST Crescent Enterprises has partnered with the Cherie Blair Foundation for Women to empower, mentor and support female entrepreneurs in a number of countries across the Middle East.

As part of the cooperation agreement, select senior female employees of Crescent Enterprises will provide their professional expertise and guidance to the Foundation’s “Mentoring Women in Business” programme for one year beginning in May via a unique online mentoring platform. According to World Bank figures, women make up half of university attendees in the MENA region, but only 21 per cent of the workforce, and control only 22 per cent of its wealth. Crescent Enterprises is seeking to raise this figure through its work with the Cherie Blair Foundation for Women by providing sustainable solutions to the challenges female entrepreneurs face, and through mentorship helping to accelerate the strides these women are making. “We are proud to share the Cherie Blair Foundation’s vision

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of a world where women have equal opportunities to succeed in business, which means proper access to the resources, mentorship and guidance necessary for longterm sustainable success,” said Badr Jafar, Chief Executive Officer of Crescent Enterprises. “We will continue to offer our time and expertise to a programme like this one that empowers female entrepreneurs, where the direct benefits will extend to their families and communities.” Drawing from the 6,000-strong workforce of Crescent Enterprises and its subsidiary companies, which include Gulftainer, URUK Engineering, Gama Aviation, and Clinical Pathology Services, between five and 15 female Arabicspeaking mentors will be selected. Following the initial training phase, mentors will interact on a oneto-one virtual basis with mentees

for a number of hours each month, providing advice and guidance on various business aspects from marketing, communications and technology to accounting, finance and human resources. Crescent Enterprises will also contribute to the development of the mentoring platform, to facilitate in the roll-out the programme across other parts of the world. Cherie Blair stated: “Through the Cherie Blair Foundation’s ‘Mentoring Women in Business’ programme, we are breaking barriers with technology, making it possible to exchange knowledge on a global scale and create opportunity where otherwise it might not have been possible. And it is only through cooperation that the foundation is truly able to achieve its objectives, which is why I am delighted that the foundation is partnering with Crescent Enterprises, a firm that truly believes in providing direct support to aspiring female entrepreneurs in the Middle East as they translate their ideas not only into employment opportunities but thriving, sustainable businesses.” The Cherie Blair Foundation for Women was established in 2008, to ensure that women entrepreneurs in developing and emerging markets are not held back by lack of access to business skills, technology, networks DQG¿QDQFH7KURXJKLWV³0HQWRULQJ Women in Business” programme, the Foundation has pioneered a new way of supporting women entrepreneurs achieve key business goals by combining mentoring with technology, offering cross-border support worldwide. Alongside its mentoring work, which has supported approximately 1,000 entrepreneurs globally to date, the Cherie Blair Foundation for Women also runs programmes that deliver tailored business training, assist with business registration and enhance access to capital and markets on a global scale. To date, the Foundation has reached over 100,000 women entrepreneurs in more than 70 countries.

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INDUSTRY WATCH

EPPCO SIGNS MOU WITH KHALIFA FUND Emirates Petroleum Product Company (EPPCO) signed a Memorandum of Understanding (MoU) with Khalifa Fund for Enterprise Development to support young Emirati entrepreneurs set up and operate ENOC’s ZOOM convenience stores across the different Emirates in the UAE starting with Abu Dhabi. The MoU was signed by His Excellency Ibrahim Al Mansoori, COO of Khalifa Fund, and Taleb Al Saleh, Director of Retail Operations & Marketing of ENOC Retail. HE Al Mansoori said: “One of the strategic goals of the UAE Government is to promote youth entrepreneurship, especially by promoting the small and medium business sector, which contributes significantly to the national GDP. The MoU will serve as a strong platform for young Emiratis to leverage the growth potential offered by the retail sector, while also benefiting from the extensive training and franchising support offered by ZOOM. The MoU will benefit entrepreneurial Emiratis to further strengthen our retail sector across all Emirates by offering worldclass services.” Burhan Al Hashemi, Managing Director of ENOC Retail, explained: “Franchising is one of the strong growth areas in the Middle East region, valued at over US$30 billion. We are thankful to Khalifa Fund

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for supporting retail franchising opportunities among Emirati youth, which is aligned with the vision of the UAE Government to empower our young talent and create entrepreneurial opportunities. “Through our participation in this landmark initiative, we are also contributing to empowering Emirati youth, especially in building entrepreneurial skills. This partnership enables us to contribute to the country’s SME sector and create thousands of jobs.” Al Saleh added: “We are thankful to Khalifa Fund for this strategic partnership, which will benefit the Emirati youth in achieving their entrepreneurial aspirations. The franchising opportunity offered by ZOOM, through the financial support from Khalifa Fund, is a strong example of the public private partnership model. It will not only lead to job creation, but is also in line with the economic diversification strategy of the UAE, by further strengthening our retail

sector. ZOOM has set a world-class model in franchising, which the UAE Nationals can leverage for personal and professional growth, while contributing to the growth of our SME sector.” As per the agreement, the franchisor responsibilities of ZOOM include surveying the location, assisting in selecting the right location, preparing financial feasibility studies, creating drawings, and training the franchisee and the operational team to manage the outlet. Following the opening, EPPCO will assist the UAE National entrepreneurs by managing the supply chain permanently and extending a wide range of marketing activities in addition to advising on daily operational issues. Khalifa Fund will assist in the entrepreneurship empowerment initiative by evaluating the financial proposal and lending assistance to the qualified SME entrepreneurs that meet its criteria for opening the ZOOM store.

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INDUSTRY WATCH

EYâ&#x20AC;&#x2122;S MENA IPO UPDATE

EYâ&#x20AC;&#x2122;s Q1 2014 MENA IPO update reported that ĹľYH,32VIURP0(1$UDLVHG86PQLQ 4

In comparison to Q1 2013, this marked a decrease of 21 per cent in terms of value. However, in terms of volume, there was no change when compared to Q1 2013. Sector wise, the oil and gas sector led in Q1 2014 with two IPOs followed by telecommunications, industrial, manufacturing and retail sectors with one IPO each. Two IPOs were in Tunisia and one each from Qatar, Saudi Arabia and the UAE. The largest IPO in Q1 2014 was in Qatar, with Mesaieed Petrochemical Holding Company raising US$ 905 mn, which was the first IPO on the Qatari stock exchange since 2010. The company which is a Qatar Petroleum subsidiary was five times oversubscribed. The second largest IPO was Gulf Marine Services from the UAE, which listed on the London Stock Exchange (LSE), raising US$ 275 mn. The remaining IPOs raised less than US$ 100 mn each, with Saudi Marketing Company raising US$ 72 mn on the Tadawul stock exchange in Saudi, followed by Sotipapier in Tunisia, raising US$ 26 mn and Cellcom in Tunisia raising US$ 6 mn. Phil Gandier, MENA Head of Transaction Advisory Services, EY, says: â&#x20AC;&#x153;The MENA IPO market is off to a slower start in the first quarter compared to the same period last

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Phil Gandier, MENA Head of Transaction Advisory Services, EY

year, however compared to IPO performance over the past few years, Q1 2014 has been one of the best performing quarters. The recently announced Emirates REIT and Marka IPOs will spur further IPO activity and point the way to high levels of activity through the first half of 2014.â&#x20AC;? â&#x20AC;&#x153;The combination of attractive valuations and solid after-market performance means that financial sponsors are actively pushing companies to list. The companies expected to list in the region range from subsidiaries of family businesses to large established companies. Sectors that are likely to show strong IPO appetite are those with strong demographics such as retail, consumer products and healthcare,â&#x20AC;? said Phil. â&#x20AC;&#x153;We expect that Q2 2014 and the second half of 2014 will see strong IPO activity. The ongoing transformation of family groups into institutional entities led by the younger generation that are more competitive and not susceptible to family succession disruptions, will drive IPO activity. With sound economic fundamentals and strong regional liquidity fuelling new listings, the MENA pipeline is looking extremely healthy,â&#x20AC;? concluded Phil.

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INDUSTRY WATCH

SMES ENJOY TERRIFIC OPPORTUNITIES As part of a nationwide strategy to support local small and medium-sized enterprises (SMEs), Qatar Development Bank (QDB) and Qatar Shell recently hosted their second annual ‘SME Business Opportunity Workshop’.

At the workshop, seven new specific business opportunities were revealed to encourage Qatari enterprises to tender to become the supplier of choice for Pearl GTL, the world’s largest gas to liquids plant delivered by Qatar Petroleum and Qatar Shell. Held at the Sharq Village & Spa, the workshop attended by 100 local SMEs and entrepreneurs was part of an ongoing commitment by QDB and Qatar Shell to develop local SMEs in support of the State of Qatar’s private sector. Abdulaziz Al Khalifa, Chief Executive Officer of QDB, said: “It is through this joint initiative that we recognise the pivotal role that local SMEs play in supporting Qatar’s economy. We have therefore joined hands with Qatar Shell to support local SMEs and entrepreneurs in order to promote the growth and diversification of Qatar’s private sector. Through this partnership QDB supports the accelerated development of Qatar’s private sector by broadening the horizons of local enterprises.” “Today, we are offering local SMEs valuable opportunities to tender to become a supplier of choice for the Pearl GTL

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During the event

At the workshop, participants were presented with seven new specific business opportunities plant. These seven new specific business opportunities therefore demonstrate the high regard in which we uphold the high capabilities and operating standards of local enterprises to handle contracts for the world’s largest Gas to liquids plant”, he added. Wael Sawan, Managing Director and Chairman of Qatar Shell companies, said: “In support of our valued partner Qatar Petroleum and in close collaboration with QDB, we are committed to the Qatar National Vision 2030 by developing local content and SMEs. I am delighted to report that we, at QDB and Qatar Shell, have certainly made progress in this area. Just last year, we held

our very first SME Business Opportunity Workshop, and it was during this process that three contracts were awarded to local suppliers. This year, we are revealing seven new specific business opportunities within the Pearl GTL plant to local SMEs.” “We are very happy to continue to join hands with QDB, to award local businesses with new contracts that will enable them to develop world-class standards and compete on a level playing field globally,” added Sawan. At the workshop, participants were presented with seven new specific business opportunities including the manufacture of large open-head steel drums; the manufacture of low voltage cables; the manufacture of electrical cable trays; the maintenance, repair and recertification of ATEX twoway radios; the maintenance and servicing of offshore diesel generator sets; the servicing of custody flow meters; and the supply of welding inspectors for onsite technical support. They were also briefed on the Qatar Shell tendering process as well as the management advisory and financial support role of QDB.

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INDUSTRY WATCH

PWC ACQUIRES BOOZ & COMPANY

PwC announced the successful completion of its combination with Booz & Company.

Hani Ashkar, PwC Middle East Senior Partner, PwC Middle East

We’re offering our clients in the Middle East and across the world something they can’t get anywhere else: a combination of strategy consulting expertise and a proven track record of delivery that draws on unrivalled global scale and experience

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With the granting of all regulatory approvals for Booz & Company to join PwC, it is now officially part of the PwC Network. All closing conditions for the deal have been met. Marking this occasion, Booz & Company has changed its name to Strategy& (pronounced Strategy and). This new name, which will be used alongside the PwC name and brand, reflects the strength in strategy consulting that Booz & Company brings to the PwC Network and the benefits this deal will bring to all clients and stakeholders. After a short grace period, Booz & Company can’t legally continue to use the Booz name following the change in ownership.

Welcoming the Strategy& team to the PwC Network, Hani Ashkar, PwC Middle East Senior Partner, says, “By establishing Strategy& as part of the PwC network, we’re changing the consulting landscape for good. We’re offering our clients in the Middle East and across the world something they can’t get anywhere else: a combination of strategy consulting expertise and a proven track record of delivery that draws on unrivalled global scale and experience.” “We are delighted to be joining PwC, the leading professional services network in the world, as it enables us to offer both our clients and our people a bigger, broader, and better opportunity to connect strategy to impact,” says Joe Saddi, SVP and Managing Director of Strategy& in the Middle East. “Our clients need great strategy and the ability to execute it. Our combination with PwC enables us to offer our clients in the Middle East and across the globe the ability to develop and execute the right strategy—delivered by one trusted, experienced, and responsive consultant.” PwC Strategy&’s Board of Directors will be chaired by Tony Poulter, a PwC partner and global consulting leader. Cesare Mainardi will be CEO of Strategy&. He has been the CEO of Booz & Company for the past two years.

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2020 READY

Integrated supply chain solutions that move your business forward. When it comes to integrated logistics solutions across the supply chain, you can trust Al-Futtaim Logistics to get your business moving ahead. Automotive: Vehicles, Spare Parts, Machinery | Retail: Fashion, Hanging Garments, Electronics, High Tech, Furniture Industrial | Project Cargo: Heavy Lift and Break Bulk | Humanitarian

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TECHNOLOGY FOR BUSINESS

NABBESH INTRODUCES NEW FEATURES

their personal and business identities to remain private, while freelancers are hired based on their skills and portfolios.

>LLiĂ&#x192;Â&#x2026;]Ă&#x152;Â&#x2026;iÂ&#x153;Â&#x2DC;Â?Â&#x2C6;Â&#x2DC;iÂ&#x201C;>Ă&#x20AC;Â&#x17D;iĂ&#x152;ÂŤÂ?>ViĂ&#x153;Â&#x2026;Â&#x2C6;VÂ&#x2026;>Â?Â?Â&#x153;Ă&#x153;Ă&#x192;LĂ&#x2022;Ă&#x192;Â&#x2C6;Â&#x2DC;iĂ&#x192;Ă&#x192;iĂ&#x192;Ă&#x152;Â&#x153;wÂ&#x2DC;`>Â&#x2DC;`Â&#x2026;Â&#x2C6;Ă&#x20AC;i vĂ&#x20AC;iiÂ?>Â&#x2DC;ViÂŤĂ&#x20AC;Â&#x153;viĂ&#x192;Ă&#x192;Â&#x2C6;Â&#x153;Â&#x2DC;>Â?Ă&#x192;]Â&#x2C6;Â&#x2DC;Ă&#x152;Ă&#x20AC;Â&#x153;`Ă&#x2022;Vi`>Â&#x2DC;iĂ&#x153;Â&#x2C6;Â&#x2DC;Ă&#x152;iĂ&#x20AC;v>Vi>Â&#x2DC;`>``Â&#x2C6;Ă&#x152;Â&#x2C6;Â&#x153;Â&#x2DC;>Â?vi>Ă&#x152;Ă&#x2022;Ă&#x20AC;iĂ&#x192;° The portal aims to improve the way businesses and freelancers complete project-based work. â&#x20AC;&#x153;This is just the beginning for Nabbesh as we shape the future of work, Work 3.0, in the Middle East & North Africa. Our platform is simple, user friendly, social, and most importantly a safe place for crossborder freelance transactions,â&#x20AC;? said Loulou Khazen Baz, CEO of Nabbesh. â&#x20AC;&#x153;75 per cent of Nabbeshâ&#x20AC;&#x2122;s users are under the age of 35, and this demographic is looking online for work opportunities.â&#x20AC;? Youth, who grew up online, account for one third of the population of nearly 340 million in the MENA region. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re excited to introduce these QHZIHDWXUHVDQGWRHIÂżFLHQWO\HQDEOH businesses to grow while increasing prosperity throughout the Middle

East. Everything we do at Nabbesh is not only designed to build a business but is designed to fuel the talent of this region. We are doing everything possible to protect our freelancers from the challenges of online work, and we will continue to enhance Nabbesh to facilitate commerce at the speed of the 21st century.â&#x20AC;? Hereâ&#x20AC;&#x2122;s an overview of the new features: Search  and  Matching  Made  Simple: *LYLQJEXVLQHVVHVWKHDELOLW\WRÂżQG KLJKO\TXDOLÂżHGIUHHODQFHSURIHVVLRQDOV across the Middle East and North Africa, immediately evaluate their work, and hire almost instantly. 3URÂżOH$QRQ\PLW\ Allowing businesses to post and search for candidates immediately, enabling

Talent  Management  Solutions:   Connecting employers immediately to IUHHODQFHUVWKURXJKDVLPSOHZRUNĂ&#x20AC;RZ IRUPZKLFKDOORZVIRUHIÂżFLHQW communications, applicant shortlisting, KLULQJÂżOHVKDULQJDQGLPSURYHG project management. &RPSOHWH3D\PHQW6ROXWLRQ Providing simple and secure third party and online payment systems powered by online payment gateway PayFort that provides a local solution, allowing employers to pay securely online, and freelancers to receive payments through bank transfers and money transfer services. 5DWLQJ6\VWHP An online dual rating system that allows both employers and freelancers to rate the quality of work and project experiences. This feature facilitates greater quality assurance and meritbased opportunities contingent on quality of work in a job market previously dominated by â&#x20AC;&#x2DC;wastaâ&#x20AC;&#x2122; - a system based on connections.

ANGELHACK TO BE HELD IN DUBAI An innovative event called AngelHack is all set to be held in Dubai on May 23 to 24, 2014. AngelHack organises hackathons and innovation-driven events across the globe. Their flagship event is the global AngelHack competition, where developers come together for a chance to enter the HACKcelerator program and showcase their work in Silicon Valley. The Spring 2014 AngelHack aims to be the largest hackathon series in the world, with more

70

than 6,000 developers participating across 30 countries, including the UAE. As part of the event, developers, designers and entrepreneurs are invited to participate alone or as a team for a chance to win cash prizes, seed capital, acceptance into a Silicon Valley accelerator, and a trip to Silicon Valley to pitch their idea in front of wellNQRZQLQYHVWPHQWÂżUPV The two-day hackathon offers participants a chance to code and demo their idea to a panel of judges, who will pick the

regional winner based on originality, technological difficulty, viability and usefulness. The event encourages new ideas, ideas that are useful, ideas that solve big problems, ideas that could potentially make money, and ideas that get people excited. In addition, the event will also feature workshops led by top regional developers, as well as local mentors providing advice and encouragement to participants.

AngelHack Dubai will be held at The Cribb, a networking and event space for entrepreneurs. The regional sponsor is TURN8, the seed accelerator organised by DP World. Attendees are invited to code through the night before the judging begins on Sunday afternoon. Food and beverages are included in the cost of registration. To register for AngelHack Dubai, please visit http:// www.angelhackdubai. eventbrite.com.

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TECHNOLOGY FOR BUSINESS

MASDAR’S INITIATIVE Masdar Institute of Science and Technology, an independent, researchdriven graduate-level university focused on advanced energy and sustainable technologies, announced that its Institute Center for Innovation and Entrepreneurship (iInnovation) will contribute to developing and maintaining a leadership role for the UAE in technology-based innovation and entrepreneurship. iInnovation is mandated to initiate iInnovation forms part of our mission measures to adapt best practices from towards creating and developing human world-class innovation hubs to the UAE, capital, especially in clean energy while working with UAE stakeholders innovation and entrepreneurship. to improve the local innovation With the support of the UAE ecosystem. In addition, it will support leadership, Masdar Institute continues the translation of technology research to implement initiatives and host into innovative commercial products, international forums to raise awareness services and processes. As part of its of the importance of technology mission, iInnovation will be hosting start-ups. We hope iInnovation will the ‘UAE Forum on Innovation and develop capabilities, encourage youth Entrepreneurship 2014’ on 28 April to launch start-up companies and in Abu Dhabi, co-sponsored with the facilitate government support for young Massachusetts Institute of Technology entrepreneurs.” (MIT) and BP. Headed by Dr. Bruce W. Ferguson, Dr. Fred Moavenzadeh, President, Professor in Engineering Systems and KYO_BusinessEntry_SmeAdvisor_17.5wx11hcm_revised.pdf 1 11/24/13 1:28 PM Masdar Institute, said: “The launch of Management, iInnovation will operate in

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three thematic areas – establishing the commercial viability of research, further advancing technology entrepreneurship among the youth in the UAE and strengthening the innovation policy framework in the UAE. iInnovation will design and implement new programs in collaboration with other UAE stakeholders across a broad range of industries. In this area, it will initiate an open technology entrepreneurship lecture series to be hosted at Masdar Institute and create a funding program for late-stage faculty research that shows commercialization potential. In January 2014, iInnovation announced a US$7 million, multi-year Technology Innovation Collaboration Agreement with BP to develop novel ways to speed development and adoption of new sustainable technologies. More recently, a two-year, fully-funded merit-based BP Innovation Scholarship Program was launched to help students develop the business potential of their own sustainable technology ideas or ideas they adopt at Masdar Institute.

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THE NEXT LEVEL

DIGITALLY SPEAKING...

The digital revolution presents a renaissance of creative ideas, opportunities and challenges. And, as companies across the globe attempt to exploit the exciting prospects that digital offers, it’s now more important than ever for your SME to fully understand and implement a sound digital strategy. In the following feature, we ask Professor Gianvito Lanzolla, Professor of Strategy at Cass Business School, part of City University London, to propose a digital blueprint for SMEs in the region…  Professor  Gianvito   Lanzolla,  Professor  of   Strategy  at  Cass  Business   School,  part  of  City   University  London Let’s put things into perspective World renowned market ˆ˜Ìiˆ}i˜ViwÀ“

«Ài`ˆVÌi` ˆ˜ˆÌà ˆ}ˆÌ>1˜ˆÛiÀÃiÃÌÕ`Þ̅>Ì ̅iÀi܈Li{äâiÌÌ>LÞÌiÃœv`>Ì> œ˜̅i«>˜iÌLÞÓäÓä°/…ˆÃˆÃ iµÕ>̜xÇ̈“iÃ̅i˜Õ“LiÀœv >̅i}À>ˆ˜ÃœvÃ>˜`œ˜>̅i Li>V…iÃœ˜i>À̅° -œÕÀVi\ÜÜÜ°Vœ“«ÕÌiÀÜiiŽÞ°Vœ“É ˜iÜÃÉÓÓ{ä£Ç{În£É >Ì>‡Ìœ‡}ÀœÜ‡“œÀi‡ µÕˆVŽÞ‡Ã>ÞÇ

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72

With today’s fast-paced digital transformation, companies have quickly realised that digital technology has the power to not only offer more effective ways of doing things, but to do so at a significantly lower cost. Such digital technology combined with the vast amounts of data available and an increasing number of social media platforms creates strong stimulus for growth like never before! So, what does a business need to do in order to exploit the opportunities that the digital world presents? Professor Gianvito Lanzolla, Professor of Strategy

at Cass Business School, explains: “Very often, I hear people talking about the digital revolution happening. In my view, the digital revolution has already happened and is behind us. Now, it’s time for the ‘execution phase’ as it were. The first step of execution is to incorporate digital strategy as a core component of your overall business strategy. For instance, previously we would see that digital was the CIO’s responsibility, but today it has shifted to become one amongst many of the CEO’s primary objectives.”

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THE NEXT LEVEL

STEP

1

LOOK AT THE BIG PICTURE

Digital transformation starts at the top, with corporate leaders providing vision and support. â&#x20AC;&#x153;Document the factors that are disrupting your market,â&#x20AC;? Solis, Li and Szymanski advise. â&#x20AC;&#x153;Assemble data and proof points that help you make the case to the C-suite or decision-makers.â&#x20AC;?

3

GET AN EXECUTIVE SPONSOR

STEP

2

ARTICULATE A VISION

STEP

5

MAP OUT THE DIGITAL JOURNEY

â&#x20AC;&#x153;Chart a sample journey around what the right experiences for the right customers could be, based on digital behaviour,â&#x20AC;? the co-authors add. â&#x20AC;&#x153;Organise the journey by channel and screen.â&#x20AC;?

6

STEP

Digital  strategy  in  10  easy  steps Writing a digital strategy for your business shouldnâ&#x20AC;&#x2122;t be very different from working on your general business strategy. In his article on Forbes.com, Joe McKendrick highlights the following 10 steps heâ&#x20AC;&#x2122;s learnt from a new report on the evolution of the digital enterprise, outlined by Brian Solis, Charlene Li and Jaimy Szymanski of the Altimeter Group.

LOOK FOR DEFICIENCIES IN CURRENT DIGITAL CHANNELS

Look for missing features or links in customer touch points, assess any corporate policies or processes that get in the way of digital progress.

7

STEP

proposition. Digital transformation enables digital disruption.â&#x20AC;?

KEEP RENEWING YOUR RESEARCH

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This person should have the ear of management, as well as the attention of employees.

4

STEP

Power  of  a  digital  strategy +RZGRHVRQHGHÂżQHDGLJLWDOVWUDWHJ\" There are several ways of answering WKLVTXHVWLRQ2QHVLPSOHGHÂżQLWLRQ however, is â&#x20AC;&#x201C; â&#x20AC;&#x2DC;using digital tools to reach your companyâ&#x20AC;&#x2122;s objectivesâ&#x20AC;&#x2122;. And, ZKDWDUHWKHEHQHÂżWVRILPSOHPHQWLQJ a digital strategy? Professor Lanzolla H[SODLQVÂł'LJLWDOHQKDQFHVHIÂżFLHQF\ in the day-to-day operational processes of a business â&#x20AC;&#x201C; particularly in the B2B and B2C models. More importantly, digital allows a company to identify different ways of doing things i.e. the â&#x20AC;&#x2DC;howâ&#x20AC;&#x2122; aspect of the business. It introduces new ways of delivering the companyâ&#x20AC;&#x2122;s value

GET TO KNOW YOUR CURRENT DIGITAL CUSTOMERS

In terms of implementation, itâ&#x20AC;&#x2122;s all about the customer. Learn all you can about your current raft of digital customers, Solis, Li and Szymanski advise. What do they seek from your company? What are challenges in reaching and serving them?

8

STEP

STEP

Prepare a vision statement that spells out Revisit your digital offerings at least â&#x20AC;&#x153;what digital transformation looks like in every six months, and adapt your the end, the top-line advantages it carries, how it enables business goals and improves strategy accordingly. customer experiences in the process.â&#x20AC;?

BUILD A CROSSFUNCTIONAL TEAM TO OVERSEE THE DIGITAL TRANSITION

The move to digital requires teamwork, from across the enterprise. Project management principles should be applied so the team operates on an ongoing collaboration schedule and reporting process, Solis, Li and Szymanski note. Also, make sure IT is intimately involved with the work group. A reporting process should also be set up to keep all parties informed.

73


THE NEXT LEVEL

STEP

9

MEASURE RESULTS

The Altimeter analysts advise that data collection be a key function within the digital work group. They even suggest taking the step of â&#x20AC;&#x153;create new roles necessary to collect, analyse, and storify data.â&#x20AC;?

STEP

10

ENCOURAGE TRAINING AND EDUCATION

Employees and other stakeholders should have the opportunity to develop their skills, knowledge and experience to help pursue the evolving digital strategy. Reaching  the  right  customers Since understanding your customer base is a key aspect of a digital strategy, KRZVLJQLÂżFDQWLVWKHUROHRIFXVWRPHU segmentation? â&#x20AC;&#x153;Segmentation is incredibly important in a companyâ&#x20AC;&#x2122;s digital strategy. In fact, customer segmentation is important in a companyâ&#x20AC;&#x2122;s overall strategy. Remember a lot of things that are already part of your business strategy donâ&#x20AC;&#x2122;t necessarily change when implemented into a digital environment. What Iâ&#x20AC;&#x2122;m trying to say here is that keep things simple and donâ&#x20AC;&#x2122;t forget the basics. The beauty of digital lies within its simplicity,â&#x20AC;? says Professor Lanzolla. The  role  of  social  media   Digital marketing, website, and mobile interface are all key components within a digital strategy. A crucial component, which is on an upward trajectory worldwide, is social media. How does DFRKHVLYHVRFLDOPHGLDSODQÂżWLQWRD companyâ&#x20AC;&#x2122;s digital strategy? Professor Lanzolla says, â&#x20AC;&#x153;Businesses need to look very carefully at the way they project themselves on social media. This is a medium that can either glorify or destroy them overnight. And, this is not limited to any one sector, this is very much applicable in any sector ranging from a cement company to a media house.â&#x20AC;?

74

Regional  trends Professor Lanzolla expresses his positive sentiment for the country, and the wider region, in terms of the adoption of digital technologies. He says: â&#x20AC;&#x153;I see CEOs becoming more and more interested. They sense and feel that there is a change happening, and they are on top of it. I VHHVLJQLÂżFDQWSURJUHVVZLWKLQWKHUHJLRQ in the uptake of digital technologies. For instance, Iâ&#x20AC;&#x2122;ve noticed there has been a complete integration of digital strategies within companiesâ&#x20AC;&#x2122; operational manuals. Itâ&#x20AC;&#x2122;s no longer a case of just appointing an external agency to design your website, itâ&#x20AC;&#x2122;s a complete department focusing on every element within your business.â&#x20AC;? And, market signals truly point in this direction. For instance, latest research by Gartner reported that Middle East IT spending is projected to total US$ 211 ELOOLRQLQUHĂ&#x20AC;HFWLQJWKHLQFUHDVHG focus of CEOs towards their IT strategies. 'LĚ&#x2020;HUHQWLDWLQJ\RXUEXVLQHVV An increased awareness of digital tools and its implementation comes with a downside. It means that there are a larger number of competitors present in the online marketplace. What can a business do to differentiate itself from its peers? Professor Lanzolla says, â&#x20AC;&#x153;Traditional mechanisms such as brand, reputation, DQGFHUWLÂżFDWLRQV\VWHPVDUHNH\WR differentiating your business in an online marketplace. I think location also plays DVLJQLÂżFDQWUROH)RUH[DPSOHLI,ZDV looking for an advertising agency online and I had two options come up in front of me; one that is based DIFC, and one that is based in some unknown remote area, I am naturally more inclined to do business with the former. The same is in the case of a secured site which will give me more FRQÂżGHQFHDVDYLVLWRUDQGSRWHQWLDO client. Everything matters in a digital environment. Ask yourself this question â&#x20AC;&#x201C; is my digital presence projecting signals of trustworthiness and predictability? â&#x20AC;&#x153;In addition, going back to what I said previously â&#x20AC;&#x201C; digital enables businesses to do things in different ways. So what makes a company different in such a PDUNHWLVLWVDELOLW\WRÂżQGDZD\RIGRLQJ WKLQJVWKDWDUHPRUHHIÂżFLHQWWKDQWKH

others and doing so at a lower cost.â&#x20AC;? :KDWGRHVWKHUHVHDUFKVD\" While in theory all of the above sounds good, what happens when we do some research on the practical aspects? As one of the foremost global experts in digital strategy, Professor Lanzolla shares valuable insights from his personal research on the subject. â&#x20AC;&#x153;We carried out research wherein we interviewed the WRSVWUDWHJ\RIÂżFHUVRIFRPSDQLHV LQWKHÂżQDQFLDODQG707 7HFKQRORJ\ Media & Telecom) sectors. Key results of the research showed that within these sectors, there are different capabilities spaces. When we narrow it down, we can say they are the content capability space and the technology capability space. The companies that had switched from one capability space to another were much weaker than their competitors. â&#x20AC;&#x153;What this means for your business is that you need to focus on your core capabilities â&#x20AC;&#x201C; think twice before venturing out, and play to your strengths. For example, if you are a media company, you do have access to digital but that doesnâ&#x20AC;&#x2122;t mean you have the same capabilities as a technology company. To summarise, what we understand from this research is that digital is just a platform, but the real essence is in the way you deliver things using it, which is capability driven.â&#x20AC;? â&#x20AC;&#x153;Another interesting insight that the research revealed was that within the content capability space, a key resource that was quite scarce was trust. People tend to be comfortable working with companies that they trust.â&#x20AC;? The  future  of  digital   Finally, what does the future hold for the world of digital? â&#x20AC;&#x153;There is a lot yet to come in the digital world. I think SMEs should look at digital sphere as an arena full of exciting opportunities. In fact, digital empowers SMEs to be PRUHHIÂżFLHQWLQQRYDWLYHDQGQLPEOHLQ comparison to their larger counterparts by teaching them new ways of doing things,â&#x20AC;? concludes Professor Lanzolla. For an online version, please visit: www.smeadvisor.com/2014/05/digitallyspeaking/

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9%

38%

Procurement cost

Cycle time

4

weeks

Implementation

Contract  Spend  (February  2014) DM  Phase  1 AED  68,000

Princess  Tower AED  67,000 Central  Stores AED  69,000

DT  Master  Community AED  74,000

Back

Order  Approval 800000009 1007CC  -­  Greens  Common

Arabian  Ranches AED  68,000

Order  Summary

0k

5k

Ordered  By

Item  Details

Rob  Lawson

March  15,  2013    2:47  PM Date 65k 70k 10k 15k 20k 25k 30k 35k 40k 45k 50k 55k 60k 75k Amount AED  11,659.53 AED

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Reject Comments  and  History 2013-­03-­16  13:37:14  |  Order  Approved  by  Greg  Styles 2013-­03-­16  16:22:36  |  Order  Approved  by  Mark  Peters

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SME Advisor Middle East - April 2014