The UAE is a global center for various industries that offer both products and services. Numerous companies in the UAE are working hard to buy their goods and parts from local sources to help grow the national economy.
The government has also been investing in initiatives to strengthen local industries and streamline supply chains. One notable initiative is the In-Country Value (ICV) addition program.
The In-Country Value (ICV) Certification was launched by ADNOC in 2018 and expanded nationwide in 2021 under the Ministry of Industry and Advanced Technology, aims to boost Emiratisation, diversify the GDP, and enhance strategic economic contributions from local companies and nationals.
The ICV Program requires companies to meet a minimum value of goods and services produced within the country. This is assessed through factors like local spending, hiring UAE nationals, and sharing knowledge and technology.
To demonstrate compliance, companies undergo an ICV audit conducted by a certified auditor like Now Consultant who verifies that companies meet the program’s criteria.
Who Conducts ICV Audits?
The ICV Audit is compulsory for companies collaborating with ADNOC, its subsidiaries, and other UAE government entities that have implemented the ICV Program. Maintaining a high ICV score is significant, as it can affect a company’s chances of securing new contracts or renewing existing ones with these entities.
An ICV audit assists companies in identifying and addressing system gaps and errors. All ADNOC suppliers are mandated to undergo this audit. ADNOC’s In-Country Value (ICV) program aims to promote localization and increase employment opportunities. Now Consultant is a certified audit firm that can help you not only find ICV audit scores but also help you improve your ICV score in the UAE.
The Objectives of ICV Audit:
The following are the specific objectives of an ICV audit:
Compliance Assessment:
The audit checks if the company follows the rules of the ICV program set by the government or relevant authorities. This means confirming the company’s commitment to hiring Emiratis, buying local, investing in UAE businesses, and helping the country’s economy grow.
Documentation Review:
The auditor will examine the company’s ICV reports and supporting documents for accuracy and completeness. This review covers records of Emirati employee hiring, local purchasing agreements, investments in UAE businesses, and financial statements illustrating the company’s impact on the UAE’s GDP.
Verification of Data:
The auditor verifies the company’s data accuracy using different methods like interviews, site visits, and checking with external sources. This ensures that the information given is reliable and genuine.
Assessment of ICV Score:
The auditor will figure out the company’s ICV score using specific methods and standards. This means checking if the company meets ICV goals and calculating how much of its spending benefits the local economy.
Key Considerations In ICV Certification:
- ICV certification depends on the latest audited IFRS financial statements of the companies, which should not be more than two years old from the certification year.
- Newly formed companies (less than 10 months old) that do not have audited financial statements can use management accounts covering up to 10 months for ICV calculations.
- The ICV certificate is valid for 14 months starting from the date when the audited financial statements are issued.
- ICV Scores are calculated using a set method that assesses the economic value added within the country for the company’s goods or services.
- The ICV score is significant in the bid evaluation process, providing additional weight to suppliers and vendors during the awarding of contracts.
- Companies indirectly involved with tenders also benefit from the ICV certification program. The spending of ICV-certified suppliers that stay within the country or contribute to the local economy is included in the ICV calculation.
- Companies that pass the ICV Audit and attain a high ICV score qualify for ICV Certification. This certification is valid for one year and can be renewed after successfully completing a subsequent ICV Audit.
Factors to Determine ICV Score:
Approved ICV auditors assign scores to various suppliers of goods and services. The ICV score essentially measures the economic value that a company’s products contribute to the nation over its lifespan. The government sets several established methods to calculate these scores.
The following factors are considered in calculating the ICV Score:
- Good manufactured
- Third-party spend
- Revenue
- Export Outside UAE
- Investment in UAE
- Emiratization
- Expatriate Contribution
Our ICV Auditing Procedure:
We make the ICV Audit process easy in the UAE as it is a formal assessment carried out by a certified ICV auditor of Now Consultant to verify a company’s adherence to the ICV Program requirements. This process includes defining the audit scope, gathering and reviewing relevant data, preparing an audit report, and issuing the ICV Certification.
The ICV audit process involves the following six steps:
Determining The Scope:
The audit’s scope is established, outlining the relevant financial periods and the sources of data to be utilized. The process defines the boundaries and parameters of an audit, specifying the timeframes and data origins to be examined.
Data Collection:
During this phase, the auditor gathers a variety of documents essential for the audit, such as financial statements, procurement records, employee files, and any other relevant documentation necessary for a thorough examination.
Data Evaluation:
The auditor evaluates the gathered data to derive the company’s ICV score, indicating the percentage of total spending kept within the UAE. This process involves thorough scrutiny of collected information to accurately quantify the extent of local spending retention.
Preparation of Audit Report:
Following the audit, a comprehensive report is compiled, detailing the outcomes alongside the computed ICV score. This document serves to encapsulate the findings and provide a clear overview of the company’s ICV performance
ICV Certification:
Following a thorough audit, the company becomes eligible for ICV certification, which remains valid for a duration of one year upon successful completion. This certification acknowledges the company’s compliance with ICV regulations and signifies its commitment to local economic development.
Follow-Up Audits:
Subsequent to initial audits, companies undergo follow-up assessments to verify sustained adherence to ICV standards. These periodic reviews serve to ensure adherence to ICV regulations.
We Are Approved ICV Auditors:
Approved ICV Auditors in the UAE are experts endorsed by the ADNOC to perform ICV Audits for UAE-based businesses. These auditors maintain impartiality and professionalism, serving a vital function in examining a company’s adherence to ICV Program criteria.
Through scrutinizing financial statements, procurement logs, staff records, and relevant documents, auditors gauge the company’s ICV score.
Now Consutant is the certified ICV auditor in the UAE, providing comprehensive ICV audit services to alleviate your burden. Our auditors conduct follow-up audits and monitoring to uphold ICV compliance.
Additionally, we offer guidance and suggestions to enhance companies’ ICV scores and increase their support to the local economy.
