Annual Financial Statements and Audit Reports are just the means and not an end in itself, when it comes to doing business in UAE. Yes, with introduction of In-Country Value Certification (ICV Certification) by ADNOC group, slowly other government and semi-government entities in UEA are also adopting the process of ICV Certificate and ICV Improvement plan in all the tender bidding processes. Hence Annual Financial Audit Reports have become a part and parcel of ICV Certification, not the whole of it. ICV Certification is much more than just Audit Reports duly signed by UAE authorized auditors. The role of ICV Consultants and Audit Firms in UAE has become more crucial since the year 2018, when Abu Dhabi National Oil Company (ADNOC) initiated the In-Country Value (ICV) certificate program. The ADNOC ICV Certification initiative was one of the many initiatives to encourage economic growth in UAE. This ADNOC ICV Certification initiative in UAE aimed at GDP growth, human capital development, involvement of more local suppliers, Emiratization in the private sector, and localization of the core functioning of UAE’s gas and oil industry and technology adoption. In the year 2019 and 2020, Unified ADNOC ICV Certification program has been introduced in which along with ADNOC group, the Department of Economic Development, Abu Dhabi Ports and Aldar properties have also joined together in the ICV certification process, thus broadening its purview to much larger section of business in UAE. It is expected that in coming days, more entities will join this ICV certification process, thus making it mandatory for all the suppliers to get in to ICV certification process. ADNOC ICV Certification program has an objective of involving more local suppliers in the selection process and also work towards localizing the core functioning of UAE’s oil and gas industry. Through this it aims to focus on development of the citizens of UAE and its overall economy.

The process of ADNOC ICV Certification involves evaluation of an entity’s value-added contribution to the United Arab Emirates in areas including the following:

• Local Manufacturing
• Local investment
• Procurement of third-party goods and services
• Expatriate contribution
• Emiratization of labor
• Generation of income from outside the United Arab Emirates

Any company/ supplier who is registered with ADNOC or expecting to work with ADNOC and allied groups, have to comply with set of conditions set in the ADNOC ICV Certification program. This ADNOC ICV Certification gives them access to variety of business opportunities. The ADNOC ICV Certification of any entity carries weightage in the tender evaluation process and selection process. The ICV certificate carries extra value in any bidding calculation process in ADNOC and other government and semi-government entities in UAE, mandated by Unified ICV Certification Program. Entities not having ICV Certification, shall be allowed and considered for bidding in a tender process but during calculation, their ICV score will be “zero”, hence keeping them in a disadvantageous position than the ICV certifies entities. In ADNOC tendering process, the ICV score has now become an integral part of it. The tender awarding criteria takes in to account the lowest price and high ICV score. All the government and semi-government institutions/ entities operating in the emirate of Abu Dhabi have made In-Country Value certificate a statutory document from the companies which are interested to work with them and participate in their procurement processes. A tender bid would require any supplier company to submit Commercial Bid and also the ICV Improvement Plan. An ICV Improvement Plan carries higher value in tender bid calculation process. An ICV Improvement Plan is the commitment made by the bidder to achieve certain ICV goals, against which the payment is released to the entity. In the UAE, an ICV approved auditor/ audit firm is authorized to perform audit, produce audit reports and issue the ICV certificate.

In summary, to get ICV audited, your company need to take the following measures:

• If you are a company which is less than 10-month-old, your Management Accounts shall be considered for ICV Audit Calculations.
• If your company is above 10-month-old, then get the annual audit done by a certified auditor in UAE.
• Your latest Financial Audit Statements should be in line with International Financial Reporting Standards (IFRS).
• Your latest Financial Audit Statements should not be older than 2 years.
• Once the Annual Financial Audit Statements are prepared and signed by authorized auditor, your company can apply for ICV Certification to any empanelled ICV Certifying Body.
• Each license of your company shall be considered as a separate legal entity. However, if under the same license, the company is operating same activities in different branches in the same emirate, single ICV certificate can be issued.
• To apply any bidding by ADNOC and its allied agencies, your company also needs to prepare its ICV Improvement Plan, which is an essential part of the bidding calculation process.
• Within one financial year, the ICV empanelled Certifying Body cannot be changed by the company without proper justification.
• The ICV Certification charges vary for different Certifying Bodies.