Every single day, across our country, men and women with exemplary commitment leave their homes always expecting a call to save the lives of people that they have never met. We can never repay these brave stewards for their sacrifices.

There’s a reason why firefighters occupy a special place in our hearts; imagine what it takes to put on that heavy coat, and that helmet, and pace against the natural human instinct for self-preservation, and run into danger knowing that you might never make it out while saving these total strangers.

For the beloved ones of the brave firefighter Jassim Eisa Al Baloushi, 27 hailing from Ras Al Khaimah, we know that words alone can’t ease the pain of your loss. But it’s a matter of pride and honor, that Jassim lived and died a Hero!

Morison Menon Team salutes Jassim’s ultimate sacrifice that kept 300 passengers and crew of the Emirates flight EK 521 from the southern Indian city Trivandrum which was involved in an operational incident upon landing, from harm’s way. He is today a Hero, not only of UAE, but also of India, as majority of the passengers were Indians.

We also laud the efforts of the crew and staff of Emirates, Dubai Airport and the personnel of Dubai Police and Dubai Civil Defense who helped passengers and crew to safety in astonishing 90 seconds.

Morison Menon Salutes the Ultimate Sacrifice ofJassim Eisa Al Baloushi

Morison Menon NewsJuly - September 2016

UAE’s Choice2016

B U I L D I N G B E T T E R B U S I N E S S E S - G L O B A L L Ywww.morisonmenon.com www.consultuae.com Pages - 24 Volume - 45

Jassim, You will always live in our hearts!

The month of August began on not a very happy note for us living in

Dubai, with Emirates flight involved in operational incident during landing at the Dubai international airport. Lives of all the passengers and crew numbering 300 was saved due to heroic efforts of the rescue team.

We at Morison Menon are proud of Jassim Eisa Al Baloushi’s ultimate sacrifice, while performing duty in

protecting lives of passengers on-board of the Emirates Flight. The heroic efforts of Al Baloushi along with that of the crew and staff of Emirates Airlines, Dubai Airport, Dubai Police and Dubai Civil Defense in conducting swift rescue operation within 90 seconds, saving so many passenger lives has no parallel in the recent history involving air accidents.

In major transformations of medium and large entities, the top management often focus their attention on devising the

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CA. Raju Menon

EDITOR’S NOTE

Khalid Al Shams - Partner & CEO, Morison Menon Group, CA. Saju Augustine - Partner, Morison Menon Sharjah Office, Mana Mohammed Saeed Al Mulla- CEO, KIZAD, Sudhir Kumar - Partner & Head, Corporate Communications, Morison Menon Group, CA. Raju Menon - Chairman & Managing Partner, Morison Menon Group and Zeid Qadan - Partner, Morison Menon Abu Dhabi office during the inauguration of Morison Menon office in Kizad, Taweelah, Abu Dhabi.

Morison Menon opens office inKIZAD, Abu Dhabi

best strategic and tactical plans without understanding the importance of change management which is linked to people — the alignment of the organization’s culture, values, people, and behaviours to get the desired results. My colleague, Arun Kumar shares his insight on ‘Managing Change’ effectively in organizations in this issue of Newsletter.

My colleague, Abhishek shares the importance of Aligning and Converging an Organization’s Governance, Risk and Compliance functions to improve functional efficiencies and seamless flow of information. He shares a strategy that can be adopted by an organization to ensure maximum coverage of organizational risk.

Operational Risk Management (ORM) is an established practice in the global Oil and Gas industry. An effective ORM can help the industry to eliminate or minimise accidents and fatalities. My Colleague Anthony calls for renewed focus on ORM and urges managements not to compromise or slash budgets in the current low oil price scenario which can lead to ineffective implementation of ORM.

My colleague Sathya believes that e-retail will continue to grow rapidly and it will be at the cost of traditional Brick & Mortar players. In his essay, “Catch -22 for Brick & Mortar Retailers: e-retail or not” he mentions the traditional retailers ignoring the initial warning bells of e-retailers. I believe the recent acquisition of the online retailer Jet.com by Walmart for more than US$ 3billion is an acknowledgement of the challenge posed by e-retailers.

In my second write-up on VAT, which is going to be reality soon in the GCC member countries, my focus is to take the reader through the design of VAT and how VAT is levied in the European Union member states for goods exported to one or more EU member states and its permutation and export to non-EU member country. In my view, the design of VAT should neither lead to greater administrative costs, nor should it be a burden on the VAT assessee. I would expect the impact of VAT to be least in the GCC countries.

With holiday season coming to an end, Team-Morison Menon looks forward to engaging with our clients with continued vigour and bringing newer perspectives to our client engagement.

Sudhir Kumar - Partner and Head, Corporate Communications, Morison Menon Group, CA. Raju Menon - Chairman and Managing Partner, Morison Menon Group, Mike English - Director, Superbrands ME, CA. Saju Augustine- Senior Partner, Morison Menon Sharjah Office and Shibu Abraham - Group HR and Administration Manager, Morison Menon during the Superbrands 2016 award ceremony.

Superbrands 2016

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The common problem which organizations are facing globally, while implementing robust GRC standards, is

of Risk Silos. Risk Silos arises when each of the oversight function (individually) gathers information from business divisions to identify potential risks. This leads to duplication of efforts (Risk Silos) among various oversight functions (including Risk Management especially Operational Risk, Compliance, Corporate Governance and Internal Audit) which increases inefficiency within the organization. It also leads to disinclination of business managers to engage with oversight functions more proactively.

This article intend to discuss and deliberate the strategy for bringing synergy to the work flow and process of organization’s oversight functions (three lines of defense) to maximize the coverage of risk within the organization.

Current State Vs Future StateOrganization must look to assess their existing GRC infrastructure and framework so as to identify the key challenges and address the same through implementation of sound convergence framework, thereby achieving the “Future State”.

A Risk Register is a risk management tool which acts as a central repository for all the risk identified under the risk universe of the organization. Risk Register covers the rating of likelihood and impact for each key risk and their subsequent action plans.

Implementing a Risk Register would enable the organization to remove Risk Silos as it acts like a common platform for the communication of the key risk areas to the key stakeholders (including the various oversight functions discussed above) within the organization. Risk Register also facilitates the development of common risk language and methodology for assessment of identified risks among the various oversight functions, thereby reducing the duplication of efforts at assessment level. Finally, a common approach to mitigate the risk would enable the organization to strengthen its preventive/contingency/recovery actions.

Convergence FrameworkOrganizations can develop a sound convergence framework that shall act as the guiding principle for the oversight functions to avoid duplication of efforts. The guiding principles should ensure that the roles and responsibilities of the oversight functions are not curtailed and that the independence of internal audit always remains. The framework shall also entail all the areas, where the overlap is prevalent, including, but not limited to:• Identification Process for Risk Issues (RCSA/Audit);• Control Based Rating vis-à-vis Management Awareness

Based Rating methodology – to ensure the assurance approach is consistent;

• Common rating methodology• Reporting of the issues to Board Committees &

Stakeholders;• Integrated Assurance Approach - Risk Register;• Follow up on open risk/audit issues;• Closing of the issues; and• Review calendar of oversight functions and align visits

to divisions.

The Convergence Framework should also entail the frequency of the meetings for these oversight functions to discuss and achieve Convergence of GRC. The same can be recommended based on the size and complexity of the organization.

To conclude, Alignment & Convergence of the Organization’s GRC functions and processes can help reduce duplication of efforts and help provide increased confidence in, and transparency of, information but without compromising the independence required in the audit function, thereby minimizing Risk Silos and facilitating the sharing of risk information across the organization.

Converging Organization’s Governance, Risk & Compliance

Current State - “As-Is”• Identify the challenges in the current GRC framework

• Outline the major issues that needs to be addressed

• Review the Risk Categorization methodology including risk

modeling and risk rating assigned by different oversight

functions for similar kind of risk issues

• Review the KRI management process among the functions

Future State• Combined reporting: Overall company-wide coverage of Key

Risk Areas

• Improved relationships with other assurance providers

• Common risk language and risk methodology

• Integrated Assessment Process (Risk Register)

• Cost synergies

Risk Register – Integrated Assessment ProcessIn order to effectively manage the key risk areas of the organization, a common repository of risk is desirable. The same can be achieved with the implementation of a Common Risk Register among the various oversight functions of the organization.

ABHISHEK JAJOOPartnerGovernance, Risk, Compliance (GRC)Morison (UAE) Consulting

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In the last issue of Newsletter, I had written about GCC members discussing about the VAT framework for

member states which in all likelihood could include:• Each member have its own VAT law and common rules

on VAT

• Simultaneously implementation of VAT in all GCC member states

• Initial VAT rate of 5% with certain goods exempted from VAT

I had also stated that VAT system ensures that the tax is neutral, regardless of the number of transactions and hence it is not really inflationary in nature.

Designing an efficient VAT regimeIf we look at the international experience in VAT implementation, the VAT is paid on a net basis on the difference between sales and purchases (of inputs) and there should be no break in the VAT chain (through exemptions) to avoid tax cascading. Another notable feature of VAT implementation is the ‘destination principle’ which means that goods and services are taxed for VAT only in the jurisdiction where they are consumed.

The success of VAT rests on ease of rolling out, managing the implementation and generation of revenue for the State. The collections from VAT depend primarily on self-assessment of taxes by taxpayers and an effective monitoring of tax compliance. A simple design of the VAT would help reduce the compliance burden on tax-payers. Based on international experience, it can be stated that four

factors that are critical for successful implementation of VAT include rate and structure, the base, registration thresholds and exemptions.

Evidence from countries that have implemented VAT shows a strong support for a single VAT rate. Multiple VAT rates lead to administrative complexities and gains are insignificant. In majority of countries that have implemented VAT, the VAT system is of the consumption-type, destination based, and implemented through the invoice-credit mechanism. In such a scenario, VAT is charged on sales invoices of registered tax-payers, a tax credit is allowed for VAT charged on inputs, and the VAT tax is applied to all imports while exports are zero-taxed. Accordingly, the VAT registered suppliers can claim tax credits/refunds on VAT paid on purchases of inputs.

If we look at EU member states, the following transactions are subject to VAT: • The supply of goods by a taxable person within the

territory of a EU Member State

• Intra-Community sale(An individual or entity from EU member state sells goods to another individual or entity in another EU member state)

• The supply of services if the recipient is established within the EU

• The importation of goods from outside of the EU

We can expect GCC countries to follow similar principles when introducing VAT.

VAT on exports In the EU, VAT is applied to goods imported into the EU and this will be payable at the time and place of import. Exports (of goods to countries outside the EU member state) will not be subject to VAT (generally zero-rated). We can expect GCC to adopt policy similar to EU while applying VAT on exports.

CA. Raju MenonChairman & Managing PartnerMorison Menon Group

VAT DESIGN AND ROLLOUTSeries 2

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Case studyExport to another GCC member If a UAE-based company exports goods to a VAT registered company or individual in Saudi (GCC member state) then VAT is not collected by the UAE company as it is an intra-community sale and is subject to zero VAT rate. The buyer in Saudi will report the applicable VAT, pay VAT to Saudi VAT authorities at the applicable VAT rate and take input credit on VAT paid. However, If the buyer in Saudi is not VAT registered in Saudi, then the UAE-based company will charge VAT applicable in UAE from the Saudi buyer, even though it is intra-community trade.

Export to outside GCC member If a UAE-based company exports goods to India, non GCC member state, the UAE exporter will show shipment as outside GCC member state and will export at zero VAT rate. In this case UAE-based company does not have to bother whether the buyer in India is VAT registered or not. Temporary transfer of goods to another GCC member state In case of EU, when a company temporarily moves its own goods from a EU member state to its own warehouse in another EU member state, with no intention of selling the goods to a third party on arrival, it is effectively treated as an intra-community transaction. The company that exports goods will pay VAT at the destination country (it will have VAT registration in destination country) and can claim input credit on VAT paid in subsequent sale. I would expect the GCC law to be similar to EU.

Installation, delivery and assembly in another GCC member state In case of EU, there are exceptions in case of delivery of goods that are subject to assembly or installation in the buyer’s country in another EU member state. If the buyer requires an assembly or installation of the goods, the acquisition is not subject to VAT. In such cases the supply (including installation) is deemed to have been made in the country where the goods are installed and is subject to VAT in that country. In this case, the liability on VAT payment shifts from

the seller to the buyer. The buyer will be responsible to pay VAT and seller need not have to have VAT registration in the country where the item was delivered and installed.

Chain transactions There can be situations where transaction can happen between more than two EU member states in many permutations. I shall cover this in detail subsequently.

Deciding threshold for VATIn the initial phase of VAT implementation, usually there is a tendency on the part of governments to set a high VAT threshold. Such situation though results in reduced administrative and compliance costs will lead to competitive distortions arising from the difference in treatment among tax-payers on the two sides of the VAT threshold. Many countries tend to address these distortions by allowing voluntary registration for tax-payers below the VAT threshold, and/or the application of a presumptive tax on companies falling below the VAT threshold.

VAT and InflationI believe the impact of VAT on inflation to be limited. Since VAT does not have cascading effect its maximum direct effect on the prices should not exceed the tax rate. Additionally, in GCC we can expect the zero VAT rate and/or exemption of certain groups of goods/services would reduce the inflationary impact.

ConclusionFor the GCC members, VAT is an effective tool in raising revenue to achieve government’s social objectives whilst preserving the neutrality for businesses. If VAT is designed and implemented correctly, it can provide significant revenues to the governments in the GCC, with limited administrative costs and insignificant impact on business and marginal impact on end consumers.

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Operational Risk is the potential of loss arising due to failures in systems, people and / or operational processes

which can result in an impact on People, Assets / Production, Environment or Reputation. Operation Risk Management (ORM) is the means and processes through which Operational Risks are managed through an asset’s operating lifecycle.

Traditionally many Organizations in the Oil & Gas and allied sectors have developed ORM Frameworks to manage Operational Risk utilizing a Hazard & Consequence Type Model associated with an Organization Specific Risk Assessment Matrix and other tools against a specific Risk Tolerability Criteria pending their risk appetite.

It is clear from an analysis of past major industrial accidents that Operational Risk needs to be managed in a coherent manner given their potential adverse impact,

But, is the industry focusing enough attention during an asset’s operating lifecycle which could be between 20 – 25 years, during which time organizations face the major operational risk exposure. Moreover, can operational risk be minimized or completely avoided.

In reality no organization can eliminate operational risk totally, however, this can be reduced to As Low As Reasonably Practicable (ALARP) by employing additional residual risk measures, protocols and Best Practices to the point at which the incremental benefit of level of risk reduction achieved is outweighed by the cost.

Key Benefits of ORMThe benefits of managing Operational Risk effectively during an asset’s operating lifecycle can be summarized as follows:

• Reduces the potential for Major Accident Incidents and / or other incident categories;

• Increases probability of maintaining and sustaining production at maximum / optimum levels required;

• Enables asset to maintain Safe Operations.

However, the above benefits can only be realized if asset Integrity management and maintenance programs are aligned to asset requirements through their lifecycle. It can also be argued that additional emphasis should also be placed on understanding more precisely the integrity of each asset, given stage in its life cycle, life extension / remnant life assessment , in an environment of ageing infrastructure particularly in the Middle East Region.

Why ORM should not be compromised in a low oil price scenarioThe current scenario of a low Oil Price (from a peak of over 100 USD per Barrel in 2014/2015 to a low of just under 28 USD per Barrel in Q1 2016), has initiated a wave of capital rationing, new project cancellations or deferment, cost reduction measures and streamlining of operations and staffing in the Oil & Gas and allied sectors both in the Middle East Region and Worldwide.

This situation could have an impact on increasing operational risks of existing assets if not addressed.

This recent shift in focus of sector’s cost cutting activities, has further exacerbated the potential for major industrial accidents, pending the focus of cost cutting measures. If such cost reduction measures are too deep or not optimized, then this could lead to inefficient operations and increased operational risk along with not meeting the major goal of maximizing production in a safe manner.

OPERATIONAL

MANAGEMENTIN A LOW OIL PRICE SCENARIO

ANTHONY TONNASubject Matter ExpertEnterprise Risk ManagementMorison (UAE) Consulting

Continued to Page 10

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Artificial Intelligence and end-to-end automation seem to be the buzz word in business and technology circles these

days. These are technologies that are bringing about radical changes to the way businesses are run on a day to day basis. The operational efficiency and customer experience these technologies bring in are unparalleled and it is predicted that almost all organizations will significantly adopt AI and end-to-end automation in several processes in the next few years.

While these technologies are brilliant in themselves it is far too utopian to think that they will replace humans completely in the organization. These technologies will simply replace repetitive work within a process pushing the employees into roles that require more cognitive thinking much like how the world doesn’t need ledger keepers or typists anymore. Technology used to change only once every 8-10 years until a decade ago, now it does every year and in some organizations much faster. If this change was not enough most sectors are governed by ever-changing regulatory compliance, employee role changes and attrition. Mergers and acquisitions bring about large scale changes which are driven by people, process and technology integration.This leaves an obvious elephant in the room (or in the city office!) – Managing Change effectively and completely.

Like all good practices, Change Management too is a culture that is inculcated within the organization. Change is the most difficult aspect of human behaviour to achieve and Employees need to be sensitized about the benefits change will bring about in their own job roles. This cultural shift is entirely driven by the stakeholders at the Board level ensuring that the Executive Management buys into the concepts and more importantly believes in it.

Another critical aspect is choosing the right methods and tools for business change. Employees make changes to technology, employees conduct impact analysis, employees make changes to processes, employees need to adhere to regulatory polices, employees need to use changed technology to deliver superior services to customers. Yet employees are provided with yesteryear’s change management methods and tools.

While operations and regulatory compliance impact analysis tools are virtually non-existent out of the box, change related competency enhancements are carried out by outdated tools such as a learning management systems or e-learning tools. Change information related to the process itself is embedded inside complex BPM tools that can be decoded only by analysts or technology folks and documentation tools provide the repository of business information documents that runs into hundreds of pages, defeating the very purpose of easy change management.

Most organizations are using one or more of these tools to achieve change management, which in itself has a fundamental flaw. These are not integrated systems that target employee experience during change management. Change Management should be driven by simple visual process information that can be interpreted without ambiguity across the organization. It should integrate regulatory information, IT system information and documentation related only to the specific process that is being accessed. The employee should be able to only see the information pertaining to her everyday work, nothing more nothing less. She should be able to understand all of this in a couple of minutes and not need to spend hours trying to link and put together various pieces of information she is seeking by herself. Finally, the management must have superior tools to investigate the impact of any operational or regulatory change and have an easy way to broadcast, collect acknowledgement and test the knowledge about the change of the employees. All of these must work in one single system to make change truly effective.

Change Management- the secret weapon for a volatile business landscape

Arun KumarSubject Matter ExpertChange Management & ComplianceMorison (UAE) Consulting

Continued to Page 10

In India, e-tailers like Amazon, Flipkart and Snapdeal in recent years have not only made the below 30 their ardent buyer

from their online platform but also have of late been able to net the people in the age group of 30 to 50 as their customers. In the case of below 30 customers the e-tailers offered them latest imported items under fashion accessories and electronics which the brick & mortar players where not offering with wide choice range of the online players. For above 30 the value proposition that the e-tailers brought in was not just convenience of buying but also the price discounts compared to physical stores that could not be ignored. More and more niche e-tailers entering the consumer segment and internet data availability and usage costs becoming cheaper is further giving fillip to the e-retail business gaining more traction from the masses leading to share of online purchase increasing at the cost of physical stores.

Why the Brick & Mortar Players adopted an “Ostrich like attitude” to the e-tailers when the war began between them and e-tailers? Did they believe that the buying habits of people are hard to change? Did they believe that people used to buying from physical stores would not buckle to the emerging trend purchasing online? Did they believe that the e-tailers do not have a robust business model that can last long? Did they believe more highly about their physical stores model compared to shopping online model? Was legacy management style of the Brick& Mortar Players refused to foresee the technological revolution happening propelled by internet? In my opinion there is a combination of above factors besides others that led to growth of e-tailers and physical retailers slowly losing some space to e-tailers.

The most notable change that has led to growth in market

8

Catch -22 for Brick & Mortar Retailers

– e-retail or not?

SathyavageeswaranPrincipal ConsultantRetailNEST

www.Retailnest.com

share of e-tailers is the fast changing technology in the hardware, software and data connectivity options that have become widely available and the price of the mobile and data technology falling drastically in the last five years. A new breed tech-savvy young entrepreneur is creating software and online marketplace that is creating easy interface between small and medium retailers and buyers in the market place making online transactions a child’s play. The secured payment gateways offered by banks and credit card companies with additional security options by sending PIN for each transaction has also increased the customer’s confidence to shop online.

The management of big retail companies in many cases were often myopic, not to notice the software and communication revolution happening and impact on their sector. If only the top bosses at retailers had realised that the first victim of the technological and communication revolution was the traditional banking and insurance industry and next would be retail they could have better prepared themselves to face the onslaught of the e-tailers.

The information technology and internet totally changed the way banking is done today compared to the late 90’s and the early 2000. Then also in India it was the India-based new private banks such as HDFC and ICICI besides Citi and HSBC which started the ATMs and online banking in a big way when the traditional government banks scoffed at them.

The traditional banks also patted themselves when online frauds happened at the nascent stages of the e-banking. During the initial years a majority of the customers of the banks also initially were reluctant to deal with their banks through online platform, fearing online fraud. As technological advances made online banking safe, more customers began to bank online and today online banking has sizable share in terms of number of transactions and in terms of value it has surpassed traditional banking at counters.

Banks that avoided automation have now aggressively migrated to online platforms and in many cases such as State-owned State Bank of India has even outgrown the private players in terms of automation and online offering of features and service for its customers.

9The management of many Brick & Mortar retailers with more than two to three decades of experience initially ignored the e-tailers and looked at e-tailers with contempt as many of the e-tailers had their CXO’s in early 20’s. They also had full faith in their ability to brainwash their customer base through print and electronic media about perceived failings of the e-tailers and celebrated the failures of the e-tailers as their success. They totally underestimated the capability and capacity of the e-tailers to bounce back after each failure with greater success and more offerings for the online shoppers.

In many cases the Brick & Mortar stores created failure stories about online players offering inferior product through their platform or lack of after sales support, though the physical stores themselves were never good in providing after sales support. Rather the online players like Amazon and Flipkart with their free 30 days return policy where offering the customers something that the physical stores had never offered to customers in many Asian markets including India for decades.

Today the online players are gaining more customers at the expense of physical stores. The primary reasons are the cheaper price of buying same/ similar product compared to physical stores, getting same or next day delivery at home, ability to see the product with three-dimensional view, multiple payment options like debit card, credit card and cash on delivery, wide choice of goods to compare and in some cases like mobile phones exclusive launches of new phones only through online platform. In families where both spouse work, due to high commute time to place of work shop online has become a convenient option hard to resist. With more and more e-tailers offering goods online, almost everything which was exclusively available at physical stores can be now bought via your mobile handset.

For most Brick & Mortar retailers, the shift in the retail ecosystem has negatively impacted revenues. Show-rooming has become a reality— the shopper uses the information provided by the staff at the store but eventually makes the purchase online, sometimes even while he/she is in the premises of the store using the free-wifi connectivity offered by large physical stores. Many physical retailers are beginning to understand the power of e-platform and pervasive use of mobile technology by people of all age group

which is leading to people experimenting with online purchase and many finally converting to online shopping as their primary mode for many categories such as books, shoes, mobile phones, consumer electronics, gifts, fashion accessories and apparel.

Having made huge investment in real estate by leasing or building physical retail stores the Brick & Mortar players are in a real dilemma. They cannot totally junk their business model and put their business and that of their lenders at risk. At the same time ignoring the e-tailers and not adopting a hybrid model whereby they have their own online shopping platform for their customers is a proposition they can no longer ignore. By having both physical stores and online platform they would end up competing against their own online format of stores, besides competing with other e-tailers. A very complex scenario of business model, where their online formats of stores would have to set a pricing for product that is lower than physical stores to match their competitors online. Such an approach would require them to revisit their physical stores business model and growth strategy and would definitely require junking some of their existing business plan and more importantly their earlier mind-set about online retail format.

The Brick & Mortar players also need to play to their strength when adopting a hybrid model of physical and online retail formats. In case certain category of purchases (e.g. home appliances and white goods and groceries) the shoppers like to touch and feel the product before they commit purchase online. In such scenarios the physical retailers can definitely have more loyalty from their customers by offering them touch and feel option besides attractive pricing.

e-retail is here to stay and Brick & Mortar players can no longer pretend to ignore the e-tailers. They need to revisit their business model that is built on physical stores expansion and identify product categories where they need to offer online platform for customers to shop. They may also need to take the hard decisions of closing many of their physical stores or stop certain products from being offered at physical stores. Brick & Mortar retailers will have to bring in below 30 tech savvy entrepreneurs into their management to successfully leverage the fast changing technology in the online retail space.

The awards were presented at the World Today Business Conclave 2016- IUA – The New Super Power at Ritz Carlton, Abu Dhabi. This is an initiative of United Research Services International and AsiaOne Magazine research project with PricewaterhouseCoopers P.L. as the Process Reviewer.

Morison Menon and Raju Menon honoured as“World’s Greatest Brands and Leaders 2015-16 - IUA”

CA. Raju Menon, Chairman and Managing Partner, Morison Menon Group”, was selected as one of “The World’s Greatest Leaders 2015-16 - India- UAE- Africa”

“Morison Menon “ has been selected as one of the “The World’s Greatest Brands 2015-16- India- UAE- Africa” under the “Services” category.

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Change Management is one of the most complex organizational challenges because it involves large set of people. It is imperative that the following steps are considered to make it potent:

1. Make employees the focus from the planning stage of any transformation or change management programme.

2. Choose the right technology tools to engage the employees effectively. If their buy-in is subpar then the effectiveness of any initiative is limited.

3. Ensure that all elements of the organizations that need to be consumed viz. processes, regulations, documents, procedures and policies, technology system information, are completely integrated with one another.

4. Deliver only role specific information to each employee, this cuts the clutter and helps find the right information at the right time easier.

5. Each set of information need to be kept “bite-size” and contextual. This ensures that the information is easily digested.

6. Supervisors must analyze the inter-connectedness of each organization elements with one another. E.g. What processes and IT system functionality change because of a regulatory change, in turn how many locations and employee roles are affected?

7. Have a realistic approach to understand the employee awareness of the change. E.g. (a) Have a quick 2 min objective type online test about the change, 45 days after the change has been communicated. (b) analyze the number of hits a particular information gets from each employee role.

8. Build in effective feedback loop from the employees. This helps in fine tuning the method and tools.

Finally, one needs to be pragmatic and not over engineer the methods or the tools. Like most things in life, keeping it simple helps in making change management, manageable.

Continued from Page 6

Continued from Page 7

Despite an oil price recovery to approximately 50 USD per Barrel in Q2 2016, there seems little evidence of this cost cutting trend reversing. This must also be viewed in the context of an ageing infrastructure and uncertainty in asset integrity particularly in the Middle East Region.

While the Oil & Gas and allied sectors continue to implement traditional measures of ORM as a basis for reducing operational risk (e.g. carrying out Task / Job Safety Analysis Risk Assessments, updating operation management, Permit To Work and Management of Change (MOC) Procedures as an asset is modified during its life cycle) incidents continue to occur. This seems to suggest that organizations in the sectors are missing something here?

It is further suggested that a new approach to and emphasis on ORM is required and embedded into an organisation’s Enterprise Risk Management (ERM) Strategy, processes, policies, procedures and decision making in order to reduce the likelihood of untoward events and incidents occurring.

How can companies not compromise on ORM in a low oil price scenarioGiven what we know and understand, it can be concluded that:• Operational risk exposures are further exacerbated in

a low oil price scenario given current cost reduction measures undertaken in the sectors considered pending investment focus, which should be as a minimum relate to Safety Critical, Maintenance Critical and Asset Integrity aspects;

• Operational risks need to be managed more proactively with a new paradigm thinking approach, if assets are to be sustainable and organization goals of maintaining and maximizing production safely are to be achieved.

Such a paradigm shift in thinking and approach to operational risk management of an asset during its operation lifecycle should give due consideration to the following:• Adopt a modern ERM approach to operational risk

management whereupon operational risks are considered and embedded in Strategic planning, ERM processes and Decision making which includes a critical review of current practices, procedures, performance and Gap Analysis;

• Identification of all Operational Risks and their categorization including range of possible outcomes ;

• Being Proactive not Reactive in Risk Measurement with an emphasis on Detection( source Historical / Industry Data / Other ) ; expressed in terms of loss frequency and severity and development of Risk and Residual Risk mitigation strategies rather than traditional current models;

• Develop robust and systematic processes for making business decisions where the level of risk to be assumed

net of controls is aligned with the risk appetite and risk tolerability criteria of the organization including stress testing;

• Build lessons Learned into operation risk Decision Making and control strategies and implement Asset Reference Plan, Asset Integrity planning and Best in Class Operational and Maintenance Practices;

• Revise / Align current policies, procedures ( e.g. Management of Change; Job Safety Analysis, Permit to Work etc ) operational management systems and risk / residual risk control measures in line with Best ORM Practices to ensure achievement of operational risk goals;

• Carry out independent risk based audits

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CA. Raju Menon with Pinarayi Vijayan, Honorable Chief Minister of Kerala State, India at the Chief Minister’s Office in Thiruvananthapuram, Kerala.

CA. Raju Menon with Dr. Thomas Isaac, Honorable Minister of Finance, Kerala State, India at the Finance Minister’s Office in Thiruvananthapuram, Kerala.

Sudhir Kumar interacting with the senior Academia of Higher Colleges of Technology, Dubai Men’s College during the delegation visit to Morison Menon Head Quarters, Dubai, UAE.

Justice N. Santhosh Hegde, Former Judge of Supreme Court of India and Former Lokayuktha of Karnataka inaugurating the new offce of our associate K B Nambiar & Associates, Bangalore. Seen along is CA. Raju Menon and CA K. Rajkumar - Managing Partner, K B Nambiar and Associates.

Sudhir Kumar with H. E. Noura Al Kaabi Minister of State for Federal National Council Affairs during the UAE delegation visit to Mumbai, India.

Sudhir Kumar with John Chambers, Executive Chairman & Former CEO of Cisco Systems during the inauguration of the Make in India, Mumbai event organized by the Ministry of Commerce and Industry, India.

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Layout and Design: IPIX Solutions Pvt. Ltd, www.ipixsolutions.com A group entity of Morison Menon

Dubai Future Accelerators

Dubai Future Accelerators was launched by Dubai Executive Council to ensure innovative and path-breaking technologies could be implemented quickly and seamlessly. This program is designed to enable entrepreneurs and ideators to convert their visions into reality, and run successful businesses. It will bring entrepreneurs and big corporations together to tackle 7 crucial ‘21st Century Opportunities’.

This will include best practices for specific industries, innovative business models, implementing state-of-the-art technology like 3D printing, artificial intelligence, genomics, robotics, and biotechnology. It has been structured around seven vital Government departments of Dubai like RTA, DEWA, Dubai Municipality, DHA, KHDA, Dubai Police and Dubai Holdings.

Technologists and entrepreneurs will be invited to present plans to tackle one of the announced challenges by implementing inventive products or technology. Winners will be flown to Dubai and given exclusive workspaces, unhindered access to a cutting-edge prototyping lab and get to interact intensely with Government officials championing specific causes. A 3-month program will follow where the participants will work closely with experts to develop proposals for global top-notch prototypes and to conduct test runs. Eventually, winners will be selected based on the potential shown by their solutions, and those will be commercially developed and deployed. Investors and interested buyers will also be able to interact with participants in the end.

The challenges and applications will be announced soon and the competition will be thrown open to everyone from multinational corporations to enthusiastic start-ups provided they are able to offer a working model that is capable of tackling one of the crucial challenges that will be announced.

According to a UAE official, the Dubai Future Accelerators (DFA) program received mind-boggling submissions in just a month for the program’s first cycle, slated to start on September 12, 2016: over 2200 companies spanning 73 countries and 7 continents, including a submission from Antarctica-based scientists. There are only 35 slots available and acceptance ratio will be just at 1%; these facts have marked the DFA as one of the most prestigious programs in the world. It has garnered the attention of top-notch venture capitalists and incubators (who have given positive feedback since DFA’s inception) along with entrepreneurs. Most submissions were from the USA, followed by UK, Germany, India, Singapore, and Australia, and local start-ups.

DFA is expected to cement the position of Dubai and UAE as major players in honing markets for 21st century technology and implementing tech-based solutions to improve lives. Officials claim that the global excitement surrounding the program is proof that the UAE’s approach to promote innovation and entrepreneurship to drive the future economy, is sound, and help forge the UAE’s leadership in key sectors.

Breakup of applications received: Education Sector 24%, Advanced Technology 19%, Infrastructure 13%, Transport 13%, and Safety 5%.

- Compiled by Morison Menon Corporate Services

Business & Business Regulations-Update12

DIRECTORY

The information conveyed in the newsletter are the individual opinions of the respective authors and is not the combined opinion of Morison Menon Group.

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