ABOUT THE SME EXCELLENCE LIST
· What is the SME Excellence List?
The SME Excellence List is a collection of the top performing SMEs in Qatar that rank high in parameters that enable a high success rate. The SME Excellence List is an effective method of identifying upcoming and promising SMEs and encouraging them to grow and be sustainable organizations. The Qatar Development Bank has launched the SME Excellence List to assess and shortlist the top performing SMEs in Qatar and inspire them to be world class enterprises.
· Why do we need to have the SME Excellence List?
The SME Excellence List serves the purpose of assessing the top performing SMEs in Qatar and inspiring them to become bigger, better and sustainable enterprises. It improves competition in the economy and leads to innovation, improved quality, motivation and knowledge enhancement. The SME Excellence List is in line with the Qatar National Vision 2030, to promote and facilitate development and growth of small and medium enterprises in economic terms that will lead to socio economic benefits to the people of Qatar. Overall, the SME Excellence List will act as a catalyst for enhancing confidence in the business community.
· How is it different from other Rankings / List?
The SME Excellence List ranks businesses on financial and non financial parameters and therefore is unbiased. With the help of this list, businesses gain recognition, more prestige and credibility.
ELIGIBILITY & PARTICIPATION
· What are the eligibility parameters for participation?
To be eligible for the SME Excellence List, an enterprise must meet the following criteria;
o Type of company:
1. A commercial, for-profit enterprise, engaged in value-added economic activity in Qatar
2. Based in Qatar with a minimum 51% of Qatari shareholding
o Existence in Qatar:
1. In existence in Qatar for a minimum period of 3 years at the time of application
2. Holding a valid Commercial Registration number in Qatar
o Willingness to share information:
1. Willing to disclose financial statements for the past 3 years for the purpose of screening as well as performance evaluation. Un-audited financial statements will be considered for assessment; however enterprises with Audited Financial statements will be given a preference in the SME Excellence List.
2. Once shortlisted for evaluation, the enterprise will be required to participate in the interviews, and site visits. They will also be required to furnish additional documents to support and validate the discussions during/after the site visits.
For details please refer to the link.
· Can we participate if we are a branch of a foreign company?
NO. The SME Excellence List supports domestic and/or home grown businesses only and is not open to branch of foreign companies.
· Can we participate if we are a holding company or subsidiary of a large enterprise?
The key eligibility parameter is alignment to the Qatar SME definition. If the Applicant SME satisfies the SME requirements it will be eligible to participate in the SME Excellence List.
· Can both the holding company and its subsidiary participate in the SME Excellence List?
NO. The Applicant SME can either be a holding company or a subsidiary. Thus the owner/CEO will need to decide the best application to be included in the current ranking cycle. Both the Holding company and the subsidiary cannot participate in the Excellence List, in the same cycle of evaluation.
· We follow a financial year ending 31st March every year, are we eligible to participate in the SME Excellence List?
YES. An SME is eligible to participate if they follow a financial year ending 31st March every year
· Can we apply even if we have witnessed a drop in our sales / profits in the previous financial year?
YES. An SME can participate even if they have witnessed a drop in sales/profits. Applicant SMEs are evaluated on the basis of financial and non financial parameters
APPLICATION & PROCESS
<liWhen does the registration process begin?
The registration process begins from 1st March 2016 and the deadline for applications is 15th April 2016.
· What are the key stages in the SME Excellence List Process?
The key stages involve Registration, Application, Phase I Decision Making, Site Visit Meeting where SMEs will be evaluated, Final Evaluation and Phase II Decision Making. For details please refer to the link.
· Do we need to dedicate a team for the SME Excellence List Process?
YES. It is recommended to the Applicant SME that they may appoint a person in charge for the communication and application process for a hassle-free process.
· Is there a fee for application?
NO. There is no fee for application. It is absolutely free of charge.
· Do we need to fill and submit all the sections in the application form?
YES. The Applicant SMEs will need to fill and submit all the sections in the application form. In case of any queries please contact: (firstname.lastname@example.org)
· Do we necessarily have to complete the form online?
YES. The application form is Web and Mobile enabled and you can apply through both channels. The SME Excellence List encourages Applicant SMEs to be digitally active and apply online.
· What happens once we submit the application online?
Once the complete application is submitted online the independent evaluator teams will shortlist the Applicant SMEs based on financial criteria. Once shortlisted for evaluation, the enterprise will be required to participate in the interviews, and site visits. They will also be required to furnish additional documents to support and validate the discussions during/after the site visits. Applicant SMEs can view the status of their application online once they create a Username and Password and complete the application form.
· What if we do not have our financial statements ready at the time of application?
If an Applicant SME does not have recent financial statements at the time of application, the Applicant SME can submit previous financial statements, until the current year statements are ready. An SME must be willing to disclose financial statements for the past 3 years for the purpose of screening and performance evaluation. Un-audited financial statements will be considered for assessment; however enterprises with Audited Financial statements will be given a preference in the SME Excellence List.
EVALUATION & RANKING PROCESS
· On what basis would the ranking be done?
SMEs will be ranked on the basis of a pre defined set of financial and non financial parameters. Financial performance include: growth in turnover, growth in profits etc. Non financial parameters include: Entrepreneurship, Innovation & Technology Adoption, Employee Development & Retention, International Orientation, Corporate Excellence, Quality Orientation and Environmental Care & Protection
1. Financial Performance: Refers to the growth of the SME Applicant over the period of 3 years covering:
§ Growth in Sales
§ Growth in Profits
2. Entrepreneurship: Refers to the ability and willingness to create, develop and manage a business venture with its associated risks in order to make profits. Components includes :
§ Role of the Entrepreneur
§ Succession Planning
§ Entrepreneur Impact on the business
3. Innovation & Technology Adoption: Refers to a new way of doing something or "new stuff that is made useful”. It may refer to incremental and emergent or radical and revolutionary changes in thinking, products, processes, or organizations. Technology Adoption refers to the awareness of the technology available and the progress made through a series of steps leading to efficient and fitting usage for effective business management. Components include:
§ Management Vision and Commitment (Strategy & Resources)
§ Resources & Capabilities
§ Processes & Technology
§ Products & Services
§ Growth Performance
4. Employee Development & Retention: Refers to the development of knowledge, skills, competencies, and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being. Components include:
§ Management Vision & Commitment
§ Learning & Competency Development
§ Employee Motivation & Retention
5. Corporate Excellence: Refers to the below components highlighting the planning aspect of the business to ensure clarity and sustainability in the SME.
§ Documented Strategic Plans and Tools
§ Documented Policies and Process Manuals
§ Presence of Board of Directors / Advisory Board
§ Risk Management / Contingency Plans
6. Quality Orientation: Refers to ensuring high quality output, following procedures and taking corrective actions to issues pertaining to quality. Components include:
§ Processes for Quality Check
§ Quality Certifications
7. Environmental Care & Protection: Refers to practices followed to protect the environment, ensuring adherence to guidelines, certifications etc and ensure actions towards defined environment protection goals and challenges.
§ Environmental Care & Protection Goals
§ Environment Certificates
· What is the importance (percentage weight) attached to each financial and non-financial parameter in the process?
The parameter weightages were set with a view to get an overall balance in the ranking process. Financial Parameter constitutes 40% weightage whereas Non-Financial Parameter constitutes to the remaining 60%.
Under Financial Parameter:
o Financial Performance: 40%
Under Non-Financial parameters
o Entrepreneurship: 10%
o Innovation & Technology Adoption: 15%
o Employee Development & Retention: 10%
o International Orientation: 10%
o Corporate Excellence: 5%
o Quality Orientation: 5%
o Environmental Care & Protection: 5%
· How often will the Ranking be published and what will be the validity of the ranking?
The ranking will be published every 2 years. Therefore SMEs can use the ranking for 2 years from the date of publishing/announcement.
ROLE OF QDB
· What is the role of QDB in the Process?
Qatar Development Bank (QDB) is a financial entity fully owned by the government, set up by an Emiri Decree to invest in and develop local industries by supporting small and medium enterprises in Qatar. QDB has aligned its strategy to correspond with the Qatar National Vision for the year 2030, to promote and facilitate development and growth of small and medium enterprises in core economic realms, resulting with long-term socioeconomic benefits to the people of Qatar. Accordingly, the role of QDB is only to facilitate the SME Excellence List Process. The Shortlisting and evaluation will be conducted by an independent evaluator agency.
· How will QDB use the data provided by us during the process?
All the data (corporate presentations, manuals and financial statements) shall be held in the strictest confidence and be used only for the sole purpose of the evaluation and ranking. As a result of the Qatar National Vision 2030, QDB is developing new methods to support SMEs to help them commit to their goals and requirements. The QDB team will collate, tabulate and analyze the data at an aggregate level to present the overall state of SME growth and development in the economy
· What is the role of the Technical Panel in the SME Excellence List process?
The Technical Panel shall ensure transparency and validate the overall ranking of the independent assessors.
BENEFITS TO APPLICANT SMEs
· What are the benefits that an SME stands to gain from the SME Excellence List?
1. The SME Excellence List will help provide greater credibility and visibility to the SME across government entities as well as the private sector. Featuring in the SME Excellence List will help the SME position itself as one of the top-performers in the sector and thus assist them to win coveted procurement contracts
2. Featuring in the SME Excellence List will enable SMEs to be looked upon as a professional enterprises and thus attract a skilled pool of employees
3. All the above will consequently improve the competitiveness of the SMEs in Qatar
4. Additionally, the publication featuring the top performing SMEs shall be showcased locally, regionally and globally providing the Applicant SMEs greater visibility.
1. The Applicant SMEs undergoing the site-visit evaluations will obtain a feedback from the evaluators (at the end of Phase II decision) on their applications covering apparent areas of strengths and weaknesses, relative rankings and overall key improvement areas. This feedback will help the SME to build on its strengths and improve on its weaknesses
2. Applicant SMEs featured in the SME Excellence List will benefit immensely from the recognition and visibility provided by QDB, earning greater respect among the business and finance community.
· Applicant SME: Applicant SME is an SME organization which has registered and has applied for the SME Excellence List evaluation process. The terms Applicant SME and SME Applicant may be used interchangeably in the Application Forms and Guidebook
· Assessment Interview: After the SME has been shortlisted for Stage 2 evaluation, QDB Team would conduct in-depth interview with the top management or owner on various non-financial parameters
· Advisory Board: a group of individuals who advise the board of directors and management of an organization but do not hold the authority to vote on corporate matters. These individuals have been selected to help advice a business owner on a number of business issues such as marketing, sales, financing, and expansion and so on.
· A Board of Directors is a body of elected or appointed members who co-oversee the activities of a company or organization. Other names include board of governors, board of managers, board of regents, board of trustees, and board of visitors. It is often simply referred to as "the board". A board's activities are determined by the powers, duties, and responsibilities delegated to it or conferred on it by an authority outside itself. These matters are typically detailed in the organization's bylaws.
· CAGR: Compounded annual growth rate (refer financial glossary for formula)
· Category: Financial and Non-Financial (used in evaluation model)
· Latest financial year: Financial year ended 31 December 2015 or 31 March 2016 or any other latest financial year up to the cut-off date as decided by QDB
· Current Ratio: The ratio shows a company's ability to pay its current obligations from current assets (refer financial glossary for formula)
· Data: Information needed to conduct further research or analysis
· DE ratio: Debt to Equity Ratio – This ratio is a measure of a company's ability to pay off creditors' claims in event of liquidation (refer financial glossary for formula)
· SME Excellence Team: Independent team of specialized consultants mandated by the QDB to assist in the evaluation process
· Evaluation Themes: The parameters used to evaluate SMEs to arrive at the QDB Excellence List. Two high level categories used as evaluation themes are Financial and Non Financial parameters.
· Evidence: supporting documents such as audited financial statements, policy manuals, internal reports, database, internal documents that indicate a proposition is true
· Eligibility Criteria: an enterprise must meet the threshold by the official definition of SMEs in Qatar as per the QDB definition. Additionally, SMEs must fulfill other requirements.
· Technical Panel: The technical panel will comprise of senior stakeholders from the SME ecosystem of Qatar who will analyze each case individually and give a final verdict based on themed scores, data and evidence provided by the applicant SME
· Management Remuneration as part of expenses: management remuneration, which is charged to the income statement as an expense in the financial year
P - R
· Parameter Groups: Parameters on which an applicant SME would be evaluated have been grouped into categories called as parameter group.
· RONW: Return on Net worth - This ratio measures profitability of an organization expressed as a percentage of the shareholders funds invested in the organization (refer financial glossary for formula)
· ROA: Return on assets, this ratio measures profitability of an organization by expressing the efficiency of asset utilization (refer financial glossary for formula)
· Business profit: Business Profit is arrived at after deducting all operating and non operating expenses from the total income (sales and other income) for the financial year. In most circumstances Business Profit is the same as Profit after Tax.
· For the purpose of SME Excellence List, it is noted that some SMEs have management remuneration being charged to their profit and loss account as expenses. This “management remuneration” component represents the share of business profit that is passed on to the Qatari shareholder. Accordingly, such management remuneration is not a real expense in the business sense. Hence, in such circumstances, business profit will mean the profit of the business before deducting such management remuneration expenses.
· Business Profit as calculated above must be substantiated by the respective organization’s auditors.
· Current Assets: Current assets are assets that can be converted into cash within one year. It includes cash, inventory, prepaid expenses, accounts receivable and other liquid assets that can be readily converted to cash.
· Current Liabilities: Current liabilities are due within one year to creditors and suppliers. These include short term debt, other debt, accrued liabilities and accounts payable.
· Current Ratio: The ratio shows a company's ability to pay its current obligations from current assets. Formula for current ratio is: Current Assets/ Current Liabilities
· Debt to Equity Ratio: This ratio is a measure of a company's ability to pay off creditors' claims in event of liquidation. Formula: Total External Debt/ Shareholder’s Equity
· Growth: Growth in Sales or Business Profit represents change (Increase/ decrease) in value in the current period (year) over the previous period (year)
· Interest Expense: The total interest paid by a firm for the total short and long term debt obligations.
· Net Profit: After deducting operating and non operating expenses from the total income, i.e. sales and other income, the business arrives at the net income also known as profit after tax.
· Profit after Tax: After deducting all operating and non operating expenses from the total income, i.e. sales and other income, the business arrives at profit after tax. This is also known as net profit.
· Return on Assets: ROA measures profitability of a business by measuring the efficiency of asset utilization. Formula: (Business Profit for the current year + Interest Expense) / Total Assets.
· Cash Flow to Sales Ratio – Operating Cash flow/ Sales. Formula: Operating Cash flow is calculated as Net Income + Non-cash charges ( Depreciation & Amortization) + /- Changes in working capital
· Return on Net Worth: This ratio measures profitability of an organization expressed as a percentage of the shareholders funds invested in the organization. Formula: Business Profit for the current year/ Shareholder’s Equity
· Shareholder’s Equity: Shareholder’s equity is defined as the shareholders /owners/ partners owned funds that they invest in the SME. It includes
1. Paid-up capital
2. Statutory and other reserves
3. Retained earnings and