Dubai SME 100 Rankings

2013
Applicant Guide
19th November, 2012

Contents
Key coverage areas

Overview of SME 100

Core objectives
Eligibility Criteria

Application Process
Evaluation Themes
Glossary

Overview of Dubai SME 100

Background
Dubai SME 100, launched by the Mohammed Bin Rashid Establishment for SME
Development (MBRE), is a premier ranking of Dubais 100 top performing SMEs.
Following the success of the inaugural ranking, the Dubai SME 100 Rankings for
2013 seek to identify Dubais top SMEs that are role models for the business
community. Unlike other rankings which are based mainly or purely on financial
indicators, the Dubai SME 100 ranking places a balanced emphasis on financial
and non-financial themes that affect enterprise performance and development.
More than just a ranking, the objective of Dubai SME 100 is to inspire willing and
able SMEs that have the potential to be world-class enterprises, to invest in
innovation and people to sustain growth.
The ranking also serves as a tool for helping SMEs identify capability gaps for
improvement. This is the real value add of Dubai SME 100.
The ultimate outcome is for Dubai to have more growth-oriented, innovative,
capable and sustainable enterprises that can fly the UAE flag high.
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Contents
Key coverage areas

Overview of SME 100

Core objectives
Eligibility Criteria

Application Process
Evaluation Themes
Glossary

Core Purpose and Objectives

Key objectives of the 2013 Ranking
Core Purpose

Showcase and groom SMEs that Dubai can be

proud of

Create a
culture of
transparency
and
governance

Objectives

Identify and
share best
management
and
excellence
practices

Create greater
awareness
and a national
motivational
psyche

Showcase
and groom
SMEs that
Dubai can
be proud of

Market the
capabilities of
Dubais SMEs
to global
investors

Encourage
and inspire
SMEs to be
part of Dubai
SME 100

Create and
celebrate
Dubais SME
icons

Contents
Key coverage areas

Overview of SME 100

Core objectives
Eligibility Criteria

Application Process
Evaluation Themes
Glossary

Eligibility Criteria
Participating SMEs to meet the following eligibility criteria
To be eligible for the Dubai SME 100 ranking, an enterprise should meet
the threshold defined by the official definition of SMEs in Dubai as
shown below.
An SME is defined as an entity engaged in an economic activity, with a
legal form i.e. registered as a business either with a Commercial Registry
(DED) or with a freezone / industrial zone and meets the thresholds of
employee headcount AND turnover as applicable to the industry group it
belongs to (Trading / Manufacturing / Services) as specified by MBRE.

Eligibility Criteria
Participating SMEs to meet the following eligibility criteria
Criteria

Description

Type of company

The enterprise must be a for-profit business.

Presence

The enterprise must be registered in Dubai; either with

Department of Economic Development or with a free zone
authority in Dubai

Existence

The enterprise must be in existence in Dubai for a minimum

period of 3 years at the time of application.

Audited Financial
Statements

The enterprise must disclose audited financial statements

for the past 3 years for the purpose of screening and
follow-up application.

Willingness to
Participate

Once shortlisted for evaluation, the enterprise must

participate in the process of discussions, interviews, site
visits, etc. and must furnish supporting details as required.
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Contents
Key coverage areas

Overview of SME 100

Core objectives
Eligibility Criteria
Application Process
Evaluation Themes
Scoring Framework
Glossary

Application & Ranking Process

Overview of the process Key stages
1

Interested SMEs can

register with by
completing a simple
Registration Form

6
Final evaluation by SME
100 team to arrive at
Top 100 SMEs in Dubai

Eligible SMEs would

receive a registration
number with username
& password from SME
100 team

5 Shortlisted SMEs would

be visited by SME 100

Team for further
evaluation on nonfinancial parameters

SME to login on the

website and provide
more details about
their business by filling
up an Application
Form

Applicants are
shortlisted based on
financial parameters
and invited for further
participation

7
Launch of Dubai SME
100 Rankings for 2013

10

Application & Ranking Process

Overview of the process (1/6)
1
Interested SMEs can
register with by
completing a simple
Registration Form

11

Application & Ranking Process

Overview of the process (2/6)
2

Eligible SMEs would

receive a registration
number with username
& password from SME
100 team

12

Application & Ranking Process

Overview of the process (3/6)
3

SME to login on the

website and provide
more details about
their business by filling
up an Application
Form
Business
Overview
(200 Words)
Trade License
Copy
Company Logo

Upload

Upload

3 years
audited
financial
statements
Company
Presentations

Upload

Upload

SUBMIT APPLICATION

13

Application & Ranking Process

Overview of the process (4/6)
4

Applicants are
shortlisted based on
financial parameters
and are invited for
further participation

Growth performance: Sales & Profit

growth over the past 3 years

ABC
Ltd.

XZY
FZCO

Short-listing
on Financial
Parameters

Financial soundness: Assessment of

Liquidity & Solvency ratios

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Application & Ranking Process

Overview of the process (5/6)
5

Shortlisted SMEs would

be visited by SME 100
Team for further
evaluation on nonShortlisted SMEs will be
financial parameters informed about their
selection through an
email
SME 100 team will
schedule appointments
with shortlisted businesses
for site visits & provide
advice them advice on
required preparation for
these site visits

SME 100 Team will

conduct site visits and
have detailed discussions
with SME management

Assessment on Non-Financial
Parameters

Innovation
Human Capital Development
International Orientation
Corporate Governance

15

Application & Ranking Process

Overview of the process (6/6)
6
Final evaluation by SME
100 team to arrive at
Top 100 SMEs in Dubai

Computation
of company
level scores

Various parameter scores will be assigned to the

Applicant SME by the SME 100 team. The team will then
aggregate various parameter scores into an overall
composite score, for every business / SME.

Inputs from
Industry
Experts (Panel)

The overall composite score for each SME will be run

through a panel of experts who will review and validate
the scores.

Computation
of Final
Rankings

Based on the overall composite score, the top 100 Dubai

SMEs will be tabulated. MBRE team will accordingly
announce the ranking list of Dubai SME 100, 2013.

Generate
feedback
reports for
SMEs

To conclude, each SME would be given specific feedback

on their performance, with insights on areas of strengths
and diagnostics on potential areas improvement ( in
context of ranking parameters)

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Contents
Key coverage areas

Overview of SME 100

Core objectives

Eligibility Criteria
Application Process
Evaluation Themes

Glossary

17

Evaluation Themes
Overview of theme areas and key weights

Growth
Performance

25%

Financial
Soundness

25%

Innovation

15%

Human Capital
Development

15%

International
Orientation

10%

Corporate
Governance

10%

Financial
Parameters
50%

SME 100
Evaluation
Criteria

Non-Financial
Parameters
50%

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Evaluation Themes
Overview of key themes
1. Growth
Performance

6. Corporate
Governance

2. Financial
Soundness

Themes

5.International
Orientation

3. Innovation

4. Human
Capital
Development

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Evaluation Themes
Explanation of Parameter

1. Growth
Performance
25%

Growth performance refers to the growth of the SME applicant in

terms of business performance, measured over a period of 3 years.
Growth performance measurement entails:
Growth in sales - i.e. Cumulative annual growth rate (CAGR) in
total sales over the 3 year period
Growth in net profit - i.e. Cumulative annual growth rate
(CAGR) in net profit over the 3 year period

2. Financial
Soundness
25%

Financial Soundness indicates the current financial strength of the

applicant SMEs business
The assessment of financial soundness is based on a combination of
various financial ratios including return ratios (Return on Net worth,
Return on Total Assets), liquidity ratio (Current Ratio), leverage ratio
(Debt to Equity Ratio) and cash flow ratio (Cash Flow to Sales).

Note: please refer to glossary of financial terms at the end of this presentation for all the financial terms used in the section above

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Evaluation Themes
Explanation of Parameter

3. Innovation
15%

Defined as 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.
Refers to both the process of doing something new and the output or
result arising from the innovative actions. Innovation may be linked to
performance and growth through improvements in efficiency,
productivity, quality, competitive positioning, market share etc.

4. Human
Capital
Development

15%

Defined as the knowledge, skills, competencies and attributes

embodied in individuals that facilitate the creation of personal, social
and economic well-being.

In the business context, it includes the competencies and commitment

of the people within an organization i.e. their skills, experience,
potential and capacity.
It can be a source of competitive advantage for organizations.
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Evaluation Themes
Explanation of Parameter

5. International
Orientation
10%

6. Corporate
Governance
10%

International orientation includes the firms efforts to sell goods /

services in the international market
It includes international outreach through joint ventures, alliances,
distributorships, agency arrangements, etc.

Corporate governance, while underpinned by the principles of

openness, integrity, and accountability, is about the management and
control of companies, providing a framework that defines the rights,
roles, and responsibilities of various groups. Companies will be
assessed on presence of Advisory Board, documentation of rights,
roles & structure of the Board of Trustees, effectiveness of
management control and documentation of key policies & procedures.
This theme will also measure companys efforts towards achieving
corporate excellence as demonstrated by Awards, Quality
Certifications and desired Emiratization levels.
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Contents
Key coverage areas

Overview of SME 100

Core objectives
Eligibility Criteria
Application Process
Evaluation Themes
Glossary

23

Glossary
A

Applicant SME: Applicant SME is an SME organization

which has registered with MBRE and has applied for the
Dubai SME 100 evaluation process. The terms Applicant
SME and SME Applicant may be interchangeably used in
the Application Forms and Guidebook

Assessment Interview (also referred to as Management

Interview): After the SME has been shortlisted for stage
2 evaluation, Dubai SME 100 Team would conduct indepth interview with the top management/ owner on
various non-financial parameters

Advisory Board - A group of individuals who've been

selected to help advise a business owner regarding any
number of business issues, including marketing, sales,
financing, expansion and so on; a body that advises the
board of directors and management of a corporation but
does not have authority to vote on corporate matters

B, C

A Board of Directors is a body of elected or appointed

members who jointly 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)

Current financial year: Financial year ended 31

December 2009 or 31 March 2010 or any other latest
financial year up to the cut-off date as decided by MBRE

Current Ratio: The ratio shows a company's ability to

pay its current obligations from current assets (refer
financial glossary for formula)

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Glossary
D

Data: Set of information provided along with a particular

story

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)

Evaluation Themes: Themes defined and used in

evaluation of the application from SMEs to arrive at
Dubai SME 100 rankings. Two broad categories of
evaluation themes are Financial and Non-Financial

Dubai SME 100 Team: Consultants / part time

employees or full time employees working with MBRE to
assist SMEs in the evaluation process

Evidence: supporting for data and story e.g. internal

documents, audited financial statements, policy
manuals, database, memos, internal reports etc.

Eligibility Criteria: To be eligible for the Dubai SME 100

ranking, an enterprise should meet the threshold
defined by the official definition of SMEs in Dubai (as per
MBRE definition) and in addition must fulfill certain
other requirements as well

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Glossary
J

Jury / Panel: Dubai SME 100 jury would comprise senior

members from MBRE or Dubai business community /
government sector who would analyze each SMEs case
and take a final decision on the theme scores based on
story, data and evidence provided for the theme
parameters by the applicant SMEs

PR

Parameter Groups: Parameters on which an applicant

SME would be evaluated have been grouped into
categories called as parameter groups

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)

Management Remuneration as part of expenses:

management remuneration, which is charged to the
income statement as an expense in the financial year

MBRE: Mohammed Bin Rashid Establishment for SME

development

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Glossary
Financial Glossary

Business profit: Business Profit is arrived at after

deducting all the expenses (operating and nonoperating) from the total income (sales and other
income) for the financial year. In normal circumstances
Business Profit is the same as Profit after Tax.

For the purpose of Dubai SME 100, it is noted that some

SMEs (especially those in DED registered firm that have
49% expatriate owner) 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 expatriate owner. 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 organizations auditors.

CAGR: Compounded annual growth rate. General

formula: ((Vn/V1)^(1/No. of intervals))-1; where Vn is
the value for the last period and V1 is the value of the
first period.

Current Assets: Current Assets are all the assets that

are reasonably expected to be converted into cash
within one year in the normal course of business.
Current assets include cash, accounts receivable,
inventory, prepaid expenses and other liquid assets that
can be readily converted to cash

Current Liabilities: A company's obligations those are

due within one year. Current liabilities appear on the
company's balance sheet and include short term debt,
accounts payable, accrued liabilities and other debts.
These are bills/payables that are due to creditors and
suppliers within a short period of time.

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/ Shareholders
Equity

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Glossary
Financial Glossary

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: Total amount of interest paid by the
organization for the total external short and long term
debt obligations
Net Profit: The net income of the business which is
arrived at after deducting all the expenses (operating
and non-operating) from the total income (sales and
other income) for the financial year. The term can also
be referred to as Profit after Tax.
Profit after Tax: The net income of the business which is
arrived at after deducting all the expenses (operating
and non-operating) from the total income (sales and
other income) for the financial year. The term can also
be referred to as Net Profit
Return on Assets: This ratio measures profitability of an
organization by expressing 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/
Shareholders Equity

Shareholders Equity: Shareholders equity is defined as

the shareholders /owners/ partners owned funds which
are invested in the SME. It includes

Paid-up capital

Statutory and other reserves

Retained earnings and

For the purpose of Dubai SME 100, SMEs which have

Partners/owners long term (interest-free) loan account that

can be substantially seen as being in the nature of equity OR

Any other long-term stable liabilities in the nature of interest

free loans from related parties that can be substantially seen as
being in the nature of equity

appearing as liability in the SMEs balance sheet, the

shareholders equity will mean an aggregation of (i) to
(v) as mentioned above and as substantiated by the
SMEs auditor.

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