What Safety Measures Restaurants should take during the COVID-19 Pandemic

Steps restaurants can take to get more customers during pandemic

After months of being stuck at home during lockdown, even the most experienced home chef would be longing for a meal that he or she did not labour to make in their kitchen. For some, a reason to change out of their sleepwear and get out of the house—with or without the kids—is becoming more of a necessity to keep their sanity than a celebratory activity. In short, people are eager to be able to eat out again.

It is safe to say that most, if not all, in the food-service industry are also eager to welcome back the diners that they are used to serving. Business owners are eager to be able to reopen and recover lost earnings while the service staff is eager to earn again after months of being without work. There are also many who simply miss the satisfaction of serving people meals that nourish them and giving them an enjoyable dining experience; who missed the creative expression that came with their food industry jobs. Whether it is grabbing an inexpensive meal at a quick-service restaurant or an exquisite dining experience at a fancy restaurant, food safety and the assurance that a consumer will not go home with a COVID-19 infection is of paramount concern to everyone.

For the employers or business owners and their management team, the responsibility for prevention and management of outbreaks rests on their shoulders.

  • Take steps to ensure that staff adhere to existing and additional government regulations to keep the workplace safe while the COVID-19 threat still exists.
  • Conduct a COVID-19 risk assessment of the entire workplace; having a tried and tested business continuity plan in place would also be a big help.
  • Increase visible monitoring and enforcement of control measures including HACCP-based SOPs.
  • Conduct regular reviews, including seeking feedback from staff and customers to identify areas for improvement.

All employees, on the other hand, must be more vigilant, strictly following all processes put in place to ensure food safety. Although it is very unlikely COVID-19 could be transmitted through properly prepared food or food packaging that is properly handled, staff must observe good hygiene practices at all times.

  • Wash hands frequently with soap and water for at least 20 seconds (or sanitise), especially before and after handling food, cleaning cutlery, dishes, glasses, or other items to be used by the customer.
  • Staff that handle dirty or used items, collect used dishes from customer tables, and handle payments should be designated for these activities only, whenever possible.
  • All employees must ensure their thorough understanding of all HACCP principles and:
    • identify any food handling hazard;
    • identify the critical control points (CCPs) to prevent, remove or reduce a hazard;
    • set limits for CCPs;
    • monitor the CCPs;
    • immediately correct any problem with a CCP;
    • put checks in place to make sure the HACCP plan is working; and
    • keep accurate and up-to-date records.

There are other resources available for business owners that could help to further reassure their customers that their establishment is a safe environment for them to be in. The World Travel and Tourism Council (WTTC) has come up with a global safety stamp to recognise establishments around the world who have adopted policies and protocols that ensure the safety of consumers (for more info, click here). Certification agency Bureau Veritas has also launched a Safeguard label for shops, restaurants, and other confined spaces were people gather (for more info, click here or here).

With business owners and their employees clearly understanding how their cooperation will ensure their customers will be safe while in their premises, this will allow for a more comfortable, enjoyable, and most importantly, COVID-19 safe customer experience. If you are in need of help with regards to implementing HACCP or another food safety management system such as ISO 22000 in your establishment, contact Affiniax Partners for a free consultation.

 

UAE Economic Substance Regulation ESR: Major Overhaul

New ESR law 2020

The United Arab Emirates (“UAE”) Cabinet of Ministers issued Cabinet Resolution No. 57 of 2020 on 10 August, 2020. This resolution replaced the original Cabinet Resolution No.31 of 2019 (the original ESR law) concerning the Economic Substance Regulation (“ESR”). The UAE Ministry of Finance has now also updated its website with further information regarding the changes to the regulation. Since the application of the new resolution is retrospective (i.e. effective 1 January, 2019), all companies are advised to revisit Notifications already submitted.

The most prominent update in Cabinet Resolution No. 57 of 2020 was the appointment of the Federal Tax Authority (“FTA”) as the National Assessing Authority for the assessment and determination of ESR compliance and governance.

Major changes introduced in the ESR legislation include:

  1. The Federal Tax Authority has been appointed as the National Assessing Authority for the enforcement, assessment and determination of compliance with ESR rules by the licensees.
  2. The amended ESR (issued on 10 August, 2020) now covers juridical persons (those with separate legal personality) and unincorporated partnerships, while excluding natural persons – including sole proprietors, trusts and foundations. Also, the licensees that are now exempt include Investment funds, entities being Tax Resident outside the UAE and UAE branches of a foreign company (head office / parent company) whose relevant income is subject to Tax in a foreign country.
  3. As branches do not have separate legal identity from their parent or head office, they are not regarded as “Licensees”.
  4. Distribution & Service Center Business: The new regulation emphasises and clarifies that, for a trading business, there is no requirement to import and stock goods in the UAE in order to be considered as a Distribution and Service Center Business. Further, the law also clarifies that any services provided to foreign connected persons shall be considered a relevant activity (previously it stated that such services are only considered a relevant activity if they are “in connection with a business outside the State”).
  5. A Connected person shall be any entity that is part of the same group as a Licensee. Groups are defined as “two or more entities related through ownership or control such that they are required to prepare consolidated financial statements for financial reporting purposes under the accounting standards applicable thereto”.
  6. High Risk Intellectual Property Licensee The definition of a High-Risk Intellectual Property Licensee has been limited to an Intellectual Property Business that meets all of the following conditions:
    a) Licensee did not create the IP asset;
    b) Licensee acquired the IP asset from a connected person or in consideration for funding, research and development by another person situated in a foreign jurisdiction, and
    c) The Licensee has sold the intellectual property asset to a connected person or earns separately identifiable income from a foreign connected person in respect of the use or exploitation of the intellectual property asset.
  7. As the application of the amended ESR law is retrospective (i.e. effective 1 January, 2019), companies that have already submitted the ESR notifications based on the previously issued Cabinet Resolution No.31 of 2019 will need to re-submit the notification based on the new law for ESR i.e. Cabinet of Ministers issued Cabinet Resolution No. 57 of 2020. Further guidance on this matter is yet to be announced by the Ministry of Finance.
  8. The deadline for the annual ESR Notification is within 6 Months from the end of the Licensee’s financial year.
  9. The deadline for the annual ESR Report is within 12 months from the end of the financial year, same as before.
  10. The Penalty for non-submission of the ESR Notification by a licensee is now increased to AED 20,000 while the penalty for non-submission of the Annual report is now AED 50,000.

Given the above updates, and in particular the appointment of the FTA, the scope of ESR is increasing and demonstrates the UAE’s increased commitment towards international tax and reporting compliance. Also, the appointment of the FTA means that there shall now be a bridge between License issuing Authorities and the Federal Tax Authority. As observed in the enforcement of VAT laws in UAE, the FTA shall be thoroughly assessing the information being submitted under the ESR Notification and Annual Report.

It is strongly recommended that all Licensees re-assess and re-evaluate the already submitted ESR notification to ensure that they are in compliance with the updated regulation. Licensees that did not submit a Notification on the basis that the original ESR law did not apply to them may need to re-evaluate their position under the amended ESR law.

To understand more about how the above changes in ESR affect your business, please reach out to us on mail@Affiniax.com.

GUIDELINES FOR DMCC MEMBER ENTITY OFFICES AS PER COMPANY REGULATIONS 2020

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In line with the new rules and regulations set out on 2nd January 2020, DMCC has introduced guidelines to define the roles and responsibilities of DMCC member entities, who are required to comply with the following changes.

Officer Designation Applicable Rules
Director
  • Appointment of Director is mandatory for all Companies except Branches entities.
  • There is no maximum limit to the number of Directors that a DMCC Company can appoint, but a minimum of one Director is required.
Manager
  • Appointment of Manager is mandatory for DMCC member entities
Secretary
  • Appointment of Secretary is now mandatory for all DMCC Member Entities except Branches. Branches have the option of appointing a Secretary if they wish to do so
  • Only one Secretary is allowed per DMCC Member entity.
Legal Representative
  • Appointment of Legal Representative is no longer allowed for any DMCC member entity, but an Authorised Representative of the Company can be appointed with duly issued Power of Attorney.

DMCC Companies registered and licensed prior to the introduction of Company Regulations 2020, which has appointed a Legal Representative and has not appointed a Company Secretary will have a maximum of twenty-four months to comply with the new rules.

The registered Legal Representative will have to resign, and if the Company wishes, it can issue a Power of Attorney to the Legal Representatives in order to make him/her an Authorized Representative. A Company Secretary must be appointed in line with the new rules.

Branches established prior to the introduction of the new Company Regulations 2020, which have appointed a Director and Legal Representatives, will have to arrange for the removal of such Directors and Legal Representatives.

To know more about this, feel free to get in touch with one of our team members at mail@affiniax.com or call us on +971 4 425 6616.

Economic Substance Regulations – Deadlines Announced so far

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The UAE Economic Substance Regulations (ES Regulations) require all UAE entities that fall within the scope of the regulations by carrying on a “relevant activity” as defined by the ES Regulations to comply with annual reporting obligations.

Due to the current pandemic and subsequent lockdown, several Free Zone Regulatory Authorities have extended the last date for making filings in compliance with the ES Regulations. The Free Zone Regulatory authorities that have extended the filing dates are as follows:

  • Abu Dhabi Global Market (ADGM): The 31st March 2020 notification deadline is no longer applicable and the new deadline is 30th June, 2020. Guidance on the filing process is available on the ADGM website.
  • Dubai Airport Freezone Authority (DAFZA): The notification deadline of 3rd May 2020 was extended to 31st May, 2020. Guidance on the filing process has been shared with DAFZA licensees via email.
  • Dubai International Financial Centre (DIFC): The 31st March 2020 notification deadline is no longer applicable and the new deadline is 12th June, 2020. Guidance on the filing process is available on the DIFC website.
  • Dubai Multi Commodities Centre (DMCC): The notification deadline is 30th June 2020. Guidance on the filing process is available on the DMCC website.
  • Dubai Silicon Oasis Authority (DSOA): The notification deadline was 31st March 2020. Guidance on the filing process has been shared with DSOA licensees via email.
  • Ras Al Khaimah International Corporate Centre (RAKICC): The notification deadline is 30th June 2020. Guidance on the filing process has been shared with RAKICC licensees via email.
  • Hamriyah Free Zone Authority (HFZA): Entities that are governed by the Regulations will need to submit a notification by 30th June 2020, and where required prepare and submit to HFZA an economic substance declaration within 12 months from the end of their financial year (e.g. 31 December 2020 for entities with a financial year ending 31 December 2019.)
  • Sharjah International Airport Free Zone (SAIF): Entities incorporated under the jurisdiction of the SAIF ZONE Authority will need to submit a notification by 30 June 2020.
  • Ajman Free Zone (AJMAN FZ): All entities/licensees, including those who do not undertake relevant activity are required to file by 30th June, 2020.
  • Dubai World Trade Centre: Only entities/licensees that are carrying out relevant activity are required to file by 30th June, 2020.
  • Securities & Commodities Authority (SCA): Investment Management Firms, Management Company Firms regulated by SCA were emailed requesting submission of the notification form by 31st March, 2020.
  • Dubai Aviation City Corporation: All entities/licensees, including those who do not undertake relevant activity are required to file the notification by 7th June, 2020.
  • Dubai Healthcare City (DHCC): Only entities/licensees that are carrying out relevant activity are required to file by 6th June, 2020.
  • Ministry of Economy (DED): Only entities/licensees that are carrying out relevant activities are required to file by 30th June, 2020.
  • Jebel Ali Free Zone Authority (JAFZA): Entities carrying out relevant activities must file by the 30th of June, 2020.

In case you have any questions regarding your organisation’s reporting obligations or the deadline for your organisation, please contact us at mail@affiniax.com.

What is an IT Audit?

An information technology audit, or information systems audit, is an examination of the management controls within an Information Technology (IT) infrastructure. The evaluation of obtained evidence determines if the information systems are safeguarding assets, maintaining data integrity, and operating effectively to achieve the organisation’s goals or objectives. These reviews may be performed in conjunction with a financial statement audit, internal audit, or other form of attestation engagement.

IT audits are also known as “automated data processing (ADP) audits” and “computer audits”. They were formerly called “electronic data processing (EDP) audits”.

An IT audit is different from a financial statement audit. While a financial audit’s purpose is to evaluate whether an organization is adhering to standard accounting practices, the purpose of an IT audit is to evaluate the system’s internal control design and effectiveness. This includes, but is not limited to, efficiency and security protocols, development processes, and IT governance or oversight.

Installing controls are necessary but not sufficient to provide adequate security. People responsible for security must consider if the controls are installed as intended, if they are effective in case any breach in security has occurred and, if so, what actions can be done to prevent future breaches. These enquiries must be answered by independent and unbiased observers. These observers are performing the task of information systems auditing. In an Information Systems (IS) environment, an audit is an examination of information systems, their inputs, outputs, and processing.

The primary function of an IT audit is to evaluate the systems that are in place to guard an organization’s information. Specifically, information technology audits are used to evaluate the organization’s ability to protect its information assets and properly dispense information to authorized parties.

WHY INTERNAL AUDIT? IS IT WORTH AN ADDITIONAL COST TO YOUR COMPANY?

In order to understand the term ‘Internal Audit’, lets first understand what an “Internal control system” is. Internal control system means the policies and procedures adopted by the management of an entity to assist in achieving management’s objective of ensuring orderly and efficient conduct of its business. It includes reliability of management policies, safeguarding of assets, the prevention and detection of fraud and error, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Internal Audit is a function that constitutes a component of internal control with the objective of determining whether the internal controls are designed, managed and operated in the best possible manner.

Assessing and managing enterprise risks have become a primary concern for CFOs, Directors and audit committees. Stakeholders are increasingly demanding a higher degree of transparency and ethical behavior. In today’s global economy, organisations must be able to demonstrate that they have adequate controls and safeguards in place.

Consequently, organisations are introducing risk-based internal audit plans, which are designed to focus on critical areas. Managing loss potential, while consciously taking acceptable risks directly enables the management to provide fair returns on investment.

As Chartered Accountants, we are no longer expected and are limited for hazard avoidance or compliance of Companies’ policies. There is a need to demonstrate knowledge of risk management, business process improvement, which is a characteristic of a consultant rather than a classical internal auditor. We need to provide value-added support to management across all areas of operation, such as the Purchase-to-Pay process, possibilities, and limitations of the IT system being used, regulatory compliance, etc. 

Potential benefits of Internal Audit include:

  • Gaining access and knowledge of highly skilled and experienced professionals within the relevant field
  • Timely and effective management of risk and hazards  
  • Managing risk with a fresh perspective 
  • Added level of scrutiny and caution in the organisation
  • Cost-benefit approach by reducing cost/overheads and managing the key ratios effectively
  • Reducing procedural complexity and participation in developing strategies and governance process

Internal Audit is no longer considered an additional cost to organisations. In fact, due to ease of business operations in UAE, it is crucial for the management to understand the risks and possible hazards, which are looking for an opportunity to pierce the shield of internal controls and paralyze the growth of any organisation. Stakeholders prefer to have a transparent approach by reviewing the internal audit reports submitted by experienced professionals.

Written by Nihar Kothari, Partner, Affiniax Partners

E-mail: nihar@affiniax.com

DLD and RERA Introduce New Service For Real Estate Stakeholders in Dubai

The Dubai Land Department (DLD), through the Real Estate Regulatory Agency (RERA), has launched an innovative electronic system called Mollak, an innovative, electronic web-based service developed by RERA for the purpose of registering Owners’ Associations and the Management Companies forming part of a Jointly Owned Property.

Mollak, which means “owner” in Arabic, is developed specifically to assist real estate stakeholders, including property developers, owners, investors, Owners Associations and Association Managers to comply with all RERA regulations and management requirements in a simple and organized manner. This is in line with the vision DLD has for Mollak, which is to position Dubai as the world’s premier real estate destination and a byword for innovation, trust and happiness.

Mollak simplifies the system of payments for Service Charges (also known as maintenance charges or operational charges for the Owners Association). The system will operate in a manner similar to the operation of an escrow account, increasing the convenience level exponentially in projects that have several different stakeholders.

The system also operates within the real estate unit owners’ database and the database of real estate units registered and approved by the DLD, where no user may change the data. These two functions operating in tandem will also allow DLD to quickly resolve several ownership disputes as they will be able to examine their own financial records regarding service or maintenance charges as well as the ownership database.

The system has already been through a highly successful pilot phase, wherein 468 bank accounts were successfully opened for project service charges, 88 management companies and 1,212 real estate projects were registered and approved by RERA, as well as 200,000 real estate units, comprising residential apartments, villas, offices and commercial shops.

The system seems on course to fulfil its mission of creating an innovative and sustainable real estate environment that will promote Dubai as the world’s happiest city through smart services, professional human and financial resources and integrated real estate legislation.

We, Affiniax Partners, are proud to be Registered Auditors for the Mollak System. To know more, please contact our Audit team at mail@affiniax.com