CRISIL, Microsoft launch first corporate risk evaluation solution for Clause 49 compliance

Mumbai: CRISIL Investment & Risk Management Services, the risk solutions business of CRISIL has launched a unique software offering for Clause 49 compliance for publicly listed companies. Called the corporate risk evaluation framework (CORE), the product will assist corporates in implementing the directives of Clause 49 as well as putting up an enterprise-wide risk management (ERM) framework. The CORE solution has been developed on the Microsoft platform leveraging Microsoft .NET technologies.

Clause 49 makes CEOs and CFOs accountable for putting in place risk management and internal control systems in critical areas of operation, in keeping with SEBI's modification to include stringent provisions, similar to the Sarbanes Oxley Act of the US. This mandate has come into force from January 1, 2006, with the first compliance status report due on April15. It therefore becomes incumbent for organisations to create and document comprehensive internal control mechanisms.

R Ravimohan, managing director & CEO, CRISIL said, "In India, the Securities and Exchange Board of India has issued guidelines on corporate governance and related amendments to Clause 49 of the listing agreement. According to the guidelines, the CEO / CFO of an entity which is publicly listed would need to certify the financial statements and offer a statement on the key risks faced by a listed company and controls for the same. Given the wide ambit of coverage, top management needs to identify the key risk areas, assess the quality of controls, the impact of failures and the possible risk mitigation strategies on an on-going basis."

The CRISIL CORE evaluates the organisation structure, process mapping, assessing effectiveness of controls, evaluating business and operational risk and providing software tools to manage them as well as training and documentation.

"Regulators world-wide are focussing on an increasing level of communication with stakeholders, making them aware of risks inherent in businesses and ensuring top management oversight of enterprise wide risk management," said Kathleen A Corbet, President, Standard & Poor's. "The desire to improve corporate governance, risk measurement and risk management practices given the plethora of directives from various regulatory agencies, poses substantial challenges for corporates including implementation of a comprehensive software solution for risk identification and data aggregation," Corbet added.

David Littlewood, managing director, financial industry, Microsoft Corporation said, "By providing an integrated platform and Microsoft .NET, we help our partners and customers align their IT solutions with business processes, quickly and easily. This is especially important with regard to risk management and compliance, where moving from disparate systems to a holistic approach increases the ability of customers to achieve their risk and compliance objectives."