This entrepreneur is on a mission to provide regulatory compliance for SMEs and save them from risk
In the late 90s, budding entrepreneur Nagaraj Krishnan saw that regulatory compliance was not a standalone, organised business offering provided by legal and HR services companies. He felt it was usually an add-on function provided by consultants unable to look at regulatory compliance in a holistic manner.
“During times of need, a company relied on local consultants such as retired government officials or chartered accountants who were piecemeal compliance providers. That’s why I set out to launch my own business for regulatory compliance and consulting services,” he says.
This led him to start Aparajitha Corporate Services Private Limited in Madurai in 2000 along with Bharat Krishna Sankar.
Nagaraj, well-versed in labour and industrial laws, started providing services such as managing compliance risks, compliance programme reviews, internal audits, risk management, monitoring and measurements, etc., for SMEs and businesses of various sizes.
In the last 20 years, Nagaraj has built the business into a large provider of labour law and industrial law compliance. He claims the 1,400-employee firm records annual revenue of Rs 450 crore and has over 1,500 clients - ranging from SMEs and startups to industrial giants and multinational companies.
In an exclusive interview with SMBStory, Nagaraj, who is MD of the firm, explains how Aparajitha Corporate Services is helping SMEs meet their regulatory compliance requirements.
Edited excerpts from the interview:
SMBStory [SMBS]: Why do SMEs need help with compliance?
Nagaraj Krishnan [NK]: It is a misconception that SMEs do not face the same compliance risks as larger enterprises. For instance, many SMEs are active in the financial services industry and the compliance risks they face will be determined by the relevant laws, regulations, and licensing restrictions that regulate the provision of financial services.
Hence, it is critical for an SME to understand the laws and regulations that govern its activities and remain aware of any changes to that legal and regulatory environment. Working with SMEs as a compliance solution provider has been a strategy that Aparajitha has actively pursued for the last couple of years.
SMBS: What are the different kinds of regulatory compliance services you are providing to SMEs?
NK: We believe in and we are offering proactive approaches with tailored services to suit their business needs. We are predominantly active in the labour, employment, and industrial domain, and we also help enterprises to get the EHS licence.
We don't just support organisations in managing a particular compliance issue, a notice, an inspection, or an audit. We’ve been known as an end-to-end solution provider for all the online and offline compliance needs of SMEs.
We handhold them right from evaluating regulatory compliance in a rigorous, disciplined manner, pinpointing real problems and potential issues, to developing an effective risk and compliance programme.
SMBS: What are the challenges working with such clients?
NK: Most SMEs are less efficient than large firms in screening the regulatory environment and dealing with norms. We did a small study on the traditional solutions that they relied on and most of them were basic and outdated tools and methods.
We also understood that since they are working on thin margins, they are a bit cost-conscious and would prefer a cost-effective compliance solution that would help them achieve end-to-end digital transformation for their compliance management like Compfie - our e-compliance platform.
SMBS: What is the USP of your services?
NK: We empower our clients to act with clarity and decisiveness. We help SMEs comply with laws under the ESG domain sector – Environmental, Social, and Governance as well as the LEI domain sector - Labour, Employment, and Industrial.
We are completely tech-enabled both at the back-end and front-end. At the back-end, we have an AI-driven system that has all the legal knowledge embedded in it.
At the front-end, we have Compfie - our compliance selfie tool, which is helping SMEs to have a dashboard and risk assessment chart available at the click of a button.
We are also keen on educating the SME market on the complexities and the consequences of non-compliance that they could be prone to.
SMBS: How did COVID-19 impact the regulatory space?
NK: The government came up with a lot of relaxations in regulations, but kept a tight hold on the importance of compliance deliverables. The MHA had issued guidelines to support employees and employers during the pandemic which were also vigorously followed by SMEs and corporates.
Due to the non-accessibility of office space, continuity of compliance regulations through digitisation became the new normal.
From a financial angle, our variable billing from existing clients came down due to unit closures and manpower reduction during lockdown. General economic downturn due to reduced manufacturing activities has also contributed to reduction in revenue.
We can expect revenues to come back to near normal as the economy is showing signs of revival. Things are still fluid considering that the second wave is still in progress in most locations and the pandemic is still not under control.
SMBS: What are the future plans for the company?
NK: We are looking to expand to APAC commonwealth countries because the laws are quite similar. We are also aiming to enter the Middle East market, which is still a virgin market since tax and regulatory compliance is still coming up in that region. We are also expanding to Singapore, Australia, and New Zealand.
Besides this, we are reaching out to underserved sectors of the economy, SMEs, as well as startups. We have also identified vendor compliance management - an often-overlooked space - as a key sector for us to perform vendor audits and vendor onboarding for better-managed vendor relationships.
Further, we are looking into EHS (Environmental Health and Safety) licensing services and risk management as well as launching an advanced version of our product Compfie.