Vicky Bowman (MCRB Director) and Nicolas Delange (Managing Director, Yever) presented at a Breakfast Talk in the Learning Series of the Myanmar Institute of Directors on March 4th, 2020. Read more: https://www.myanmar-responsiblebusiness.org/news/corporate-disclosure-in-myanmar.html

1. CORPORATE DISCLOSURE IN
MYANMAR: REGULATORY
REQUIREMENTS, AND
SUSTAINABILITY LEADERSHIP
Vicky Bowman, Director, Myanmar Centre for Responsible Business
Nicolas Delange, Managing Director, Yever
Myanmar Institute of Directors Breakfast Briefing
4 March 2020, Yangon

2. What is corporate disclosure?
Corporate Disclosure
Companies NGOs
Government Foundations
WHEN A
SECRET
IS SHARED
EVENTUALLY
PUBLICY

3. Why should we disclose information?
Investors Regulators
We want...We have to...
Peers Customers
COMPLIANCE
Leadership Purpose
Identity
LEADERSHIP
Stakeholders

4. How can we disclose information?
Offline Online
ANNUAL REPORT
NEWS / PRESS
CONFERENCE
WEBSITE
SOCIAL NETWORKS

5. Regulatory/compliance drivers of corporate disclosure in
Myanmar
 2017 Companies Law
 Securities and Exchange Commission of
Myanmar (SECM) Continuous Disclosure
Requirements
 Central Bank of Myanmar Directives
 Anti-Money Laundering Law and the
Financial Action Task Force (‘grey-list’)
 Myanmar Extractives Industries
Transparency Initiative
 Myanmar Investment Law/Rules requires
annual reports for projects with MIC
Permits (Rule 196/199)
 Environmental and Social Impact
Assessment

6. Non-regulatory drivers of corporate disclosure in Myanmar
 Investor demand
 private equity
 due diligence requirements of business and
JV partners
 International support (particularly UK/Australia):
 IFC – CG Scorecard, translation of resources
 Myanmar Institute of Directors (MIOD)
 OECD (Japan-supported) to support
Myanmar CG Code
 Stakeholder pressure
 MCRB/Yever’s Pwint Thit Sa/Transparency
in Myanmar Enterprises report
 UN Fact Finding Mission report:
transparency/ governance of donations
 Media and NGOs
……..and Leadership!

7. Companies Law disclosure requirements
 Myanmar Companies Law requires every public
company to circulate a statutory ‘Directors
report’ to every ‘member’ (shareholder) of the
company (S.148(a) and (b), certified by at least
two directors. It must include:
(i) a fair review of the company’s business,
including a description of the company’s
primary business
(ii) an analysis of the company’s performance
during the year,
(iii) a description of risks and uncertainties
facing the company and
(iv) any other matters which may be
prescribed’.
 The report must be sent to the Registrar i.e.
DICA (s148e)
7
All reports sent to the Registrar are in principle
publicly available from MyCo.com.mm n payment
of a 10,000 kyats fee per company

8. SECM disclosure obligations for public companies in
Myanmar
 Securities and Exchange Commission Notification 1/2016
on ‘continuous disclosure’ requires
 Companies listed on the Yangon Stock Exchange
 Public companies which are traded ‘over the counter’ or
have SECM approval to raise a public offering
 Public companies with > 100 shareholders
 To submit:
 Annual reports
 Half-yearly reports
 Extraordinary reports e.g. change of CEO, auditor,
major shareholders with > 20% voting rights, material
lawsuit
 And to publish them on the company and SECM website
More details in Pwint Thit Sa pp 26-27 EN and pp 38-40 MM

9. YSX disclosure

10.  Supported by OECD and Japan
 Advisory Committee for Corporate Governance
Reform in Myanmar constituted by the Ministry of
Planning and Finance in January 2019.
 Chaired by Marcello Bianchi, former Chair of the
OECD Corporate Governance Committee.
 MIFER, DICA, SECM, MICPA, CBM, UMFCCI,
IFC, Hermes, YSX
 Feb 2020 endorsed the draft corporate
governance regulation
 Compiles existing obligations on internal control
system, Audit Committee, independent directors, and
disclosure.
 Regulation to apply to listed companies and public
companies with >100 shareholders.
 Regulation planned to published April, come into effect
for October 2020
Forthcoming Corporate Governance Regulation
https://www.dica.gov.mm/en/news/endorsement-
newcorporate-governance-regulation

11. CBM disclosure requirements for banks
 Directive on External Auditors of Banks 10/2019
(paras 34-35) effective for 2019-2020 FY
 Every bank to publish its audited statement of
financial position and statement of comprehensive
information within 4 months after the FY end together
with the external auditor’s opinion:
 in at least one widely read Myanmar newspaper
 on its website
 exhibit conspicuously all year in each of its offices
and branches

12. Reporting requirements for companies with an MIC Permit or Tax
Incentive (1)
Under Rule 196 of the 2017 Myanmar Investment Rules, an Investor who has been issued a Permit or Tax
Incentive Approval must within 3 months of the end of the financial year submit an ANNUAL REPORT in the
prescribed form to the Commission in the prescribed form which gives details of:
(a) its progress in implementing the Investment;
(b) any material variations to the Investment as implemented from the description presented in the
Application, including, as relevant:
 amount of the Investment and any changes in capital invested;
 any change in shareholders or parties with an interest in the investor;
 employment performance of the Investment;
 impact of the Investment on the environment and local community; and
 land used in the Investment and changes to land or land uses.
(c) how the Investor and the Investment are supporting the relevant objectives of the Law, as set out in
section 3 of the Law;
(d) the Investor’s compliance with the conditions of the Approval and any instances of noncompliance,
including non-compliance with other applicable laws;

13. Reporting requirements for companies with an MIC Permit or Tax
Incentive (2)
Rule 196 (contd)
(e) the material operating licences, permits and approvals obtained by the Investor since the Approval or
date of the previous annual report; and
(f) in the case of an Investor with a Permit, how it has demonstrated its commitment to carry out the
Investment in a responsible and sustainable manner;
(g) in the case of an Investor with a Tax Incentive Approval:
 the estimated value of the Tax Incentives that the Investor has claimed or benefited from in the year
and a breakdown of these by type of incentive;
 any recalculation and reimbursement of Tax Incentives required due to the operation of these Rules
or confirmation that no such recalculation and reimbursement is required;
 confirmation of the applicable Zone of the Investment if the Investor benefits from an exemption in
accordance with section 75 of the Law;
 the export earnings of the Investment.
(h) the audited financial statements of the Investor; and
(i) such other matters as may be prescribed by the Commission

14. Format and disclosure of the annual Rule 196 report to MIC
 No prescribed format for the report.
 As a minimum, reports should address items in Rule
196 (a) to (h)
 According to Rule 199, “a summary of the report
submitted under rule 196 must be published by the
Investor on its website or the Commission’s website
within 3 days from the date of submission. If it is
published on the Investor’s website, the website
address shall be notified to the Commission”.
 We recommend that reports submitted for disclosure
under Rules 196/199 are published on the investor’s
website
 They can be adapted to be a useful tool for
communicating the company’s activities to Myanmar
stakeholders
Currently DICA has received and posted a few
reports on its website
www.dica.gov.mm/en/announcements-
information

15. https://www.dica.gov.mm/en/announcements-information
https://www.woodside.com.au/our-business/myanmar

16. Environmental Impact Assessment
2015 EIA Procedure (Art 13) requires the Project Proponent to:
 a) arrange for appropriate public consultation through all phases of the Initial Environmental
Examination and EIA process as required by Articles 34, 50, and 61, and
 b) disclose to the public in a timely manner all relevant Project-related information in accordance
with this Procedure except that which may relate to National Security concerns as informed by the
Ministry.
Articles 34 (IEE), 50 (Scoping for EIA) and 61(a) (EIA Investigations) all require the project proponent to
hold public consultations and also arrange “timely disclosure of all relevant information about the
proposed Project and its likely Adverse Impacts to the public and civil society through:
 local and national media
 website(s) of the Project or Project Proponent
 public places such as libraries and community halls, and
 sign boards at the Project site visible to the public, and
 appropriate and timely explanations in press conferences and media interviews”
Arts. 38 (IEE)/65 (EIA) require Project Proponent to disclose IEE/EIA report within 15 days of submitting
it to Environmental Conservation Department, as above

17. Disclosing Beneficial Ownership
 Myanmar’s obligations under Extractives Industries
Transparency Initiative (MEITI):
 By 2020, all EITI countries have to ensure that
companies that apply for or hold a participating
interest in an oil, gas or mining license or contract in
their country disclose their beneficial owners.
 The EITI Standard also requires transparency about
ownership of oil, gas and mining companies and
public officials – also known as Politically Exposed
Persons (PEPs)
 Information should be publicly available and published
in EITI Reports and/or public registries. See recent
disclosure of BO and PEP information by DICA
Recent regulatory developments requiring disclosure of beneficial ownership by companies
including those who are ‘Politically Exposed Persons’ (PEPs) are driven by two initiatives
OECD Financial Action Task
Force (FATF) (‘grey-list’)
review of Myanmar;s anti-
money laundering (AML)
compliance
This led to:
DICA’s Directive
17/2019 issued on 15
November but Central Bank
of Myanmar’s Directive
18/2019 of 15 November

18. Financial Action Task Force Grey List
 Myanmar placed on the ‘grey list’ as a ‘Jurisdiction under increased
monitoring’ on 21 February 2020
 FATF does not call for the application of enhanced due diligence to be
applied to ‘grey-list’ jurisdictions. But it encourages countries/banks etc to
take into account the ‘deficiencies’ in their risk analysis.
 FATF notes Myanmar has made a high-level political commitment to resolve
swiftly the identified strategic deficiencies in anti-money laundering
(AML)/Counter-financing of terrorism (CFT) regimes within agreed
timeframes. These were identified in Sept 2018 Mutual Evaluation Report.
 Proactive progress already made on MER recommendations to improve
technical compliance and effectiveness, including:
 introducing various legislative measures
 establishing a regulatory framework for the registration of hundi
operators.

19. FATF’s comments/Myanmar Action Plan
Points to monitor include:
1. demonstrating an improved understanding of money-laundering risks in key
areas
2. ensuring the supervisory body for Designated non-financial businesses and
professions(DNFBPs) is sufficiently resourced, onsite/offsite inspections are
risk-based, and hundi operators are registered and supervised;
3. demonstrating enhancements in the use of financial intelligence in law
enforcement agency investigations, and increasing operational analysis and
disseminations by the Financial Intelligence Unit;
4. ensuring that money-laundering is investigated/prosecuted in line with risks;
5. demonstrating investigation of transnational money-laundering cases with
international cooperation
6. demonstrating an increase in the freezing/seizing and confiscation of criminal
proceeds, instrumentalities, and/or property of equivalent value;
7. managing seized assets to preserve the value of seized goods until
confiscation; and
8. demonstrating implementation of targeted financial sanctions related to
proliferation, including training on proliferation sanctions evasion.
DNFBs
• casinos
• real estate agents
• dealers in precious
metals and
gemstones.
• lawyers, notaries
• other independent
legal professionals
and accountants
• trust and company
service providers

21. Politically Exposed Person definition in MEITI
myanmareiti.org/sites/myanmareiti.org/files/publication_docs/the_myanmar_beneficial_ownership_taskforce_and_the_myanmarupdated_pep.pdf

23. What is the difference between beneficial ownership and legal
ownership?
Beneficial owner refers to the natural person(s) who
ultimately owns or controls a customer (company) and/or
the natural person on whose behalf a transaction is being
conducted. It also includes those persons who exercise
ultimate effective control over a legal person or
arrangement.
Definition from Financial Action Task Force, OECD
Usual international threshold for declaration is 25% control
• 25% in 2015 Myanmar Anti-Money Laundering rules
• 20% in CBM Directive 18/2019
• 5% in MEITI for extractives companies
• 5% in DICA Directive 17/2019 (requires clarification)

24. Six Legal Owners of Air KBZ
Natural Person Shareholding Percent
AUNG KO WIN 1360 17%
NANG KHAM NOUNG 1360 17%
NANG LANG KHAM 1360 17%
AUNG AUNG ZAW 3520 44%
BO BO ZAW 400 2.5%
YAR ZAR PHYO WAI HTUN 400 2.5%
– according to MyCo filings

25. Beneficial Owners
If Air KBZ filed a beneficial ownership (BO) declaration with DICA, based on a 25%
threshold, and treated legal ownership as the same as BO, this would exclude mention of
any member of the KBZ family, as each has a 17% shareholding. Yet the family acting
together has majority control (51%).
Taking into account normal family-owned business arrangements in Myanmar, MCRB
would therefore expect them to identify two Beneficial Owners i.e. those who are ‘exercising
ultimate effective control over a legal person or arrangement’.
Aung Ko Win (KBZ)
Father of Nang Kham Noung and Nang Lang Kham, so total shareholding for family
members, who are presumed to act together giving 51% control
Aung Aung Zaw (24 Hours Company)
44% Legal and Beneficial Ownership or, if also able to exercise control over Bo Bo Zaw
and Yar Zaw Phyo Wai Htun, 49% control

27. Leadership: Myanmar companies can do
more...
8%
11%
54%
31%
0%
10%
20%
30%
40%
50%
60%
Annual report Press conference Website Facebook Source
2019

28. … making sure the website is accessible

29. … making sure the website is up to date
8%
54%
8%
0%
10%
20%
30%
40%
50%
60%
Annual report Website Website up to date
GAP
Source
2019

30. Main audience
အဓိကသက္ိိုင သူမ ်ား
Why is it relevant?
မညသည့အအတက ္ကစပေသသသည်ား။
 Stakeholders
 အဓိကအကိ်ားသက
္ိိုငသူမ ်ား
 Global standard used by 12,500+ organizations across the globe
 Concrete definition for a wide range of KPIs
 Database accessible to identify best practices
 ကမၻ အစ၀ွမ်ားရွိ အဖတြဲ႕အစည်ား (၁၂၅၀၀)ေက မွအသအို်ားပသည့ ႏုိိုိငငအအက စအႏုိသ်ားဖစ င်ား၊
 KPIs မ ်ားအအတက အိကသည့အဓိပပၸါသအမွအ ကမ ်ားရွိ င်ား၊
 အေလ့အထေက င်ားမ ်ားအ ်ား အကြဲဖအသအမွအေပ်ားႏုိိုိငသည့ Database အစ ိုဖစ င်ား၊
 Investors
 ရင်ားႏုိွ်ားမွပႏုိွအသူမ ်ား
 Provide a framework that help organizations to comply with law (or its spirit) in South Africa,
Europe, ...
 Database accessible to identify best practices
 ဥေရ ပ၊ ေအ ငအ ဖရိကရွိ အဖတြဲ႔အအစည်ားမ ်ားအ ်ား ဥပေဒႏုိွင့အညလိိုကသ ေ္ ငရတကႏုိိုိငသည့ မူေဘ ငမ ်ား ေထ ကပအ့ေပ်ားထ ်ား င်ား၊
 အေလ့အထေက င်ားမ ်ားအ ်ား အကြဲဖအသအမွအေပ်ားႏုိိုိငသည့ Database အစ ိုဖစ င်ား၊
 Regulators
 အရ ်ား၀ငၾက်ားၾကပကတပ
ကြဲသည့အဖတြဲ႔အအစည်ား
 Identification of the most relevant topics for each sector with some KPIs
 Standards and tools available online to access the relevant information freely
 က႑အစ ို င်ားစအအတက ္ကစပေ ၸင်ားစဥမ ်ားအ ်ား KPIs ႏုိွင့အအူ သအမွအေပ်ား င်ား၊
 သင့ေလ သည့သအင်ားအ ကအလကမ ်ားအ ်ား စစစအကြဲဖအရသအအတက စအႏုိသ်ားမ ်ားႏုိွင့ အိိုင်ားအ ကမ ်ား အ ်ား Online မွ
အ မြဲ့ရရွိႏုိိုိင င်ား
 Investors
 ရင်ားႏုိွ်ားမွပႏုိွအသူမ ်ား
 Identification of the most relevant topics for each sector
 Identification of the most performing companies per sector in a document updated each
year: the DJSI Yearbook
 က႑အစ ို င်ားစအအတက အသင့ေအ ္အို်ားေ ၸင်ားစဥမ ်ားအ ်ား သအမွအေပ်ား င်ား၊
 ႏုိွစစဥထိုအေ၀သည့ DJSI Yearbook တတင က႑အလိိုက လိုပေ္ င ကအေက င်ားမတသ္အို်ား ကိုမပဏမ ်ားအ ်ား သအမွအေပ်ား င်ား၊
Bridging financial and
non-financial reporting
ဘ႑ ေရ်ားအစရင အစ ႏုိွင့ ဘ႑ ေရ်ား
ႏုိွင့မသက္ိိုငသည့ အ ကအလက
အစရင အစ မ ်ားအ ်ား ေပၸင်ားစည်ား င်ား

31. #Focus 1
The GRI
http://database.globalreporting.org/
When using it?
When an international company is applying, you can check if they have disclosed
their non financial / sustainability / CSR report.
ႏုိိုိငငအအက ကိုမပဏအစ ိုမွ ေလွ ကထ ်ားသည့အ ိသအတင ဘ႑ ေရ်ားႏုိွင့မသက္ိုိငသည့ အ ကမ ်ား၊
ေရရွညအညအအ့ ိုိငမြဲေရ်ားႏုိွင့ CSR အစရင အစ မ ်ားအ ်ား ထိုအေဖ င်ားရွိ/မရွိကိို စစေ္်ားလိိုသည့ အ ိသအတင
အသအို်ားပႏုိိုိငပၸသည။
Why using it?
You can then easily research for other reports published by their peers (in the
same sector and/or region, ...) to be able to easily gather all the data /
documents that may help you to review their disclosure.
အူညသည့က႑(သိုိ႕)ေဒသမ ်ားရွိ ကိုမပဏမ ်ားမွ ထိုအပသေၾကင ထ ်ားသည့ အစရင အစ မ ်ားကိို
လတါကူစတ ဖအရ င်ားအ ်ားဖင့ အ ကအလကမ ်ားအ ်ား လတါကူစတ စိုေ္ င်ားႏုိိုိိုငပ်ား ၄င်ားအိို႕႕၏
ပတင့လင်ားမငသ မမ ်ားအ ်ား ေလ့လ ႏုိိုိငပၸသည။

32. #Focus 1: Global Reporting Index (GRI)
Standards
When to
use it?
When you want to check which KPI may be used to disclose the performance on a
specific topic.
သအမွအထ ်ားေသ ေ ၸင်ားစဥမ ်ား႕၏ လိုပေ္ င ကမ ်ားကိို ထိုအေဖ အငပရ အတင
မညသည့ KPI အသအို်ားပထ ်ားသညကိို စစေ္်ားလိိုသည့အ ၸအတင အသအို်ားပႏုိိုိငပၸသည။
Why to
use it?
To get a definition that has been checked / challenged by different stakeholders and to
speak a « common » language with your counterparts.
အမိ်ားမိ်ားေသ အကိ်ားသက္ိိုငသူမ ်ားမွ အသအို်ားပထ ်ားသည့ အဓိပပၸါသအမွအ ကကိို
သိရွိႏုိိုိငပ်ား အ ်ားေသ အကိ်ားသက္ိိုငသူမ ်ားႏုိွင့ အူညိသည့စအႏုိသ်ားမ ်ားအအိိုင်ား
အအူအကတလိုပေ္ ငရသဖစသည။

33. #Focus 2: Integrated Reporting
http://examples.integratedreporting.org/home
When
to use
it?
When an international company is disclosing its
annual report, you can check if its disclosure is
consistent and cover the most important areas.
ႏုိိုိငငအအက ကိုမပဏအစ ို႕၏ ႏုိွစစဥ အစရင အစ
(Annual Report) ကိို ထိုအပသသည့အ ၸ
ကိုမပဏအေသဖင့ အေရ်ားၾက်ားသည့
အ သ်ားက႑မ ်ားအ ်ား ထည့သတင်ား င်ားရွိ/မရွိကိို
စစေ္်ားႏုိိုိငသည။
Why
to use
it?
You can identify easily the best practices. It is
then easier to understand how other
international companies are disclosing their
information.
အေက င်ားမတသ္အို်ားေသ လိုပေ္ င က မ ်ားကိို
လတါကူစတ သအမွအႏုိိုိငမညဖစ ပ်ား အ ်ားေသ
ႏုိိုိငငအအက ကိုမပဏမ ်ား
႕၏သအင်ားအ ကအလကမ ်ား ေဖ ထိုအ
ပသသည့ ပအိုစအကိို ပိိုမိိုသ ်ားလညလ ႏုိိုိငမည
ဖစသည။

34. #Focus 3: Dow Jones Sustainability Index
DJSI
https://yearbook.robecosam.com
When to use it?
To check what are the key trends shaping a sector and to identify who
are the companies seen as the most responsible by a leading investor.
က႑အစ ို င်ားစ႕၏ အဓိကလိုပေ္ င ကမ ်ားႏုိွင့ အ ၀သါူမ၊
အ ၀သ အမအရွိ္အို်ားကိုမပဏမ ်ားအ ်ား သိရွိႏုိိုိငရသအအတက အသအို်ားပ င်ားဖစသည။
Why to use it?
To identify easily the top performer in a sector.
က႑အစ ို င်ားစ႕၏ အေက င်ား္အို်ားလိုပေ္ ငသည့ ကိုမပဏမ ်ားအ ်ား
လတါကူစတ သအမွအႏုိိုိငရသ ဖစသည။

35. Inspiring reports provide information…

36. … that are easy to read

37. … and that are material

38. … and that are material

39. 39
Q&A session

40. 40
Thank you!
က ျေးဇျေးတင်ပါတယ်။