Question

Shaan Goods LLC is a leading manufacturing and trading company. They have a diverse business of Polyester, Chemicals and Life Sciences. The company’s diversified business & product portfolio caters the needs of every industry in the country. Shaan Goods LLC has a strong reputation for excellent quality & customer service. They have laid solid foundation for future growth, with major expansion projects and investments across its diversified portfolio in all of their products. The annual results for Shaan Goods LLC is also encouraging. They are able to deliver resilient performance in year 2018-19. The Company’s net turnover increased by 19% to OMR 82 Million. Net turnover of more than OMR 40 Million is a new milestone for the company and reflects its status as the partner of choice for its valued customers.

The Company has taken all necessary steps to ensure good governance. The management of the company are pleased to follow the code of governance. The financial statements prepared by the management of the company present fairly its state of affairs, the results of its operations, cash flows and changes in equity. Appropriate accounting policies have been consistently applied in preparation of financial statements and accounting estimates are based on reasonable and prudent judgment. The system of internal control is sound in design and has been effectively implemented and monitored. As per International Financial Reporting Standards, best practices have been followed in preparation of financial statements and any deviation from these has been adequately disclosed.

Shaan Goods LLC also wanted to play an important part as a responsible corporate citizen. The company recognizes that CSR initiatives in the communities where it operates creates positive impact for the people and improves their lives. As a part of its commitment, the company support the initiatives by providing vocational training and higher education to communities. Considering the growing pressures on environment, the company continues to participate in tree plantation drives and utilizes biodegradable envelopes for the mailing of the official documents. The company has started a campaign to provide safe clean water in the rural areas, more than 100

reverse osmosis plants have been fixed in the last 5 years.

a. During the current pandemic COVID 19, economies are under severe financial stress. Economies have limited resources and unable to provide the basic necessities to their people. In your opinion, how Shaan Goods LLC, with a baggage of huge net worth, can be a good example of corporate social responsibility? Relate their CSR activities to the current scenario created due to COVID 19.

b. Establishing and implementing good governance practices is the most useful activity an

organization can do to create a higher functioning of management, while building the right

foundation for achieving an organization’s vision and mission. Based on your understanding,

evaluate good governance practices followed by Shaan Goods LLC.

Your answer should be around 400 words for each question.

Answer 1

a) The economies across the world are suffering from severe financial stress and more and more corporates are coming forward to help the governments in dealing with the crisis.

Shan Goods LLC can also undertake CSR activities during these testing times of COVID 19 :

• Undertaking Research for developing an effective drug to combat COVID 19.  

The amount spent in the research work for this noble cause has been declared as those treated under CSR activity. Research teams across the world are working tirelessly to develop the vaccine. Some trials have proved successful but it will take a few months before the vaccine reaches the market and is easily available.

However there is a need for better and more effective vaccine which has least side effects and generates positive results for maximum people.

• Developing a effective testing kit and scaling up its production and distribution. - The testing kits have become of utmost importance in these times where this pandemic spreads widely from one infected person to many people. Thus it becomes imperative to follow the norms of contact tracing and scale up testing to dael with the situation ans check community transmission.
• Developing Quarantine facilities for the increasing number of patients - Since the number of patients has been rising steeply in most of the countries and it is important for the authorities to isolate and quarantine the infected and the asymptomatic patients. There is a high demand for increasing quarantine facilities.
• Production or Distribution of PPE Kits for Healthcare workers and other frontline workers

b) Shan Goods LLC has always followed good governance activities

• The company has always followed integrity and ethical practices - All accounting standards are adhered to strictly and all policies are disclosed and follwed ethically.
• Effective Risk Analysis - The good governance activities followed by the company have helped to evaluate all kinds of risks such as financial. market related, industry related, operational and legal. This has helped the comapny sustain all types of business risks and scale up effectively.
• Strategic Management - The strategies adopted on the basis of analysis have helped strategicvally devise policies that have hel[ped the company in growing not only in the short run but also in the long run.
• Goals aligned with strategies- A good governance policy incorporated by Shan Goods has shown that by aligning a company's goals with its strategies a firm can rapidly scale up its activities and profits.
• Assigning Accountability- The Board members are held accountable