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.

Answer 1

a. Shaan Goods LLC could be a good example of CSR as its business has grown despite it incurring huge expenditure on CSR activities. This could prove as an example for other companies which have stepped away from CSR because of high expenditure, instead they can see that by undertaking CSR, one can even grow business as the company spends on providing skills to the local community which benefits the company by way of highly skilled employable people who stay close to their factories. Due to Covid-19, there is severe stress on the economy and the government to look after and see that people are not unemployed and get all the social benefits. This company sets a good example of looking after its people and creating employment and investment opportunities under such circumstances so that the complete onus is not entirely on the government. This creates room for the company to get tax rebates once the government sees the effort it has put in during such economic crisis.

b. Shaan Goods LLC has followed good financial reporting, thus there is no fudging of documents and activities in order to pay less taxes, instead it spends on CSR so that it benefits them locally and helps them get rebates. Plus major changes occur on the internal front, which the company ensured that it followes rules strictly. Even if there are any deviations, the company has ensured that those are addressed in timely manner to address the concerns.