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

The Shaan Goods LLC where it operates creates positive impact for the people and improves their lives by providing vocational training by advirtising regarding the COVID 19 symtoms and precaution to be taken care of like all gatherings and events of people should be avoided, social distancing is vital to reducing the spread of the COVID 19, emotional well-being by awaring the precautionery solution can be supporting to mental as well as physical health to communities. Campaign started by the company to provide safe clean water in the rural areas is a great initiative for the community as COVID 19 can be spread through contaminated water, over these food support can be provided to the needy peoples in the community.

Good governance practices followed by Shaan Goods LLC is 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 which will have positive impact on the credit worthiness of company, will also help in easily settling the tax dues to the goverment, investors have higher reliance on the company. The system of internal control desined is sound and has effectively implemented and monitored which will help in early detection of fraud and errors, operations will be fast and effective which will lead to growth of company.