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

Description of Shaan Goods LLC

1)Business Operations

   Manufacturing and Trading

   Polyester, Chemicals and Life Sciences

2) Company’s diversified its business & product
    Portfolio caters the needs of every industry in the country

List of CSR activities to the current scenario created due to COVID 19

1)"It is clarified that spending of CSR funds for COVID-19 is eligible CSR activity.

Since Company is having a baggage of Huge Net worth to spend on CSR activities relating to COVID 19.  

2) CSR funds could be utilised for various activities related to COVID-19, including those relating to preventive healthcare and sanitation,

CSR funds could be used for direct expenditure to contain the spread, morbidity and mortality due to the disease.

3) Company support the intiatives by providing vocational training and higher education and should tied up with Hospital for a 24/7 help-line for employees, communities, citizien to give them basic health information and guidance.” related to COVID 19 as a preventive measures to curb pandemic COVID 19.

Towards fighting Coronavirus disease has spurred demand for personal hygiene, the company has already started campaign to provide Clean and safe water in rural areas and not only now but for last 5 years company is continous process of planting 100 reverse osmosis pants with its initiative to provide pure and clear water for personal hygiene in rural areas

4) As it is rightly said "trees have no owners - they belong to the community. Here it is possible to not only gift it to your friends or family but an entire community" Trees has an interesting social impact-driven business model. Company continues in tree plantation activities creating number of job opportunities for many tribals and women these trees will offset about kilos of carbon every year once mature and also will provide flowers, fruit, fodder and fuel to communities and living creatures, offer shade to nomads and their livestock, give shelter to birds and animals, prevent soil erosion and flooding, improve water catchment, generate oxygen, remove pollution, reduce carbon in the atmosphere and fight climate change and helps in prevention of Diseases(Pandemic).

Also using biogegradable envelopes are beneficial for the environment. It is an Eco friendly option. Due to this we have less impact on Environment, materials which can be completely biodegraded (bio-assimilated) by micro-organisms such as bacteria, fungi and algae.

5)Funds may be spent on various activities related to COVID-19 such as promotion of healthcare including preventive healthcare and sanitation, and disaster management.

Company can commit  towards helping the healthcare system and communities to combat the crisis and contain the spread of the pandemic. company can  ensure immediate support to enhance the country’s healthcare infrastructure, including testing facilities and Personal Protective Equipments (PPEs) for health workers

6)Company can also work with various NGO towards providing free meals to the distressed communities and relief to waste workers through provisioning of dry rations, PPEs, and emergency medical funds.

7) In the first phase, money needs to be spent on addressing hunger and disease and subsequently on providing livelihood for migrant workers.

8) Work from home’ arrangement might have a lasting impact on jobs, as many employers may seek to continue such arrangements for their employees. That could reduce the number of jobs such as those of office attendants, security guards and housekeeping staff. People doing such jobs will need to be supported.

Following are the list of Evaluation of good governance practices followed by Shaan Goods LLC

1) Company has a strong reputation for excellent quality & customer service, this reflects company provide excellent product to customer and not only profit motivated/driven

2) They have laid solid foundation for future growth, with major expansion projects and investments across its diversified portfolio resulting in Number of Job/Employment opportunities resulting in Economic growth of country

3) Company has reflects its status as the partner of choice for its valued customers since Net turnover has increased by 19%. Company policy is to enhanced it vertical as well as horizontal supply chain also i.e Customer, Supplier, Employee, Government and Society.

4)The Company has taken all necessary steps to ensure good governance. The management of the
company are pleased to follow the code of governance

This reflects company compliance with all the legal and statutory liability, follows all the rules and regulations and benefits society as a whole , adherence with all the policy, procedure, rules and regulations of the company.

5) The financial statements, Appropriate accounting policies, the system of internal control relects a true and fair report. The reflects management provide a true and fair report to the its shareholders, to Government, Banking/Financial Institutions, Rating Agencies etc

6) 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.

Company provide correct information and if there is any deviation , company disclosed it in its report and does not hide the same. company provide true and fair financial statement and doesn't have any manupulative figure to supress the figure

7) 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.

The number of CSR (Coporate Social Responsibilty) reflects comapny is concern about welfare of society. All the policy and procedure are followed as per statutory rules and regulations.  

Comany is responsible towards Employee, Government , customer , Supplier, Banking/Financial Institutions and for better development of Society as a whole