Question

Khimji Ramdas headquartered in Muscat. The Khimji Ramdas Group (KR) is an established
business conglomerate in the Sultanate of Oman. Trusted and respected for more than a century
(150 years), KR has consistently maintained its leadership position in the Consumer, Telecom,
Infrastructure and Industrial arenas. The vision of Khimji Ramdas is “to drive Oman to the
forefront, through progressive business practice”. The management always ensure the follow up
of the vision of Khimji Ramdas. Out of many businesses, one of its most successful business in
Oman is SPAR. It is a retail outlet with variety of consumer products. Majority of their goods are
imported from European countries. These days COVID 19 is at its peak in European countries.
SPAR is facing difficulty in importing goods to cater the needs of their customer. Muscat is under
lock down and due to unavailability of goods at SPAR, the management is thinking to shut down
their SPAR outlets or to send their employees on forced leaves. SPAR have reliable staff who have
been working with them for several years. Staff working at SPAR are concerned about their health
as well as jobs. Globally many businesses are facing crisis due to the current Pandemic. Worldwide
trade has also been badly affected.
KR management is fully aware of the importance of a strong internal control system. The
management continues to evaluate all business processes along with related policies and
procedures and also implements the recommendations of the internal auditor to further augment
the overall internal controls environment. The primary function of Internal control system is to
provide independent assistance to the management in fulfilling their oversight responsibility to the
shareholders, investors and other stakeholders. The ICS has to take care of the integrity of the
company’s financial statements, their financial reporting processes, the company’s risk
management, and to ensure the company’s compliance with ethical, legal and regulatory
requirements.
a. In your opinion, what necessary steps should be taken by the SPAR management to run the
business in order to serve their clients and employees suffering due to Pandemic. What should be
their strategy to compensate their loss in future?
b. What do you suggest the internal control units of Khimji Ramdas to take appropriate steps to
tackle the expected financial crisis due to COVID 19?

Answer 1

Necessary steps to be taken by Spar Management to run the business in order to serve their clients and employees suffering due to Pandemic:-

· For Clients:-

o To serve all clients at lesser fees and giving relief on outstanding amount.

o Giving assurance to every client of 24/7 support

o Make sure all employees has work from home facility to serve clients.

o Try to find alternative to imported products and supply for time being to all clients

· For Employees:-

o Rather than sacking employees, give paycuts for time being

o Stop all promotions and bonus for time being in order to save costs of company

o Increase provisions for future problems.

o Transfer employees to other department/company who is requiring same skills.

o Remove those employees whose performance is poor

Strategy to compensate loss in future:-

· Increase provisions of company

· Avoid giving dividends to shareholders

· No bonus or promotions

· Avoid unnecessary expenses

· Entire framework to be prepared for post COVID 19 challenges and execution of strategies prepared

· Policies w.r.t to social distancing and how to work in business premises to be discussed.

Suggestions to the internal control units of Khimji Ramdas to take appropriate steps to
tackle the expected financial crisis due to COVID 19

· Increase provisions of company

· Policy on how to work post COVID 19 to be roled out

· No payouts for this year

· Take government help for pumping of funds in order to sustain the market

· All the existing loans to be opted for moratorium.

· Situations will change so laying of employees will lead to bad market goodwill

· Future vision to be updated to all stakeholders.

· Create work from home facilities in order to take effective work from employees.