The following information is extracted from the financial statements of Zarelo Holdings Ltd, a player in the manufacturing sector. Specifically, Zarelo manufactures Secure Digital (SD) cards for computers of different brands.

Zarelo Holdings
Income Statement for the year ended 31 December 2020 and 2021
	2020	2021
	RM’ mil	RM ’mil
Revenue	207	153
Cost of sales	(101)	(76)
Gross profit	106	77
Distribution expenses	(22)	(20)
Administrative expenses	(20)	(28)
Operating profit	64	29
Interest payable	(4)	(4)
Profit before taxation	60	25
Taxation	(16)	(6)
Profit for the year	44	19

Statement of financial position as of 31 December 2021
	2020	2021
	RM’mil	RM’mil
Non-current Assets
Property, plant, and equipment
Land and buildings	110	130
Plant and machinery	62	56
	172	186
Current assets
Inventory	24	25
Trade receivables	26	25
Cash at bank	19	-
	69	50
Total Assets	241	236
Non-current liabilities
Borrowings- loan note (10%)	40	40
Current liabilities
Borrowings (all bank overdraft)	-	2
Trade payables	37	34
Taxation	8	3
	45	39
Owners' Equities
Called-up ordinary share capital	100	100
Retained earnings	56	57
	156	157
Total equities and liabilities	241	236

Additional information

• Depreciation for Land and buildings and Plant and machinery in 2017 is RM11 mil and RM14 mil respectively
• There were no non-current asset disposals in either year.
• The amount of cash paid for interest equaled the expense in each year
• Dividends were paid totaling RM21 mil in each year

Required:

a) “Sustainability Accounting Standards Board (SASB) standards are intended for use in communications to investors regarding sustainability issues that are likely to impact corporate ability to create value over the long term. The use of SASB standards is voluntary. A company determines which standard(s) is relevant to the company, which disclosure topics are financially material to its business, and which associated metrics to report, taking relevant legal requirements into account¹.”

Critically advise the Board of Directors of Zarelo Holdings on the alarming sustainable issues pertaining to technological products. Evaluate the role of businesses and professional accountants in reference to SASB standards.

Answer rating: 100% (QA)

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