PRINTING and recycling specialist A-Smart Holdings has responded to several queries posed by the Singapore Exchange Securities Trading (SGX-ST) on the company’s annual report for the financial year 2022 ended July.

In a lengthy list of responses posted in a bourse filing on Friday (Feb 3), the company replied to queries on its non-compliance with several provisions prescribed in the Code of Corporate Governance 2018. This includes not ensuring its board composition had an appropriate level of independence and diversity of thought and background, as well as its lack of disclosure on remuneration of key management personnel (KMP) to the full extent recommended by the Code.

SGX-ST noted that independent directors did not make up a majority of A-Smart’s board where its chairman is not independent, and that no explanations were provided for this in its annual report.

In its response, A-Smart said while it did not comply with provision 2.2 of the code, its board was made up of a majority of non-executive directors “which is in compliance with provision 2.3”. Independent directors make up one-third of its board, it noted.

Its board and nominating committee are therefore “satisfied that the board has substantial independent elements to ensure that objective judgment is exercised on corporate affairs”, it said. It added that matters requiring the board’s approval “are discussed and deliberated with participation from each member of the board, and all major decisions are made collectively”.

SGX-ST also noted that A-Smart had not complied with provision 8.1 of the code with regard to the disclosure of remuneration. It requested more transparency on the company’s remuneration policies, level and mix of remuneration, the procedure for setting remuneration and the relationships between remuneration, performance and value creation, in accordance with the code.

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It pointed out A-Smart’s statement in its FY2022 annual report, which stated that “it is not in the group’s interest to disclose the remuneration of the KMPs to the full extent recommended, due to continuing confidentiality and sensitivity of executives’ remuneration”. The company had also stated that such disclosure may “hamper its ability to retain the group’s talent pool in a competitive environment”.

In its response, A-Smart said it had disclosed in its annual report that the aggregate total remuneration of the top four KMP, who are not directors or the chief executive, amounted to S$589,237 for FY2022. It added that its board was of the view that the expression of each director’s remuneration n bands of S$250,000 with a percentage breakdown, rather than disclosing to the nearest dollar, “is good indication of each director’s remuneration package, as remuneration continues to be a sensitive subject”.

Lastly, SGX-ST asked A-Smart to disclose how it will comply to ensure protection of whistleblowers against detrimental or unfair treatment, as this was not explained in its annual report.

The company replied that it had disclosed details of its whistleblowing policy in its annual report, whereby “concerns on financial improprieties or other matters raised by whistleblowers may be investigated and appropriate follow-up action taken”. These procedures have been “clearly” communicated to its employees, it said.

Shares of A-Smart closed flat at S$0.28 on Friday, before the filing.