Embracing A Philosophy That Promotes Mutually Beneficial Strategic Alliances Accounting Essay Essays

Embracing A Philosophy That Promotes Mutually Beneficial Strategic Alliances Accounting Essay Essays Embracing A Philosophy That Promotes Mutually Beneficial Strategic Alliances Accounting Essay Essay Embracing A Philosophy That Promotes Mutually Beneficial Strategic Alliances Accounting Essay Essay Established in 1981, the Linear Group is a airy and mission driven administration dedicated to meeting and transcending the demands of its clients and spouses. Embracing a doctrine that promotes reciprocally good strategic confederations with the purpose of blending the strengths and operational efficiencies of its venture spouses, Linear has enjoyed great success in its enterprise. Headquartered in Penang with offices in Kuala Lumpur and Petaling Jaya every bit good as a distribution web that spans across the Earth, Linear is today one of the taking warming, airing and air-conditioning ( HVAC ) solution suppliers in the ASEAN part. Flag-shipped by Linear Corporation Berhad, a public company listed on the Main Board of Bursa Malaysia ( The Malaysian Bourse ) . Linear offers market expertness in the countries of fabrication, selling, gross revenues and distribution of HVAC merchandises, multi-disciplinary technology services and incorporate HVAC solutions playing as a individual beginning supplier for Clients who require a comprehensive scope of HVAC merchandises and the technology expertness to develop substructure required to ease them. By incorporating the assorted activities under a diversified portfolio, the Linear Group has successfully evolved and reinvented itself to thrive and run into the challenges of a invariably altering planetary economic system. The Linear Group has achieved international acknowledgment. 1.2 Group Structure The inside informations of the subordinate companies of Linear Corporation Berhad ( 288687-W ) are as follows: LCI Global Sdn Bhd ( once known as Linear Cooling Industries Sdn Bhd ) Clasps Ko Lim BAC Sdn Bhd Linear Water Treatment Sdn Bhd Linear District Cooling ( GCC ) Sdn Bhd ( once known as Linear Ice Solutions Sdn Bhd ) Linear-TES Sdn Bhd ( once known as Linear Ventures Sdn Bhd ) PrimeAce Holdings Sdn Bhd District Cooling Systems Sdn Bhd Imux ( Asia ) Limited BAC Cooling Technology Sdn Bhd PrimeAce Venture Limited Clasps Unified Systems Pte Ltd Clasps Idea-Hub.com Limited Linear Water Tank Sdn Bhd Linear Composites Sdn Bhd Clasps Linear Complexs Marketing Sdn Bhd Linear Cooling Technology Sdn Bhd Linear Towerline ( M ) Sdn Bhd ( once known as Nihon Spindle ( M ) Sdn Bhd ) 1.3 Board Of Directors PERVEZ RUSTIM MANECKSHA @ PAUL MANECKSHA Chairman A ; Independent Non-Executive Director and member of the Audit Committee Mr Pervez Rustim Manecksha @ Paul Manecksha, a Malayan, aged 63, was appointed to the Board on 12 February 2007 and as Chairman on 2 June 2008. He is a Barrister-at-Law of the Honourable Society of the Inner Temple, London, United Kingdom. He was admitted as an Advocate and Solicitor of the High Court of Malaya in 1971 and has been in active jurisprudence pattern since so. He was besides admitted as a Barrister and Solicitor in Canberra, Australia in 1978. He is presently the Managing and Principal Partner of the jurisprudence house, PR Manecksha A ; Associates. He is presently non a manager of any other public company listed on Bursa Malaysia Securities Berhad ESWARAMOORTHY PILLAY S/O AMUTHER Executive Director Mr Eswaramoorthy Pillay S/O Amuther ( Bryann ) , a Singaporean, aged 43, was appointed to the Board on 8 December 2006 and as Executive Director on 26 December 2006. He holds a Maestro s Degree in Business Studies from the University of Newport, United States of America and has extended experience in the field of information engineering. He is presently non a manager of any other public company listed on Bursa Malaysia Securities Berhad. MEVIN NEVIS A/L AF NEVIS Executive Director Mr Mevin Nevis A/L AF Nevis, a Malayan, aged 55, was appointed to the Board on 22 February 2008 and as Executive Director on 2 June 2008. He graduated from the INSEAD EURO ASIA International Management Programme in Fontainebleau, France and holds a Maestro s Degree in Business Administration, Executive Management. He started his calling with Standard Chartered Bank Berhad ( the Bank ) in 1972. Rising through the ranks under the Bank s Executive Management Trainee plan, he has held assorted executive and senior managerial places in the Bank during the period from 1980 to 2007 such as Branch Manager, Area Manager for Northern/Central Region, Head of Small A ; Medium Enterprises, Head of Large Local Corporations and Head of Product Management for Cash Management, Trade A ; Securities Services. From 1990 to 1992, he was assigned to the Bank s offices in Chicago and Los Angeles in the United States of America as Senior Relationship Manager for transnational corporate concerns. His las t poster before he left the Bank in October 2007 was as Director/Head of Transaction Banking. Thereafter, he joined the Linear Group in late 2007. He is presently non a manager of any other public company listed on Bursa Malaysia Securities Berhad. KHOO ENG CHIN Independent Non-Executive Director A Mr. Khoo Eng Chin, a Malayan, aged 52, was appointed to the Board on 22 February 2010A as Independent Non-Executive Director.A He holds a Bachelor of Economics from La Trobe University, Victoria, Australia.A He started his calling with Malayan International Merchant Bankers Berhad ( MIMB ) in 1986.A He was involved in all facets of Corporate Advisory, Corporate Banking and Money Market operations.A He was with MIMB for 10 old ages and in 1996, he left MIMB as an Assistant Branch Manager to fall in ECM Libra Securities Sdn. Bhd. ( once known as Smith Zain Securities Sdn. Bhd. ) .A In 2004, he joined Kenanga Investment Bank as the Senior Manager, Corporate Finance and in October 2008, he left Kenanga Investment Bank as an Assistant Vice President.A He is presently non a manager of any other public company listed on Bursa Malaysia Securities Berhad. A SAW HENG SOO Executive Director A Saw Heng Soo, a Malayan, aged 54, was appointed to the Board on 7 May 2010 as Executive Director.A He graduated with a Diploma in Commerce from Kolej Tunku Abdul Raman Malaysia in 1980 and completed his scrutiny of Association of Chartered Certified Accountants ( ACCA ) in 1981.A He has been a member of the ACCA in 1984 and Fellow of ACCA in 2001. Over the last 34 old ages of his calling, he had worked with the International Accounting Firms for 8 years.A He had besides served as Group Chief Accountant/Director of Subsidiaries with Chocolate Products Berhad for 5 years.A He was General Manager of Trade Ocean Exporter Sdn. Bhd. , an international nutrient exporter, for about 2 years.A He was Operations Manager of Berjaya Sports Toto Filipino Operationss for about 2 years.A He served as General Manager of Paragon Paper-Mill of Hai Meng Holdings Berhad for about 3 years.A He was appointed as Senior General Manager of Golden Frontier Berhad and subsequently promoted to Group Operations Director for 10 years.A He is presently attached to an investing keeping company as a Director and is non a manager of any other public company listed on Bursa Malaysia Securities Berhad. A YAP CHEE KEONG Executive Director A Yap Chee Keong, a Malayan, aged 55, was appointed to the Board on 7 May 2010 as Executive Director.A He holds a Bachelor of Arts ( First Class Honours ) grade in Economicss from the University Of Leeds, United Kingdom ( 1978 ) .A He is besides a Chartered Accountant of the Institute of Chartered Accountants of Scotland ( 1981 ) .A He has scrutinizing experience in England from 1978 to 1981.A He besides has extended fiscal experience gained from his calling in merchandiser banking from 1981 to 1997 with Bumiputra Merchant Bankers Berhad.A He is now a Financial Adviser and Company Director.A He has served as a Director of several public listed companies but is presently non a manager of any other public company listed on Bursa Malaysia Securities Berhad. A NEOH CHEE KEAN Independent Non-Executive Director A Mr. Neoh Chee Kean, a Malayan, aged 56, was appointed to the Board on 7 May 2010 as Independent Non-Executive Director.A He graduated as a Chartered Accountant from ACCA in the United Kingdom in 1977 and was admitted as an Associate of ACCA in 1981 and a chap in 1986.A He was besides admitted as a member of the Malaysian Institute of Accountants in 1981.A He has more than 30 old ages of working experience in accounting, audit, finance, revenue enhancement, company secretarial and fabrication which he accumulated in an International Audit Firm, a transnational company and direction consultancy firms.A He is presently non a manager of any other public company listed on Bursa Malaysia Securities Berhad. Other Information of BOD None of the Directors are significant stockholders of the Company. There are no household relationships among the Directors and/or significant stockholders of the Company. None of the Directors has any struggle of involvement with the Company. None of the Directors has been convicted of any offense, other than traffic offenses, within the past 10 old ages. 1.4 Corporate Doctrine Our Strategic Vision Linear s passion is to be a prima multi-country industrial endeavor turning globally through winning partnerships in the field of chilling, warming and its related merchandises and services. Our purpose is to present entire client satisfaction by guaranting best quality and best cost through operational excellence and uninterrupted invention. Our Mission To be the leader in all related market sections Our Goal To be the high quality best cost leader in all our merchandises and services Our Corporate Values A ; Credo i Longevity in merchandise quality, concern partnerships and employee dealingss i Innovative in our pursuit for uninterrupted betterments and cost decreases i No barriers in communicating with our clients, spouses and employees iExcellence and entrepreneurship in all we do iAgile and fast in all our actions iResult orientated and honoring to our employees and stockholders 2.0 BUSINESS BACKGROUND 2.1 Core Businesss 1. Fabrication and distribution of HVAC merchandises ( capacitor, evaporator, chilling tower ) 2. Technology services, after gross revenues and care services, H2O intervention 3. Design, physique and run territory chilling workss What Linear Offers: Design and customisation District chilling works design Design audit and professional sentiment Customisation of system demands based on clients demands Construction HVAC equipment supplier District chilling works builder Testing and commissioning of territory chilling workss Controling and supervising systems Operationss District chilling works direction District chilling works public presentation optimization Water intervention services for chilling towers After gross revenues and services for all HVAC merchandises Support and ownership Linear will plan, concept and run territory chilling workss on a JV or ain Utility charges will be levied based on usage with a minimal up-take Market Reach Linear s solutions are widely used in: aˆ?A A A Central concern territories aˆ?A A A Industrial Parkss aˆ?A A A Shopping promenades aˆ?A A A Hotels aˆ?A A A Convention centres aˆ?A A A Railway Stationss aˆ?A A A Airports aˆ?A A A Hypermarkets and supermarkets aˆ?A A A Office edifices aˆ?A A A Universities aˆ?A A A Hospitals Major HVAC Product Clients Undertaking Portfolio 2.3.1 Bandar Perda, Seberang Prai Owner Aseania Linear District Cooling System Sdn Bhd ( 100 % owned by Linear ) Rated end product capacity of chilling works 18,000 dozenss Water supply/return temperatures 34AÂ °F/54AÂ °F ( 1.1AÂ °C/12.2AÂ °C ) Description of undertaking 22,000 square pes, individual degree, stand-alone edifice that contains three 1,905 ton centrifugal H2O hair-raisers, three 2,180 ton traffic circle screw compressors hair-raisers and 50,000 ton-hours of external thaw ice-based thermic storage. Plant in-service 2005 ( Phase 1 ) Linear Group s range Design, Build, Operate and Own Bandar Perda Plant Facility 2.3.2 The Curve A Owner Boustead Linear Corporation Sdn Bhd ( 40 % owned by Linear ; 60 % owned by Boustead Properties Berhad ) Rated end product capacity of chilling works 7,600 dozenss Water supply/return temperatures 34AÂ °F/54AÂ °F ( 1.1AÂ °C/12.2AÂ °C ) Description of undertaking 9,800 square pes, individual degree works built on the roof of the 5-storey edifice. stand-alone edifice that contains two 850 ton centrifugal H2O hair-raisers, three 1,224 ton traffic circle screw compressor double evaporator hair-raisers and 25,600 ton-hours of external thaw ice-based thermic storage. Plant in-service December 2004 Linear Group s range ( a ) A A technology, procurance and building ; and ( B ) A A sole operation, care and direction The Curve Plant Facility 2.4 The Business Partners IR CHUA KENG SENG B.E. ( Hons ) , MIEM, P.Eng. , MASHRAE. MMIM. CPP Our Leading A ; Executive Consultant for our HVAC merchandises and District Cooling Projects. Over the past 25 old ages, Ir. Chua has been responsible for the design and supervising of building for more than 5 territory chilling undertakings locally. Ir. Chua, a seasonal lector and tester for the topic of HAVC at assorted universities, has conducted huge classs and seminars on the topic of thermic storage, co coevals systems supplying for big chilling systems, cost economy schemes, energy transition, effectual care and problem shot, planing and be aftering air conditioning systems for clients and user edifices. Ir. Chua is one of the taking and preferable District Cooling Plant adviser in this part with a combined end product of his undertakings wholly more than 120,000 dozenss of chilling. 3.0 Corporate Administration 3.1 BOARD OF DIRECTORS 3.1.1 Board Responsibilities The Board assumes overall duty for the Group s corporate administration and retains full and effectual control over the Group s concerns and personal businesss. As such, it has reserved for itself a agenda of affairs for consideration and determination which include inter alia, the Group s strategic concern way and action programs, hazards direction and internal control steps to guarantee the proper behavior of operations, fiscal and operating efficiency and public presentation of all concern units every bit good as human resource capablenesss within the Group. 3.1.2 Board Composition The Board presently has 7 members consisting 3 Independent Non-Executive Directors, 1 Non-Executive Director and 3 Executive Directors. The composing reflects that 1/3 of its members are independent. Jointly, the Directors bring to the Company a wide mix of concern, direction, fiscal, legal, selling and proficient expertness and experience to supply clear and effectual leading for the Group. Brief descriptions on the background of the Directors are presented on pages 5 and 6 of this one-year study. 3.1.3 Board Balance The Board is presently led by the Chairman who is an Independent Non-Executive Director. The Chairman is chiefly responsible for the orderly and effectual behavior of the Board whilst the Executive Directors are responsible for the devising of twenty-four hours to twenty-four hours concern and operational determinations and execution of the Board policies in run intoing the ends, vision and way set by the Board. The Independent Non-Executive Directors are non involved in the daily direction of the Group but they play a cardinal back uping function, lending their accomplishments and cognition in all major affairs and issues referred to the Board for consideration and blessing. Their function is peculiarly of import in guaranting that affairs proposed to the Board will be to the full discussed and examined, taking into history the long term involvement of the Company s minority stockholders. Most significantly, their parts will supply an component of objectiveness and independent judge ment to the Board. Mr. Pervez Rustim Manecksha @ Paul Manecksha is presently the designated Senior Independent Non-Executive Director to whom affairs of concern may be conveyed. 3.2 Board Committees To heighten concern and operational efficiency every bit good as to be in line with the best patterns prescribed by the Code, the Board had delegated specific undertakings to 5 Board Committees, viz. Audit Committee, Nomination Committee, Remuneration Committee, Risk Management and Investment Committee and Employees Share Options Committee, the composings of which are as follows: 3.2.1 Audit Committee ( consisting wholly Independent Non-Executive Directors ) Neoh Chee Kean Chairman Pervez Rustim Manecksha @ Paul Manecksha Member Khoo Eng Chin Member 3.2.2 Nomination Committee ( consisting wholly Independent Non-Executive Directors ) Pervez Rustim Manecksha @ Paul Manecksha Chairman Khoo Eng Chin Member 3.2.3 Remuneration Committee ( consisting wholly Independent Non-Executive Directors ) Pervez Rustim Manecksha @ Paul Manecksha Chairman Khoo Eng Chin Member 3.2.4 Risk Management and Investment Committee Saw Heng Soo Chairman Mevin Nevis A/L AF Nevis Member 3.2.5 Employees Share Options Committee Saw Heng Soo Chairman Mevin Nevis A/L AF Nevis Member 3.3 Appointments to the Board The Nomination Committee is charged with the responsibility to measure and reexamine the suitableness of campaigners nominated for assignment to the Board based on the campaigners makings, accomplishments and experience. In the class of this reappraisal, it will guarantee that the Board has the needed mix of accomplishments and experience for the effectual discharge of responsibilities. The Nomination Committee will so do its recommendations to the Board and the concluding determination on the assignment lies with the full Board. 3.4 Re-election of Directors Harmonizing to the Company s Articles of Association, all Directors appointed to the Board are capable to retirement at the first one-year general meeting of the Company. Thereafter, at least 1/3 of the Board is capable to retirement by rotary motion at every subsequent one-year general meeting provided that all Directors including the Managing Director shall retire one time in every 3 old ages in conformity with the Listing Requirements of Bursa Securities ( the List Requirements ) . The Articles of Association farther provides that all new Directors shall retire at the one-year general meeting subsequent to their assignment, and that all retiring Directors are eligible for re-election. The Board, upon the recommendation of the Nomination Committee, will usually put up the retiring Directors for re-election. The Directors standing for re-election at the forthcoming one-year general meeting are Mr. Khoo Eng Chin, Mr. Saw Heng Soo, Mr. Yap Chee Keong and Mr. Neoh Chee Kean. They are all eligible for re-election and have offered themselves for re-election. The Board, upon the recommendation of the Nomination Committee, has nominated the retiring Directors for re-election at the Company s forthcoming Sixteenth Annual General Meeting. 4.0 AUDIT COMMITTEE 4.1 Composition The Audit Committee of Linear Corporation Berhad presently comprises all Independent Non-Executive Directors viz. : Neoh Chee Kean Chairman Pervez Rustim Manecksha @ Paul Manecksha Member Khoo Eng Chin Member 4.2 Footings Of Reference Of Audit Committee The Audit Committee is governed by the undermentioned Footings of Reference which are in line with the Malayan Code on Corporate Administration: 4.2.1 Composition of members The Board shall elect the Audit Committee members from amongst themselves consisting no fewer than three ( 3 ) managers. All members of the Audit Committee shall be non-executive managers who possess equal fiscal cognition to dispatch their maps efficaciously. A bulk of the Audit Committee members shall be independent managers. The term of office of the Audit Committee is three ( 3 ) old ages and may be re-nominated and appointed by the Board of Directors. In this regard, the Board adopts the definition of independent manager as defined under Bursa Securities s List Requirements. At least 1 member of the Audit Committee must be: ( a ) a member of the Malaysian Institute of Accountants ( MIA ) ; or ( B ) if he is non a member of MIA, he must hold at least three ( 3 ) old ages of working experience and: ( I ) he must hold passed the scrutinies specified in Part 1 of the 1st Agenda of the Accountants Act,1967 ; or ( two ) he must be a member of one ( 1 ) of the associations of comptrollers specified in Part II of the 1st Agenda of the Accountants Act, 1967 ; or ( degree Celsius ) fulfills such other demands as prescribed by the Exchange No alternate manager of the Board shall be appointed as a member of the Audit Committee. 4.2.2 Retirement and surrender If a member of the Audit Committee resigns, dies, or for any ground ceases to be a member with the consequence that the figure of members is reduced below three ( 3 ) , the Board shall within three ( 3 ) months of the event appoint such figure of the new members as may be required to make full the vacancy. 4.2.3 Chairman The Chairman of the Audit Committee, elected from amongst the Audit Committee members, shall be an independent manager. The Chairman of the Committee shall be approved by the Board of Directors. 4.2.4 Secretary The Secretary of the Audit Committee shall be the Company Secretary. The Secretary shall be responsible for pulling up the docket with concurrency of the Chairman and go arounding it, supported by explanatory certification to members of the Audit Committee prior to each meeting. The Secretary shall besides be responsible for maintaining the proceedingss of meetings of the Audit Committee, go arounding them to members of the Audit Committee and to the other members of the Board of Directors and for following up outstanding affairs. 4.2.5 Meetings The Audit Committee meetings shall be conducted at least four ( 4 ) times yearly, or more often as fortunes dictate. In add-on, the Chairman may name for extra meetings at any clip at the Chairman s discretion. In the absence of the Chairman, the other independent manager shall be the Chairman for that meeting. The members of the Audit Committee, General Manager ( Corporate Affairs, Finance and Administration ) , Finance Manager and the caput of internal audit will usually be in attending at the meetings. Representatives of the external hearers are to be in attending at meetings where affairs associating to the audit of the statutory histories and/or external hearers are to be discussed. Other Directors, officers and employees of the Company and/or Group may be invited to go to, except for those parts of the meetings where their presence is considered inappropriate, as determined by the Audit Committee. However, at least twice a twelvemonth the Audit Committee shall run into with the external hearers without any executive board member nowadays. Minutess of each meeting shall be kept and distributed to each member of the Audit Committee and besides to the other members of the Board of Directors. The Audit Committee Chairman shall describe on each meeting to the Board of Directors. 4.2.6 Quorum The quorum for the Audit Committee run intoing shall be the bulk of members present whom must be independent managers. 4.2.7 Reporting The Audit Committee shall describe to the Board of Directors, either officially in authorship, or verbally, as it considers appropriate on the affairs within its footings of mention at least one time a twelvemonth, but more often if it so wishes. The Audit Committee shall describe to the Board of Directors on any specific affairs referred to it by the Board for probe and study. 4.2.8 Objective The chief aim of the Audit Committee is to help the Board of Directors in dispatching its statutory responsibilities and duties associating to accounting and coverage patterns of the keeping company and each of its subordinates. In add-on, the Audit Committee shall: ( a ) evaluate the quality of the audits performed by the internal and external hearers ; ( B ) provide confidence that the fiscal information presented by direction is relevant, dependable and seasonably ; ( degree Celsius ) oversee conformity with Torahs and ordinances and observation of a proper codification of behavior ; ( vitamin D ) determine the quality, adequateness and effectivity of the Group s control environment ; and ( vitamin E ) develop and keep an effectual hazard direction system and procedures are applied in the twenty-four hours to twenty-four hours concern and activities. 4.2.9 Authority The Audit Committee shall, in conformity with a process to be determined by the Board of Directors and at the disbursal of the Company: ( a ) authorise to look into any activity within its footings of mention. All employees shall be directed to co-operate as requested by members of the Audit Committee ; ( B ) have full and unlimited/unrestricted entree to all information and documents/resources which are required to execute its responsibilities every bit good as to the internal and external hearers and senior direction of the Company and Group ; ( degree Celsius ) obtain, at the disbursal of the Company, other independent professional advice or other advice and to procure the attending of foreigners with relevant experience and expertness if it considers necessary ; ( vitamin D ) be able to convene meetings with the external hearers whenever deemed necessary ; ( vitamin E ) be able to do relevant studies when necessary to the relevant governments if a breach of the Listing Requirements occurred ; ( degree Fahrenheit ) be kept informed every bit shortly as possible of any inauspicious development originating from any event such material judicial proceeding ; and ( g ) the Audit Committee shall hold the power to set up Sub-Committee ( s ) and depute its powers to such Sub-Committee ( s ) for the intent of transporting out certain probes on its behalf in such mode as the Audit Committee deems fit and necessary and, to name any individual ( s ) as member ( s ) of the Sub-Committee ( s ) and/or as Head of Internal Audit who shall describe straight to the Audit Committee. 4.2.10 Duties and Duties The responsibilities and duties of the Audit Committee are as follows: ( a ) To reexamine the care and control of an effectual accounting system. ( B ) To reexamine the Group s public answerability and conformity with the jurisprudence. ( degree Celsius ) To reexamine and measure the adequateness and effectivity of the internal and external audit processs, and to guarantee that they have the necessary authorization to transport out their work. ( vitamin D ) To measure the quality of external hearers and do recommendations refering their assignment and wage and to see the nomination of a individual or individuals as external hearers. ( vitamin E ) To supply affair between the external hearers, the direction and the Board of Directors and besides to reexamine the aid given by the direction to the external hearers. ( degree Fahrenheit ) To reexamine the findings of the internal and external hearers and to guarantee that appropriate actions are taken on the recommendations of the hearers. ( g ) To reexamine the quarterly consequences and fiscal statements and one-year study prior to entry to the Board of Directors. ( H ) To supervise and to reexamine any related party minutess that may originate within the Group and to describe, if any minutess between the Group and any related party outside the Group which are non based on arms-length footings and on footings which are disadvantageous to the Group. ( I ) To verify the allotment of portion options under the Employees Share Option Scheme ( ESOS ) as being in conformity with the standards set out in the ESOS By-Laws. ( J ) To describe its findings on the fiscal and direction public presentation, and other stuff affairs to the Board of Directors. ( K ) To move in line with the waies of the Board of Directors. ( cubic decimeter ) To see and analyze such other affairs as the Audit Committee considers appropriate. ( m ) To reexamine the studies of direction in relation to the unity and adequateness of the procedure for placing chief hazards and guarantee the execution of appropriate systems to pull off these hazards. ( N ) To reexamine any assessment or appraisal of the public presentation of members of the internal audit map who are full-time employees of the Group, if any. ( O ) To O.K. any assignment or expiration of senior staff members of the internal audit map who are fulltime employees of the Group, if any. ( P ) To take awareness of surrenders of internal audit staff members who are full-time employees of the Group, if any, and supply such resigning staff member an chance to subject his/her grounds for vacating. 5.0 THE RELATED EVENT 5.1 Reports from Audit Committee The Audit Committee met 5 times during the fiscal twelvemonth ended 31 December 2009 and has met with the external hearers twice in the same fiscal twelvemonth without the presence of any executive board member. All Audit Committee meetings were punctually convened with sufficient notice given to all Committee members together with the docket, studies and proposals for deliberation at the meetings. Detailss of attending of the Audit Committee members at the Audit Committee meetings held during the twelvemonth ended 31 December 2009 are as follows: Audit Committee Member Attendance Pervez Rustim Manecksha @ Paul Manecksha 5 out of 5 Heinrich August Diehl ( Resigned: 11.09.09 ) 2 out of 4 Kok Seng Loong ( Resigned: 14.09.09 ) 4 out of 4 See Keng Leong ( Appointed: 11.09.09, Resigned: 12.11.09 ) Not applicable Chan Weng Kwong ( Appointed: 11.09.09, Resigned: 23.12.09 ) 1 out of 1 Khoo Eng Chin ( Appointed 22.02.10 ) Not applicable Neoh Chee Kean ( Appointed 07.05.10 ) Not applicable Summary Of Activities Of The Audit Committee During the fiscal twelvemonth ended 31 December 2009, the Audit Committee carried out the undermentioned activities in the discharge of its responsibilities: aˆ? Reviewed wholly unaudited quarterly fiscal consequences and the audited fiscal statements of the Company before urging them to the Board for blessing ; aˆ? Reviewed the external hearers range and attack of audit as presented in their audit program before beginning of audit ; aˆ? Reviewed the external hearers audit study and considered the countries of concern raised by the external hearers ; aˆ? Reviewed all recurrent related party minutess on a quarterly footing ; aˆ? Reviewed the position of employees portion option allotments on a quarterly footing. aˆ? Verified the allotment of options pursuant to Employee Share Option Scheme ( ESOS ) of the Company. The Audit Committee noted that the Company has a sum of 1,137,000 portions available under the Company s ESOS to the employees of the Company and the options have non been exercised as at 31 December 2009. The exercising monetary value of the ESOS portions is RM1.16 and the ESOS is valid until 13 August 2013. 5.2 Internal Audit Function The internal audit map is independent of the auditable countries in the organisation and study to the Audit Committee. The duties include reexamining the adequateness of the systems of internal controls and measuring the assorted fiscal and operational hazards faced by the organisation. 5.3 Statement On Internal Control The Board of Directors ( Board ) of Linear Corporation Berhad ( Linear ) is pleased to put out below the Statement of Internal Control pursuant to paragraph 15.27 ( B ) of the Listing Requirements of Bursa Malaysia Securities Berhad ( Bursa Securities ) . It is prepared in conformity with Bursa Securities Statement of Internal Control Guidance for Directors of Public Listed Companies. The Board acknowledges its duty to keep a sound system of internal controls to safeguard the Linear Group ( the Group ) s assets in conformity with the Malayan Code on Corporate Governance ( the Code ) . The Board is committed to taking appropriate enterprises to further beef up the transparence, answerability and efficiency of the Group s operations. The Board believes that the pattern of good corporate administration is an of import uninterrupted procedure and non merely a affair to be covered as conformity in its one-year study. 5.3.1 Board Duty The Board affirms the overall duty for keeping a sound system of internal controls and for reexamining its adequateness and unity so as to safeguard stockholders investing and the Group s assets. Due to built-in restrictions in any system of internal control, the system is designed to pull off and command hazard suitably instead than extinguish the hazard of failure to accomplish concern aims. Consequently, the internal control system provides sensible confidence and non absolute confidence against material misstatement or loss, and hence hazards should be continually monitored and managed at all times. The Board takes awareness of the betterment points highlighted by the external hearers and recognizes that reexamining and heightening the Group s system of internal control is a go oning procedure. 5.3.2 Internal Control Cardinal elements of the system of internal controls are as follows: Operating construction with clearly defined lines of duty The operating construction includes defined deputation of responsibilities and duties to the assorted Board Committees, the Executive Board members, the Management and runing units. Independence of the Audit Committee The Audit Committee, which comprises wholly Independent Non-Executive Board members, holds regular meetings to consider on audit findings and recommendations and studies to the Board. Employee competence Proper processs are in topographic point in regard of enlisting and expiration of employees. Emphasis is placed on the quality and abilities of employees with go oning instruction, preparation and development being actively encouraged through assorted plans. Fiscal coverage Regular monitoring and reappraisal of fiscal consequences by the Management and preparation of action programs to turn to countries of concern before they are being reported to the Audit Committee and the Board. Insurance Adequate insurance on major assets such as stocks, edifices and machineries belonging to the Group, is in placed to guarantee that the Group is sufficiently covered against any bad luck that may ensue in stuff losingss impacting the Group. Failings in Internal Controls that Results in Material Losses There were no stuff or important losingss incurred during the fiscal twelvemonth ended 31 December 2009 as a consequence of failing in internal control. Notwithstanding, the Board remains committed to beef up the Group s control environment and procedures and its pursuit for uninterrupted betterment is ongoing and, appropriate action programs will be put in topographic point, when necessary, to farther heighten the Group s system of internal controls. 5.3.3 Statement On Internal Audit Function Due to the Group s restructuring exercising, we were unable to prosecute an independent organic structure to set about the internal audit map. However, this map will be filled for the fiscal twelvemonth 2010. 5.4 Reports from Hearer 5.4.1 Report on the Financial Statements We have audited the fiscal statements of Linear Corporation Berhad, which comprise the balance sheets as at December 31, 2009 of the Group and of the Company, and the income statements, statements of alterations in equity and hard currency flow statements of the Group and of the Company for the twelvemonth ended December 31, 2009, and a sum-up of important accounting policies and other explanatory notes, as set out on pages 31 to 89. Directors Duty for the Financial Statements The managers of the Company are responsible for the readying and just presentation of these fiscal statements in conformity with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This duty includes designing, implementing and keeping internal control relevant to the readying and just presentation of fiscal statements that are free from material misstatement, whether due to fraud or mistake ; choosing and using appropriate accounting policies ; and doing accounting estimations that are sensible in the fortunes. Hearers Duty Our duty is to show an sentiment on these fiscal statements based on our audit. We conducted our audit in conformity with sanctioned criterions on scrutinizing in Malaysia. Those criterions require that we comply with ethical demands and program and execute the audit to obtain sensible confidence whether the fiscal statements are free from material misstatement. An audit involves executing processs to obtain audit grounds about the sums and revelations in the fiscal statements. The processs selected depend on our judgement, including the appraisal of hazards of material misstatement of the fiscal statements, whether due to fraud or mistake. In doing those hazard appraisals, we consider internal control relevant to the Company s readying and just presentation of the fiscal statements in order to plan audit processs that are appropriate in the fortunes, but non for the intent of showing an sentiment on the effectivity of the Company s internal control. An audit besides includes measuri ng the rightness of accounting policies used and the rationality of accounting estimations made by the managers, every bit good as measuring the overall presentation of the fiscal statements. We believe that the audit grounds we have obtained is sufficient and appropriate to supply a footing for our audit sentiment. Emphasis of Matter Without measure uping our sentiment, we draw our attending to Note 23 of the notes to the fiscal statements that the Group had defaulted on the bank adoptions. The direction is presently in the procedure of negociating to dispose certain belongings, works and equipment and prepaid land rental to refund the bank adoptions. Footing for Qualified Opinion We are unable to fulfill ourselves on the collectability of the progress of RM36 million reflected in other receivables, as mentioned in Note 15 and Note 39 of the notes to the fiscal statements. However, the direction is of the position that this sum can be recovered. In the event that the said sum can non be recovered, the stockholders equity will be decreased by the said sum and in the absence of extra capital being injected into the Company and/or future net incomes generated by the Group, the Company may be classified as an Affected Listed Issuer pursuant to the amendments to the Listing Requirements of Bursa Malaysia Securities Berhad in relation to Practice Note 17/2009. Qualified Opinion In our sentiment, except for the effects on the fiscal statements of the affair described in the Basis for Qualified Opinion paragraph, the fiscal statements have been decently drawn up in conformity with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and just position of the fiscal place of the Group and of the Company every bit at December 31, 2009 and of their fiscal public presentation and hard currency flows for the twelvemonth so ended December 31, 2009. Report on Other Legal and Regulatory Requirements In conformity with the demands of the Companies Act 1965 in Malaysia, we besides report the followers: ( a ) In our sentiment, the accounting and other records and the registries required by the Act to be kept by the Company and its subordinates of which we have acted as hearers have been decently kept in conformity with the commissariats of the Act. ( B ) We have considered the histories and the hearers studies of the subordinates of which we have non acted as hearers, which are indicated in Note 9 ( B ) of the notes to the fiscal statements. ( degree Celsius ) We are satisfied that the histories of the subordinates that have been consolidated with the Company s fiscal statements are in signifier and content appropriate and proper for the intents of the readying of the fiscal statements of the Group and we have received satisfactory information and accounts required by us for those intents. ( vitamin D ) The audit study on the histories of LCI Global Sdn. Bhd. ( once known as Linear Cooling Industries Sdn. Bhd. ) contains qualified sentiment made under Section 174 ( 3 ) of the Act. The audit study of staying subordinates did non incorporate any making or any inauspicious remark made under Section 174 ( 3 ) of the Act. Other Matters This study is made entirely to the members of the Company, as a organic structure, in conformity with Section 174 of the Companies Act 1965 in Malaysia and for no other intent. We do non presume duty to any other individual for the content of this study. The fiscal statements for the preceding twelvemonth were audited by another house and are presented simply for comparative intents. 6.0 Determination OF THE CASE OF LINEAR The fiscal statement of Linear Corporation get downing in 2005 shows that company was in fiscal hurt. They are loss about RM 50 million. In 2006, the company was reported a net loss about RM 20 million. However, the conditions of fiscal in 2007 become better. The company was reported net net income about RM 4 million. But, in 2008 the fiscal place cyberspace net income was decrease RM 700 1000. Then, the fiscal statement in 2009 shows a bad place. The company was reported net loss about RM 17 million. Therefore no dividend has been recommended, paid or declared by the Company since the terminal of the old fiscal twelvemonth. The company has released their one-year study to the populace on the 4th of June 2010. From the one-year study the hearer mentioned that they are unable to fulfill their egos on the collectability of the progress of RM36 million reflected in other receivables, as mentioned in Note 15 and Note 39 of the notes to the fiscal statements. However, the direction is of the position that this sum can be recovered. In the event that the said sum can non be recovered, the stockholders equity will be decreased by the said sum and in the absence of extra capital being injected into the Company and/or future net incomes generated by the Group, the Company may be classified as an Affected Listed Issuer pursuant to the amendments to the Listing Requirements of Bursa Malaysia Securities Berhad in relation to Practice Note 17/2009. This company is in fiscal hurt when Bursa Malaysia issued PN17. Companies that fall within the definition of PN17 will necessitate to subject their proposal to the Approv ing Authority to reconstitute and resuscitate the company in order to keep the listing position. After the company has released their one-year study to the populace, the hearer was uncovering the fraud made by board of manager. The company job began when the former manager Alan Rajendram has signed a missive of award with Global Investment Group ( GIG ) on December 29, 2009 for the dome undertaking and was paid to GIG as public presentation consideration for a RM1.6 billion King Dome undertaking. The undertaking of King Dome is the chilling works that would be providing chilled H2O for the air-conditioning system in Manjung Perak. He has informed the board of managers after he has transferred out the money. In February 2010, the internal hearers advised the GIG to return the money, which the latter followed through. This is because the money could non be transferred without the blessing of the board. Again Alan Rajendram has transferred out the money of RM36 million one time more to GIG in April without advising the board. He gives account was that there was force per unit area from GIG on him to reassign the money to be used as a public presentation consideration payment for the RM1.6 billion King Dome undertaking. Therefore, he used the bossy mode to do the determination. This happen because there were no proper processs for undertakings to be prepared and submitted for blessing by the board. Harmonizing to Linear Corp executives manager Mervis Nevis, prior to this, for three old ages, they were no proper processs for undertaking to be prepared and submitted for blessing. Linear s problems began when there was no advancement made after the company signed a missive of award with GIG on Dec 29, 2009 for the dome undertaking and the RM 36 million was paid out to GIG as public presentation consideration . Besides that, Linear defaulted on its loan duties. Harmonizing to Executive manager C.K. Yap, the payment to GIG was to demo that Linear Corporation had the ability to set about the King Dome undertakings. The company now wanted to sell its chilling system-manufacturing works in Prai Industrial Estate and used the returns as working capital. The company besides would analyze whether the King Dome undertaking was still feasible. If the undertaking can continue, there will no job in acquiring funding. If it non, Rajendram had given an insurance missive to state that the RM 36 million will be returned to Linear by November 30. Bursa Malaysia was instantly appoint a particular hearer to look into the company, peculiarly its fiscal affairs and place any possible abnormalities. When the instance began, the executive manager of a public listed company was charged in the Sessions Court on five charges of abetting three persons to rip off and perpetrate condemnable breach of trust ( CBT ) affecting nine million portion amounting to RM 23 million. Harmonizing to instance of Linear Corporation, the anterior job in this company was weak in internal control. The transportation of money can easy be made because there were no proper processs for undertakings to be prepared and submitted for blessing by the board. Linear besides acknowledging its recent job were self-inflicted by internal failings. To work out this job, there were calls for one-year general meeting. From this AGM, they will transport on with their restructuring exercising with the usual model of capital decrease, decrease of liability followed by injection of new equity financess. The 2nd resort is to retrieve the money from its former manager Alan Rajendram Jeya Rajendram, who has issued a statutory declaration and a missive of insurance ( LOI ) on June 17 to present the undertaking or indemnify the company in the event of any losingss. He has until Nov 30 to make so. Linear will reconstitute attempts include fastening other loopholes, with any determinations affecting more than RM10,000 necessitating the blessing of the board. Therefore, all contractual agreements must besides be vetted and prepared by external legal advisors before being brought to the board for deliberation. 7.0 Decision BKAF 5043 FINANCIAL ACCOUNTING THEORY AND REPORTING PRACTISES Case Study: LINEAR CORPORATION BHD. PREPARED FOR: PN. ROHANA @ NORLIZA YUSOF Prepared BY: NURUL FARIDA BINTI ABDULLAH ( 801920 ) ZURAINI BINTI ZAKARIAH ( 802990 ) Date ON SUBMISSION: 1 AUGUST 2010