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Contents
Chairmans Statement
Corporate Information
Profile of Directors
Corporate Governance Statement
Audit Committee Report
Statement on Internal Control
Statement on Internal Audit Function
Statement of Directors Responsibilities
Additional Compliance Information
Directors Report
Statement by Directors
Statutory Declaration
Independent Auditors Report
Consolidated Statement of Financial Position
Consolidated Statement of Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Statement of Financial Position
Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Supplementary Information - Realised and Unrealised Profits or Losses
List of Properties
Analysis of Shareholdings
Notice of 18th Annual General Meeting
Statement Accompanying the Notice of 18th Annual General Meeting
Form of Proxy
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02
Chairmans Statement
On behalf of the Board of Directors, I hereby present to you the 18th Annual Report and Audited Financial Statements of
Linear Corporation Berhad (LCB) for the financial year ended 31 December 2011.
PERFORMANCE REVIEW
Despite Linear Corporation Berhad being considered as an Affected Listed Issuer pursuant to the Amended Practice Note
17/2005 (PN17/2005) of the Listing Requirements of Bursa Securities Malaysia Berhad (Bursa Securities), the Group
recorded a higher consolidated revenue of RM12.279 million for the financial year ended 31 December 2011 as compared
to RM7.502 million generated in the preceding financial year. The increase was mainly due to an increase in chilled water
rates to Aeon Co (M) Berhad following the execution of Supply Agreement on 1 August 2011 between the Group and Aeon
Co (M) Berhad. The increase was also due to an increase in the Groups sales for BAC models, a brand under Baltimore
Aircoil Company Inc (USA) .
However, the Group reported a higher loss after tax of RM63.883 million for the financial year under review, as compared
to the previous years loss after tax of RM15.126 million. The loss after tax of RM63.883 million was mainly due to an
operating loss of RM3.038 million and interest expenses of RM3.259 million, impairment loss on loans and receivables
of RM 48.101 million, allowance for slow moving stocks of RM 0.914 million, impairment loss on property, plant and
equipment of RM 4.894 million and revaluation decrease of the buildings belong to District Cooling System Sdn Bhd of
RM3.677 million.
CORPORATE DEVELOPMENT
The Company had on 22 September 2011 submitted a regularisation plan to Bursa Malaysia Securities Berhad (Bursa
Securities) to address the PN17 status of LCB. As at todate, the Company has yet to obtain any decision from Bursa
Securities on the regularisation plan. Nevertheless, should the regularisation plan be successfully implemented, it will
restructure the viability of the LCB to one with the elements of profitability, liquidity and going concern.
The Company had also announced on 26 March 2012, that an extension of time for the restraining order had been granted
by the Penang High Court pursuant to Section 176(10) of the Companies Act, 1965, to the Company and its subsidiaries
namely LCI Global Sdn Bhd, District Cooling Systems Sdn Bhd and BAC Cooling Technology Sdn Bhd. (the Relevant
Subsidiaries) for a period of 90 days. The Board is of the view that a restraining order is necessary to prevent any proceeding
against the Company and the Relevant Subsidiaries that may jeopardize the restructuring of the LCB Group.
Meanwhile, the Group will continue with its endeavors to rebuild its core businesses, with much effort expended to procure
new orders and contracts.
DIVIDENDS
The Board does not recommend any dividend payment for the financial year under review.
03
DIRECTORATE
On behalf of the management team and staff of the Group, I would like to take this opportunity to welcome the following
directors to be on board.
Ong Tai Chew
Executive Director
Dato Wira Amiruddin Bin Che Embi
Independent Non-Executive Director
DatoLing Keak Ming
Independent Non-Executive Director
Adam Bin Bachek
Independent Non-Executive Director
With these appointments, the new directors will collectively bring to the Board a diverse array of experiences and expertise
that will improve the Groups performance moving forward.
ACKNOWLEDGEMENT
On behalf of the Board, I wish to thank our staff for their continued efforts, dedication and contributions to our Group despite
the many challenges associated with the current global economic crisis and the circumstances of our Groups on-going
restructuring efforts. I would also like to express our sincere appreciation to our customers, business partners, financiers,
advisers, the government authorities, and particularly our valued shareholders for their continuing support and confidence
in our Group.
04
Corporate Information
BOARD OF DIRECTORS
HEAD OFFICE/FACTORY
PRINCIPAL BANKERS
SELANGOR OFFICE
REGISTERED OFFICE
AUDIT COMMITTEE
AUDITORS
SECRETARY
Lim Saw Im (MACS 00363)
REGISTRARS
Tricor Investor Services Sdn.Bhd.
(Formerly known as Tenaga
Koperat Sdn. Bhd.)
Level 17, The Gardens
North Tower, Mid Valley City
Lingakaran Syed Putra
59200 Kuala Lumpur, Malaysia
Tel : 603-22643883
Fax : 603-22821886
WEBSITE
www.linear.com.my
Profile Of Directors
05
06
07
OTHER INFORMATION
1.
2.
3.
4.
08
The Board of Directors (the Board) of Linear Corporation Berhad (Linear) is committed to uphold and maintain sound
principles of corporate governance within the Linear Group (the Group) with the objective of building and enhancing long
term shareholders value. Set out below is how the Company has applied the principles and practices of good governance
set out in Part 1 and 2 of the Malaysian Code on Corporate Governance (the Code) throughout the financial year ended
31 December 2011 (the financial year).
1. BOARD OF DIRECTORS
Board Responsibilities
The Board assumes overall responsibility for the Groups corporate governance and retains full and effective control
over the Groups businesses and affairs. As such, it has reserved for itself a schedule of matters for consideration
and decision which include inter alia, the Groups strategic business direction and action plans, risks management and
internal control measures to ensure the proper conduct of operations, financial and operating efficiency and performance
of all business units as well as human resource capabilities within the Group.
Board Composition
The Board currently has 7 members comprising 4 Independent Non-Executive Directors and 3 Executive Directors. The
composition reflects that 1/3 of its members are independent. Collectively, the Directors bring to the Company a broad
mix of business, management, financial, legal, marketing and technical expertise and experience to provide clear and
effective leadership for the Group. Brief descriptions on the background of the Directors are presented on pages 5, 6
and 7 of this annual report.
Board Balance
The Board is currently led by the Chairman who is an Executive Director. The Chairman is primarily responsible for the
orderly and effective conduct of the Board and Business Directions of the Group, and the Executive Directors are
responsible for the making of day to day business and operational decisions and implementation of the Board policies
in meeting the goals, vision and direction set by the Board.
The Independent Non-Executive Directors are not involved in the day-to-day management of the Group but they play a
key supporting role, contributing their skills and knowledge in all major matters and issues referred to the Board for
consideration and approval. Their role is particularly important in ensuring that matters proposed to the Board will be
fully discussed and examined, taking into account the long term interest of the Companys minority shareholders. Most
importantly, their contributions will provide an element of objectivity and independent judgment to the Board.
Board Committees
To enhance business and operational efficiency as well as to be in line with the best practices prescribed by the Code,
the Board had delegated specific tasks to 6 Board Committees, namely Audit Committee, Nomination Committee,
Remuneration Committee, Risk Management and Investment Committee, Special Task Committee and Employees
Share Options Committee, the compositions of which are as follows:Audit Committee
(comprising entirely Independent Non-Executive Directors)
Neoh Chee Kean
Adam Bin Bachek
Dato Wira Amiruddin Bin Che Embi
- Chairman
- Member
- Member
Nomination Committee
(comprising entirely Independent Non-Executive Directors)
Neoh Chee Kean
Adam Bin Bachek
- Chairman
- Member
09
- Chairman
- Member
- Chairman
- Member
- Chairman
- Member
- Chairman
- Member
10
Attendance
1 out of 1
6 out of 6
5 out of 6
4 out of 6
5 out of 6
5 out of 6
4 out of 4
3 out of 4
The Board had, at the Board meetings, deliberated on and considered a variety of matters including amongst others,
the Groups financial results, challenges faced by the Group, strategic action plans to enhance performance and to
tighten internal controls, recurrent related party transactions. All of the existing Directors have met the minimum
requirement of 50% attendance at Board meetings during a financial year. In addition, the Board has exercised control
on matters that required the Boards approval during the intervals between the scheduled Board meetings through the
passing of Directors Circular Resolutions prepared and circulated from time to time by the company secretary.
Supply of Information
The Management has the responsibility and duty to provide the entire Board with all the information, of which it is aware,
to facilitate the effective discharge of the Boards duties. The notice calling for each Board meeting is given to the
Directors in advance together with the agenda and all relevant Board papers which encompass both quantitative and
qualitative factors so that informed decisions can be made by the Directors at the meetings. All Board members had
access to the advice and services of the company secretary and auditors and all information relating to the Group to
assist them in the furtherance of their duties. The Directors may, if necessary, obtain independent professional advice
from external consultants, at the Companys expense.
Directors Training
The Directors are encouraged to attend relevant training courses deemed necessary so as to keep abreast with the
changes on guidelines issued by the relevant authorities as well as the latest developments in the market place which
can complement their services to the Group. The Directors will continue to undergo other relevant training programmes
as appropriate, to further enhance their skills and knowledge.
The Directors who attended training during the financial year ended 31 December 2011 are as follows:Title of the seminar, workshop or courses attended
Lim Hun Beng
Discharging the Audit Committee & Internal Audit Function in compliance with risk
management best practices
Mandatory Accreditation Programme For Directors of PLC
Saw Heng Soo
Discharging the Audit Committee & Internal Audit Function in compliance with risk
management best practices
Mandatory Accreditation Programme For Directors of PLC
Date
11 April 2011
7 & 8 September 2011
11 April 2011
7 & 8 September 2011
11
9 June 2011
5 July 2011
25 & 26 July 2011
7 & 8 September 2011
29 November 2011 1 December 2011
12 September 2011
Save as disclosed above, the other Directors have not attended any training during the financial year due to their work
commitments.
Directors Remuneration
The Remuneration Committee, comprising entirely of Independent Non-Executive Directors, is responsible for the
establishment of a formal and transparent procedure to assess and determine the remuneration packages offered to
the Directors with the objective to attract and retain Directors of the caliber needed to run the Group successfully. The
remuneration packages offered to Directors who hold executive functions are based on prevailing market rates and
commensurate with the knowledge skills, experience and level of responsibilities of each Director. The Board, upon
the recommendation of the Remuneration Committee, will determine the remuneration packages of each Director.
However, the Directors do not participate in decisions regarding their own remuneration packages. Independent NonExecutive Directors, on the other hand, receive Directors fees that are approved by shareholders at annual general
meetings. The Company also reimburses the Directors with meeting allowances for expenses necessarily incurred by
them for attendance at Board meetings.
The remuneration of the Companys Directors derived from the Group during the financial year are as follows :-
Type of remuneration
Executive
Directors
RM
Non-Executive
Directors
RM
Total
RM
Fees
Salaries
Other emoluments
Total
250,000
25,500
275,500
30,000
30,000
250,000
55,500
305,500
12
Executive
Directors
Non-Executive
Directors
Total
2
1
3
4
4
4
2
1
7
13
COMPOSITION
The Audit Committee of Linear Corporation Berhad currently comprises all Independent Non-Executive Directors namely:
Neoh Chee Kean
- Chairman
Adam Bin Bachek
- Member
Dato Wira Amiruddin Bin Che Embi - Member
he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act, 1967;
or
(ii) he must be a member of one (1) of the associations of accountants specified in Part II of the 1st Schedule
of the Accountants Act, 1967; or
(c) fulfills such other requirements as prescribed by the Exchange
No alternate director of the Board shall be appointed as a member of the Audit Committee.
3. Chairman
The Chairman of the Audit Committee, elected from amongst the Audit Committee members, shall be an independent
director. The Chairman of the Committee shall be approved by the Board of Directors.
4. Secretary
The Secretary of the Audit Committee shall be the Company Secretary. The Secretary shall be responsible for drawing
up the agenda with concurrence of the Chairman and circulating it, supported by explanatory documentation to members
of the Audit Committee prior to each meeting. The Secretary shall also be responsible for keeping the minutes of
meetings of the Audit Committee, circulating them to members of the Audit Committee and to the other members of
the Board of Directors and for following up outstanding matters.
Annual Report 2011 Linear Corporation Berhad (288687-W)
14
5. Meetings
The Audit Committee meetings shall be conducted at least four (4) times annually, or more frequently as circumstances
dictate. In addition, the Chairman may call for additional meetings at any time at the Chairmans discretion. In the
absence of the Chairman, the other independent director shall be the Chairman for that meeting. The members of the
Audit Committee, General Manager (Corporate Affairs, Finance and Administration), Finance Manager and the head of
internal audit will normally be in attendance at the meetings. Representatives of the external auditors are to be in
attendance at meetings where matters relating to the audit of the statutory accounts and/or external auditors are to
be discussed.
Other Directors, officers and employees of the Company and/or Group may be invited to attend, except for those portions
of the meetings where their presence is considered inappropriate, as determined by the Audit Committee. However,
at least twice a year the Audit Committee shall meet with the external auditors.
Minutes of each meeting shall be kept and distributed to each member of the Audit Committee and also to the other
members of the Board of Directors. The Audit Committee Chairman shall report on each meeting to the Board of
Directors.
6. Quorum
The quorum for the Audit Committee meeting shall be the majority of members present whom must be independent
directors.
7. Reporting
The Audit Committee shall report to the Board of Directors, either formally in writing, or verbally, as it considers
appropriate on the matters within its terms of reference at least once a year, but more frequently if it so wishes. The
Audit Committee shall report to the Board of Directors on any specific matters referred to it by the Board for investigation
and report.
8. Objective
The principal objective of the Audit Committee is to assist the Board of Directors in discharging its statutory duties
and responsibilities relating to accounting and reporting practices of the holding company and each of its subsidiaries.
In addition, the Audit Committee shall :(a)
(b)
(c)
(d)
(e)
evaluate the quality of the audits performed by the internal and external auditors;
provide assurance that the financial information presented by management is relevant, reliable and timely;
oversee compliance with laws and regulations and observance of a proper code of conduct;
determine the quality, adequacy and effectiveness of the Groups control environment; and
develop and maintain an effective risk management system and processes are applied in the day to day business
and activities.
9. Authority
The Audit Committee shall, in accordance with a procedure to be determined by the Board of Directors and at the
expense of the Company:(a) authorise to investigate any activity within its terms of reference. All employees shall be directed to co-operate as
requested by members of the Audit Committee;
(b) have full and unlimited/unrestricted access to all information and documents/resources which are required to
perform its duties as well as to the internal and external auditors and senior management of the Company and
Group;
Annual Report 2011 Linear Corporation Berhad (288687-W)
15
9. Authority (contd)
(c) obtain, at the expense of the Company, other independent professional advice or other advice and to secure the
attendance of outsiders with relevant experience and expertise if it considers necessary;
(d) be able to convene meetings with the external auditors whenever deemed necessary;
(e) be able to make relevant reports when necessary to the relevant authorities if a breach of the Listing Requirements
occurred;
(f) be kept informed as soon as possible of any adverse development arising from any event such material litigation;
and
(g) the Audit Committee shall have the power to establish Sub-Committee(s) and delegate its powers to such SubCommittee(s) for the purpose of carrying out certain investigations on its behalf in such manner as the Audit
Committee deems fit and necessary and, to appoint any person(s) as member(s) of the Sub-Committee(s) and/or
as Head of Internal Audit who shall report directly to the Audit Committee.
16
Attendance
0 out of 1
4 out of 4
3 out of 4
2 out of 2
17
The Board of Directors (Board) of Linear Corporation Berhad (Linear) is pleased to set out below the Statement of
Internal Control pursuant to paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa
Securities). It is prepared in accordance with Bursa Securities Statement of Internal Control - Guidance for Directors of
Public Listed Companies. The Board acknowledges its responsibility to maintain a sound system of internal controls to
safeguard the Linear Group(the Group)s assets in accordance with the Malaysian Code on Corporate Governance (the
Code). The Board is committed to taking appropriate initiatives to further strengthen the transparency, accountability and
efficiency of the Groups operations. The Board believes that the practice of good corporate governance is an important
continuous process and not just a matter to be covered as compliance in its annual report.
BOARD RESPONSIBILITY
The Board affirms the overall responsibility for maintaining a sound system of internal controls and for reviewing its adequacy
and integrity so as to safeguard shareholders investment and the Groups assets.
Due to inherent limitations in any system of internal control, the system is designed to manage and control risk appropriately
rather than eliminate the risk of failure to achieve business objectives. Accordingly, the internal control system provides
reasonable assurance and not absolute assurance against material misstatement or loss, and therefore risks should be
continually monitored and managed at all times.
The Board confirms that there is an on-going process for identifying, evaluating and managing significant risks faced by the
Group. This process is in place during the current financial year and is regularly reviewed by the Board and is in accordance
with the guidelines promulgated by the Statement on Internal Control - A Guidance for Directors of Public Listed Companies
(the Internal Control Guidance), a publication of the industry task force on internal control.
INTERNAL CONTROL
Key elements of the system of internal controls are as follows:
Operating structure with clearly defined lines of responsibility
The operating structure includes defined delegation of duties and responsibilities to the various Board Committees, the
Executive Board members, the Management and operating units.
Independence of the Audit Committee
The Audit Committee, which comprises entirely Independent Non-Executive Board members, holds regular meetings to
deliberate on audit findings and recommendations and reports to the Board.
Risk Management
The Risk Management Committee meets from time to time to identify and manage risks to a manageable level. The risks
are being continually monitored and appropriate actions taken to address any change in existing risks or new risks identified
as part of an on-going proactive control measure.
Employee competency
Proper procedures are in place in respect of recruitment and termination of employees. Emphasis is placed on the quality
and abilities of employees with continuing education, training and development being actively encouraged through various
programs.
18
Financial reporting
Regular monitoring and review of financial results by the Management and formulation of action plans to address areas of
concern before they are being reported to the Audit Committee and the Board.
Insurance
Adequate insurance on major assets such as stocks, buildings and machineries belonging to the Group, is in placed to
ensure that the Group is sufficiently covered against any mishap that may result in material losses affecting the Group.
Weaknesses in Internal Controls that Results in Material Losses
There were no material or significant losses incurred during the financial year ended 31 December 2011 as a result of
weakness in internal control. Notwithstanding, the Board remains committed to strengthen the Groups control environment
and processes and its quest for continuous improvement is ongoing and, appropriate action plans will be put in place, when
necessary, to further enhance the Groups system of internal controls.
19
The Internal Audit function of the Group is carried out by the Internal Audit Department (IAD) that reports directly to the
Board of Audit Committee (BAC). The principal role of the IAD is to undertake independent, regular and systematic review
of the systems of internal controls.
The results of the audits were reported to the BAC on a quarterly basis. The relevant management of the specific audit
subject was made responsible for ensuring that corrective actions on reported weaknesses were taken within the required
time frame. The IAD conducted follow up audits to ensure that managements corrective action was implemented appropriately.
In this respect, the IAD has assisted the management to improve the control processes within the Group.
During the financial year ended 31 December 2011, the IAD reviewed the adequacy and integrity of the Groups system of
internal control covering both financial as well as non-financial controls. For 2011, the total costs incurred by IAD function
was RM29,733.35. (2010:RMNIL)
20
(Pursuant To Paragraph 15.26 (a) Of The Listing Requirements Of Bursa Malaysia Securities Berhad)
The Companies Act, 1965 (the Companies Act) and the Listing Requirements of Bursa Malaysia Securities Berhad require
the Directors to prepare financial statements for each financial year, which give a true and fair view of the state of affairs
of the Company and the Group as at the end of the financial year, and the profit and loss account and cash flows of the
Company and the Group for the financial year in accordance with the applicable approved accounting standards in Malaysia
and the provisions of the Companies Act.
In preparing the financial statements for the financial year ended 31 December 2011 of Linear Corporation Berhad (the
Company or Linear), the Directors, with the advice from the external auditors, have :a.
b.
c.
d.
adopted the suitable accounting policies and have applied them consistently;
made judgements and estimates that are prudent and reasonable;
ensure that applicable accounting standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
prepared the financial statements on a going concern basis.
The Directors will ensure that the Company and the Linear Group (the Group) keep accounting records which disclose
with reasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the
financial statements comply with the Companies Act.
21
Sale of cooling tower components by BAC Cooling Technology Sdn. Bhd.* to Baltimore
Aircoil Inc. # Group of Companies
Purchase of cooling tower components by BAC Cooling Technology Sdn. Bhd.* from Baltimore
Aircoil Inc. # Group of Companies
RM
3,797,895.97
601,242.47
Notes:
*
#
6. Non-audit fees
There were no non-audit fees paid or payable by the Company or the Group to the external auditors or a firm of company
affiliated to the external auditors in respect of the financial year.
22
8. Profit Guarantee
There were no profit guarantees given by the Company and its subsidiaries in respect of the financial year.
9. Material Contracts
There were no material contracts (not being contracts entered into in the ordinary course of business) either subsisting
as at the financial year or entered into during the financial year, by the Company and its subsidiaries which involved
the interest of the Directors and major shareholders of the Company.
Directors Report
23
The directors hereby submit their report and the audited financial statements of the Group and the Company for the financial
year ended 31 December 2011.
PRINCIPAL ACTIVITIES
The principal activities of the Company are those of investment holding and provision of management services to its
subsidiaries. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have
been no significant changes in the nature of the principal activities of the Group and the Company during the financial year.
RESULTS
Group
RM000
Loss for the financial year attributable to:- Owners of the Company
- Non-controlling interests
(61,377)
(2,506)
(63,883)
Company
RM000
(5,498)
0
(5,498)
DIVIDENDS
No dividends were proposed, declared or paid by the Company since the end of the previous financial year.
Date of Offer
25 August 2003
Exercise
Price
RM
At
1.1.2011
Exercised
Forfeited
At
31.12.2011
1.16
324,000
(152,000)
172,000
24
CURRENT ASSETS
Before the financial statements of the Group and the Company were made out, the directors took reasonable steps to
ascertain whether any current assets, other than debts, which were unlikely to realise in the ordinary course of business
their values as shown in the accounting records of the Group and the Company had been written down to an amount that
they might be expected so to realise.
At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the
current assets in the financial statements of the Group and the Company misleading.
VALUATION METHODS
At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to
the existing methods of valuation of assets or liabilities of the Group and the Company misleading or inappropriate.
CHANGE OF CIRCUMSTANCES
At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report or in
the financial statements of the Group and the Company, which would render any amount stated in the respective financial
statements misleading.
25
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material and unusual nature which, in the opinion of the directors, will affect substantially the results of the
operations of the Group and the Company for the financial year in which this report is made.
DIRECTORS BENEFITS
Since the end of the previous financial year, no director of the Company has received or become entitled to receive any
benefit (other than the directors remuneration disclosed in the financial statements) by reason of a contract made by the
Company or a related corporation with the director or with a firm of which the director is a member, or with a company in
which the director has a substantial financial interest except for any benefits which may be deemed to have arisen by virtue
of those related party transactions as disclosed in Note 20 to the financial statements.
Neither during nor at the end of the financial year, was the Company a party to any arrangement, apart from the Companys
ESOS, whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures
of the Company or any other body corporate.
AUDITORS
The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.
26
Statement By Directors
We, Lim Hun Beng and Saw Heng Soo, being two of the directors of Linear Corporation Berhad, do hereby state that in the
opinion of the directors, the financial statements set out on pages 30 to 72 have been properly drawn up in accordance
with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial
position of the Group and the Company as at 31 December 2011 and of their financial performance and cash flows for
the financial year then ended.
In the opinion of the directors, the supplementary information set out on page 73 is prepared, in all material respects, in
accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context
of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute
of Accountants and the directive of Bursa Malaysia Securities Berhad.
Statutory Declaration
I, Saw Heng Soo, being the director primarily responsible for the financial management of Linear Corporation Berhad, do
solemnly and sincerely declare that the financial statements set out on pages 30 to 72 are, to the best of my knowledge
and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the
provisions of the Statutory Declarations Act 1960.
Subscribed and solemnly declared by
Saw Heng Soo at Georgetown in the
State of Penang on this 26 April 2012
Before me
Nachatar Singh A/L Bhag Singh
Commissioner for Oaths
27
As disclosed in Note 4 to the financial statements, the Groups land, buildings and district cooling plant are stated at
managements estimates of fair values totalling RM38,070,000. In the absence of sufficient appropriate audit evidence
about the reasonableness of these fair value estimates, we were unable to determine whether the property, plant and
equipment have been fairly stated.
(ii) The Groups inventories include those of a subsidiary stated at RM1,485,000. Numerous errors were noted during our
review of the costing system of the subsidiarys inventories. As at the date of our audit report, management was still
in the process of rectifying the system deficiencies and correcting the errors. Consequently, we were unable to determine
whether any adjustments were necessary in respect of the subsidiarys inventories.
(iii) As disclosed in Note 25 to the financial statements, management is doubtful about the veracity, legality and recoverability
of those receivables cited as Exceptional Items I to VII which might indicate the possibility of fraud. Despite the fact
that impairment losses on the receivables totalling RM58,446,000 and RM11,454,000 have been fully recognised by
the Group and the Company respectively, we were unable to determine the appropriate accounting treatment for these
amounts as it might involve the correction of prior period errors.
(iv) As disclosed in Note 25 to the financial statements, management is doubtful about the veracity of those payables cited
as Exceptional Items VIII and IX which might indicate the possibility of fraud. We were unable to determine the
appropriate accounting treatment for the said payables stated at RM2,592,000 and RM132,000 by the Group and the
Company respectively as it might involve the correction of prior period errors.
(v) The Groups and the Companys loans and borrowings are stated at RM42,396,000 and RM1,087,000 respectively.
As the Group and the Company have defaulted on the loans and borrowings, we were unable to obtain confirmation
replies from certain principal banks. In the absence of sufficient appropriate audit evidence about the default interest
and other charges, if any, we were unable to determine whether the loans and borrowings have been fairly stated.
(vi) The material litigations and contingencies in respect of the Group and the Company are summarised in Note 22 to the
financial statements. As the Group has defaulted on the fees payable to the main solicitors who handled the cases,
the solicitors did not respond to our confirmation request. In the absence of sufficient appropriate audit evidence about
the details of all litigations, we were unable to determine whether the material litigations and contingencies have been
fairly disclosed. We were also unable to determine whether the amounts of unrecognised contingent liabilities disclosed
in Note 22 contained misstatements which should have been recognised as liabilities in the financial statements.
Accordingly, the recorded liabilities of the Group and the Company might have been understated.
Annual Report 2011 Linear Corporation Berhad (288687-W)
28
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not
been able to determine whether the accounting and other records required by the Act to be kept by the Company and
its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the
Act. In our opinion, the registers required by the Act to be kept by the Company and its subsidiaries of which we have
acted as auditors have been properly kept in accordance with the provisions of the Act.
(ii) We have not been able to consider the financial statements and the auditors reports of all the subsidiaries of which
we have not acted as auditors, which are indicated in Note 6 to the financial statements, as the financial statements
of those subsidiaries have not been audited.
(iii) Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not
been able to determine whether the financial statements of the subsidiaries that have been consolidated with the
Companys financial statements are in form and content appropriate and proper for the purposes of the preparation
of the financial statements of the Group. We have not received satisfactory information and explanations required by
us for those purposes.
29
Our audit reports on the financial statements of other subsidiaries did not contain any modified opinion or any adverse
comment made under Section 174(3) of the Act.
The supplementary information set out on page 73 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad
and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information
in accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian
Institute of Accountants (the MIA Guidance) and the directive of Bursa Malaysia Securities Berhad. Because of the
significance of the matters described in the Basis for Disclaimer of Opinion paragraphs, we have not been able to determine
whether the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the
directive of Bursa Malaysia Securities Berhad.
Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of
this report.
Crowe Horwath
Firm No: AF 1018
Chartered Accountants
30
2011
RM'000
2010
RM'000
4
5
7
8
38,663
0
0
2
38,665
41,579
0
0
1,070
42,649
9
10
2,643
2,697
138
38
100
5,616
3,887
51,753
74
41
458
56,213
11
12
21,101
42,396
1,447
64,944
(59,328)
19,686
41,292
818
61,796
(5,583)
NET (LIABILITIES)/ASSETS
(20,663)
37,066
75,105
(230)
(94,638)
(19,763)
(900)
(20,663)
75,105
(230)
(39,422)
35,453
1,613
37,066
Note
NON-CURRENT ASSETS
Property, plant and equipment
Goodwill
Investment in associate
Available-for-sale financial assets
CURRENT ASSETS
Inventories
Receivables
Prepayments
Current tax assets
Cash and bank balances
CURRENT LIABILITIES
Payables
Loans and borrowings
Current tax liabilities
EQUITY
Share capital
Treasury shares
Reserves
Equity attributable to owners of the Company
Non-controlling interests
TOTAL EQUITY
13
13
31
Note
2011
RM'000
2010
RM'000
14
12,279
7,502
Other income
488
548
(785)
(605)
(3,732)
(3,041)
Depreciation
(2,034)
(1,716)
(2,736)
(3,224)
(3,259)
(4,161)
(64,904)
(12,264)
Revenue
15
Finance costs
Other expenses
Share of profit of associate
16
Tax income
17
(64,683)
800
(63,883)
25
(16,936)
1,810
(15,126)
Other comprehensive income:Revaluation of property, plant and equipment:- Gross revaluation increase
- Gross revaluation decrease
- Deferred tax effects thereof
Gain on available-for-sale financial assets
Reclassification adjustments on derecognition of available-for-sale
financial asset
7,722
(70)
(1,432)
0
0
0
60
67
(126)
6,154
(57,729)
68
(15,058)
32
Note
Loss for the financial year attributable to:- Owners of the Company
- Non-controlling interests
Total comprehensive income for the financial year attributable to:- Owners of the Company
- Non-controlling interests
2011
RM'000
2010
RM'000
(61,377)
(2,506)
(63,883)
(14,665)
(461)
(15,126)
(55,216)
(2,513)
(57,729)
(14,605)
(453)
(15,058)
(82)
(82)
(20)
(20)
18
(230)
301
683
(757)
910
(164)
60
60
60
0
0
0
0
0
0
0
0
59
1,074
301
1,440
75,105
0
0
0
0
Balance at 31 December
2010
1,769
(1,999)
75,105
Gain on available-for-sale
financial assets
Reclassification adjustments
on derecognition of availablefor-sale financial assets
Other comprehensive income
for the financial year
Loss for the financial year
Total comprehensive income
for the financial year
Treasury
shares
RM'000
Share
capital
RM'000
272
(41,648)
164
35,453
1,012
(14,605)
60
(14,665)
0
(14,665)
(14,665)
0
0
0
59
49,046
(27,147)
272
67
51,112
Total
equity
RM'000
1,613
37,066
1,012
(453) (15,058)
8
68
(461) (15,126)
2,066
Equity
Currency
Capital
attributable
NonShare redemption Revaluation Fair value translation Accumulated to owners of controlling
losses the Company interests
reserve
surplus
reserve
reserve
premium
RM'000
RM'000
RM'000 RM'000
RM'000
RM'000
RM'000
RM'000
Non-distributable
33
75,105
(230)
683
Balance at 31 December
2011
301
7,007
(123)
272
(59)
(102,902)
123
(61,377)
6,220
0
(61,377)
0
0
(59)
0
6,220
0
0
0
0
0
0
0
0
0
(113)
54
(41,648)
0
0
0
272
0
0
0
60
0
0
0
7,722
(70)
(1,432)
0
0
0
910
0
0
0
301
0
0
0
683
0
0
0
(230)
75,105
Treasury
shares
RM'000
Share
capital
RM'000
(19,763)
(55,216)
6,161
(61,377)
(113)
54
7,722
(70)
(1,432)
35,453
(126)
60
7,722
(70)
(1,432)
37,066
Total
equity
RM'000
(900) (20,663)
(2,513) (57,729)
(7)
6,154
(2,506) (63,883)
(13)
0
0
0
1,613
Equity
Currency
Capital
Nonattributable
Share redemption Revaluation Fair value translation Accumulated to owners of controlling
reserve
reserve
surplus
reserve
premium
losses the Company interests
RM'000
RM'000 RM'000
RM'000
RM'000
RM'000
RM'000
RM'000
Non-distributable
34
For the Financial Year Ended 31 December 2011
35
2011
RM'000
2010
RM'000
(64,683)
(16,936)
914
2,034
(126)
(129)
0
48,101
4,894
3,259
(1)
0
3,677
(48)
(103)
0
(2,211)
692
1,716
1
(73)
7
1,047
0
4,161
0
1,829
0
(68)
(47)
(25)
(7,696)
378
994
1,415
576
0
576
667
1,614
3,654
(1,761)
150
(1,611)
1
0
1,128
129
(37)
1,221
0
2,500
63
73
(378)
2,258
(2,794)
0
(153)
(2,947)
(2,884)
1,012
(193)
(2,065)
(1,150)
(1,418)
(15,151)
(13,733)
(16,301)
(15,151)
Note
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax
Adjustments for:Allowance for slow moving inventories
Depreciation
(Gain)/Loss on derecognition of available-for-sale financial assets
Gain on disposal of property, plant and equipment
Impairment loss on investment in associate
Impairment loss on loans and receivables
Impairment loss on property, plant and equipment
Interest expense
Interest income
Loss on disposal of associate
Revaluation decrease of property, plant and equipment
Reversal of allowance for slow moving inventories
Reversal of impairment loss on loans and receivables
Share of profit of associate
Operating loss before working capital changes
Changes in:Inventories
Receivables and prepayments
Payables
Cash generated from/(absorbed by) operations
Tax refunded
Net cash from/(used in) operating activities
19
36
2011
RM'000
2010
RM'000
4
6
7
0
95
0
95
558
2,929
0
3,487
10
31
3
18
52
718
0
71
789
Note
NON-CURRENT ASSETS
Property, plant and equipment
Investments in subsidiaries
Investment in associate
CURRENT ASSETS
Receivables
Prepayments
Cash and bank balances
CURRENT LIABILITIES
Payables
Loans and borrowings
NET CURRENT LIABILITIES
29,716
1,087
30,803
(30,751)
28,379
1,055
29,434
(28,645)
NET LIABILITIES
(30,656)
(25,158)
75,105
(230)
(105,531)
(30,656)
75,105
(230)
(100,033)
(25,158)
EQUITY
Share capital
Treasury shares
Reserves
TOTAL EQUITY
11
12
13
13
37
2011
RM'000
2010
RM'000
63
Other income
543
Depreciation
(319)
(379)
(366)
(410)
(32)
(41)
(5,329)
(46,780)
(5,498)
(47,547)
Note
Revenue
14
15
Finance costs
Other expenses
Loss before tax
16
Tax income
17
0
(5,498)
0
(47,547)
(19,030)
(19,030)
(5,498)
(66,577)
38
Share
capital
RM'000
Balance at 1 January 2010
75,105
Treasury
shares
RM'000
(1,999)
Impairment loss on
investments in subsidiaries
(representing other
comprehensive income for
the financial year)
Loss for the financial year
Total comprehensive income
for the financial year
0
0
0
0
0
0
1,769
Balance at 31 December
2010
75,105
75,105
(230)
(230)
Non-distributable
Capital
Share redemption Revaluation
surplus
reserve
premium
RM'000
RM'000
RM'000
1,440
301
0
0
0
0
0
0
Total
equity
RM'000
19,030
(53,470)
40,407
(19,030)
0
(19,030)
0
(47,547)
(47,547)
(19,030)
(47,547)
(66,577)
1,012
683
301
(101,017)
(25,158)
(5,498)
(5,498)
683
301
(106,515)
(30,656)
(757)
Accumulated
losses
RM'000
39
Note
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax
Adjustments for:Depreciation
Impairment loss on investment in associate
Impairment loss on investments in subsidiaries
Impairment loss on loans and receivables
Impairment loss on property, plant and equipment
Interest expense
Loss on disposal of associate
Reversal of impairment loss on loans and receivables
Operating loss before working capital changes
Changes in:Receivables and prepayments
Payables
Net cash used in operating activities
2011
RM'000
2010
RM'000
(5,498)
(47,547)
319
0
2,834
676
239
32
0
(543)
(1,941)
379
30
11,871
32,137
0
41
2,300
0
(789)
(3)
798
(1,146)
13
67
(709)
554
0
0
554
(2,753)
2,500
(132)
(385)
0
539
0
0
539
(11)
193
1,012
(52)
1,142
(53)
48
71
23
18
71
19
40
1. GENERAL INFORMATION
The Company is a public company limited by shares, incorporated and domiciled in Malaysia and listed on the Main
Market of Bursa Malaysia Securities Berhad. As announced on 23 June 2010, the Company has been classified as
an Affected Listed lssuer pursuant to Practice Note 17 of the Main Market Listing Requirements of Bursa Malaysia
Securities Berhad.
The registered office of the Company is located at 60 Sri Bahari Road, 10050 Penang and its principal place of business
is located at 20A Jalan Perusahaan, Prai Industrial Estate 4, 13600 Prai, Penang.
The principal activities of the Company are those of investment holding and provision of management services to its
subsidiaries. The principal activities of the subsidiaries are disclosed in Note 6.
The consolidated financial statements set out on pages 30 to 35 together with the notes thereto cover the Company
and its subsidiaries (the Group) and the Groups interest in an associate. The separate financial statements of the
Company set out on pages 36 to 39 together with the notes thereto cover the Company solely.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
directors dated 26 April 2012.
FRS
Amendment to FRS 1 Limited Exemption from Comparative FRS 7 Disclosures for Firsttime Adopters
Amendments to FRS 1 Additional Exemptions for First-time Adopters
Amendments to FRS 2 Share-based Payment
Amendments to FRS 2 Group Cash-settled Share-based Payment Transactions
Amendments to FRS 5 Non-current Assets Held for Sale and Discontinued Operations
Amendments to FRS 7 Improving Disclosures about Financial Instruments
Amendments to FRS 132 Financial Instruments: Presentation
Amendments to FRS 138 Intangible Assets
Amendments to IC Interpretation 9 Reassessment of Embedded Derivatives
Amendments to FRSs contained in the document entitled Improvements to FRSs (2010)
FRS 1 First-time Adoption of Financial Reporting Standards (revised in 2010)
FRS 3 Business Combinations (revised in 2010)
FRS 127 Consolidated and Separate Financial Statements (revised in 2010)
IC Interpretation 4 Determining whether an Arrangement contains a Lease
1 January 2011
1 January 2011
1 July 2010
1 January 2011
1 July 2010
1 January 2011
1 March 2010
1 July 2010
1 July 2010
1 January 2011
1 July 2010
1 July 2010
1 July 2010
1 January 2011
41
FRS
IC
IC
IC
IC
Interpretation
Interpretation
Interpretation
Interpretation
12
16
17
18
1 July
1 July
1 July
1 January
2010
2010
2010
2011
The adoption of the above amended/revised/new FRSs did not result in any significant changes in the accounting
policies of the Group and the Company except as follows:FRS 3 Business Combinations (revised in 2010) and FRS 127 Consolidated and Separate Financial Statements
(revised in 2010)
FRS 3 (revised in 2010) and FRS 127 (revised in 2010), which supersede FRS 3 Business Combinations (issued
in 2005) and FRS 127 Consolidated and Separate Financial Statements (revised in 2005) respectively, introduce
significant changes to the accounting principles for business combinations and consolidated financial statements,
both at the acquisition date and post acquisition. Some of the key principles established are disclosed in Note
2.4.
In accordance with the transitional provisions of FRS 3 (revised in 2010), the Group and the Company have applied
the standard prospectively to business combinations for which the acquisition date is on or after the effective
date. In accordance with the transitional provisions of FRS 127 (revised in 2010), the significant amendments
thereto have also been applied prospectively. Accordingly, business combinations entered into prior to 1 January
2011 have not been restated to comply with the standards.
2.2 Future Accounting Standards
In November 2011, the Malaysian Accounting Standards Board (MASB) issued a new MASB approved accounting
framework, the Malaysian Financial Reporting Standards (MFRS) framework. The issuance was made in conjunction
with the MASBs plan to converge with International Financial Reporting Standards (IFRS) in 2012. The MFRS
framework is a fully IFRS-compliant framework and equivalent to IFRSs. It comprises standards as issued by the
International Accounting Standards Board (IASB) that are effective on 1 January 2012 and also amended/revised/new
standards recently issued by the IASB that will be effective after 1 January 2012.
The Group and the Company will first adopt the MFRS framework for the financial year ending 31 December 2012.
Management foresees that the transition to the MFRS framework will not have any significant impacts on the
financial statements except as follows:MFRS 9 Financial Instruments
MFRS 9 (effective for annual periods beginning on or after 1 January 2015) replaces the guidance in MFRS 139
Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets
by dividing them into 3 classifications: (1) those measured at amortised cost; (2) those measured at fair value
through profit or loss; and (3) those measured at fair value through other comprehensive income. Management
foresees that the adoption of these new classifications will not result in any significant changes to the existing
measurement bases of financial assets of the Group and the Company.
42
43
2 - 6%
2 - 20%
10 - 20%
8 - 20%
20%
The residual value, useful life and depreciation method of an asset are reviewed at least at the end of each
reporting period and any changes in expectations from previous estimates are accounted for prospectively as
changes in accounting estimates.
44
45
46
47
48
49
50
51
38
1,447
Representing:- Cost
- Valuation
Representing:- Cost
- Valuation
Cost/Valuation
Balance at 1 January 2010
Transfer from assets held for sale
Additions
Disposals
Adjustments
Balance at 31 December 2010
Group
0
6,000
6,000
0
15,570
15,570
31,038
0
31,038
5,576
0
5,576
2,284
0
2,284
2,277
0
7
0
0
2,284
5,551
0
25
0
0
5,576
40,767
(9,729)
0
0
0
31,038
11,431
9,729
0
0
(5,590)
15,570
4,500
0
0
0
1,500
6,000
2,077
0
0
0
1,923
4,000
0
4,000
4,000
2,277
0
2,277
2,235
26
16
0
0
2,277
5,551
0
5,551
5,546
5
0
0
0
5,551
40,767
0
40,767
0
41,986
0
0
(1,219)
40,767
96
11,335
11,431
585
10,846
0
0
0
11,431
Plant and
machinery
RM'000
Office
equipment,
furniture
and fittings
RM'000
0
4,500
4,500
0
4,500
0
0
0
4,500
Buildings
RM'000
District
cooling
plant
RM'000
2,077
0
2,077
0
2,077
0
0
0
2,077
Freehold
land
RM'000
Short-term
leasehold
land
RM'000
2,772
0
2,772
3,247
0
5
(480)
0
2,772
3,247
0
3,247
3,435
0
132
(320)
0
3,247
Motor
vehicles
RM'000
230
0
230
230
0
0
0
0
230
230
0
230
0
0
230
0
0
230
Capital
work-inprogress
RM'000
41,900
25,570
67,470
70,080
0
37
(480)
(2,167)
67,470
54,245
15,835
70,080
11,801
59,440
378
(320)
(1,219)
70,080
Total
RM'000
52
For the Financial Year Ended 31 December 2011
325
255
188
625
488
385
0
23,680
12,500
10,062
15,570
3,960
6,000
2,077
4,000
2,096
0
2,096
5,191
0
5,191
5,582
12,956
18,538
0
0
0
0
0
0
0
0
0
526
2,022
0
2,022
0
74
0
0
0
5,063
0
5,063
0
128
0
0
0
5,582
11,505
17,087
(3,778)
949
0
4,280
0
1,369
0
1,369
3,778
365
0
0
(5,512)
540
0
540
0
90
0
0
(630)
0
0
0
0
0
0
0
0
1,910
0
1,910
3
109
0
4,921
0
4,921
4
138
0
0
0
0
16,437
650
0
59
0
59
1,081
229
0
Plant and
machinery
RM'000
Office
equipment,
furniture
and fittings
RM'000
0
0
0
450
90
0
Buildings
RM'000
District
cooling
plant
RM'000
0
0
0
0
0
0
Freehold
land
RM'000
Short-term
leasehold
land
RM'000
Carrying Amount
Balance at 1 January 2010
Reclassification
Depreciation
Disposals
Impairment loss
Revaluation
Balance at 31 December 2011
Accumulated depreciation
Accumulated impairment losses
Group
20
827
1,195
2,368
384
2,752
2,420
0
2,420
0
428
(480)
384
0
2,240
0
2,240
0
500
(320)
Motor
vehicles
RM'000
230
0
230
230
0
0
0
0
0
0
230
0
0
0
0
0
0
0
Capital
work-inprogress
RM'000
38,663
41,579
2,671
15,237
13,570
28,807
16,996
11,505
28,501
0
2,034
(480)
4,894
(6,142)
9,130
0
9,130
17,975
1,716
(320)
Total
RM'000
53
54
Freehold land
Short-term leasehold land
Buildings
2011
RM000
2010
RM000
2,077
1,283
11,975
15,335
2,077
1,315
6,352
9,744
The district cooling plant was written down to its recoverable amount based on managements estimate of fair value
by reference to relevant market information.
The carrying amounts of property, plant and equipment pledged as security for credit facilities granted to the Group
are as follows:Group
Freehold land
Buildings
District cooling plant
Office equipment, furniture and fittings
2011
RM000
2010
RM000
4,000
2,120
12,500
17
18,637
2,077
0
23,680
20
25,777
Company
Motor
vehicles
RM'000
Cost
Balance at 1 January 2010
Additions
Balance at 31 December 2010
Movement during the year
Balance at 31 December 2011
Depreciation and Impairment Losses
Balance at 1 January 2010
Accumulated depreciation
Accumulated impairment losses
1,463
132
1,595
0
1,595
658
0
658
55
Depreciation
Balance at 31 December 2010
Accumulated depreciation
Accumulated impairment losses
1,037
0
1,037
319
239
Depreciation
Impairment loss
Balance at 31 December 2011
Accumulated depreciation
Accumulated impairment losses
1,356
239
1,595
Carrying Amount
Balance at 1 January 2010
805
558
The carrying amounts of property, plant and equipment acquired under hire purchase financing which remained outstanding
as at the end of the reporting period are as follows:-
2011
RM000
Motor vehicles
Group
Company
2010
RM000
2011
RM000
2010
RM000
797
558
2011
RM000
2010
RM000
5. GOODWILL
Group
Cost
Accumulated impairment losses
91
(91)
0
91
(91)
0
56
6. INVESTMENTS IN SUBSIDIARIES
Company
2011
RM000
2010
RM000
25,033
32,099
(57,037)
95
25,033
32,099
(54,203)
2,929
Name of Subsidiary
Country of
Incorporation
Effective Ownership
Interest
2011
2010
Principal Activity
Malaysia
100%
100%
Malaysia
100%
100%
Malaysia
70%
70%
Malaysia
100%
100%
Malaysia
100%
100%
Malaysia
100%
100%
Investment holding
Malaysia
100%
100%
Investment holding
Malaysia
100%
100%
Dormant
Malaysia
100%
100%
Dormant
Malaysia
100%
100%
Dormant
Malaysia
100%
100%
Dormant
Malaysia
100%
100%
Dormant
Singapore
100%
100%
Dormant
65%
65%
Investment holding
57
Country of
Incorporation
Name of Subsidiary
Effective Ownership
Interest
2011 2010
Principal Activity
100%
100%
Investment holding
Malaysia
100%
100%
Dormant
Singapore
46%
46%
Dormant
Idea-Hub.Com Limited*
Hong Kong
33%
33%
Dormant
Not audited by Crowe Horwath, and consolidated using unaudited financial statements
7. INVESTMENT IN ASSOCIATE
2011
RM000
Group
2010
RM000
30
(7)
23
(23)
0
2011
RM000
30
(7)
23
(23)
0
Company
2010
RM000
30
(30)
0
0
0
30
(30)
0
0
0
Name of Associate
Country of Incorporation
Effective Ownership
Interest
2011
2010
Malaysia
30%
30%
Principal Activity
Dormant
2011
RM000
2010
RM000
1,070
58
9. INVENTORIES
Group
2011
RM000
2010
RM000
797
1,247
141
458
2,643
931
1,572
516
868
3,887
Raw materials
Spare parts and components
Work-in-progress
Finished goods
10. RECEIVABLES
2011
RM000
Group
2010
RM000
2011
RM000
Company
2010
RM000
Trade receivables
Allowance for impairment
3,485
(1,615)
1,870
3,225
(1,472)
1,753
0
0
0
0
0
0
Other receivables
Allowance for impairment
1,644
(817)
827
3,880
(1,522)
2,358
26
(26)
0
26
0
26
0
0
0
Subsidiaries
Allowance for impairment
0
0
0
58,446
(58,446)
0
58,446
(10,804)
47,642
2,697
51,753
31,625
(31,594)
31
32,179
(32,137)
42
11,454
(11,454)
0
11,454
(10,804)
650
31
718
Trade Receivables
Trade receivables are unsecured, non-interest bearing and generally on 30 to 180 day terms.
The movements in allowance for impairment are as follows:Group
2011
RM000
Balance at 1 January
Impairment loss recognised
Impairment loss reversed
Impairment loss written off
Balance at 31 December
1,472
260
(103)
(14)
1,615
2010
RM000
1,389
143
(47)
(13)
1,472
All the above impairment losses were individually determined after considering the adverse financial conditions of the
debtors who have defaulted/delayed in payments.
Annual Report 2011 Linear Corporation Berhad (288687-W)
59
2011
RM000
2010
RM000
1,253
406
153
38
20
1,870
916
638
38
17
144
1,753
Trade receivables that are neither past due nor impaired mainly relate to creditworthy customers who have regular
transactions and good payment records with the Group.
Management determines credit risk concentration in terms of counterparties. As at 31 December 2011, there were 3
(2010 : 2) major customers that accounted for 10% or more of the Groups trade receivables and the total outstanding
balances due from these major customers amounted to RM1,180,000 (2010 : RM992,000).
Other Receivables
Other receivables are unsecured, non-interest bearing and have no fixed repayment terms.
The movements in allowance for impairment are as follows:-
2011
RM000
Balance at 1 January
Impairment loss recognised
Impairment loss written off
Balance at 31 December
1,522
199
(904)
817
Group
2010
RM000
2011
RM000
618
904
0
1,522
0
26
0
26
Company
2010
RM000
0
0
0
0
All the above impairment losses were individually determined after considering the adverse financial conditions of the
debtors who have defaulted/delayed in payments.
Subsidiaries
The amounts owing by subsidiaries are unsecured, non-interest bearing and repayable on demand.
60
Balance at 1 January
Impairment loss recognised
Impairment loss reversed
Balance at 31 December
2011
RM000
2010
RM000
32,137
0
(543)
31,594
0
32,137
0
32,137
All the above impairment losses were individually determined after considering the adverse financial conditions of the
debtors who have defaulted/delayed in payments.
Exceptional Items
The movements in allowance for impairment are as follows:-
2011
RM000
Balance at 1 January
Impairment loss recognised
Balance at 31 December
Group
2010
RM000
2011
RM000
10,804
0
10,804
10,804
650
11,454
2010
RM000
2011
RM000
6,657
9,887
550
0
0
2,592
19,686
0
1,454
0
27,882
248
132
29,716
10,804
47,642
58,446
Company
2010
RM000
10,804
0
10,804
11. PAYABLES
2011
RM000
Trade payables
Other payables
Directors
Subsidiaries
Other related parties*
Exceptional Items (Note 25)
*
6,689
10,965
0
0
855
2,592
21,101
Group
Company
2010
RM000
0
904
0
27,343
0
132
28,379
Payables are generally short-term in nature or repayable on demand and their carrying amounts will approximate to
the remaining contractual undiscounted cash flows.
Trade and Other Payables
Trade and other payables are unsecured, non-interest bearing and generally on 30 to 120 day terms. The Group and
the Company have defaulted on the payables.
61
2011
RM000
Secured
Hire purchase payables
Bank overdrafts
Term loans
Unsecured
Bank overdrafts
Banker acceptances
Group
Company
2010
RM000
2011
RM000
1,244
2,014
15,217
1,365
2,053
15,252
1,087
0
0
1,055
0
0
14,387
9,534
42,396
13,556
9,066
41,292
0
0
1,087
0
0
1,055
2010
RM000
Hire purchase payables are secured against the assets acquired thereunder (Note 4). Other secured loans and borrowings
are secured against certain property, plant and equipment (Note 4).
The effective interest rates of loans and borrowings as at 31 December 2011 ranged from 4.27% to 10.10% (2010 :
4.27% to 9.80%) per annum.
The Group and the Company have defaulted on the loans and borrowings with the effect that the liabilities have become
repayable on demand. Accordingly, the entire carrying amounts are disclosed as current liabilities and will approximate
to the remaining contractual undiscounted cash flows.
2010
RM000
500,000
500,000
75,105
75,105
62
No. of Shares
000
Balance at 1 January
Reissue of treasury shares
Balance at 31 December
339
0
339
2011
Cost
RM000
No. of Shares
000
230
0
230
2010
Cost
RM000
2,950
(2,611)
339
1,999
(1,769)
230
The number of outstanding shares in issue after excluding the treasury shares is as follows:-
Balance at 1 January
Reissue of treasury shares
Balance at 31 December
2011
No. of Shares
000
2010
No. of Shares
000
74,766
0
74,766
72,155
2,611
74,766
The total number of share options offered under the scheme shall not exceed 10% of the issued and paid-up share
capital of the Company at any point of time during the existence of the ESOS.
(ii) The number of new shares that may be offered and allotted to an eligible employee of the Group who is entitled
to participate in the scheme shall be at the discretion of the Option Committee after taking into consideration of
the performance, seniority and length of service of the eligible employee subject to the following:(a) the total number of shares allocated, in aggregate, to directors and senior management of the Group shall
not exceed 50% of the total number of shares available under the scheme; and
(b) the number of shares allocated to any individual director or employee who, either singly or collectively through
his/her associates, holds 20% or more of the issued and paid-up share capital of the Company shall not exceed
10% of the total number of shares available under the scheme.
(iii) Any employee (including executive directors) of the Group shall be eligible to participate in the scheme if as at the
date of offer he/she:(a) has attained the age of 18 years;
(b) is employed under full-time by and is on the payroll of a company within the Group; and
(c) is under such categories and such criteria that the Option Committee may from time to time decide.
63
Exercise
Price
RM
Remaining
Contractual
Life
2.6 years
1,137,000
(813,000)
324,000
1.16
1.16
1.16
324,000
1.16
324,000
(152,000)
172,000
1.16
1.16
1.16
172,000
1.16
1.6 years
14. REVENUE
2011
RM000
Sale of goods
Rendering of services:- Current year
- Reversal for 2008
- Reversal for 2009
Group
Company
2010
RM000
2011
RM000
5,423
5,091
6,856
0
0
12,279
6,840
(1,428)
(3,001)
7,502
5
0
0
5
63
0
0
63
2010
RM000
64
2011
RM000
Short-term employee benefits
Defined contribution plan
Group
Company
2010
RM000
2011
RM000
2,935
289
3,224
366
0
366
2010
RM000
2011
RM000
914
692
143
(2)
145
0
43
(2)
45
0
250
56
228
158
250
56
228
158
41
94
30
2,834
11,871
0
48,101
0
1,047
0
676
32,137
0
4,894
239
3,259
4,161
32
41
0
0
31
42
1
1,829
527
24
0
0
0
0
0
2,300
0
0
3,677
126
129
73
2,527
209
2,736
2010
RM000
386
24
410
2011
RM000
Group
Company
2010
RM000
65
2011
RM000
Interest income for financial assets not
at fair value through profit or loss
Rental of premises
Reversal of allowance for slow moving
inventories
Reversal of impairment loss on loans
and receivables:- Subsidiaries
- Others
*
Group
Company
2010
RM000
2011
RM000
1
16
0
16
0
0
0
0
48
68
0
103
0
47
543
0
0
0
2010
RM000
2011
RM000
30
0
30
0
0
0
0
0
0
0
0
0
0
0
0
2010
RM000
2011
RM000
Tax based on results for the year:- Malaysian income tax
- Deferred tax
Tax under/(over) provided in previous
years:- Malaysian income tax
- Deferred tax
Group
0
(1,432)
(1,432)
632
0
(800)
(295)
(1,545)
(1,810)
Company
2010
RM000
The numerical reconciliation between the applicable tax rate, which is the statutory income tax rate, and the average
effective tax rate on results for the year is as follows:-
Group
Company
2010
%
2010
%
2011
%
(25.00)
16.98
(0.03)
(25.00)
9.55
(0.09)
(25.00)
27.40
(2.47)
(25.00)
25.00
0.00
5.84
(2.21)
15.72
0.18
0.07
0.00
0.00
0.00
2011
%
66
Group
Company
2010
RM000
2010
RM000
2011
RM000
8
2,453
9,519
40,943
20,311
1
2,113
820
36,059
17,747
8
0
0
0
915
0
0
0
0
915
(22,285)
50,949
(20,894)
35,846
0
923
(7)
908
2011
RM000
The tax saving of the Group for which credit has been taken in the current year as a result of the realisation of unused
tax losses brought forward that had not been accounted for previously amounted to approximately RM16,000 (2010 :
NIL).
2010
(61,377)
(14,665)
74,766
0
74,766
72,155
2,151
74,306
(82)
(20)
The diluted loss per share equals the basic loss per share due to the anti-dilutive effect of the share options which
has been ignored in calculating the diluted loss per share.
67
2011
RM000
Cash and bank balances
Bank overdrafts
Group
100
(16,401)
(16,301)
2010
RM000
458
(15,609)
(15,151)
2011
RM000
Company
2010
RM000
18
0
18
71
0
71
Group
Company
2010
RM000
2010
RM000
2011
RM000
306
0
306
0
485
32
517
0
306
0
306
5
368
18
386
63
84
2011
RM000
68
3,798
2,741
4,404
0
6,205
(4,429)
The identity of the major customer has not been disclosed as permitted by FRS 8 Operating Segments.
Carrying
Amount as at
31.12.2011
RM000
*Un-recognised
Contingent
Liability
RM000
Claimant/Plaintiff
Suppliers
Suppliers, employee, statutory bodies, etc.
4,831
2,192
4,359
1,634
472
558
2,383
2,022
361
Financial institutions
Inland Revenue Board
43,398
1,419
42,396
1,419
1,002
0
Claimant/Plaintiff
Total
Claim
RM000
Carrying
Amount as at
31.12.2011
RM000
*Un-recognised
Contingent
Liability
RM000
Suppliers
28
28
132
132
43,241
1,087
42,154
Company
69
Whilst reasonable steps have been taken to ensure the completeness of the above summarised disclosures,
management acknowledged that the actual quantum of unrecognised contingent liabilities as at 31 December 2011
should be higher and would increase continuously from the ongoing litigations as the claimants/plaintiffs were also
claiming for overdue interest, costs and other damages.
70
(206)
206
Group
2010
RM000
2011
RM000
35,472
8,185
3,085
600
250
50
10,804
58,446
(58,446)
0
35,472
8,185
3,085
600
250
50
10,804
58,446
(10,804)
47,642
0
0
650
0
0
0
10,804
11,454
(11,454)
0
2,022
570
2,592
2,022
570
2,592
2011
RM000
132
0
132
Company
2010
RM000
0
0
650
0
0
0
10,804
11,454
(10,804)
650
132
0
132
71
The existence and LCI Globals ownership of the PST Account could not be proven.
The Advance Sum recorded as being held in the PST Account might not have existed.
The existence of the Kingdome Project could not be proven.
It was unclear whether GIG had the operational and financial capabilities to deliver the Kingdome Project.
The audited financial statements of the Group for the financial years 1999 to 2008 might have been overstated.
Exceptional Item II
This represents long-outstanding trade debts owing by a company which is suspected to be connected with certain
former directors. Management is suspicious about the veracity of the trade transactions which were recorded in 2007
whereby the related costs of sales were paid to the same company to which the sales were made. Accordingly,
management is doubtful about the veracity, legality and recoverability of the debts which might indicate the possibility
of fraud.
Exceptional Item III
This represents long-outstanding advances to companies which are suspected to be connected with certain former
directors. Section 133A of the Companies Act 1965 (regarding prohibition of loans to persons connected with directors)
might have been contravened in previous years when the advances were made. Management is doubtful about the
veracity, legality and recoverability of the advances which might indicate the possibility of fraud.
Exceptional Item IV
This represents an amount alleged as brokerage fee paid to a company which is suspected to be connected with certain
former directors. Management is doubtful about the veracity, legality and recoverability of the amount which might
indicate the possibility of fraud.
Exceptional Item V
This represents long-outstanding advances to a prospective investee whose statutory information could not be found
from the records of the Companies Commission of Malaysia. Management is doubtful about the veracity, legality and
recoverability of the advances which might indicate the possibility of fraud.
Exceptional Item VI
This represents an amount alleged as loan processing fee paid to a company which is suspected to be connected with
certain former directors. Management is doubtful about the veracity, legality and recoverability of the amount which
might indicate the possibility of fraud.
Annual Report 2011 Linear Corporation Berhad (288687-W)
72
2011
RM000
Total accumulated losses of the Company
and its subsidiaries:- Realised
- Unrealised
Total share of accumulated losses of
associate:- Realised
- Unrealised
Group
73
Company
2010
RM000
2011
RM000
(209,531)
0
(209,531)
(136,207)
0
(136,207)
(106,515)
0
(106,515)
(101,017)
0
(101,017)
(23)
0
(209,554)
(23)
0
(136,230)
0
0
(106,515)
0
0
(101,017)
106,652
94,582
(102,902)
(41,648)
0
(106,515)
2010
RM000
0
(101,017)
The above supplementary information is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is
not part of the financial statements. The directors are responsible for the preparation of the supplementary information in
accordance with Guidance on Special Matter No. 1 Determination of Realised and Unrealised Profits or Losses in the Context
of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute
of Accountants and the directive of Bursa Malaysia Securities Berhad.
74
List Of Properties
As At 31 December 2011
Description/
Existing use
Tenure
Land/
Built-up
area
Age of
Building/
Land(years)
NBV as at
31-12-2011
RM
Location
Title
Head Office
And Factory
Building
Leasehold
(60 years
Expiring on
11.5.2052)
6.42913
Acres
15
19,000,000
T-3-1, T-3-2,
T-3-15, T-3-16
T-4-1, T-4-16,
Jalan Pelangi 2,
Taman Pelangi
Prai, Penang
Workers
quarters
Leasehold
(99 years
Expiring on
22.4.2092)
689
square
feet
each
12
270,000
3A-F, Marina
Crescent
Condominium,
BT 5 , Jalan
Pantai, Si Rusa,
Port Dickson,
Negeri Sembilan
Condominium
Leasehold
(99 years
Expiring on
27.7.2094)
62
Square
meters
13
180,000
Mukim 6 & 7,
Seberang Perai
Tengah,
Pulau Pinang
Mukim 6 & 7
Seberang Perai
Tengah
Pulau Pinang
District
Cooling
plant
Freehold
Land &
building
1.85
acres
18,637,337
Total
38,087,337
Analysis of Shareholdings
75
As At 10 May 2012
SHARE CAPITAL
Authorised share capital
: RM500,000,000
Issued and Paid-up share capital : RM75,104,777
Class of shares
: Ordinary shares of RM1.00 each
Voting rights
: One (1) vote per ordinary share
Number of shareholders
: 3,976
ANALYSIS OF SHAREHOLDINGS
No. of
Shareholders
No. of Ordinary
Shares
314
773
2,132
683
73
1
7.90
19.44
53.62
17.18
1.84
0.02
12,275
674,934
8,730,030
22,206,505
28,769,515
14,372,518
0.02
0.90
11.68
29.70
38.48
19.22
Total
3,976
100.00
*74,765,777
100.00
Size of Shareholdings
Note: *Excluding 339,000 shares bought back by the Company and held as treasury shares
SUBSTANTIAL SHAREHOLDERS
As per the Register of Substantial Shareholders
Name
Shareholdings
Direct
Indirect
14,372,518
#%
19.22
Notes:
# Excluding 339,000 shares bought back by the Company and held as treasury shares
Shareholdings
Direct
%
#%
76
No. of
Ordinary
Shares
14,372,518
19.22
1.
2.
2,765,900
3.70
3.
2,081,500
2.78
4.
2,047,149
2.74
5.
Citigroup Nominees (Asing) Sdn. Bhd. Exempt An for OCBC Securities Private Limited
1,534,100
2.05
6.
1,435,000
1.92
7.
1,000,000
1.34
8.
1,000,000
1.34
9.
731,400
0.98
720,000
0.96
600,000
0.80
581,700
0.78
566,000
0.76
550,000
0.74
520,400
0.70
520,000
0.70
505,200
0.68
465,400
0.62
393,100
0.53
392,000
0.52
384,800
0.51
360,000
0.48
318,100
0.42
300,000
0.40
290,000
0.39
281,700
0.38
276,000
0.37
28
258,600
0.34
250,000
0.33
233,000
0.31
35,733,567
47.79
Ho Han Min
TOTAL
77
NOTICE IS HEREBY GIVEN THAT THE EIGHTEENTH ANNUAL GENERAL MEETING (THE MEETING) OF LINEAR CORPORATION
BERHAD (THE COMPANY) WILL BE CONVENED AND HELD AT THE SEMINAR HALL, GROUND FLOOR, NO. 20A, JALAN
PERUSAHAAN, PRAI INDUSTRIAL ESTATE 4, 13600 PRAI, PENANG, MALAYSIA ON FRIDAY, 29 JUNE 2012 AT 2.30 P.M. TO
TRANSACT THE FOLLOWING BUSINESSES :AGENDA
Ordinary Business
1. To receive the Consolidated Audited Financial Statements of the Company for the financial year ended
31 December 2011 and the Reports of the Directors and Auditors thereon.
Resolution 1
2. To approve the payment of Directors fees totalling RM250,000 in respect of the financial year ended
31 December 2011.
Resolution 2
3. To re-elect the following Directors who retire by rotation pursuant to the Companys Ar ticles of
Association and who, being eligible, have offered themselves for re-election:Article 95
3.1 Saw Heng Soo
3.2 Neoh Chee Kean
Resolution 3
Resolution 4
4. To re-appoint Messrs Crowe Horwath as Auditors of the Company who shall hold office until the
conclusion of the next annual general meeting of the Company, and to authorise the Directors to fix
their remuneration.
Resolution 5
Special Business
To consider, and if thought fit, to pass with or without any modifications the following resolutions:Ordinary Resolutions
5. Proposed Renewal of Shareholders Mandate For Recurrent Related Party Transactions
That subject always to the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa
Securities), approval be and is hereby given for the Company and its subsidiaries (the Group) to
enter into the recurrent related party transactions, as detailed in section 2.4.1 of the Circular to
Shareholders dated 4 June 2012 accompanying the Companys Annual Report 2011 (the Circular),
which are of revenue in nature and which are transacted within and/or are necessary for the day-today operations of the Group and which are carried out on terms no more favourable to the related
parties than those generally available to the public or non-related parties and are not to the detriment
of the minority shareholders of the Company (the Shareholders Mandate)
Resolution 6
the conclusion of the next annual general meeting of the Company, at which time it will lapse
unless by a resolution passed at such meeting, such authority is renewed; or
(ii) the expiration of the period within which the next annual general meeting of the Company is
required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend
to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965);
or
(iii) revoked or varied by resolution passed by the shareholders of the Company in a general meeting.
78
That the Directors of the Company be and are hereby authorised to complete and do all such acts
and things as they may consider expedient or necessary to give effect to the Shareholders Mandate.
And That the estimates given of the recurrent related party transactions specified in section 2.4.1
of the Circular being provisional in nature, the Directors and/or any of them, be and are hereby
authorised to agree to the actual amount or amounts thereof provided that such amount or amounts
comply with the procedures set out in section 2.6 of the Circular.
6. Proposed Renewal of Authorisation for the Company to Purchase its Own Shares.
That subject to the Companies Act, 1965, the Memorandum and Articles of Association of the
Company, the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) and all
other relevant applicable laws, regulations and guidelines and the approvals of all relevant authorities,
the Company be and is hereby authorised to purchase such amount of ordinary shares of RM1.00
each in the Company (Proposed Share Buy-Back) as may be determined by the Directors from time
to time through Bursa Securities and to enter into any agreement(s), arrangement(s) and guarantee(s)
with any party(ies) to implement, finalise and give full effects to the Proposed Share Buy-Back
implement, finalise and give full effects to the Proposed Share Buy-Back with full powers to assent
to any condition(s), modification(s), revaluation(s), variation(s) and/or amendment(s) as may be
imposed by the relevant authorities from time to time and to do all such things and acts as the
Directors may deem fit and expedient in the best interest of the Company subject further to the
following :(i)
the aggregate number of shares purchased pursuant to this resolution does not exceed ten per
centum (10%) of the existing issued and paid-up share capital of the Company inclusive of the
339,000 ordinary shares already purchased and retained as treasury shares as at 4 June 2012;
(ii) the amount allocated for the Proposed Share Buy-Back shall not exceed the Companys audited
retained profit and/or share premium account.
That upon completion of the Proposed Share Buy-Back, the Directors are authorised to retain the
purchased shares as treasury shares or cancel the purchased shares or retain part of the purchased
shares as treasury shares and cancel the remainder. And That the Directors are further authorised
to resell the treasury shares on Bursa Securities or distribute the treasury shares as share dividends
to the shareholders of the Company or subsequently cancel the treasury shares or any combination
of the above.
And That the authority conferred by this Resolution shall be effective immediately upon the passing
of this Ordinary Resolution until :(i)
the conclusion of the next annual general meeting (AGM) of the Company, at which time the
said authority will lapse unless by an ordinary resolution passed at a general meeting of the
Company, the authority is renewed, either unconditionally or subject to conditions;
(ii) the expiration of the period within which the next AGM is required by law to be held; or
(iii) revoked or varied by ordinary resolution passed by the shareholders in general meeting;
whichever occurs first but shall not prejudice the completion of purchaser(s) by the Company before
the aforesaid expiry date.
Resolution 7
79
Resolution 8
8. To transact any other business of which due notice shall have been given in accordance with the
Companys Articles of Association and the Companies Act, 1965.
BY ORDER OF THE BOARD
Lim Saw Im (MACS 00363)
Secretary
Penang, Malaysia
4 June 2012
NOTES
1. Record of Depositors
In respect of deposited securities, only members whose names appear in the Record of Depositors on 22 June 2012
(General Meeting Record of Depositors) shall be eligible to attend the Meeting.
2. Appointment of Proxy
A member entitled to attend and vote at this Meeting is entitled to appoint a proxy or proxies (but not more than two
(2) save for an Authorised Nominee as defined in the Securities Industries (Central Depositories) Act, 1991) to attend
and vote in his stead. A proxy may but need not be a member of the Company and Section 149(1) (b) of the Companies
Act, 1965 shall not apply.
The Form of Proxy must be deposited at the Companys Registered Office, 60 Sri Bahari Road, 10050 Penang not less
than forty-eight (48) hours before the time appointed for the holding of the Meeting.
3. Statement accompanying the Notice of 18th Annual General Meeting
Additional information as required under Appendix 8A pursuant to Paragraph 8.27 of the Listing Requirements of Bursa
Malaysia Securities Berhad (Bursa Securities) is set out in the Statement Accompanying the Notice of 18th Annual
General Meeting.
80
Resolution 6, if passed, will allow the Company and its subsidiaries (the Group) to enter into recurrent related
party transactions (Shareholders Mandate) pursuant to paragraph 10.09(1) of the Listing Requirements of Bursa
Securities. The details of the Shareholders Mandate are set out in the Circular to Shareholders dated 4 June 2012.
b)
Resolution 7, if passed, will allow the Company to buy back its own shares up to 10% of the issued and paid-up
share capital of the Company (Share Buy-Back). This authority, unless revoked or varied by the Company in general
meeting, will expire at the conclusion of the next annual general meeting of the Company. Further details on the
Share Buy-Back are set out in the Share Buy-Back Statement dated 4 June 2012.
c)
Resolution 8 if passed, will allow the Board of Directors to allot and issue new ordinary shares up to ten percent
(10%) of the total issued and paid-up share capital of the Company as at the date of allotment of such new ordinary
shares in any one (1) financial year, for such purposes and upon such terms as the Directors consider would be
in the best interest of the Company (other than as a bonus or rights issue or pursuant to the Companys Employees
Share Option Scheme). This authority will, unless revoked or varied by the Company in a general meeting, expire
at the conclusion of the next annual general meeting of the Company. This general mandate is a renewal of the
mandate that was approved by the shareholders on 29 June 2011. The Company did not utilise the mandate that
was approved last year. The renewal of the general mandate is to facilitate the Company to raise funds expeditiously
for the purpose of funding future investment, working capital and/or acquisition without having to convene a general
meeting to seek shareholders approval when such opportunities or needs arise.
81
Details of Interest of Directors Standing For Re-Election At The Eighteenth Annual General Meeting.
No. of Shares held in the Company as at 10 May 2012
Direct
Indirect
Name of Director
None of the above Directors has any direct interest in the Companys subsidiaries. The Directors interest, if any, in the
subsidiaries are to the extent that the Company has an interest, pursuant to Section 6A of the Companies Act, 1965.
The profile and details of the Directors standing for re-election are outlined in pages 5 and 6 of this annual report.
82
Proxy Form
I/We
of
being a member / members of LINEAR CORPORATION BERHD (the Company) hereby appoint
of
or failing whom
of
/ the Chairman of the Meeting as my/our proxy to attend, speak and vote on my/our behalf at the Eighteenth Annual General
Meeting of the Company (the Meeting) to be held at the Seminar Hall, Ground Floor, No. 20A, Jalan Perusahaan, Prai
Industrial Estate 4, 13600 Prai, Penang, Malaysia on Friday, 29 June 2012 at 2.30 p.m., and at any adjournment thereof.
I/We direct my / our proxy to vote (see Note 4 herein) for or against the resolutions to be proposed at the Meeting as
indicated hereunder :Resolution
1
2
3
4
5
6
7
8
For
To
To
To
To
To
To
To
To
Against
Affix
STAMP
Here
To
The Company Secretary
LINEAR CORPORATION BERHAD
60 Sri Bahari Road
10050 Penang
Malaysia.
(288687-W)