The Board is committed to maintaining good corporate governance to enhance and safeguard the interest of its shareholders. This report below describes the corporate governance framework & practices of the Company with reference to the Code of Corporate Governance 2012 (the “Code 2012”) for the financial year ended 31 December 2014 (“FY2014”). Explanations are provided where there are deviations from the Code 2012. The Company has complied with the principles of the Code where appropriate.

1.         BOARD MATTERS

1.1.       Board’s Conduct of Affairs

Principle 1: Every Company should be headed by a long-term effective Board to lead and control the Company. The Board is collectively responsible for the success of the Company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The primary function of the Board is to protect and enhance long term value and returns for shareholders. Besides carrying out its statutory responsibilities, the Board’s roles includes:

l	Providing entrepreneurial leadership stewardship to the Company including charting its corporate strategies and business plans;

l   Ensuring that the necessary financial and human resources are in place for the Company to meet its objectives;

l   Authorizing and monitoring major investment and strategic commitments;

l   Reviewing and assessing the performance of the Management (comprising executive directors (“Executive
Directors”) and executive officers (“Executive Officers”)) of the Company;

l	Overseeing the evaluation of the adequacy of internal controls, addressing risk management, financial reporting and compliance, and satisfying itself as to the sufficiency of such processes;

l	Establishing a framework for effective control, including the safeguarding of shareholders’ interests and the company’s assets;

l   Providing guidance and advice to Management;

l   Being responsible for good corporate governance;

l	Considering sustainability issues, including environmental and social factors, as part of the Company’s strategic formulation;

l	Identifying key stakeholder groups of the Company and recognising that their perceptions affect the Company’s reputation; and

l	Setting the Company’s values and standards, including ethical standards, and ensuring that the obligations to its shareholders and other stakeholders are understood and met.

All directors are expected to discharge their duties and responsibilities at all times as fiduciaries in the interests of the

Annual Report 2014

Company.

The Board has also adopted strict internal guidelines and financial authority limits structure setting forth matters that require Board approval. The Board’s decision or specific approval is required on matters such as commitments and payments of operating and capital expenditure exceeding S$2,000,000, major funding proposals, investment and divestment proposals, major acquisitions and disposals, corporate or financial restructuring, mergers and acquisitions, share issuance and dividends, acceptance of bank facilities, release of the Group’s half year and full year results announcements and interested person transactions of a material nature.

The Company’s Articles of Association permit the Directors of the Company to attend meetings through the use of audio-visual communication equipment.

ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS

Board	Audit
Committee	Remuneration
Committee	Nominating
Committee	
No. of meetings held in FY2014					
Directors	Number of meetings attended in FY2014	
Loh Yih	4	4 (1)	1 (1)	1 (1)	
Wong Kok Chye	4	4 (1)	1 (1)	1 (1)	
Ong Chin Lin	4	4	1	1	
Ho Ta-Huang	4	4	1	1	
Yeo Meng Hin	3	3	1	1	

Notes:

(1)        Attendance by invitation.

To assist the Board in the discharge of its responsibilities, the Board has established three (3) Board Committees, namely the Audit Committee, Nominating Committee and Remuneration Committee. Upon its establishment, the Board Committees operate within clearly defined terms of reference and operating procedures, which would be reviewed on a regular basis. Minutes of all Board Committee meetings will be circulated to the Board so that the Directors are aware of and kept updated as to the proceedings and matters discussed during such meetings.

1.2.	Board Composition and Guidance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management and 10% shareholders. No individual or small group of individuals should be allowed to dominate the Board’s decision making.
The Board currently consists of five (5) Directors and is as follows: Loh Yih	Executive Chairman
Wong Kok Chye                                          Executive Director and Group Chief Executive Officer
Ong Chin Lin                                               Lead Independent Non-Executive Director
Yeo Meng Hin                                             Independent Non-Executive Director
Ho Ta-Huang                                               Non-Executive and Non-Independent Director

Linair Technologies Limited

The Company endeavours to maintain a strong and independent element on the Board. Two (2) of the Company’s Directors are independent, thereby fulfilling the Code 2012’s requirement that at least one-third of the Board should comprise Independent Directors. The Company is aware of Guideline 2.2 of the Code 2012 that Independent Directors should constitute at least half of the Board where the Chairman is not an Independent Director, and the Company has plans to satisfy this Guideline 2.2 by year 2016.

The Board considers an Independent Director as one who has no relationship with the Company, its related companies, its 10% shareholders(1)   or its officers that could interfere, or be reasonably perceived to interfere, with the exercise of the Directors’ independent judgment of the Group’s affairs with a view to the best interests of the Company. The Independent Directors have confirmed that they do not have any relationship with the Company, its related companies, its 10% shareholders or its officers that would interfere, or be reasonably perceived to interfere, with the exercise of their independent business judgement, with a view to the best interests of the Company. The independence of each Director will be reviewed annually by the Nominating Committee in accordance with the definition of independence in the Code 2012. The Nominating Committee has reviewed and is of the view that the two (2) Independent Directors are independent.

Notes:
10 	(1)	The Code 2012 defines a 10% shareholder as a person who has an interest or interests in one or more voting shares in the company and the total votes attached to that shares is not less than 10% of the total votes attached to all the voting shares in

The Board notes that Mr Ong Chin Lin (“Mr Ong”) has been an Independent Director of the Company for more than
9 years. The Board has undertaken a rigorous review of the independence of Mr Ong, and has concluded that Mr Ong is suitable to continue as an Independent Director of the Company. During the 10 years period, Mr Ong had no relationship with the Company, its related companies, its 10% shareholders or its officers. Neither Mr Ong nor any of his immediate family member has been employed by the Company or its related companies, has accepted any significant compensation by the Company or its related Company, has been a 10% shareholder, partner, director or executive officer of an organisation which has provided or received significant payments or material services from the Company, is a 10% shareholder of a 10% shareholder of the Company, or has been directly associated with a 10% shareholder of the Company. In addition, the Board also reviews the performance of each independent director and opine that Mr Ong having gained good understanding of the Group’s business and operations will be able to continue to bring in valuable expertise, experience and knowledge to the Board. To ensure continued management and governance, the Board believes that Mr Ong can provide the necessary and required stability to work with both new and old directors to collectively drive the Group forward.

A review of the size of the Board will be undertaken by the Company, and the Nominating Committee will also determine if the current size and composition of the Board is appropriate for the scope and nature of the Group’s operations, and facilitate effective decision-making. In line with Code 2012, the Nominating Committee will take into account the requirements of the Group’s businesses and the need to avoid undue disruptions from changes to the composition of the Board and Board Committees. The Nominating Committee considers the current Board size to be appropriate for effective decision-making, taking into account the nature and scope of the Group’s operations.

The composition of the Board will be reviewed on an annual basis by the Nominating Committee to ensure that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective functioning and informed decision-making. The Nominating Committee has reviewed and is of the view that the current Board comprises persons who as a group provide an appropriate balance and diversity of skills, experience and capabilities required for the Board to be effective, and the present composition of the Board allows it to exercise objective judgement on corporate matters and that no individual or small group of individuals dominates the decisions of the Board.

The Non-Executive Directors effectively check on Management by constructively challenging and helping to develop proposals on strategy. They monitor and review the reporting and performance of Management in meeting agreed goals and objectives. The Non-Executive Directors may meet regularly on their own as warranted without the presence of Management.

The profiles of the Directors are set out on pages 4 and 5 of this Annual Report.

Upon appointment to the Board, each Director will be given appropriate briefings by the Management on the Business activities of the Group, its strategic direction and the Company’s corporate governance policies and practices.

Directors will be updated regularly on accounting and regulatory changes, and are encouraged to attend workshops, seminars and training, to enhance their skills and knowledge, or on relevant new laws, regulations and changing commercial risks.

1.3.	Chairman and CEO

Principle 3: There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the Company’s business. No one individual should represent a considerable concentration of power.

Annual Report 2014

The company adopts a dual leadership structure whereby the roles of chairman & CEO are separate. There is a clear division of responsibilities between the company’s Executive Chairman & CEO, which provides a balance of power and authority.

Mr Loh Yih is the Executive Chairman of the Board, and is responsible for the workings of the Board to ensure the effectiveness and integrity of the governance process. Mr Wong Kok Chye is the Chief Executive Officer (“CEO”), who is responsible for the business and operational decisions of the Group. The Board is of the view that there is a clear division of responsibilities between the Executive Chairman and the CEO in order to ensure that there is an appropriate balance of power, increased accountability and sufficient capacity of the Board for independent decision making. The Executive Chairman is not related to the CEO.

The CEO works with the Board to determine the strategy for the Group and is responsible for the Group’s business performance. He reports directly to the Board, and updates the Board on the performance of the Company during regular meetings and ensures that policies and strategies adopted by the Board are implemented. The CEO also works with the senior management of the Group to ensure that the senior management operates in accordance with the strategic and operational objectives of the Group.

The Executive Chairman leads the Board to ensure its effectiveness on all aspects of its role. He approves the agendas for the Board, and ensures that adequate time is available for discussion of all agenda items during the meetings, in particular strategic issues. The agendas for Board Committees are approved by the Executive Chairman together with the respective chairpersons of the Board Committees.

The Executive Chairman also exercises control over the quality, quantity and timeliness of information flow between the Board, the Management and the shareholders of the Company. He encourages interactions between the Board and the senior management, as well as between the Executive and Non-Executive Directors, and promotes a culture of openness and debate at the Board. The Executive Chairman also ensures that the Directors receive complete, adequate and timely information and ensures effective communication with shareholders. In addition, the Executive Chairman takes a leading role in ensuring the Company’s compliance with corporate governance guidelines.

In order to ensure good corporate governance practice and that there is no concentration of power and authority vested in one individual, the Company has appointed Mr Ong as the Lead Independent Director. The Lead Independent Director will be available to the shareholders where they have concerns which cannot be resolved through the normal channels of the Executive Chairman, the CEO or the Chief Financial Officer, or where such contact is not possible or inappropriate.  The independent Directors will also meet periodically without the presence of the other Directors, and the Lead Independent Director will provide feedback to the Executive Chairman after such meetings.

1.4.	Board Membership

Principle 4: There should be a formal and transparent process for the appointment and re-appointment of Directors to the Board.

The Nominating Committee

The  Company  has  constituted  a  Nominating  Committee  to,  among  other  things,  make  recommendations  to  the Board on all Board appointments and oversee the Company’s succession and leadership development plans. The Nominating Committee comprises Mr Yeo Meng Hin (Chairman of the Nominating Commitee), Mr Ong Chin Lin, and Mr Ho Ta-Huang, of which the majority of whom, including the Chairman, are independent.

The primary function of the Nominating Committee is to determine the criteria for identifying candidates, review nominations for the appointment of Directors to the Board, to decide how the Board’s performance may be evaluated and to propose objective performance criteria for the Board’s approval. Its duties and functions are outlined as follows:-

(a)         to make recommendations to the Board on all Board appointments and re-nomination having regard to the Director’s contribution and performance (e.g. attendance, preparedness, participation, candour and any other salient factors);

Linair Technologies Limited

(b)         to ensure that all Directors would be required to submit themselves for re-nomination and re-election at regular intervals and at least once in every three years;

(c)          to determine annually whether a Director is independent, in accordance with the guidelines contained in the
Code 2012;

(d)	to decide whether a Director is able to and has adequately carried out his duties as a director of the Company, in particular, where the Director has multiple board representations;

(e)         to review and approve any new employment of related persons and the proposed terms of their employment;

(f )          put in place and review Board succession plans for the Directors, and in particular, for the Chairman of the Board and the chief executive officer of the Company;

(g)	to decide how the Board’s performance may be evaluated and to propose objective performance criteria, subject to the approval of the Board, which address how the Board has enhanced long term shareholders’ value; and

(h)         to review the training and professional development programs for the Board.

The Board has implemented a process to be carried out by the Nominating Committee for assessing the effectiveness of the Board as a whole and for assessing the contribution by each individual Director to the effectiveness of the Board. Each member of the Nominating Committee shall abstain from voting on any resolution and making any recommendations and/or participating in any deliberations of the Nominating Committee in respect of the assessment of his performance or re-nomination as a Director.

There is a formal and transparent process for the appointment of new Directors to the Board. The Nominating Committee reviews and recommends all new Board appointments and also the re-nomination and re-appointment of Directors to the Board. The Nominating Committee has used its best efforts to ensure that Directors appointed to the Board possess the background, experience and knowledge in technology, business, legal, finance and management skills critical to the Company’s business and that each Director contributes and brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

In the nomination and selection process of a new Director, the Nominating Committee identiﬁes key attributes of an incoming Director based on the requirements of the Group and recommends to the Board the appointment of the new Director. The Nominating Committee will take into consideration the current Board size and its composition – including the mix of expertise, skills and attributes of the Directors – and determine if the candidate’s background, experience and knowledge will bolster the core competencies of the Board.

Annually, the Nominating Committee will assess the independence of each Director, the performance of the Board as a whole, and the contribution of each Director to the effectiveness of the Board. The Nominating Committee is also required to determine whether Directors who hold multiple board representations are able to and have been devoting sufficient time to discharge their responsibilities adequately. The Code 2012 requires listed companies to fix the maximum number of board representations on other listed companies that their directors may hold. The Nominating Committee has conducted an annual review of the independence of the Independent Directors, based on guidelines stated in the Code 2012, and has ascertained that they are independent. The Nominating Committee has also fixed the maximum number of board representations on other listed companies that their Directors may hold to be nine (9).

All Directors are subject to the provisions of Article 89 of the Company’s Articles of Association whereby one-third of the Directors are required to retire and subject themselves to re-election by the shareholders at each annual general meeting, and each Director is required to subject himself for re-nomination and re-election at least once every three (3) years. In addition, any new Director appointed during the year either to fill a casual vacancy or as an addition to the Board will have to retire at the annual general meeting following his appointment, and is eligible for re-election if he/she so desires.

Annual Report 2014

The Nominating Committee has recommended to the Board that – Mr Ho Ta-Huang and Mr Wong Kok Chye be nominated for re-appointment at the forthcoming Annual General Meeting of the Company. Mr Ho Ta- Huang will, upon re-election as a Director, remain as a member of the Audit Committee, Nominating Committee and Renumeration Committee. Mr Wong Kok Chye will, upon re-election as a Director, remain as the Executive Director and Group Chief Executive Officer of the Company. The current directorships and other principal commitments of Mr Ho Ta-Huang and Mr Wong Kok Chye are found in the table below.

Key information regarding the Directors, including the date of initial appointment and last re-election of each Director, together with their directorships in other companies, are set out on pages 4 and 5 of this Annual Report and below:

Name of Director	Date of initial
Appointment	Date of last re-election	Directorships in other listed companies	Other Principal
Commitments	
			Current	Past 3 Years		
Loh Yih	30 September
2013	30 April 2014	l Ban Leong Technologies Limited
l International Press Softcom Limited
l Weichai
Power Co. Ltd.	Nil	Nil	
Wong Kok Chye	7 January 2013	29 April 2013	Nil	Nil	Nil	
Ong Chin Lin	30 November
2004	30 April 2014	l Old Chang
Kee Ltd
l Yi-Lai Berhad	Nil	Consultant	
Ho Ta-Huang	7 December
2001	27 April 2012	Nil	Nil	Chairman of Chern Dar Enterprise Co., Ltd	
Yeo Meng Hin	30 September
2013	30 April 2014	Nil	Nil	Asia Pacific Head of Human Resources for a global logistics company	

There are no alternate directors appointed in the Company.

1.5.	Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and its Board
Committees and the contribution by each director to the effectiveness of the Board.

Review of the Board’s performance will be conducted by the Nominating Committee annually. The Nominating Committee is guided by its terms of reference which set out its responsibility for assessing the Board’s effectiveness as a whole, the effectiveness of its Board Committees, and the contribution from each individual Director to the effectiveness of the Board. The Board, through the delegation of its authority to the Nominating Committee, has used its best efforts to ensure that Directors appointed to the Board possess the background, experience and knowledge in technology, business, legal, finance and management skills critical to the Company’s business and that each Director contributes and brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

Linair Technologies Limited

In assessing the effectiveness of the Board, the Nominating Committee considers a number of factors, including the discharge of the Board’s functions, access to information, participation at Board meetings and communication and guidance given by the Board to the Management. The Nominating Committee’s focus in the assessment of the Board’s effectiveness is on its ability to provide supervisory and oversight.

With regard to the performance evaluation process, each Director will complete an evaluation questionnaire to assess the performance of the Board as a whole and his individual performance, and provide the feedback to the Nominating Committee. Each member of the Audit Committee, Nominating Committee and Remuneration Committee will also complete evaluation questionnaires in respect of the Audit Committee, Nominating Committee and Remuneration Committee respectively. A summary report will be compiled by the Chairman of Nominating Committee and submitted to the Chairman of the Board for analysis and discussion with a view to implementing certain  recommendations to further enhance the effectiveness of the Board. If necessary, a copy of the summary report will  be extended to the individual Director for information and feedback. No external facilitator was used in the evaluation process.

In reviewing the Board’s effectiveness as a whole, the Nominating Committee shall take into account feedback from Board members as well as the Director’s individual skills and experience. The Nominating Committee will also consider the guidelines set out in the Code 2012 for the evaluation and assessment of the performance of the Board as a whole in achieving strategic objectives. The Nominating Committee is of the view that although some of the Directors have multiple board representations, these Directors are able and have been adequately carrying out their duties as Directors of the Company.

The Nominating Committee, having reviewed the overall performance of the Board and the respective committees in terms of its roles and responsibilities and the conduct of its affairs as a whole, and the individual Director’s performance, is of the view that the performance of the Board, the respective committees and each individual Director has been satisfactory.

1.6.	Access to Information

Principle 6: In order to fulfill their responsibilities, Directors should be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis so as to enable them to make informed decisions to discharge their duties and responsibilities.

The Company recognises the importance of continual dissemination of relevant information which is explicit, accurate, timely and vital to the Board in carrying out its duties. The Management reports to the Board the Company’s progress and drawbacks in meeting its strategic business objectives or financial targets and other information relevant to the strategic issues encountered by the Company in a timely and accurate manner. Prior to each Board meeting, the Board members are each provided with the relevant documents and the necessary information to allow the Board to comprehensively understand the issues to be deliberated upon and to make informed decisions thereon, including periodic financial summary reports, budgets, forecasts and other disclosure documents. In respect of budgets, any material variances between projections and actual results of the Company will be reviewed by the Directors, and will be disclosed and explained by the Company to the shareholders. Directors are also entitled to request from Management additional information required to make informed decisions, which the Management will provide in a timely manner.

In exercising their duties, the Directors have unrestricted, separate and independent access to the Company’s Management, company secretary (“Company Secretary”) and independent auditors. The Company Secretary attends all Board meetings of the Company, ensures a good flow of information within the Board and between the management and the Non-Executive Directors, attends to corporate secretariat administration matters, and advises the Board on governance matters, ensuring Board procedures are followed and that applicable rules and regulations are complied with. The appointment and the removal of the Company Secretary is a matter for the Board as a whole.

Each Director has the right to seek independent legal and other professional advice, at the Company’s expense, concerning any aspect of the Group’s operations or undertakings in order to fulfill their duties and responsibilities as directors.

2.	REMUMERATION MATTERS

2.1.	Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual Directors. No Director should be involved in deciding his own remuneration.

Annual Report 2014

The Remuneration Committee comprises Mr Yeo Meng Hin (Chairman of the Remuneration Committee), Mr Ong Chin Lin and Mr Ho Ta-Huang, of which the majority of whom, including the Chairman, are independent. The Remuneration Committee is regulated by a set of written terms of reference and has access to independent professional advice, if necessary.

Pursuant to the Remuneration Committee’s term of reference, the Remuneration Committee reviews and recommends to the Board a framework of remuneration for the Directors and key management personnel, including the CEO, other personnel having the authority and responsibility for planning, directing and controlling the activities of the Company, and the employees related to the Executive Directors and controlling shareholders of the Company, and determines specific remuneration packages for each Executive Director. The review will cover all aspects of remuneration including
but not limited to Director’s fees, salaries, allowances, bonuses, options, share-based incentives and awards, and other            15

Annually, the Remuneration Committee will review the level and mix of remuneration and benefits policies and practices of the Company, including long-term incentives. When conducting such reviews, the Remuneration Committee will take into account the performance of the Company and that of individual employees. It will also review and approve the framework for salary reviews, performance bonus and incentives for key management personnel of the Group. The recommendations of the Remuneration Committee on remuneration of Directors will be submitted for endorsement by the entire Board.

Each member of the Remuneration Committee shall abstain from voting on any resolutions in respect of his remuneration package. The overriding principle is that no Director should be involved in deciding his own remuneration. The Remuneration Committee has met to consider and review the remuneration packages of the Executive Directors and key Executive Officers, including those employees related to the Executive Directors and controlling shareholders of the Company.

The Remuneration Committee may from time to time, and where necessary or required, engage independent external consultants in framing the remuneration policy and determining the level and mix of remuneration for Directors and Management and ensure that existing relationships, if any, between the Company and its appointed consultants will not affect the independence and objectivity of the consultants. Among other things, this helps the Company to stay competitive in its remuneration packages. No independent external consultants have been engaged by the Company for this purpose for FY2014.

2.2.	Level and Mix of Remuneration

Principle 8: The level and structure of remuneration should be aligned with long-term interest and risk policies of the Company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good stewardship of the Company, and (b) key Management personnel to successfully manage the Company. However, companies should avoid paying more than is necessary for this purpose.

In setting remuneration packages, the Remuneration Committee takes into account pay and employment conditions within the same industry and in comparable companies, as well as the Group’s relative performance and the performance of individual Directors.

The Independent Directors and Non-Executive Director receive a fixed Directors’ fees plus a variable component, in accordance with their contribution, taking into account factors such as effort, time spent, and responsibilities of each Director. The Remuneration Committee recognises the need to pay competitive fees to attract, motivate and retain such Independent Directors and Non-Executive Director, yet not over-compensate them to the extent that their independence (if applicable) may be compromised. Directors’ fees are recommended by the Board for approval by the shareholders at the Company’s annual general meeting.

The Company’s Executive Directors, namely Mr Loh Yih and Mr Wong Kok Chye are remunerated based on their service agreements with the Company. The service agreements have a fixed term of three (3) years with a notice period of three (3) months. The remuneration comprises a fixed salary and performance bonuses linked to corporate and individual performances where appropriate, and is designed to align the interests of the Executive Directors with those of shareholders. Independent and Non-Executive Directors do not have service contracts with the Company.

Linair Technologies Limited

The Group has also entered into letters of employment with all the Executive Officers. Such letters typically provide for the salaries payable to the Executive Officers, their working hours, medical benefits, grounds of termination and certain restrictive covenants.

The Company’s compensation framework comprises fixed pay and short-term and long-term incentives. The Company subscribes to linking executive remuneration to corporate and individual performance, based on an annual appraisal of employees and using indicators such as core values, competencies, key result areas, performance rating, and potential of the employees. Long-term incentive schemes are put in place to motivate and reward employees and align their interests with the interests of shareholders to promote the long-term success of the Company. The Company’s Share Plan (defined below) is administered by the Remuneration Committee with such discretion, powers and duties as are conferred on it by the Board. A member of the Remuneration Committee shall not be involved in the deliberations of the Remuneration Committee in respect of the grant of awards to him. The Company has not granted any shares under its Share Plan (defined below).

The  recommendations  of  the  Remuneration  Committee  will  be  submitted  to  the  Board  for  endorsement.  The
16 	Remuneration Committee will be provided with access to expert professional advice on remuneration matters as and when necessary. The expense of such services shall be borne by the Company.

2.3.	Disclosure on Remuneration

Principle 9: Every Company should provide clear disclosure of its remuneration policies, level and mix of remuneration, and the procedure for setting remuneration in the Company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to Directors and key management personnel, and performance.

The breakdown of remuneration of the Directors of the Company for FY2014 is as follows:

Directors/ Chief
Executive Officers	

Remuneration (S$)	
Fees
(S$)	
Fees
%	
Salaries
%	
Bonus
%	Other
Benefits
%	
Total
%	
S$250,000 to S$500,000	
Loh Yih	In between 250,000 to 500,000	–	–	81	10	9	100	
Below S$250,000	
Wong Kok Chye	Below 250,000	–	–	80	9	11	100	
Ong Chin Lin	–	34,000	100		–	–	100	
Ho Ta-Huang	–	30,000	100		–	–	100	
Yeo Meng Hin	–	30,000	100		–	–	100	

In view of the competitive pressures in the talent market, the remuneration paid to the Executive Chairman and the
Chief Executive Officer are disclosed in bands.

Details of remuneration paid to key Executive Officers of the Group for FY2014 is as follows:

Key Executive Officers	Salaries
%	Bonus
%	Other Benefits
%	Total
%	
Below S$250,000	
Lee Wee Beng	90	10	–	100	
Ng Yui Wei	82	11	7	100	

The aggregate split of total remuneration paid to the top two key senior management personnel (who are not Directors or the CEO) for FY2014 are disclosed in bands. Save for the four Executive Officers described in the table above, the Company does not have any other key management personnel.

Linair Performance Bonus Share Plan

The  Linair  Performance  Bonus  Share  Plan  (“Share  Plan”)  was  approved  by  the  shareholders  of  the  Company  on
27 November 2008, and has been renewed by the shareholders at the last annual general meeting held on 30 April

Annual Report 2014

2014. The Share Plan was introduced to promote higher performance goals and recognize commendable exceptional achievement, and to encourage a sense of belonging in its employees. The Share Plan is designed to reward its participants by the issue and/or transfer of fully-paid shares in the Company according to the extent to which they achieve their performance targets over set performance periods.

As of the date of this Report, the Company has not granted any shares under its Share Plan.

The Company’s staff remuneration policy is based on individual’s rank and role, the individual performance, the Group’s performance and industry benchmarking gathered from companies in comparable industries. The remuneration of Non-Executive Directors takes into account their level and quality of contribution and their respective responsibilities, including attendance and time spent at Board meetings and Board Committee meetings. Non-Executive Directors who perform services through Board Committees will be paid additional basic and attendance fees for such services. No Director decides his own fees. Directors’ fees will be reviewed periodically to benchmark such fees against the amounts
paid by other major listed companies.                                                                                                                                                                               17

3.	ACCOUNTABILITY AND AUDIT

3.1.	Accountability

Principle 10: The Board should present a balanced and understandable assessment of the Company’s performance, position and prospects.

The Board believes that it should conduct itself in ways that deliver maximum sustainable value to its shareholders. Timely releases of the Group’s financial results and all significant information to shareholders as well as the prompt fulfillment of statutory requirements are ways to maintain shareholder’s confidence and trust in the Board’s capability and integrity.

Currently, the Company is required to release half year and full year results announcements pursuant to the Listing Manual Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) (“Catalist Rules”). In this respect, the Board, with the assistance of the Management, strives to provide a balanced and understandable assessment of the Group’s performance, position and prospects. The Board also undertakes such effort with respect to other price sensitive public reports and reports to regulators, where required. Price sensitive information will be publicly released either before the Company meets with any group of investors or analysts or simultaneously with such meetings.

The Management is responsible to the Board and the Board itself is accountable to the shareholders of the Company. The Board is provided with the management accounts of the Group’s performance and position on a monthly basis.

The Board has also established written policies of the Company to ensure compliance of the Company with legislative and regulatory requirements, including requirements under the Catalist Rules.

3.2.	Risk Management and Internal Controls

Principle 11: The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard the shareholders’ interests and the Company’s asset, and should determine the nature and extent of the significant risks which the Board is willing to take in achieving its strategic objectives.

The Board is responsible for the overall internal control framework and is fully aware of the need to put in place a system of internal controls within the Group to safeguard shareholders’ interests and the Group’s assets, and to manage risks. The Board also oversees management in the design, implementation and monitoring of the risk management and internal control systems. The Board will review on an annual basis the adequacy and effectiveness of the Company’s risk management and internal controls system, including financial, operational, compliance and information technology controls.

Linair Technologies Limited

With the assistance of the internal audit function of the Company and through the Audit Committee, the Board reviews the adequacy and effectiveness of the Company’s risk management policies and systems, and key internal controls at least on an annual basis, provides its perspective on management control and ensures that the necessary corrective actions are taken on a timely basis. There are formal procedures in place for both the internal and external auditors to report conclusions and recommendations to Management and to the Audit Committee independently.

Based on the internal controls established and maintained by the Group, work performed by the internal and external auditors, and reviews performed by the Management and the Board, the Audit Committee and the Board are of the opinion that the Group’s internal controls, including financial, operational, compliance and information technology controls, and risk management systems, are adequate and effective.

The Board has also received assurances from the CEO and Chief Financial Officer of the Group whom relied upon the representation letters from senior management of key subsidiaries, that:

a)           the financial records have been properly maintained and the financial statements give a true and fair view of the
Company’s operations and finances; and

b)          the Company’s risk management and internal control systems were adequate and effective as at 31 December
2014.

The Board understands that it may establish a separate board risk committee or otherwise assess appropriate means to assist it in carrying out its responsibility of overseeing the Company’s risk management framework and policies. The Company currently does not have a separate board risk committee.

3.3.	Audit Committee

Principle 12: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.

The  Audit  Committee  comprises  Mr  Ong  Chin  Lin  (Chairman  of  Audit  Committee),  Mr  Yeo  Meng  Hin,  and
Mr Ho Ta-Huang, of which the majority of whom, including the Chairman, are independent.

The Audit Committee members possess many years of experience in accounting, legal, business and financial management. The Board considers that the members of the Audit Committee are appropriately qualified to discharge the responsibilities of the Audit Committee.

It functions under a set of written terms of reference which sets out its responsibilities below. The Audit Committee also has explicit authority to investigate any matter within its terms of reference.

(a)         review the scope and results of the audit and its cost effectiveness;

(b)         review the independence and objectivity of the external auditors annually;

(c)         review the significant financial reporting issues and judgements so as to ensure the integrity of the financial statements of the Group and any formal announcements relating to the Group’s financial performance;

(d)	review the half-yearly and full year financial results before submission to the Board for approval. (e)	review the adequacy of the Group’s internal controls, as set out in the Code 2012;
(f )          review the effectiveness of the Group’s internal audit function;

(g)         meet periodically with the Company’s internal and external auditors to review their audit plan and discuss the results of their respective examinations and their evaluation of the Group’s system of internal accounting controls without the presence of the Company’s Management;

(h)         consider and recommend to the Board on the appointment, re-appointment and removal of the external and internal auditors, and approving the remuneration and terms of engagement of the external and internal auditors;

(i)	review arrangements by which staff of the Group may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters;

( j)          review the external and internal auditors’ reports;

(k)         review the co-operation given by the Group’s officers to the external auditors;

(l)           review and approve interested persons transactions, if any, falling within the scope of Chapter 9 of the Catalist

Annual Report 2014

Rules;

(m)        review the adequacy of the business risk management process;

(n)        review potential conflicts of interest, if any, and ensuring procedures for resolving such conflicts are strictly adhered to;

(o)         undertake such other reviews and projects as may be requested by the Board and report to the Board its findings from time to time on matters arising and requiring the attention of the Audit Committee;

(p)	review and establish procedures for receipt, retention and treatment of complaints received by the Group
regarding inter alia, criminal offences involving the Group or its employees, questionable accounting, auditing,	19
business, safety or other matters that impact negatively on the Group; and

(q)	generally undertake such other functions and duties as may be required by statute or the Catalist Rules, or by such amendments made thereto from time to time.

In addition to reviewing the effectiveness of the Group’s internal audit function, the internal auditor’s primary line of reporting is the Chairman of the Audit Committee.

Apart from the above functions, the Audit Committee will also commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls, or infringement of any law, rule or regulation which has or is likely to have a material impact on the Group’s operating results or financial position. The Audit Committee is authorised to obtain independent professional advice if it deems necessary in the discharge of its responsibilities. Such expenses are to be borne by the Group. Each member of the Audit Committee will abstain from any deliberations and/or voting in respect of matters in which he is interested.

The Audit Committee has full access to the Management and also full discretion to invite any Director or key Management to attend its meetings, and has been given reasonable resources to enable it to discharge its function properly.
The Audit Committee has met with the external auditors, without the presence of Management, at least once in FY2014. The Audit Committee has recommended to the Board the nomination of PKF-CAP LLP for their re-appointment as
external auditors of the Company at the forthcoming annual general meeting.  The Company confirms that it complies with Rules 712 and 715 of the Catalist Rules in relation to the proposed re-appointment of PKF-CAP LLP as the external auditors of the Company. The Audit Committee, having reviewed the scope and value of non-audit services provided to the Group by the external auditors, is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors. No non-audit fee was paid to the external auditors during the financial year. The aggregate amount of audit fees paid to the external auditors for the financial year is S$ 109,000.

The Group has established a whistle-blowing policy that seeks to provide a channel for the Group’s employees to raise concerns in good faith and in confidence about possible improprieties in matters of financial reporting or other matters such as possible corruption, suspected fraud and other non-compliance issues. The Audit Committee will address the issues and/or concerns raised and ensure that necessary arrangements are in place for the independent investigation of issues and/or concerns raised by the employees and for appropriate follow-up actions. Details of the whistle-blowing policies and arrangements have been made available to the Group’s employees.

The Audit Committee takes measures to keep abreast of the changes to accounting standards and issues which have direct impact on financial statements, with training conducted by professional or external consultants.

3.4.	Internal Audit

Principle 13: The Company should establish an effective internal audit function that is adequately resourced and independent of the activities it audits.

Linair Technologies Limited

The Board recognises the importance of maintaining an internal audit function to maintain a sound system of internal control within the Group to safeguard shareholders’ investments and the Company’s assets. The Audit Committee has the responsibility to review annually the adequacy and effectiveness of the internal audit function, review the internal audit program and ensure co-ordination between internal auditor, external auditor and Management, and ensure that the internal auditor  carry out its function according to the standards set by nationally or internationally recognised professional bodies, in particular, the Standards for Professional Practice of Internal Auditing set by the Institute of Internal Auditors. The Audit Committee will also approve the hiring, removal, evaluation and compensation of the accounting or auditing firm or corporation which the internal audit function of the Company is outsourced to.

The internal audit function of the Group has been outsourced to an external professional Audit Firm and their primary line of reporting is to the Audit Committee. The objective of the internal audit function is to provide an independent review on the adequacy and effectiveness of the Group’s internal controls and provide reasonable assurance to the Audit Committee on the Group’s controls and governance processes. The internal auditor has unfettered access to all the Company’s documents, records, properties and personnel, including access to the Audit Committee. An annual internal audit plan which entails the review of the effectiveness of the Group’s controls has been developed by the internal auditor. The Audit Committee is satisfied that the internal audit function has been adequately resourced and has the appropriate standing within the Group.

4.	SHAREHOLDERS RIGHTS AND RESPONSIBILITIES

4.1.	Shareholder Rights and Communication with Shareholders

Principle 14: Companies should treat all shareholders fairly and equitably, and should recognise, protect and facilitate the exercise of shareholders’ rights, and continually review and update such governance arrangements.

Principle 15: Companies should actively engage their shareholders and put in place an investor relations policy to promote regular, effective and fair communication with shareholders.

In line with the continuous disclosure obligations of the Company pursuant to the Catalist Rules and the Companies Act, Chapter 50 of Singapore, it is the Board’s policy to ensure that all shareholders are informed regularly and on a timely basis of every significant development that has an impact on the Group.

Pertinent information is communicated to shareholders on a regular and timely basis via SGXNET announcements and news releases. The Group also maintains a website at http://linair.com.sg at which shareholders can access information on the Group. The website provides, inter alia, corporate announcements, press releases and profiles of the Group.

In presenting the annual financial statements and announcements of financial results to shareholders, it is the aim of the Board to provide shareholders with a balanced and understandable assessment of the Company’s performance, position and prospects. The financial results for the half-year and full year are released to shareholders within 45 and 60 days of the half-year end and full year end, respectively.

The Board establishes and maintains regular dialogue with its shareholders, to gather views or inputs and to address shareholders’ concerns. The annual general meeting of the Company is a principal forum for dialogue and interaction with all shareholders. All shareholders of the Company will receive annual reports and are informed of shareholders’ meetings through notices published in the newspapers and reports or circulars sent to all shareholders. Shareholders are invited at such meetings to put forth any questions they may have on the motions to be debated and decided upon. Save for nominee companies, any shareholder who is unable to attend is allowed to appoint up to two proxies to vote on his behalf at the meeting through proxy forms sent in advance. Nominee shareholders are allowed to appoint more than two proxies to allow for shareholders who hold shares through such nominee companies to attend and participate in the meetings of the Company as proxies.

The Company does not have a fixed policy on payment of dividends; instead the issue of the payment of dividend is deliberated seriously and at length by the Board annually having regard to various factors. Where dividends are not paid, the Company discloses the reasons. The Company did not pay any dividends in respect of FY2014 in view of the challenging operating environment.

4.2.	Conduct of Shareholder Meetings

Principle 16: Companies should encourage greater shareholder participation at annual general meetings of shareholders, and allow shareholders the opportunity to communicate their views on various matters affecting the Company.

At the annual general meeting, the shareholders of the Company will be given the opportunity to voice their views and direct to the Directors or the Management questions regarding the Company. At the Company’s general meetings, each distinct issue is proposed as a separate resolution, and all resolutions will be voted on by poll.

Annual Report 2014

The Chairman of each Board Committees is required to be present to address questions at the annual general meeting. The external auditors are also present to address shareholders’ queries about the conduct of audit and the preparation and content of the auditor’s report.

After the annual general meeting, the Company will make an announcement of the details results showing the number of votes cast for and against each resolution and the respective percentage, and will prepare minutes of the annual general meeting. Such minutes are available to shareholders upon their request.

Having undertaken a cost/benefit analysis, the Company has decided not to undertaking polling by means of electronic polling at this juncture.

ADDITIONAL INFORMATION

5.	DEALING IN SECURITIES

In line with Rule 1204 (19) of the Catalist Rules on Dealing in Securities, the Company issues circulars to its directors and employees, to remind them that (i) they should not deal in shares of the Company on short-term considerations or if they are in possession of unpublished material price-sensitive information; and (ii) they are required to report on their dealings in shares of the Company. The Directors and employees are also reminded of the prohibition in dealing in shares of the Company one month before the release of the half-year and year-end financial results and ending on the date of the announcement of the relevant results. The Company has complied with the said Rule during the financial year.

Directors and officers are also expected to observe insider-trading laws at all times even when dealing with securities within the permitted trading period.

6.	MATERIAL CONTRACTS

Save as disclosed above, there was no material contract entered into by the Company or any of its subsidiary companies involving the interest of the CEO, any Director, or controlling shareholder, which are either still subsisting at the end of FY2014 or if not then subsisting, entered into since the end of the previous financial year.

7.	INTERESTED PERSONS TRANSACTIONS (“IPTs”)

The Group has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the Audit Committee and that transactions are conducted on an arm’s length basis that are not prejudicial to the interests of the shareholders. When a potential conflict of interest occurs, the Director concerned will be excluded from discussions and refrain from exercising any influence over other members of the Board. Besides the information disclosed below, there is no other IPTs conducted during the year, which exceeds S$100,000 in value.

Name of Interested Person	Aggregate value of all IPTs conducted during FY2014 (excluding transactions less than S$100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920)	Aggregate value of all IPTs conducted during FY2014 under shareholders’ mandate pursuant to Rule 920 (excluding transactions less than S$100,000)	
	$’000	$’000	
Chern Dar Enterprise Co., Ltd			
Purchases	283	N/A	

The Group does not have a general mandate obtained from shareholders for IPTs.

Linair Technologies Limited

8.	RISK MANAGEMENT

The Management regularly reviews the Company’s business and operational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. The Management reviews all significant control policies and procedures and highlights all significant matters to the Directors and the Audit Committee.

9.	NON-SPONSORS FEES

The Company has appointed RHT Capital Pte. Ltd. (“RHT Capital”) as the Company’s Continuing Sponsor with effect from
23 May 2014.

The  Directors  and  Management  of  the  Company  would  consult  RHT  Capital  on  all  material  matters  relating  to
22 	compliance with the Catalist Rules, its listing and quotation of its securities, documents to be released to shareholders