envair holding berhad - logistics · mid valley city, lingkaran syed putra 59200 kuala lumpur tel :...

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ANNUAL REPORT

ENVAIR HOLDING BERHAD(412406-T)

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Contents

Corporate Information

Directors’ Profile

Chairman’s Statement

Corporate Governance Statement

Audit Committee Report

Statements on Internal Control

Additional Disclosures

Financial Statements

• Directors’ Report

• Statement by Directors and Statutory Declaration

• Report of the Auditors

• Income Statements

• Balance Sheets

• Statement of Changes in Equity

• Statements Of Cash Flow

• Notes to Financial Statements

List of Properties

Analysis of Shareholdings

Notice of Fifteenth Annual General Meeting

Statement Accompanying Notice of Annual General Meeting

Appendix I

Form of Proxy

Page

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6-12

13-16

17

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20-22

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24-25

26

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29-30

31-56

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58-60

61-63

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66

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CORPORATE INFORMATION

Board of Directors Dato’ Meor Chek Hussien Bin Mahayuddin - Chairman, Independent Non-Executive Director Deepak Jaikishan A/L Jaikishan Rewachand - Managing Director Mohd Anuar Bin Mohd Hanadzlah - Executive Director Yap Chi Keong - Independent Non-Executive Director Mohd Shukri Bin Abdullah - Independent Non-Executive Director

Audit Committee Yap Chi Keong - Chairman Dato’ Meor Chek Hussien Bin Mahayuddin - Member Mohd Shukri Bin Abdullah - Member

Secretary Ng Yim Kong (LS 0009297)

Registered Office & No. 6, Jalan Salung 33/26Corporate Office Shah Alam Technology Park Section 33, 40400 Shah Alam Selangor Darul Ehsan Tel : 603-5124 9818 Fax : 603-5121 6218

Auditors STYL Associates AF 1929 Chartered Accountants No. 107B, Jalan Aminuddin Baki Taman Tun Dr. Ismail 60000 Kuala Lumpur Tel: 603-7727 5573 Fax: 603-7727 0771

Share Registrar Tricor Investor Services Sdn. Bhd. Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur Tel : 603-2264 3883 Fax : 603-2282 1886 E-Mail: [email protected]

Principal Bankers Public Bank Berhad CIMB Bank Berhad EON Bank Berhad

Stock Exchange Listing ACE Market of Bursa Malaysia Securities Berhad

Stock Name ENVAIR

Stock Code 0080

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DIRECTORS’ PROFILE

DATO’ MEOR CHEK HUSSIEN BIN MAHAYUDDINIndependent Non-Executive ChairmanChairman of Remuneration Committee and Nomination CommitteeMember of Audit Committee

Dato’ Meor Chek Hussien Bin Mahayuddin, aged 66, a Malaysian, was appointed to the Board on 19 February 2009. He was re-designated as Non-Executive Chairman of the Company on 15 December 2009.

Dato’ Meor Chek Hussien Bin Mahayuddin was attached to the Royal Malaysia Police Force where he served for more than 31 years before retiring in 2001 upon reaching the compulsory retirement age of 55 years. His last appointment with the Royal Malaysia Police was as the Chief Police Officer (CPO) of Kuala Lumpur, a position he held about 2 years. Prior to that post, Dato’ Meor Chek Hussien was the Commander of the Police Elite Unit – Unit Tindakhas (UTK) for more than 25 years. Dato’ Meor Chek Hussien had enormous exposure and experience in Police Operations in Malaysia as well as overseas.

Dato’ Meor Chek Hussien’s appointment in UTK had himself exposed to wide globe networking with overseas Police Forces and other relevant security organisations. Dato’ Meor Chek Hussien has attended and participated in numerous trainings, International Symposiums, courses and seminars in the United Kingdom, United States, Germany, France, Vienna, Japan and other Asean Countries.

Dato’ Meor Chek Hussien has no family relationship with the other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences, other than traffic offences, if any. He does not hold any shares in the Company.

DEEPAK JAIKISHAN A/L JAIKISHAN REWACHANDManaging Director

Mr. Deepak Jaikishan A/L Jaikishan Rewachand, aged 39, a Malaysian, was appointed to the Board on 1 March 2012.

Mr. Deepak Jaikishan A/L Jaikishan Rewachand is from a family pioneering in the Property Development and Investment and Carpet Manufacturing with fifteen (15) years experience in the industry.

He has initiated the marketing and distribution operations in 1997 and with his leadership, both Carpet Raya Sdn. Bhd. and Tek Holding Sdn. Bhd., have been contributing a billion ringgit revenue todate.

Through his vision and foresight of the carpet industry in Malaysia, Mr. Deepak initiated and successfully acquired the largest carpet manufacturing plant in Malaysia known as Nobel Carpet Sdn. Bhd. in the year 2000 whereby this manufacturing unit is the only carpet manufacturer that extruded its own carpet yarn. In addition to year 2003, Mr. Deepak embarked on the biggest manufacturing plant (Premier Weavers) with the latest weaving technology in Malaysia.

From years 2000 to 2009, Mr. Deepak had completed a few property investment projects, totalling about RM3 billion.

Mr. Deepak Jaikishan has no family relationship with the other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences, other than traffic offences, if any. He has a direct shareholding of 14,701,000 ordinary shares of RM0.10 each and an indirect interest in 530,000 ordinary shares of RM0.10 each in the Company.

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MOHD ANUAR BIN MOHD HANADZLAHExecutive DirectorMember of Remuneration Committee

Encik Mohd Anuar Bin Mohd Hanadzlah, aged 54, Malaysian, was appointed to the Board on 21 July 2011.

He started his career as an auditor in 1982 with Azman Wong Salleh & Co., Kuala Lumpur for 3 years. Since then he has worked in a number of companies namely, Mafira Holdings Sdn. Bhd., Ipoh as Assistant Accountant (3 years), Permodalan Perak Bhd., Ipoh as Assistant Manager (9 years), PT. Wapoga Mutiara Industries, Indonesia as Branch Manager (3 years) and Precision Logging Ltd., Papua New Guinea as Accountant (6 months). In all these companies he was assigned to various departments and fields such as accounts, finance, sales, marketing, wholesale, trading, personnel, administration, mining, sawmilling, plywood and woodworking factory.

In the month of June 2007, he joined Avic Tech Corporation Sdn. Bhd. as Marketing Manager and was subsequently appointed as the General Manager in January 2008. He left Avic Tech Corporation Sdn. Bhd. on 31 August 2008. Since then until present, he owned a private company, Ada Digital Solutions Sdn. Bhd. as director cum Chief Executive Officer.

Encik Mohd Anuar has no family relationship with the other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences, other than traffic offences, if any. He does not hold any shares in the Company.

YAP CHI KEONGIndependent Non-Executive DirectorChairman of Audit CommitteeMember of Nomination Committee

Mr. Yap Chi Keong, aged 60, a Malaysian, was first appointed to the Board on 19 February 2009. He was not re-elected as a Director at the Fourteenth Annual General Meeting held on 29 June 2011 but subsequently, he was re-appointed to the Board on 28 September 2011.

Mr. Yap Chi Keong is a Chartered Accountant of Malaysian Institute of Accountants and an Associate Member of The Chartered Institute of Management Accountants. Mr. Yap started his career as a management accountant with The News Group, United Kingdom. Mr. Yap later moved into industries where he held several senior accounting positions in public listed companies in Malaysia.

Mr. Yap is currently in private practice as a management consultant specialising in corporate restructuring. His other directorships in public listed companies are Grand Hoover Berhad and Astral Supreme Berhad.

Mr. Yap has no family relationship with the other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences, other than traffic offences, if any. He does not hold any shares in the Company.

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MOHD SHUKRI BIN ABDULLAHIndependent Non-Executive DirectorMember of Audit Committee and Nomination Committee

Encik Mohd Shukri Bin Abdullah, aged 46, Malaysian, was appointed to the Board on 1 March 2012. Encik Mohd Shukri started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. (“Carpet Raya”). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity. He established Indah Profiles Sdn. Bhd. in 2000 to focus on his passion to effectively produce promotional activities for organisations by garnering support from their industry partners. His passion for the Halal Industry saw him founding and organising the first Malaysia International Halal Showcase in 2004.

Encik Mohd Shukri has no family relationship with the other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences, other than traffic offences, if any.He does not hold any shares in the Company.

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CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present you the Annual Report and Audited Financial Statements for the financial year ended 31 December 2011 of Envair Holding Berhad (“Envair”).

Financial ReviewThe Group’s financial position under review for the financial year has continued to suffer losses mainly due to further impairment of assets and lower trading activities. This has resulted the Group posted a net loss after tax of RM3.4 million for the financial year ended 31 December 2011.

For the financial year ended 31 December 2011, the Group recorded a 90% decrease in revenue to RM740,000.00 from RM7.1 million last year due to lower sales of filtration products and lower trading. The Group posted a loss after taxation of RM3.4 million for the financial year ended 31 December 2011 as compared to a loss of RM5.8 million for the previous financial year mainly due to impairment of assets.

Corporate DevelopmentENVAIR is currently undertaking the following proposals aimed at addressing the financial position of the Company as follows:

(I) Proposed private placement of up to 35,566,740 new ordinary shares of RM 0.10 each in envair representing up to 30% of the issued and paid up capital of Envair and

(II) Proposed Dirersification of the Company’s business into the oil and gas business.

The above proposals are crucial for the Group and with the proposed diversification of its existing business, it is expected to contribute positively to the Company’s business and further strengthen its financial position in the future.

DividendsThe Board has decided not to declare any dividends for the financial year ended 31 December 2011. The decision was derived after taking into consideration the Group’s ongoing assessment and future cash requirements.

Note of AppreciationOn behalf of the Board, I would like to thank our valued shareholders, customers, business associates, financiers, relevant authorities and other stakeholders for their continous support and trust in our Group during the past year that has enabled the Group to weather out another difficult and challenging year despite the uncertainties in the global & local economy. The gratitude is also extended to all my fellow Directors, Management and staff for their unrelenting trust and unwavering support.

The Board of Directors welcome Mr Deepak Jaikishan A/L Jaikishan Rewachand, Encik Mohd Anuar Bin Mohd Hanadzlah and Encik Mohd Sukri Bin Abdulah to the Board and with their experiences, they will assist the Group to work toward a sustainable growth in the future.

We look forward to your continuous trust and support for the year 2012.

Dato’ Meor Chek Hussien Bin MahayuddinChairman

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CORPORATE GOVERNANCE STATEMENT

The Board of Directors (“the Board”) of Envair Holding Berhad (“Envair”) recognizes the importance of upholding the highest standards of corporate governance in conducting the Group’s business activities and discharging the Board’s fiduciary responsibilities to protect and enhance the shareholder’s value. Premised on this, the Board is committed to ensure that high standards of corporate governance are practiced throughout the Company and to apply the principles and best practices as governed by the Listing Requirements of the ACE Market of Bursa Malaysia Securities Berhad (“Listing Requirements”) and Guidance Note 11 on Corporate Governance. The Company continuously endeavors to comply with the Malaysian Code on Corporate Governance (“Code”).

This statement describes the Company’s compliance with the principles of the Code.

A. DIRECTOR

i. The Board

The Board is primarily responsible for the strategic directions of the Company. In addition, the Board also oversees the conduct of the Company‘s business, whereby it devises and puts in place adequate systems of control, focuses primarily on the mitigation of any foreseeable or potential risk besetting the Company.

ii. Board Balance

The Board comprises five (5) directors; one of whom is a Managing Director, one (1) is an Executive Director and three (3) are Non-Executive Directors.

More than one-third (1/3) of the current Board is represented by Independent Non-Executive Directors who are independent of management and free from any business or other relationship which could interfere with the exercise of independent judgment on the Board’s deliberation and decision making, each of whom, brings with him vast and varied experiences, exposure and expertise.

iii. Board Meetings

To ensure that the Envair Group is managed effectively and efficiently, the current Board is scheduled to meet at least four (4) times a year, with additional meetings being convened when necessary. Besides that, the Board also approves matters through the circulation of Director’ Circular Resolution in accordance with the Articles of Association of the Company.

During the financial year ended 31 December 2011, the Board met eight (8) times. The details of the Director’s attendances at the Board Meetings are set out below:-

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Name of Directors

Dato’ Meor Chek Hussien Bin Mahayuddin(Independent Non-Executive Director)

Mohd Anuar Bin Mohd Hanadzlah*(Executive Director)

Yap Chi Keong**(Independent Non-Executive Director)

Wong Yu Sun***(Executive Director)

Zhang Li****(Independent Non-Executive Director)

Xu Sheng*****(Non-Independent Non-Executive Director)

Dato’ Sri Ung Eng Huat******(Executive Director)

No. of Meetings Attended

8/8

5/5

7/7

5/5

7/8

1/3

0/0

%

100

100

100

100

87.5

33.33

0

Notes:-* Appointed on 21 July 2011** Retired but not re-elected at the Fourteenth Annual General Meeting held on 29 June 2011; and re-appointed on 28 September 2011*** Resigned on 9 November 2011**** Resigned on 30 December 2011***** Appointed on 9 November 2011 and resigned on 28 February 2012****** Appointed on 28 December 2011 and resigned on 28 February 2012

iv. Supply of Information and Access to Advice

The Board is provided with comprehensive board papers on a timely manner prior to board meetings. This is to ensure and enable the members of the Board to discharge their duties and responsibilities competently in a well- informed manner. All members of the Board have unhindered access to the advice and services of the Company Secretary, and where necessary, may seek independent professional advisers for advice for the purpose of discharging their statutory and fiduciary duties. Every Director also has unrestricted access to all information with regard to the activities of the Envair Group.

v. Directors’ Training

All the Directors are provided with appropriate training and guidance as to their duties and responsibilities as Directors of a public listed company. The Directors had attended the Mandatory Accreditation Programme pursuant to Bursa Malaysia Securities Berhad’s guidelines on Training for Directors. The Directors will continue to undergo other relevant programmes to further enhance their skills and knowledge to assist them in discharging their duties as Directors.

During the financial year ended 31 December 2011, the Company Secretary has briefed the Directors on the amended Listing Requirements.

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vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the Directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:

(a) Audit Committee

The Audit Committee comprises three (3) Independent Non-Executive Directors as follows:

Chairman: Yap Chi Keong Independent Non-Executive Director (Appointed on 28 September 2011)

Members : Dato’ Meor Chek Hussien Bin Mahayuddin Independent Non-Executive Director

Mohd Shukri Bin Abdullah Independent Non-Executive Director (Appointed on 1 March 2012)

Xu Sheng Non-Independent Non-Executive Director (Appointed on 9 November 2011 and resigned on 28 February 2012)

Zhang Li Independent Non-Executive Director (Resigned on 30 December 2011)

The Audit Committee Report is set out on page 13-16 of this Annual Report.

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(b) Nomination Committee

The Nomination Committee comprises the following members:

Chairman: Dato’ Meor Chek Hussein Bin Mahayuddin Independent Non-Executive Director

Members : Yap Chi Keong Independent Non-Executive Director

Mohd Shukri Bin Abdullah Independent Non-Executive Director (Appointed on 1 March 2012)

Xu Sheng Non-Independent Non-Executive Director (Resigned on 28 February 2012) Zhang Li Independent Non-Executive Director (Appointed on 9 November 2011 and resigned on 28 February 2012)

The terms of reference of the Nomination Committee are as follows:

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board. • To annually review the required mix of skills and experience and other qualities and competencies which non- executive directors should bring to the Board. • To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met two (2) times during the financial year ended 31 December 2011.

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(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company. The Remuneration Committee comprises the following members:-

Chairman : Dato’ Meor Chek Hussein Bin Mahayuddin Independent Non-Executive Director Members : Mohd Anuar Bin Mohd Hanadzlah Executive Director (Appointed on 30 November 2011) Wong Yu Sun Executive Director (Appointed on 15 November 2010 and resigned on 9 November 2011)

The term of reference of the Remuneration Committee are as follows:

• To review and determine, at least once annually, adjustments to the remuneration package including benefits- in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry. • To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors. • To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

The aggregate Directors’ remuneration paid or payable to all Directors of the Company categorised into appropriate components for the financial year ended 31 December 2011 are as follows:-

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C. RELATIONS WITH SHAREHOLDERS

The Company recognised the importance of timely and regular dissemination of information to shareholders of the Company via the Annual Report to shareholders, quarterly financial reports and the various announcements made during the year. These will enable the shareholders and members of the public to have an overview of the Group’s performance and operations.

The Annual General Meeting also provides an opportunity for the shareholders to seek and clarify any issues relevant to the Company. Shareholders are encouraged to meet and communicate with the Board at Annual General Meeting and to vote on all resolutions.

D. ACCOUNTABILITY AND AUDIT

i. Financial Reporting The Directors aim to provide a balanced and meaningful assessment of the Company’s financial performance and prospects, primarily through the Annual Report and quarterly financial statements.

The Directors are also responsible for ensuring that the annual financial statements are prepared in accordance with the provisions of the Companies Act, 1965 and the applicable Approved Accounting Standards prevailing in Malaysia.

A statement by the Directors of their responsibilities in the preparation of financial statements is set out in the ensuring section. ii. Statement of Directors’ Responsibility in respect of the Financial Statements

The Malaysian Company Law requires 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 results and cash flow of the Company for that period.

Remuneration ( RM’000)

Salaries

Fees

Bonuses

Payroll based expenses – EPF

Meeting allowances

Benefits-in-kind

Total

Range of Remuneration

Below RM50,000

RM50,000 – RM100,000

RM100,000 – RM150,000

Non-Executive Directors

-

32

-

-

30

-

62

Non-Executive Director

5

-

-

Executive Directors

123

-

-

13

-

-

136

Executive Director

-

-

1

Total

123

32

-

13

30

-

198

Total

5

-

1

Number of Directors

212


In preparing those financial statements, the Directors are required to:

a) Select suitable accounting policies and then apply them consistently; b) State whether applicable accounting standards have been followed; c) Make judgments and estimates that are reasonable and prudent; and d) Prepared the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy, at any time, the financial position of the Company. The Directors are also responsible for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and irregularities.

The Directors have prepared the annual financial statements in compliance with the Companies Act, 1965.

iii Internal Control

The Board acknowledges its responsibility for maintaining a sound system of internal control, which provides reasonable assessment of effective operations, internal controls and compliance with the laws and regulations as well as with internal procedures and guidelines. A statement on internal control of the Company is set out on pages 17 of this Annual Report.

iv Relationship with the Auditors

Through the Audit Committee, the Company shall establish a transparent and appropriate relationship with the Company’s auditors, which enable the auditors to highlight to the Audit Committee and the Board, matters that require the Board’s attention.

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AUDIT COMMITTEE REPORT

COMPOSITION AND DESIGNATION OF AUDIT COMMITTEE

The Audit Committee currently comprises the following members:

Chairman : Yap Chi Keong Independent Non-Executive Director (Appointed on 28 September 2011) Members : Dato’ Meor Chek Hussien Bin Mahayuddin Independent Non-Executive Director Mohd Shukri Bin Abdullah Independent Non-Executive Director (Appointed on 1 March 2012)

Xu Sheng Non-Independent Non-Executive Director (Appointed on 9 November 2011 and resigned on 28 February 2012)

Zhang Li Independent Non-Executive Director (Resigned on 30 December 2011) TERMS OF REFERENCE

Composition of the Audit Committee The Audit Committee shall be appointed by the Board from amongst their members, who fulfils the following requirements:

a) The Audit Committee must be composed of no fewer than three (3) members. In the event of any vacancy in the Audit Committee resulting in the non-compliance of the above, the Company must fill the vacancy within three (3) months.

b) All the Audit Committee members must be non-executive directors, with a majority of them being independent directors.

c) All the Audit Committee members must be financially literate, with at least one member:-

• must be a member of the Malaysian Institute of Accountants; or • if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years’ working experience and:- > he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act 1967; or > he must be a member of one of the Associations of Accountants specified in Part II of the 1st Schedule of the Accountants Act 1967; or • fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad.

d) No alternate director shall be appointed as a member of the Audit Committee. e) The members of the Audit Committee shall elect a Chairman from among themselves who shall be an Independent Director. The Chairman of the Audit Committee should engage on a continuous basis with senior management, the internal auditor and the external auditor in order to be kept informed of matters affecting the Company.

All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. The Board must review the terms of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference.

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Secretary of the Audit Committee

The Company Secretary of the Company shall be the Secretary of the Audit Committee.

Duties and Responsibilities of the Audit Committee

The following are the main duties and responsibilities of the Audit Committee collectively:

(a) Review the following and report the same to the Board of the Company:

(i) oversee the Company’s internal control; (ii) with the external auditors, the audit plan; (iii) with the external auditors, their evaluation of the system of internal controls; (iv) with the external auditors, their audit report; (v) the assistance given by the employees of the Company to the external auditors and the internal auditors; (vi) the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work; (vii) the internal audit programme, processes, the results of the internal audit programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function; (viii) the quarterly results and year end financial statements, prior to the approval by the Board, focusing particularly on : • changes in or implementation of major accounting policy changes; • significant and unusual events; and • compliance with accounting standards and other legal requirements; (ix) any related party transactions and conflict of interest situation that may arise within the Company or group including any transaction, procedure or course of conduct that raises questions of management integrity; (x) any letter of resignation from the external auditors and any questions of resignation or dismissal; and (xi) whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment;

(b) Oversee the Company’s internal control structure to ensure operational effectiveness and efficiency, reduce risk of inaccurate financial reporting, protect the Company’s assets from misappropriation and encourage legal and regulatory compliance;

(c) Assist the Board in identifying the principal risks in the achievement of the Company’s objectives and ensuring the implementation of appropriate systems to manage these risks;

(d) Recommend to the Board on the appointment and re-appointment of the external auditors and their audit fee, after taking into consideration the independence and objectivity of the external auditors and the cost effectiveness of the audit;

(e) Discuss with the external auditors before the audit commences the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved;

(f) Discuss problems and reservations arising from the audits and any matter the auditors may wish to discuss in the absence of the management where necessary;

(g) Review the external auditor’s management letter and management’s response therein;

(h) In relation to the internal audit function:

(i) review the adequacy of the scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work; (ii) review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function; (iii) review any appraisal or assessment of the performance of members of the internal audit function; (iv) approve any appointment of termination of senior staff members of the internal audit function; and (v) take cognisance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning;

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(i) Consider the major findings of internal investigations and management’s response;

(j) To review the effectiveness of the internal controls and risk management processes of the Company; and

(k) Consider other matters as defined by the Board.

Rights of the Audit Committee

In carrying out its duties and responsibilities, the Audit Committee will:

• have the authority to investigate any matter within its terms of reference;• have the resources which are required to perform its duties;• have full and unrestricted access to any information pertaining to the Company;• have direct communication channels with the external auditors and person(s) carrying out the internal audit function or activity;• be able to obtain independent professional or other advice and to invite outsiders with relevant experience and expertise to attend the Audit Committee meeting (if required) and to brief the Audit Committee; and• be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

Conduct of Meetings

a) The Audit Committee will meet at least four (4) times in each financial year although additional meetings may be called at any time, at the discretion of the Chairman of the Audit Committee.

b) The quorum shall consist of a majority of independent committee members and shall not be less than two (2).

c) Recommendations to the Audit Committee are submitted to the Board for approval.

d) The Company Secretary shall be in attendance at each Audit Committee meeting and record the proceedings of the meeting thereat.

e) Minutes of each meeting shall be kept as part of the statutory record of the Company upon confirmation by the Audit Committee and a copy shall be distributed to each member of the Board.

f) The Managing Director and other officers may be invited to attend where their presence are considered appropriate as determined by the Audit Committee Chairman.

g) The internal auditors and /or external auditors have the right to appear and be heard at any meeting of the Audit Committee.

h) Upon the request of the internal auditors and /or external auditors, the Audit Committee Chairman shall also convene a meeting of the Audit Committee to consider any matter the auditor(s) believes should be brought to the attention of the Board or the shareholders.

i) The Audit Committee must be able to convene meetings with external auditors without the presence of the executive board members and management at least twice a year and whenever deemed necessary.

j) Where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach or Bursa Malaysia Securities Berhad requirements, the Audit Committee must promptly report such matter to Bursa Malaysia Securities Berhad.

k) The attendance at any particular Audit Committee meeting by other directors and employees of the Company shall be at the Audit Committee’s invitation and discretion and must be specific to the relevant meeting.

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SUMMARY OF ACTIVITIES

The Audit Committee is scheduled to meet at least four (4) times a year, with additional meetings being convened when necessary.

Details of the attendance during the year ended 31 December 2011 were as follows:

Name

Yap Chi Keong

Dato’ Meor Chek Hussien Bin Mahayuddin

Zhang Li (Resigned on 30 December 2011)

Xu Sheng(Appointed on 9 November 2011 and resigned on 28 February 2012)

No. of Meetings Attended

4/4

5/5

4/5

0/1

%

100

100

80

0

During the year under review, the following activities were carried out by the Audit Committee:

(a) Reviewed the quarterly financial results and ensured that the financial reporting and disclosure requirements of relevant authorities had been complied with, focusing particularly on:

(i) changes in or implementation of major accounting policies and practices; (ii) the on-going concern assumption; (iii) significant and unusual event; and (iv) compliance with accounting standards and other legal policies and requirements.

(b) Reviewed the related party transactions and conflict of interest situation, if any, within the Company or Group including any transactions, procedures or course of conduct that raised questions of management integrity in the ordinary course of business.

(c) Reviewed the audit strategy and plan of the external auditors.

(d) Meetings with external auditors.

INTERNAL AUDIT FUNCTION

The activities of the Internal Audit function during the financial year were as follows: (i) Develop an internal audit schedule with subsidiaries to be audited for the financial year under review; (ii) Execution of the internal audit activities as per the approved internal audit schedule; (iii) Presentation of the internal audit findings at the quarterly Audit Committee meetings; and (iv) All the findings raised by the Internal Audit Function have been appropriately addressed by management.

217

STATEMENT ON INTERNAL CONTROL

INTRODUCTIONThe Malaysian Code on Corporate Governance stipulates that the Board of Directors of listed companies should maintain a sound system of internal control to safeguard shareholders’ investments and the Group’s assets.

RESPONSIBILITIESThe Board affirms its overall responsibility for maintaining sound systems of internal control within the Group to safeguard shareholders’ investments and company’s assets. However, such system is designed to manage rather than eliminate the risk that may impede the achievement of business objectives. It could therefore only provide reasonable and not absolute assurance against material misstatement of management or financial information or financial losses or frauds.

The Board acknowledges the importance of Risk Management. Risk management forms an integral part of the Group’s business operations. The process of identifying, evaluating, monitoring and managing significant risks is embedded in the various work processes and procedures of the respective operational functions and management team. Any significant issues and controls implemented were discussed at the regular management discussions and meetings.

AUDIT COMMITTEEThe Audit Committee reviews the Group’s accounting, reporting, policies, practices, adequacy and effectiveness of the systems of internal control. The Audit Committee also ensures that there is continuous effort by management to address and resolve areas where control weaknesses exist.

The Audit Committee had appointed an outsourced independent professional internal audit service provider to discharge the internal audit function. The independent consulting firm acts as internal auditor and reports directly to the Audit Committee. During the financial year, the internal auditor reviewed some of the critical business processes, internal control gaps, assessed the effectiveness and adequacy of the existing state of internal control of the Group and recommended possible improvements, to internal control process. For the financial year ended 31 December 2011, the total costs incurred for the outsourced internal audit function is RM8,656 inclusive of reimbursable expenses and service tax.

CONCLUSIONThe Board is of the opinion that there are no weaknesses that could result in material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report. The Group continues to take measures to strengthen the internal control environment.

REVIEW BY EXTERNAL AUDITORSThe External Auditors have reviewed this Statement on Internal Control and reported to the Board of Directors that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board of Directors in reviewing the adequacy and integrity of the system of internal controls.

218

ADDITIONAL DISCLOSURES

Share Buy-Back During the financial year, there was no Share Buy-Back by the Company.

Options or Convertible SecuritiesThere were no exercises of options or convertible securities during the financial year.

American Depository Receipts or Global Depository Receipts ProgrammeDuring the financial year, the Company did not sponsor any such programme.

Material Contracts Involving Directors’ and Major Shareholders’ InterestThere were no material contracts entered by the Company or its subsidiaries involving directors’ and major shareholders’ interest in the financial year ended 31 December 2011.

Variation of ResultsThere were no significant variations between the audited results for the financial year and the unaudited results previously announced.

Sanctions and / or PenaltiesThere were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies during the financial year.

Non-Audit FeesOther fees paid by the Company to external auditors for the financial year ended 31 December 2011 other than the statutory audit fees of RM25,500 as disclosed in Note 7 of the financial statements.

Profit Forecast / Profit Guarantee The Company did not issue any profit forecast in any public documents during the current financial year.

Corporate Social Responsibility (CSR) StatementThe Group is driven by the belief that in pursuit of any business objective, it needs to strike a balance between profitability and contributions to the social and environmental responsibilities. With such belief, the Group uses its best endeavour, on an on-going basis, to integrate CSR practices into its day-to-day business operations and adopting eco-friendly practices such as minimizing the use of hazardous compound in its manufacturing process and its engineering services to protect the environment.

219

FINANCIAL STATEMENTS

ENVAIR HOLDING BERHAD

FINANCIAL STATEMENTSFor The Year Ended 31 December 2011

(412406-T)

220

DIRECTORS’ REPORT

DIRECTORS’ REPORT

The directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31st December 2011.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding and the provision of management services.

The principal activities of the subsidiaries are as disclosed in Note 13 to the Financial Statements.

There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

FINANCIAL RESULTS

The results of the operations of the Group and of the Company for the financial year are as follows:

DIVIDENDS

No dividend has been paid or declared by the Company since theend of the previous financial year. The directors also do not recommend the payment of any dividend in respect of the current financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the Financial Statements.

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take up unissued shares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

Loss before taxIncome tax creditNet loss for the financial year

Attributable to:Equity holders of the Company

GROUPRM

(3,406,415)4,470

(3,401,945)

(3,401,945)

COMPANYRM

(1,615,239)-

(1,615,239)

(1,615,239)

221

DIRECTORS’ REPORT

DIRECTORS

The directors who served on the Board of the Company since the date of the last report are:

Dato’ Meor Chek Hussien Bin MahayuddinYap Chi KeongMohd Anuar Bin Mohd Hanadzlah (appointed on 21.7.2011)Xu Sheng (appointed on 9.11.2011)Dato’ Sri Ung Eng Huat (appointed on 28.12.2011)Wong Yu Sun (resigned on 9.11.2011)Zhang Li (resigned on 30.12.2011)

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 benefit included in the aggregate amount of emoluments received or due and receivable by directors as disclosed in the financial statements or the fixed salary of full-time employees of the Company) 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.

Neither during nor at the end of the financial year, wasthe Company a party to any arrangements 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.

DIRECTORS’ INTERESTS

The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

By virtue of the directors’ interests in the shares of the Company, the directors are deemed to have an interest in the shares of all the subsidiaries to the extent the directors have their interests.

None of the other directors in office at the end of the financial year hold shares or have any beneficial interests in the shares of the Company during and at the end of the financial year.

STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS

a) Before the statements of comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts; and

Shares in the Company

Registered in name of directors

Xu ShengDato’ Sri Ung Eng Huat

Balance as at1.1.2011/date of

appointment

8,000,0006,700,000

Sold

--

Bought

--

Balance as at31.12.2011

8,000,0006,700,000

Number of ordinary shares of RM0.10 each

222

DIRECTORS’ REPORT

(ii) to ensure that any current assets which were unlikely to realise in the ordinary course of business their values as show in the financial statements of the Group and of the Company have been written down to an amount which they might be expected to realise. b) At the date of this report, the directors are not aware of any circumstances: (i) which would render the amount written off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or (ii) which would render the values attributable to current assets in the financial statements of the Group and of the Company misleading; or (iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

c) At the date of this report, there does not exist: (i) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or (ii) any contingent liability of the Group and of the Company which has arisen since the end of the financial year. d) No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which in the opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due other than those as disclosed in Note 25 to the Financial Statements. OTHER STATUTORY INFORMATION a) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. b) In the opinion of the directors, (i) the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and (ii) 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 likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made. AUDITORS The auditors, Messrs. STYL Associates, have indicated their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the Directors,

YAP CHI KEONGDirector

Kuala Lumpur Date: 18th April 2012

MOHD ANUAR BIN MOHD HANADZLAH Director

223

STATEMENT BY DIRECTORS AND STATUTORY DECLARATION

ENVAIR HOLDING BERHAD (Incorporated in Malaysia)

STATEMENT BY DIRECTORS

We, YAP CHI KEONG and MOHD ANUAR BIN MOHD HANADZLAH, being two of the directors of Envair Holding Berhad, do hereby state that, in the opinion of the directors, the accompanying statements of financial position and statements of comprehensive income, statements of changes in equity and statements of cash flows, together with the notes thereto, are drawn up in accordance with the provisions of the Companies Act, 1965 and Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31st December 2011 and of the results and cash flows of the Group and of the Company for the year ended on that date. The information set out in Note 28 to the Financial Statements has been prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Signed on behalf of the Board in accordance with a resolution of the Directors,

STATUTORY DECLARATION

I, MOHD ANUAR BIN MOHD HANADZLAH, being the director primarily responsible for the financial management of Envair Holding Berhad, do solemnly and sincerely declare that the accompanying statements of financial position and statements of comprehensive income, statements of changes in equity and statements of cash flows, together with the notes thereto, 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.

YAP CHI KEONGDirector

Kuala Lumpur Date: 18th April 2012

Subscribed and solemnly declared by the abovenamed MOHD ANUAR BIN MOHD HANADZLAH, at Petaling Jaya, on 18th April 2012

Before me: S. AROKIADASS A.M.N NO. B 390

MOHD ANUAR BIN MOHD HANADZLAH

MOHD ANUAR BIN MOHD HANADZLAH Director

224

REPORT OF THE AUDITORS

INDEPENDENT AUDITORS’S REPORT TO THE MEMBERS OF

ENVAIR HOLDING BERHAD (Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS We have audited the financial statements of Envair Holding Berhad, which comprise the statements of financial position as at 31st December 2011 of the Group and of the Company, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 26 to 56. Directors’ Responsibility for the Financial Statements The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements have been properly drawn up in accordance with the 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 of the Company as at 31st December 2011 and of their financial performance and cash flows for the year then ended.

225

REPORT OF THE AUDITORS

Emphasis of Matter Without qualifying our opinion, we draw attention to Note 4 a) to the Financial Statements which indicates that the Group and the Company incurred net losses of RM3,401,945 and RM1,615,239 respectively during the financial year ended 31st December 2011 and as at that date, the accumulated losses of the Group and of the Company were RM16,508,908 and RM8,980,479 respectively. The successful turnaround plan for the Group and the Company, from loss to profit, is one of the key factors for the sustainability of the Group’s and of the Company’s operations and for the Group and the Company to continue as going concerns in the foreseeable future. The validity of the going concerns assumption is therefore dependent on the successful implementation of the turnaround plan in the future. In the event the going concern assumption is no longer valid, the Group and the Company may not able to discharge its liabilities in the normal course of business and adjustments may have to be made to reflect such situation. The financial statements of the Group and the Company do not include any adjustment relating to the amounts and classification of assets and liabilities that might be necessary should the Group and the Company be unable to continue as going concerns. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act. b) We have considered the financial statements and the auditors’ reports of the subsidiaries of which we have not acted as auditors, as indicated in Note 13 to the Financial Statements, being financial statements that have been included in the consolidated financial statements. c)We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for these purposes. d) The auditors’ report on the financial statements of the subsidiaries were not subject to any qualification and did not include any comment made under Subsection (3) of Section 174 of the Act. OTHER MATTERS

The supplementary information set out in Note 28 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 Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

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.

STYL ASSOCIATES Firm No. AF 1929 Chartered Accountants

TAN CHIN HUAT Approval No: 2037/06/12(J) Chartered Accountant Date: 18th April 2012 Kuala Lumpur

226

INCOME STATEMENTS

ENVAIR HOLDING BERHAD(Incorporated in Malaysia)

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER 2011

Revenue

Other operating incomeRaw materials and consumables used Changes in inventories of finished goodsPurchases and other direct costsStaff costsDepreciation of property, plant and equipmentDirectors’ remunerationOther operating expenses

Loss from operations

Finance costs

Loss before tax

Income tax credit

Loss for the year, representing total comprehensive loss for the financial year

Total comprehensive loss for the financial year attributable to: Equity holders of the Company

Loss per share attributable to equity holders of the Company:

Basic (sen)

Diluted (sen)

Note

6

7

1287

9

10

11

11

2011RM

740,908

268,369 (50,451) (585,142) (65,656) (401,380)

(586,739) (169,358)

(1,985,925)

(2,835,374)

(571,041)

(3,406,415)

4,470

(3,401,945)

(3,401,945)

(2.87)

N/A

2010RM

7,083,935

72,080 (409,418) (532,786)

(5,644,186) (974,230)

(623,731) (319,160)

(4,067,446)

(5,414,942)

(473,422)

(5,888,364)

2,179

(5,886,185)

(5,886,185)

(5.01)

N/A

2011RM

-

10,350 - - -

(389,133)

(12,886) (169,358)

(1,054,212)

(1,615,239)

-

(1,615,239)

-

(1,615,239)

(1,615,239)

2010RM

1,200,000

11,626 - - -

(560,304)

(15,241) (283,544)

(2,059,027)

(1,706,490)

(15,589)

(1,722,079)

3,524

(1,718,555)

(1,718,555)

GROUP COMPANY

The accompanying Notes form an integral part of the Financial Statements.

227

BALANCE SHEETS


STATEMENTS OF FINANCIAL POSITION AS AT 31ST DECEMBER 2011

ASSETS Non-Current Assets Property, plant and equipment Investments in subsidiaries Total Non-Current Assets Current Assets Inventories Trade receivables Other receivables and prepaid expenses Tax recoverable Amount owing by subsidiaries Cash and bank balances Total Current Assets Total Assets EQUITY AND LIABILITIESCapital and Reserves Issued capital Reserves Total Equity Non-Current Liabilities Finance lease liabilities Term loans Deferred tax liabilities Total Non-Current Liabilities Current Liabilities Trade payables Other payables and accrued expensesAmount owing to directorsBank borrowings Tax liabilitiesTotal Current LiabilitiesTotal LiabilitiesTotal Equity and Liabilities

Note

12 13

14 15

15

13

1617

18 19 20

21

21 2223

2011RM

9,593,909 -

9,593,909

2,627,574 232,148

849,589 43,345

- 82,518

3,835,174 13,429,083

11,855,580 (5,767,989) 6,087,591

59,900 4,033,420

14,623 4,107,943

321,066

626,997 528,462

1,755,148 1,876

3,233,549 7,341,492 13,429,083

2010RM

10,204,069 -

10,204,069

3,262,316 1,192,654

3,242,646 43,345

- 130,315

7,871,276 18,075,345

11,855,580 (2,366,044) 9,489,536

97,472 3,928,898

19,093 4,045,463

440,269

1,486,061 256,234

2,355,906 1,876

4,540,346 8,585,809 18,075,345

2011RM

27,753 503,995 531,748

- -

7,632 -

11,220,554 31,937

11,260,123 11,791,871

11,855,580 (793,492)

11,062,088

- - - -

-

199,445 528,462

- 1,876

729,783 729,783

11,791,871

2010RM

47,809 510,000 557,809

- -

1,937,743 -

11,252,267 83,160

13,273,170 13,830,979

11,855,580 821,747

12,677,327

- - - -

-

895,542 256,234

- 1,876

1,153,652 1,153,652 13,830,979

GROUP COMPANY


228

STATEMENTS OF CHANGES IN EQUITY


STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST DECEMBER 2011

GROUP Balance as at 1st January 2010 Issuance of shares during the financial year Total comprehensive loss for the year Balance as at 31st December 2010 Total comprehensive loss for the year Balance as at 31st December 2011

COMPANY Balance as at 1st January 2010 Issuance of shares during the financial year Total comprehensive loss for the year Balance as at 31st December 2010 Total comprehensive loss for the year Balance as at 31st December 2011

Issuedcapital

RM

10,777,800

1,077,780

-

11,855,580

-

11,855,580

AccumulatedlossRM

(7,220,778)

-

(5,886,185)

(13,106,963)

(3,401,945)

(16,508,908)

AccumulatedlossRM

(5,646,685)

-

(1,718,555)

(7,365,240)

(1,615,239)

(8,980,479)

TotalRM

14,297,941

1,077,780

(5,886,185)

9,489,536

(3,401,945)

6,087,591

TotalRM

13,318,102

1,077,780

(1,718,555)

12,677,327

(1,615,239)

11,062,088

Sharepremium

RM

8,186,987

-

-

8,186,987

-

8,186,987

Issuedcapital

RM

10,777,800

1,077,780

-

11,855,580

-

11,855,580

Revaluationreserve

RM

2,553,932

-

-

2,553,932

-

2,553,932

Sharepremium

RM

8,186,987

-

-

8,186,987

-

8,186,987


229

STATEMENTS OF CASH FLOWS


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2011

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments for: Bad debts written off Depreciation of property, plant and equipment Development costs written off Exceptional item: Impairment loss on receivables Impairment loss on investments in subsidiary Inventories written off Investment in subsidiary written off Loss on liquidation of subsidiary Reversal of impairment loss on trade receivables Gain on disposal of property, plant and equipment Interest income Finance costs Operating loss before working capital changes Changes in working capital: Decrease in inventories Decrease in trade receivables Decrease in other receivables and prepaid expenses (Increase)/Decrease in amount owing by subsidiaries Decrease in trade payables Increase/(Decrease) in other payables and accrued expenses Increase in amount owing to directors Decrease in amount owing to subsidiariesCash Generated From/(Used In) Operations Interest received Interest paid Tax refund Net Cash From/(Used In) Operating Activities

2011RM

(3,406,415)

26,800

586,739 -

1,538,496

- 49,600

- -

(12,985)

(77,849) -

571,041

(724,573)

585,142 354,876

1,446,376

- (119,203)

(859,064) 272,228

- 955,782

- (540,115)

-

415,667

2010RM

(5,888,364)

288

623,731 48,238

2,785,467

- - -

26,975

-

- (16,071) 473,422

(1,946,314)

867,424 399,057

753,744

- (315,256)

162,363 213,919

- 134,937 16,071

(237,684) 12,900

(73,776)

2011RM

(1,615,239)

-

12,886 -

946,681

6,005 - - -

-

(9,850) - -

(659,517)

- -

983,430

31,713 -

(696,097) 272,228

- (68,243)

- - -

(68,243)

2010RM

(1,722,079)

-

15,241 -

927,470

250,000 -

103,000 -

-

- (8,025) 15,589

(418,804)

- -

459,511

(1,473,730) -

655,344 213,919 (95,171) (658,931)

8,025 (15,589) 12,900

(653,595)

GROUP COMPANY

(Forward)

230

STATEMENTS OF CASH FLOWS


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2011

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Net Cash From/(Used In) Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Uplift of fixed deposits pledged to financial institutions Proceeds from issuance of shares Repayment of term loans Repayment of finance lease obligations Decrease in bank borrowings, excluding bank overdraft and long term borrowings - current portion Net Cash From/(Used In) Financing Activities NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS BROUGHT FORWARD CASH AND CASH EQUIVALENTS CARRIED FORWARD Cash and cash equivalents carried forward consist of:

Cash and bank balances Bank overdraft (Note 23)

2011 RM

(230)

101,500

101,270

- -

(319,275) (126,286)

(69,802)

(515,363)

1,574

(820,831)

(819,257)

82,518 (901,775) (819,257)

2010 RM

(66,659)

-

(66,659)

2,197,958 1,077,780 (336,666) (211,824)

(2,160,268)

566,980

426,545

(1,247,376)

(820,831)

130,315 (951,146) (820,831)

2011 RM

(230)

17,250

17,020

- - - -

-

-

(51,223)

83,160

31,937

31,937 -

31,937

2010 RM

(5,605)

-

(5,605)

546,178 1,077,780

- -

(638,000)

985,958

326,758

(243,598)

83,160

83,160 -

83,160

GROUP COMPANY


231

NOTE TO FINANCIAL STATEMENTS


NOTES TO THE FINACIAL STATEMENTS

1) GENERAL INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the ACE Market of Bursa Malaysia Securities Berhad. The Company is principally engaged in investment holding and the provision of management services. The principal activities of the subsidiaries are as disclosed in Note 13 to the Financial Statements. There have been no significant changes in the nature of the principal activities of the Company and its subsidiaries during the financial year.

The registered office of the Company is located at Unit: 07-02, Level 7, Persoft Tower, 6B, Persiaran Tropicana, 47410 Petaling Jaya, Selangor Darul Ehsan. The principal place of business of the Company is located at No: 6, Jalan Salung 33/26, Seksyen 33, Shah Alam Technology Park, 40400 Shah Alam, Selangor Darul Ehsan. The financial statements are presented in Ringgit Malaysia (RM). The financial statements have been authorised by the Board of Directors for issuance on 18th April 2012. 2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements of the Group and of the Company have been prepared in accordance with Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia. Changes in Accounting Policies The accounting policies adopted by the Group and by the Company are consistent with those adopted in prior years except for the adoption of the following Financial Reporting Standards (“FRS”) and the Issues Committee (“IC”) Interpretations:

FRS 1 FRS 3 FRS 127 Amendments to FRS 1 Amendments to FRS 2 Amendments to FRS 5 Amendments to FRS 7 Amendments to FRS 132 Amendments to FRS 138 IC Interpretation 4 IC Interpretation 12 IC Interpretation 16 IC Interpretation 17 IC Interpretation 18 Amendments to IC Interpretation 9

First-time Adoption of Financial Reporting StandardsBusiness Combinations Consolidated and Separate Financial Statements Limited Exemption from Comparative FRS 7 Disclosures for First-time Adopters and Additional Exemptions for First-time Adopters Share-based Payment Non-current Assets Held for Sale and Discontinued Operations Improving Disclosures about Financial Instruments Financial Instruments: Presentation – Classification of Rights Issues Intangible Assets Determining Whether an Arrangement Contains a Lease Service Concession Arrangements Hedges of a Net Investment in a Foreign Operation Distributions of Non-cash Assets to Owners Transfers of Assets from Customers Reassessment of Embedded Derivatives

The adoption of the above FRSs, amendments and interpretations does not have any significant impact on the financial statements of the Group and of the Company upon their initial application except as follows:

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i) FRS 3: Business Combinations Under the revised FRS 3, all acquisition-related costs are recognised as an expense in profit or loss in the period in which they are incurred. All considerations transferred, including contingent considerations, are measured at fair value as at the acquisition date. Any equity interests held prior to the date control is obtained and is remeasured at fair value, with the resulting gains or losses recognised in profit or loss. There is now an option on a case to case basis to measure non- controlling interests either at fair value or at the non-controlling interests’ proportionate share of the net identifiable assets of the assets acquired. Goodwill arising from the business combination is measured as the difference between the aggregate fair value of consideration transferred, any non-controlling interests in the acquiree and the fair value at acquisition date of any previously held equity interest in the acquiree, and the fair value of identifiable assets acquired and liabilities assumed (including contingent liabilities) at acquisition date. ii) FRS 127: Consolidated and Separate Financial Statements The revised FRS 127 requires that changes in ownership interest which do not result in a loss of control be accounted for as equity transaction, instead of in profit or loss. Where changes in ownership interest result in loss of control, any remaining interest in the entity is remeasured at fair value and any resulting gains or losses is recognised in profit or loss. Total comprehensive income will be proportionately allocated to non-controlling interests, even if it results in the non- controlling interests being in a deficit position. iii) Amendments to FRS 7 Improving Disclosures about Financial Instruments Prior to 1st January 2011, information about financial instruments was disclosed in accordance with the requirements of FRS 7 Financial Instruments: Disclosures. Amendments to FRS 7 require enhanced disclosure about fair value measurements in which a three-level fair value hierarchy was introduced. Each class of financial instrument is to be classified in accordance to this hierarchy which reflects the inputs used in making the fair value measurement. It also reinforces the existing principles for disclosures on liquidity and credit risks. The adoption of this amendment resulted in additional disclosures in the financial statements but did not have any financial impact on the Group and the Company. Standards and Interpretations in issue but not yet effective The Group and the Company have not applied the following new and revised FRSs and the IC Interpretations which have been issued by the Malaysian Accounting Standards Board (“MASB”) but not yet effective for the Group and the Company as described hereunder:

FRS 1 FRS 7 FRS 9 FRS 10 FRS 11

Amendments to FRS 1, First-time Adoption of Financial Reporting Standards - Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters Amendments to FRS 7, Financial Instruments - Disclosures - Transfers of Financial Assets - Mandatory Effective Date of FRS 9 and Transition Disclosure - Offsetting Financial Assets and Financial liabilities Financial Instruments Financial Instruments - International Financial Reporting Standards (“IFRS”) 9 issued by the International Accounting Standards Board (“IASB”) in November 2009 and October 2010* Consolidated Financial Statements Joint Arrangements

Effective for financial period beginningon or after

1st January 2012 1st January 2012 1st March 2012 1st January 2013 1st January 2013 1st January 2015 1st January 2013 1st January 2013

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* Effective for annual periods beginning on or after 1st January 2015 immediately upon the issuance of Amendments to FRS 9 (IFRS 9 issued by IASB on November 2009 and October 2010 respectively) and FRS 7 relating to “Mandatory Effective Date of FRS 9 and Transition Disclosure” on 1st March 2012. The directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements in the period of initial application. Convergence of the FRS Framework in Malaysia with the IFRS Framework issued by the IASB On 19th November 2011, MASB issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards Framework (“MFRS Framework”). The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual periods beginning on or after 1st January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate (IC 15), including its parent, significant investor and venturer (“Transitioning Entities”). The Group and the Company will be required to prepare financial statements using the MFRS Framework in its first MFRS financial statements for the year ending 31st December 2012. In presenting its first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of the MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening undistributed income. The Group and the Company are currently assessing the impact of adoption of MFRS 1, including identification of the differences in existing accounting policies as compared to the new MFRSs and the use of optional exemptions as provided for in MFRS 1. As at the date of authorisation of issue of the financial statements, accounting policy decisions or elections have not been finalised. Thus, the impact of adopting the new MFRS Framework on the Group’s and the Company’s first set of financial statements prepared in accordance with the MFRS Framework cannot be determined and estimated reliably until the process is complete. 3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The operations of the Group are subject to a variety of financial risks, including foreign currency exchange risk, market risk, credit risk, interest rate risk and liquidity risk. The Group has formulated a financial risk management framework whose principal objective is to minimise the Group’s exposure to risks and/or costs associated with the financing, investing and operating activities of the Group.

Effective for financial period beginningon or after

1st January 20131st January 20131st January 20131st January 20131st January 2013

1st July 2012

1st January 2012

1st January 20121st January 2014

1st July 2011

1st July 20111st January 2013

FRS 12 FRS 13 FRS 119 FRS 127 FRS 128 FRS 101 FRS 112

FRS 124 FRS 132 IC Interpretation 14 IC Interpretation 19 IC Interpretation 20

Disclosure of Interests in Other Entities Fair Value Measurement Employee Benefits Separate Financial Statements Investment in Associates and Joint Ventures Amendment to FRS 101, Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income Amendment to FRS 112, Income Taxes – Deferred Tax: Recovery of Underlying Assets Amendment to FRS 124, Related Party Disclosures Amendment to FRS 132, Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities Amendments to IC Interpretation 14, Prepayments of a Minimum Funding Requirement Extinguishing Financial Liabilities with Equity Instruments Stripping Cost in the Production Phase of a Surface Mine

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Foreign currency exchange risk Foreign currency risk is that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. The Group has exposure to foreign currency fluctuation arising from revenue or expense that are denominated in currency other than the functional currency of the Group. However as at 31st December 2011, the Group’s exposure to foreign currency risk is not significant. The Group has not entered into any forward foreign exchange contracts as at 31st December 2011. Market risk Market risk is the risk that changes in market prices, and other prices will affect the Group’s financial position and cash flows. The Group has in place policies to manage its competitive risks from its competitors in providing better alternatives in terms of better services. Credit risk Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its receivables from customers. The Company’s exposure to credit risk arises principally from loans and advances to subsidiary. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented by the carrying amounts in the statements of financial position. Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are measured at their realisable values. A significant portion of these receivables are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the receivables. Any receivables having significant balances past due more than 120 days, which are deemed to have higher credit risk, are monitored individually. The ageing of trade receivables as at the end of the reporting period was:

Past due 0 - 30 days Past due 31 - 120 days Past due more than 120 days

As at beginning of year Impairment loss recognised Reversal of impairment loss As at end of year

2011RM

- 191,723

2,744,964 2,936,687

2011RM

2,201,807 591,815 (89,083)

2,704,539

2010RM

38,466 72,078

3,283,917 3,394,461

2010RM

819,005 1,382,802

- 2,201,807

GROUP

GROUP

The movements in the allowance for impairment losses of receivables during the financial year were:

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Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market interest rates. The Group’s variable rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates. The Group’s investment in financial assets are mainly short term in nature and mostly placed in financial deposits. Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss. Cash flow sensitivity analysis for variable rate instruments An increase of 100 basis point at the reporting date would have increase loss before tax by the amount shown below and a decrease would have an equal but opposite effect. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they fall due. The Group practises prudent liquidity risk management to minimise the mismatch of financial assets and liabilities and to maintain sufficient funds for contingent funding requirement of working capital. Fair values The fair value of financial instruments is the amount at which the instrument could be exchanged for or settled between knowledgeable parties at an arm’s length transaction, other than a forced or liquidation sale. The carrying amounts of the financial assets and financial liabilities as reported in the statements of financial position as at 31st December 2011 approximate their fair values because of the immediate/short maturity terms of these financial instruments. Capital Risk Management Policies and Procedures The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the year. The Group is not subject to any externally imposed capital requirements.

Increase in loss before tax

GROUPRM

155,695

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4) SIGNIFICANT ACCOUNTING POLICIES a) Basis of Accounting The financial statements are prepared under the historical cost convention unless otherwise indicated in the accounting policies below. The Group and the Company incurred net losses of RM3,401,945 and RM1,615,239 respectively during the financial year ended 31st December 2011 and as at that date, the accumulated losses of the Group and of the Company were RM16,508,908 and RM8,980,479 respectively. The successful turnaround plan for the Group and the Company, from loss to profit, is one of the key factors for the sustainability of the Group’s and of the Company’s operations and for the Group and the Company to continue as going concerns in the foreseeable future. The validity of the going concerns assumption is therefore dependent on the successful implementation of the turnaround plan in the future. In the event the going concern assumption is no longer valid, the Group and the Company may not able to discharge its liabilities in the normal course of business and adjustments may have to be made to reflect such situation. The financial statements of the Group and the Company do not include any adjustment relating to the amounts and classification of assets and liabilities that might be necessary should the Group and the Company be unable to continue as going concerns. b) Revenue Recognition Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable, net of returns, allowances and trade discounts. Gross dividend income from investment is recognised when the right to received payment is established. Management fee, administrative charges, rental income and interest income are recognised on accrual basis. c) Employee Benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined contributions plans As required by law, companies in Malaysia make contributions to the state pension scheme, Employees Provident Fund. Such contributions are recognised as an expense in profit or loss as incurred.

Total borrowings Less: Cash and cash equivalents Net debt Total equity Debt-to-equity ratio

2011RM

5,848,468 (82,518)

5,765,950 6,087,591

0.95

2010RM

6,382,276 (130,315) 6,251,961 9,489,536

0.66

GROUP

The debt-to-equity ratios as at 31st December 2011 and at 31st December 2010 were as follows:

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(iii) Share-based compensation The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in profit or loss with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on the date of the grant. Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable on the vesting date. At each reporting date, the Group revises its estimates of the number of options that are expected to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period. The equity amount is recognised in the share option reserve until the option is exercised, upon which it will be transferred to share premium, or until the option expires, upon which it will be transferred directly to retained earnings. d) Foreign Currency Conversion (i) Functional and Presentation Currency The individual financial statements of each entity in the Group are measured using the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Company’s functional currency. (ii) Foreign Currency Transactions Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. e) Income Taxes (i) Current tax Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the reporting date. Current taxes are recognised in profit or loss, except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. (ii) Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credit to the extent that it is probable that taxable profit will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

238


Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis. f) Property, Plant and Equipment All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial year in which they are incurred. Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. At each reporting date, the Group assesses whether there is any indication of impairment. If such indications exist, an analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying amount exceeds the recoverable amount. Freehold land and building are stated at valuation and are revalued at regular intervals of at least once in every three years by the directors based on the valuation reports of independent professional valuers using the “open market value on existing use” basis with additional valuation in the intervening years where market conditions indicate that the carrying values of the revalued assets differ materially from the market value. An increase in the carrying amount arising from revaluation of property, plant and equipment is credited to the revaluation reserve account as revaluation surplus. Any deficit arising from revaluation is charged against the revaluation reserve account to the extent of a previous surplus held in the revaluation reserve account for the same asset. In all other cases, a decrease in carrying amount is charged to profit or loss. An increase in revaluation directly related to a previous decrease in carrying amount for that same asset that was recognised as an expense, is credited to profit or loss to the extent that it offsets the previously recorded decrease. Freehold land is not depreciated as it has an infinite life. Depreciation of other property, plant and equipment is calculated to write off the cost of the property, plant and equipment on a straight-line basis over the expected useful lives of the property, plant and equipment concerned. The annual depreciation rates used are:

Freehold building and renovation Furniture, fittings and other equipment Tools and equipment Motor vehicles Computers Office equipment

%

2 - 101515201515

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Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal proceed and the carrying amount of the asset, and is recognised in profit or loss. g) Basis of Consolidation (i) Subsidiaries The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the financial year. Subsidiaries are those entities in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities. Subsidiaries are consolidated using the purchase method of accounting. Under the purchase method of accounting, subsidiaries are fully consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The cost of acquisition is measured as fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition dates. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. The excess of the consideration transferred, the amount of any non-controlling interests in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statements of comprehensive income. All significant intercompany balances and transactions have been eliminated on consolidation. (ii) Transactions with non-controlling interests Transactions with non-controlling interests that do not result in loss of control are accounted as equity transactions - that is, as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate and joint venture of financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. h) Subsidiaries A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities. In the Company’s separate financial statements, investments in subsidiary are accounted for at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.

240


i) Finance lease Leases in terms of which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. On initial recognition of the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Minimum lease payments made under finance leases are apportioned between the finance expenses and the reduction of the outstanding liability. The finance expenses is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. j) Inventories Inventories are valued at the lower of cost and net realisable value after adequate allowance has been made for all deteriorated, damaged, obsolete or slow moving inventories. Cost is determined on the first-in, first-out method. Cost consists of purchases and other direct costs in bringing the inventories to its present condition and location. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. k) Financial Instruments i) Initial recognition and measurement A financial instrument is recognised in the financial statements when, and only when, the Group becomes a party to the contractual provisions of the instrument. A financial instrument is recognised, initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. ii) Financial instrument categories and subsequent measurement The Group categories financial instruments as follows: Financial assets a) Financialassetsatfairvaluethroughprofitorloss Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near term. Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss do not include exchange differences, interest and dividend income. Exchange differences, interest and dividend income on financial assets at fair value through profit or loss are recognised separately in profit or loss as part of other losses or other income. Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

241


Investment in quoted securities are designated as fair value through profit or loss on initial recognition. b) Held-to-maturity investments Held-to-maturity investments category comprises debt instruments that are quoted in an active market and the Group has the positive intention and ability to hold to maturity. Financial assets categorised as held-to-maturity investments are subsequently measured at amortised cost using the effective interest method. c) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market, trade and other receivables and cash and cash equivalents. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using effective interest method. d) Available-for-salefinancialassets Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for- sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss. All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment. Financial liabilities All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are held for trading or financial liabilities that are specifically designated into category upon initial recognition. Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. iii) Derecognition A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial assets expire or the financial asset is transferred to another party without retaining control or substantially transferring all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

242


A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. l) Impairment The Group and the Company assess at each reporting date whether there is any objective evidence that financial and non- financial assets are impaired. (i) Trade and other receivables and other financial assets carried at amortised cost To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables. If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the original effective interest rate of the financial asset. The impairment loss is recognised in profit or loss. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account. If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss. (ii) Non-financial assets The carrying amounts of non-financial assets (except for inventories and non-current assets (or disposal groups) classified as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

243


An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversals of impairment losses are credited to profit or loss in the year in which the reversals are recognised.

m) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. n) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. o) Cash and Cash Equivalents Cash and cash equivalents comprise cash at bank and in hand, demand deposits and short term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. p) Share Capital An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. q) Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

244


r) Operating Segments Operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. 5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY The preparation of financial statements in conformity with Financial Reporting Standards requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities, and the reported results during the reported period. It also requires directors to exercise their judgement in the process of applying the Company’s accounting policies. Although these estimates and judgement are based on the director’s best knowledge of current events and actions, actual results may differ. Critical judgements in applying the Group’s and the Company’s accounting policies In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 4 above, management is of the opinion that there are no instances of application of judgement which are expected to have significant effect on the amounts recognised in the financial statements. Key sources of estimation uncertainty Management believes that there are no key assumptions made concerning the future, and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year other than as follows: (i) Impairment on receivables The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the Group’s loans and receivable at the reporting date is disclosed in Note 15 to the Financial Statements. (ii) Allowance for inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. 6) REVENUE

Air filter Cleanroom Management services Water filter

GROUP COMPANY2011RM

288,431 174,849

- 277,628 740,908

2011RM

- - - - -

2010RM

764,252 149,850 150,000

6,019,833 7,083,935

2010RM

- -

1,200,000 -

1,200,000

245


7) OTHER OPERATING EXPENSES/(INCOME)

Included in other operating expenses/(income) are the following charges/(credits):

8) DIRECTORS’ REMUNERATION

The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below:

Auditors’ remuneration - current year - underprovision in prior year Bad debts written off Development costs written off Exceptional item: Impairment loss on receivables Impairment loss on investments in subsidiary Investment in subsidiary written off Inventories written off Loss on liquidation of subsidiary And crediting: Bad debts recovered Gain on disposal of property, plant and equipment Interest income Management fee receivable Reversal of impairment loss on trade receivables Rental income

Executive directors: Salaries and other emoluments Defined contribution plan

Non-executive directors: Fees

Executive directors: RM100,001 - RM200,000 Non-executive directors: Below RM50,000

2011RM

25,500 630

26,800 -

1,538,496

- -

49,600 -

(103,936)

(77,849) - -

(12,985) (72,192)

2011RM

123,522 13,334

32,502 169,358

2010RM

28,400 -

288 48,238

2,785,467

- - -

26,975

-

- (16,071) (150,000)

- (432,192)

2010RM

263,616 20,544

35,000 319,160

2011RM

12,000 - - -

946,681

6,005 - - -

-

(9,850) - -

- -

2011RM

123,522 13,334

32,502 169,358

2011

1

5

2010RM

10,000 - - -

927,470

250,000 103,000

- -

-

- (8,025)

(1,200,000)

- -

2010RM

228,000 20,544

35,000 283,544

2010

2

3

GROUP

GROUP

COMPANY

COMPANY

Number of directors

246


9) FINANCE COSTS

10) INCOME TAX CREDIT

A numerical reconciliation between the income tax credit and the product of accounting loss multiplied by the applicable statutory income tax rate, is as follows:

Interest on: Bank overdraft Bankers’ acceptances and trust receiptsFinance lease Term loans

Estimated income tax payable - current year - overprovision in prior year Deferred tax liabilities (Note 20)

Accounting loss Tax at the applicable statutory income tax rate of 25% Tax effects in respect of: Expenses that are not deductible for tax purposes Under/(Over)provision of deferred tax in prior year Utilisation of previous year’s unrecognised tax losses Net deferred tax assets not recognised Overprovision in prior year Income tax credit

2011RM

83,947 22,720 42,769 421,605 571,041

2011RM

- -

(4,470) (4,470)

2011RM

(3,406,415)

(851,604)

294,438

-

(739) 553,435

- (4,470)

2010RM

126,484 111,200 41,004 194,734 473,422

2010RM

1,876 (7,929) 3,874

(2,179)

2010RM

(5,888,364)

(1,472,091)

884,790

278,822

- 314,229 (7,929) (2,179)

2011RM

- - - - -

2011RM

- - - -

2011RM

(1,615,239)

(403,810)

231,579

-

- 172,231

- -

2010RM

14,119 1,470

- -

15,589

2010RM

1,876 (5,400)

- (3,524)

2010RM

(1,722,079)

(430,520)

448,525

(310,331)

- 294,202 (5,400) (3,524)

GROUP

GROUP

GROUP

COMPANY

COMPANY

COMPANY

11) LOSS PER ORDINARY SHARE Basic loss per share Basic loss per share is calculated by dividing the loss for the year attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year as follows:

Diluted The diluted earnings per share of the Group has not been presented as there are no dilutive potential ordinary shares.

Loss attributable to equity holders of the Company (RM) Weighted average number of ordinary shares in issue Basic loss per share (sen)

2011

(3,401,945)118,555,800

(2.87)

2010

(5,886,185)117,507,548

(5.01)

COMPANY

247


12) PROPERTY, PLANT AND EQUIPMENT

GROUP

2010

2011 Cost/Valuation As at 1st January 2011 Additions Disposals As at 31st December 2011 Accumulated depreciation As at 1st January 2011 Charge for the year Disposals As at 31st December 2011

Net carrying amount At cost At valuation As at 31st December 2011

Cost As at 1st January 2010 Additions Written off As at 31st December 2010 Accumulated depreciation As at 1st January 2010 Charge for the year Written off As at 31st December 2010 Net carrying amount At cost At valuation As at 31st December 2010

Freehold landRM

2,900,000 - -

2,900,000

- - - -

- 2,900,000 2,900,000

2,900,000 - -

2,900,000

- - - -

- 2,900,000 2,900,000

Freeholdbuilding

and renovation

RM

6,702,165 - -

6,702,165

608,638 191,882

- 800,520

- 5,901,645 5,901,645

6,662,751 39,414

- 6,702,165

418,727 189,911

- 608,638

19,958 6,073,569 6,093,527

Tools andequipment

RM

322,158 - -

322,158

322,158 - -

322,158

- - -

364,140 -

(41,982) 322,158

364,140 -

(41,982) 322,158

- - -

Furniture,fittings and

otherequipment

RM

2,822,696 230

- 2,822,926

1,802,876 353,290

- 2,156,166

666,760 -

666,760

2,848,429 27,245

(52,978) 2,822,696

1,486,001 360,841 (43,966)

1,802,876

1,019,820 -

1,019,820

Motor vehicles

RM

509,571 -

(258,950) 250,621

318,849 41,567

(235,299) 125,117

125,504 -

125,504

509,571 - -

509,571

245,870 72,979

- 318,849

190,722 -

190,722

TotalRM

13,256,590 230

(258,950) 12,997,870

3,052,521 586,739

(235,299) 3,403,961

792,264 8,801,645 9,593,909

13,284,891 66,659

(94,960) 13,256,590

2,514,738 623,731 (85,948)

3,052,521

1,230,500 8,973,569 10,204,069

(Forward)

248


12) PROPERTY, PLANT AND EQUIPMENT

COMPANY

Assets of the Group with a total net carrying amount of RM255,289 (2010: RM410,840) were acquired under finance lease. Included in property, plant and equipment of the Group are fully depreciated assets which are still in use, with a cost of RM787,143 (2010: RM403,099). The above landed properties are charged to banks for banking facilities granted to the Group as disclosed in Notes 19 and 23 to the Financial Statements. The details of the valuation of the Group’s land and building are as follows:

2010

2011 Cost As at 1st January 2011 Additions Disposal As at 31st December 2011 Accumulated depreciation As at 1st January 2011 Charge for the year Disposal As at 31st December 2011 Net book value as at 31st December 2011

Cost As at 1st January 2010 Additions As at 31st December 2010 Accumulated depreciation As at 1st January 2010 Charge for the year As at 31st December 2010 Net book value as at 31 December 2010

Details of property Freehold land Freehold building

Officeequipment

RM

12,049 230

- 12,279

3,626 1,695

- 5,321

6,958

11,299 750

12,049

1,931 1,695 3,626

8,423

Details of valuers Jamsari Mohamad Aris, MIS (M) Registered Valuer of TD Aziz Sdn. Bhd. Jamsari Mohamad Aris, MIS (M) Registered Valuer of TD Aziz Sdn. Bhd.

ComputersRM

45,829 - -

45,829

18,160 6,874

- 25,034

20,795

40,974 4,855 45,829

12,014 6,146 18,160

27,669

Year of valuation

2009

2009

Motor vehicles

RM

37,000 -

(37,000) -

25,283 4,317

(29,600) -

-

37,000 -

37,000

17,883 7,400 25,283

11,717

TotalRM

94,878 230

(37,000) 58,108

47,069 12,886

(29,600) 30,355

27,753

89,273 5,605 94,878

31,828 15,241 47,069

47,809

GROUP Revaluedamount

RM

2,900,000

6,073,569

249


13) INVESTMENTS IN SUBSIDIARIES

The details of the subsidiaries are as follows

* Audited by firm of auditors other than auditors of the Company

The amount owing by subsidiaries, which arose mainly from trade transactions and advances given, is unsecured, interest-free and repayable on demand. Management fees charged to subsidiaries amounted to RM1,050,000 in 2010. 14) INVENTORIES

Unquoted shares - At cost Less: Impairment loss Net

At cost: Raw materialsFinished goods

Name of Company

Envair Energy Sdn. Bhd (formerly known as Vokes Air (M) Sdn.Bhd.)* Quest Equipment and Services Sdn. Bhd.* Quest Technology Sdn. Bhd.*

Quest Filter Sdn. Bhd.*

Quest System and Engineering Sdn. Bhd.*

Country ofIncorporation

Malaysia

Malaysia

Malaysia

Malaysia

Malaysia

2010%

100

100

100

100

100

2011%

100

100

100

100

100

2011RM

1,390,000 (886,005) 503,995

2011RM

885,871 1,741,703 2,627,574

Principal Activities Distribution and manufacturing of air filters. Installation of cleanroom systems and sale of air filters and cleanroom equipment. Trading in air filters, cleanroom equipment and vinyl flooring and installation of cleanroom systems. Also principally involved in trading of beauty products. Manufacturing and trading of water and air filters. Also principally involved in trading of beauty products. Selling, installation, maintenance and servicing of water treatment equipment and sale of cleanroom filters and equipment.

2010RM

1,390,000 (880,000) 510,000

2010RM

936,322 2,325,994 3,262,316

COMPANY

GROUP

Equity Interest

250


15) TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES

16) SHARE CAPITAL

Trade receivables comprise amounts receivable from the sale of goods. The credit period granted to their customers are assessed and approved on a case by case basis. Other receivables and prepaid expenses consist of:

Pursuant to the authority given by the shareholders of the Company at the Annual General Meeting held on 29th June 2010, the issued and paid-up share capital of the Company was increased from RM10,777,800 to RM11,855,580 in 2010 by the allotment of 10,777,800 ordinary shares of RM0.10, for cash, for working capital purposes. These new shares rank pari passu with the then existing ordinary shares of the Company.

Trade receivables Less: Allowance for doubtful debts Net

Authorised 250,000,000 ordinary shares of RM0.10 each

Other receivables Refundable deposits Prepaid expenses

Issued and fully paid Balance as at beginning of the yearIssued during the year Balance as at end of the year

2011RM

2,936,687 (2,704,539)

232,148

2011RM

25,000,000

2011RM

4,992 640

2,000 7,632

2011RM

11,855,580 -

11,855,580

2011RM

421,269 427,680

640 849,589

2011RM

118,555,800 -

118,555,800

2010RM

3,394,461 (2,201,807) 1,192,654

2010RM

25,000,000

2010RM

1,935,103 640

2,000 1,937,743

2010RM

10,777,800 1,077,780 11,855,580

2010RM

2,714,326 426,320 102,000

3,242,646

2010RM

107,778,000 10,777,800 118,555,800

GROUP

GROUP AND COMPANY

COMPANY

GROUP AND COMPANY

GROUP

GROUP AND COMPANYNo. of ordinary shares

of RM0.10 each

251


17) RESERVES

The interest rates on finance lease range from 2.35% to 4.20% (2010: 2.35% to 4.20%) per annum.

19) TERM LOANS

Share premium reserve

The reserve comprises the premium paid on subscription of shares in the Company over and above the par value of the shares net of share issue expenses. Revaluation reserve Revaluation reserve arose from revaluation of the Group’s freehold land and building in 2009. 18) FINANCE LEASE LIABILITIES

Non-distributable reserves: Share premium Revaluation reserve

Accumulated loss

Total finance lease instalments payable Less: Finance lease interest in suspense Principal outstanding Portion payable within the next 12 months (Note 23)Portion payable after the next 12 months: Payable between 1 and 2 years Payable between 2 and 5 years

Secured term loans Less: Portion payable within the next 12 months (Note 23) Non-current portion

2011RM

8,186,987 -

8,186,987

(8,980,479) (793,492)

2011RM

175,456

(25,909) 149,547

89,647

42,288 17,612 59,900 149,547

2011RM

4,761,728 (728,308) 4,033,420

2011RM

8,186,987 2,553,932 10,740,919

(16,508,908) (5,767,989)

2010RM

8,186,987 -

8,186,987

(7,365,240) 821,747

2010RM

306,809

(44,536) 262,273

164,801

58,716 38,756 97,472 262,273

2010RM

4,116,003 (187,105) 3,928,898

2010RM

8,186,987 2,553,932 10,740,919

(13,106,963) (2,366,044)

COMPANY

GROUP

GROUP

GROUP

252


The non-current portion of the term loans is repayable as follows:

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2010: 5.00% to 8.00%) per annum and are secured by the following: i) General facility agreement; and ii) First legal charge over the landed property of the Group. The fair value of term loans of the Group at the end of reporting period are RM2,989,132 (2010: RM4,102,468). 20) DEFERRED TAX LIABILITIES

The recognised deferred tax liabilities are made up of temporary differences between tax capital allowances and book depreciation of property, plant and equipment. 21) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to the Group and the Company for trade purchases range from 30 to 60 days and certain credit terms granted by the suppliers were based on negotiation. Other payables and accrued expenses comprise:

22) AMOUNT OWING TO DIRECTORS The amount owing to directors, which arose mainly from payments made on behalf, is unsecured, interest-free and repayable on demand.

Financial years ending 31st December: 2012 2013 2014 and thereafter

Balance as at beginning of the year Recognised in profit or loss (Note 10) Balance as at end of the year

2011RM

- 220,583

3,812,837

2011RM

19,093 (4,470) 14,623

2010RM

199,834 213,429

3,515,635

2010RM

15,219 3,874 19,093

GROUP

GROUP

Other payables Accrued expenses Deposits received in advance

2011RM

111,640 87,805

- 199,445

2011RM

351,553 127,337 148,107 626,997

2010RM

699,257 196,285

- 895,542

2010RM

1,189,584 284,444 12,033

1,486,061

COMPANYGROUP

253


23) BANK BORROWINGS

As at 31st December 2011, the Group has bank overdraft and other credit facilities (excluding finance lease and term loan as mentioned in Notes 18 and 19) totalling RM5,350,000 obtained from licensed banks. These facilities bear interest range from 1.25% - 7.55% (2010: 1.25% - 7.55%) per annum and are secured by the following: i) Legal charge over the Group’s landed properties; and ii) A joint and several guarantee by certain directors of the Company in their personal capacities. 24) SIGNIFICANT RELATED PARTY DISCLOSURES a) In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party transactions. The related party transactions listed below were carried out on terms and conditions obtainable in transactions with unrelated parties unless otherwise stated.

b) Compensation of key management personnel The remuneration of directors and other members of key management during the financial year are as follows:

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group and of the Company, directly or indirectly. The key management personnel of the Group includes the directors and Chief Executive Officer of the Company, Head of Sales and the Head of Group Finance while the key management personnel of the Company includes the directors, Chief Executive Officer and Heads of Finance and Sales of the Company.

Included in the total key management personnel are:

Bank overdraft Bankers’ acceptances and trust receipts Finance lease - current portion (Note 18) Term loans - current portion (Note 19)

Management fee receivable from subsidiaries Facilities fees payable to subsidiaries

2011RM

901,775 35,418 89,647 728,308

1,755,148

2011RM

- -

2010RM

951,146 1,052,854 164,801 187,105

2,355,906

2010RM

1,050,000 (120,000)

GROUP

COMPANY

Short-term employee benefitsEPF expenses Total

Directors’ remuneration (Note 8)

2011RM

272,281 26,605 298,886

2011RM

169,358

2011RM

272,281 26,605 298,886

2011RM

169,358

2010RM

263,000 20,544 283,544

2010RM

283,544

2010RM

298,616 20,544 319,160

2010RM

319,160

COMPANY

COMPANY

GROUP

GROUP

254


25) CONTINGENT LIABILITIES As at 31st December 2011, the Company had contingent liabilities in respect of corporate guarantees issued to financial institutions amounting to RM7,733,000 (2010: RM7,733,000) for banking facilities extended to certain subsidiaries. The Company is also contingently liable in respect of corporate guarantees issued to suppliers of certain subsidiaries in respect of supply agreements to supply product to the subsidiaries

26) SEGMENTAL INFORMATION Secondary Reporting - Geographical Segments

The Group’s operations are entirely located in Malaysia. Therefore, information on geographical segments is not presented. Primary reporting- Business segments

2011 REVENUE External sales Intersegment sales RESULTS Loss from operations Finance costs Loss before tax Income tax expense Loss after tax OTHER INFORMATION Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses otherthan depreciation

Investmentholding

RM

- - -

(1,615,239) -

(1,615,239) -

(1,615,239)

11,791,871

729,783

230

12,886

952,686

Liquid filtration system

RM

- - -

(6,620) -

(6,620) -

(6,620)

61

506,875

-

-

-

EliminationsRM

(90,415) (90,415)

6,005

6,005

6,005

(16,172,522)

(15,668,524)

(6,005)

ConsolidatedRM

740,908 -

740,908

(2,835,374) (571,041)

(3,406,415) 4,470

(3,401,945)

13,429,083

7,326,869

230

586,739

1,614,896

Air filtration system, fast

moving consumerproduct and

ancillary supportservices

RM

325,020 -

325,020

(721,522) (37,442) (758,964)

4,470 (754,494)

3,808,715

5,578,494

-

65,566

534,131

ManufacturingRM

415,888 90,415 506,303

(497,998) (533,599)

(1,031,597) -

(1,031,597)

14,000,958

16,180,241

-

508,287

134,084

(Forward)

255


Primary reporting- Business segments

(Forward)

2010 REVENUE External sales Intersegment sales RESULTS Profit/(Loss) from operations Finance costs Profit/(Loss) before tax Income tax credit/(expense) Profit/(Loss) after tax OTHER INFORMATION Segment assets Segment liabilities Capital expenditure Depreciation Non-cash expenses other than depreciation

Investmentholding

RM

150,000 1,050,000 1,200,000

(1,706,490)

(15,589) (1,722,079)

3,524 (1,718,555)

13,830,979

1,153,652

5,605

15,241

1,177,470

Liquid filtration system

RM

5,773,293 -

5,773,293

(351,058) -

(351,058) -

(351,058)

78,878

579,072

-

1,660

64,497

EliminationsRM

(2,190,355) (2,190,355)

203,398

203,398

203,398

(16,125,934)

(15,615,932)

(223,025))

ConsolidatedRM

7,083,935 -

7,083,935

(5,414,942) (473,422)

(5,888,364) 2,179

(5,886,185)

18,075,345

8,566,716

66,659

623,731

2,860,968

Air filtration system

RM

571,622 -

571,622

(2,115,286) (100,371)

(2,215,657) (3,874)

(2,219,531)

4,950,364

5,961,180

-

100,384

999,600

ManufacturingRM

589,020 1,140,355 1,729,375

(1,445,506) (357,462)

(1,802,968) 2,529

(1,800,439)

15,341,058

16,488,744

61,054

506,446

842,426

256


27) CORPORATE PROPOSALS During the financial year, the Group (via its wholly owned subsidiaries, Envair Energy Sdn.Bhd (formerly known as Vokes Air (M) Sdn. Bhd.) entered into a Joint Marketing Agreement with Resscom Petroleum Sdn.Bhd. for the distribution and trading of lubricant, diesel and liquidified petroleum gas whereby Envair Energy Sdn. Bhd. agrees to pay 5% of the gross profit generated from the products as stipulated in the Agreement, to Resscom Petroleum Sdn. Bhd. On 2nd March 2012, the Company proposed to undertake a private placement of up to 35,566,740 new ordinary shares of RM0.10 each in the Company, representing up to thirty percent of the existing issued and paid up share capital of the Company. The Proposed Private Placement is subject to the approvals from the shareholders of the Company and relevant authorities. 28) SUPPLEMENTARY INFORMATION The breakdown of the accumulated loss of the Group and of the Company as at 31st December 2011 into realised and unrealised loss is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25th March 2011 and prepared in accordance with Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.

Accumulated loss carried forward are analysed as follows:- Realised - Unrealised Add: Consolidation adjustments Total accumulated loss

2011RM

(8,980,479) -

(8,980,479) -

(8,980,479)

2011RM

(16,500,290) (14,623)

(16,514,913) 6,005

(16,508,908)

2010RM

(7,365,240) -

(7,365,240) -

(7,365,240)

2010RM

(12,938,268) (19,093)

(12,957,361) (149,602)

(13,106,963)

COMPANYGROUP

257

LIST OF PROPERTY

The details of the landed property of the Group as at 31 December 2011 are set out below:

Location

Quest Filter Sdn Bhd

No.6, Jalan Salung 33/26 Shah Alam Technology Park, Section 3340400 Shah AlamSelangor Darul Ehsan

Approximate Land Area / Built-

up Area

Land area:

Approximately 58,578 square feet

Built-up floor area:

Approximately66,632 square feet

Net book valueas at

31 December 2011

RM8,801,645

Age of building (years)

12

Description / Use

Corner three (3) storey office block annexed to a one and a half storey warehouse

building

Tenure / Date of Acquisition

Tenure:

The land on which the property is a

erected is a freehold land

Date of acquisition:

9 March 2006

258

ANALYSIS OF SHAREHOLDINGS

Authorised Share Capital : RM25,000,000.00 (250,000,000 Ordinary Shares of RM0.10 each)Issued and Fully Paid-up Share Capital : RM11,855,580.00 (118,555,800 Ordinary Shares of RM0.10 each)Class of Shares : Ordinary Shares of RM0.10 Each Voting Rights : One (1) vote per Ordinary Share

DISTRIBUTION OF SHAREHOLDINGS AS AT 14 MAY 2012

DIRECTORS’ SHAREHOLDINGS AS PER THE REGISTER OF DIRECTORS’ SHAREHOLDINGS AS AT 14 MAY 2012

SUBSTANTIAL SHAREHOLDINGS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 14 MAY 2012

Note:

(1) Deemed interestedv by virtue of his father, Mr. Jaikishan Rewachand’s direct shareholdings in Envair Holding Berhad and his sister, Ms. Renu Jaikishan’s direct shareholdings in Envair Holding Berhad.

Size of Shareholdings1 - 99100 - 1,0001,001 - 10,00010,001 - 100,000 100,001 – less than 5% of the issued shares5% and above of issued shares Total

Director

Deepak Jaikishan A/L Jaikishan Rewachand

Substantial Shareholder


<------------Direct------------>No. of Shares % 14,701,000 12.40

<------------Direct------------>No. of Shares % 14,701,000 12.40

<-----------Indirect----------->No. of Shares % 530,000(1) 0.45

<-----------Indirect----------->No. of Shares % 530,000(1) 0.45

No. of Shares

87645,960

3,860,40030,904,31069,043,25414,701,000

118,555,800

No. ofShareholders

20123531783181

11,639

%0.000.043.26

26.0758.2312.40

100.00

%1.227.51

32.4047.7711.040.06

100.00

259


THIRTY (30) LARGEST SHAREHOLDERS AS AT 14 MAY 2012

Name of Shareholders


Ang Ah Tee

Ang Leng

Maybank Securities Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Jaikishan Rewachand A/L Rewachand Bhojumall

Choe Yang Choon

Wendy Ng Ai Hoon

Liew Kok Chiang

Sucha Singh @ Gurmej Singh

Ang Leng

Low Lay Khim

Raymond Chan Boon Siew

Wang Fook Weng

Ranjit Singh A/L Harchand Singh

See Hong Cheen @ See Hong Chen

Tang Ah Kau

Dharminder Singh A/L Amar Singh

Ho Yip Yin

JF Apex Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Loo Chuan Lu

Maybank Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Teh Siew Wah

Yong Boon Fook

Teo Hua Poh

Saroni Bin Judi

Public Invest Nominees (Tempatan) Sdn. Bhd.Exempt An for Philip Securities Pte. Ltd.

No. of Shares

14,701,000

2,550,000

2,343,800

2,300,000

1,978,500

1,600,000

1,583,000

1,500,000

1,359,800

1,250,000

1,200,000

1,200,000

1,100,000

1,000,000

1,000,000

937,000

810,000

800,000

800,000

776,700

776,500

750,000

749,300

No.

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

%

12.40

2.15

1.98

1.94

1.67

1.35

1.34

1.27

1.15

1.05

1.01

1.01

0.93

0.84

0.84

0.79

0.68

0.67

0.67

0.66

0.65

0.63

0.63

260


Name of Shareholders

HLB Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Francis Kong @ Kong Fen Shin

Citigroup Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Lai Seow Khee

Pakirisamy Baskaran A/L P Thangavelu

Wong Lit Meng

Citigroup Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Chen Lai Fun

Maybank Nominees (Tempatan) Sdn. Bhd.Chin Kah Seng

Laila Binti Ismail

Total

No. of Shares

705,000

600,000

600,000

600,000

570,000

567,000

550,000

47,257,600

No.

24.

25.

26.

27.

28.

29.

30.

%

0.60

0.51

0.51

0.51

0.48

0.48

0.46

39.86

261

NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Fifteenth Annual General Meeting of the Company will be held at Small Function Room, Bukit Kemuning Golf & Country Resort, Lot 6031, Batu 7, Bukit Kemuning, 42450 Shah Alam, Selangor Darul Ehsan, Malaysia on Thursday, 28 June 2012 at 10.00 a.m. for the following purposes:-

A G E N D A

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2011 together with the Directors’ and Auditors’ Reports thereon. 2. To approve the payment of Directors’ fees for the year ended 31 December 2011. 3. To re-elect the following Directors: 3.1 Dato’ Meor Chek Hussein Bin Muhayuddin who retires by rotation pursuant to Article 92 the Company’s Articles of Association. 3.2 Deepak Jaikishan A/L Jaikishan Rewachand who retires pursuant to Article 98 of the Company’s Articles of Association. 3.3 Mohd Anuar Bin Mohd Hanadzlah who retires pursuant to Article 98 of the Company’s Articles of Association.

3.4 Yap Chi Keong who retires pursuant to Article 98 of the Company’s Articles of Association.

3.5 Mohd Shukri Bin Abdullah who retires pursuant to Article 98 of the Company’s Articles of Association.

4. To appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

SPECIAL BUSINESSTo consider and, if thought fit, to pass with or without modifications, the following Resolutions:- 5. (a) Ordinary Resolution Authority to Allot Shares pursuant to Section 132D of the Companies Act, 1965

“THAT subject always to the approvals of the relevant authorities, the Directors be and are hereby authorised pursuant to Section 132D of the Companies Act, 1965, to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” (b) Special Resolution Proposed Amendments to the Company’s Articles of Association

“THAT the proposed amendments to the Articles of Association of the Company as contained in Appendix I of the 2011 Annual Report (“Proposed Amendments”) be and are approved and adopted.” 6. To transact any other business of the Company of which due notice shall be given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

262


BY ORDER OF THE BOARD

NG YIM KONG (LS0009297)Company Secretary

Kuala Lumpur 6 June 2012

Notes: Proxy

a) A member of the Company who is entitled to attend and vote at this meeting is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead. b) A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each proxy. c) Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. Please indicate the securities account number where applicable. d) The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing. e) The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at No. 6 Jalan Salung 33/26, Shah Alam Technology Park, Section 33, 40400 Shah Alam, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

Explanatory Notes

• Ordinary Resolution - Authority to allot shares pursuant to Section 132D of the Companies Act, 1965 The Proposed Resolution 5(a) under item 5 above, if passed, will empower the Directors of the Company from the date of the above Annual General Meeting, authority to allot and issue shares in the Company up to an aggregate amount of not exceeding 10% of the issued share capital of the Company for the time being for such purposes as they consider would be in the best interest of the Company and also to empower Directors to obtain approval from Bursa Malaysia Securities Berhad for the listing of and quotation for additional shares issued. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

However, the last mandate granted to the Directors’ at the Fourteenth Annual General Meeting held on 29 June 2011 was not approved by the shareholders.

The renewal of this mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment, working capital and/or acquisition or to issue new shares as consideration for investments and/or acquisition which the Directors consider would be in the best interest of the Company.

• Special Resolution - Proposed Amendments to the Company’s Articles of Association The proposed Resolution 5(b) under item 5 above is to amend the Company’s Articles of Association to be in line with the recent amendments to the Listing Requirements of Bursa Malaysia Securities Berhad. The details of the Proposed Amendments are as set out in Appendix I of this Annual Report.

263


General Meeting Record Of Depositors

For the purpose of determining a member who shall be entitled to attend this meeting, the Company shall be requesting the Bursa Malaysia Depository Sdn Bhd in accordance with Article 60(2) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 21 June 2012. Only a depositor whose name appears on the Record of Depositors as at 21 June 2012 shall be entitled to attend this meeting or appoint proxy/proxies to attend and/or vote in his stead.

STATEMENT ACCOMPANYING NOTICE OF FIFTEENTH ANNUAL GENERAL MEETING

Details of the following Directors who are standing for re-election or re-appointment at the Fifteenth Annual General Meeting of Envair Holding Berhad are set out on pages 2 to 4 of this Annual Report:

(a) Dato’ Meor Chek Hussien Bin Muhayuddin (b) Deepak Jaikishan A/L Jaikishan Rewachand (c) Mohd Anuar Bin Mohd Hanadzlah (d) Yap Chi Keong (e) Mohd Shukri Bin Abdullah

264

Appendix I

Special Resolution – Proposed Amendments to the Company’s Articles of Association

THAT the Articles of Association of the Company be amended in the following manner:-

Article No.

2

Interpretation

77

Instrument appointing proxy to be deposited at the office78

Existing Articles

Words Meanings

-No Provision

The instrument appointing a proxy or the power of attorney (if any) under which its is signed or an office copy or notarially certified copy thereof shall be deposited at the office not less than forty-eight hours before the time for holding the meeting or adjourned meeting (as the case may be) at which the person named in such instrument proposes to vote but no instrument (other than a power of attorney under seal) appointing a proxy shall be valid after the expiration of twelve months from the date of its execution.

Amended Articles

Words Meanings

ExemptAuthorisedNominee

The instrument appointing a proxy or the power of attorney (if any) under which its is signed or an office copy or notarially certified copy thereof shall be deposited at the office not less than forty-eight hours before the time for holding the meeting or adjourned meeting (as the case may be) at which the person named in such instrument proposes to vote but no instrument (other than a power of attorney under seal) appointing a proxy shall be valid after the expiration of twelve months from the date of its execution. The completed instrument appointing a proxy once deposited will not preclude the Member from attending and voting in person at the general meeting should the Member subsequently wish to do so.

An authorised nominee defined under the Central Depositories Act which is exempted from compliance with provisions of subsection 25A (1) of the Central Depositories Act.

265

Appendix I

78

Appointment of more than2 proxies

A member may appoint more than two (2) proxies to attend on the same occasion. If the proxy is not a member, he need not be an advocate, an approved company auditor or a person approved by the registrar of companies. If a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

A member may appoint more than two (2) proxies to attend on the same occasion. There shall be no restriction as to the qualification of the proxy and the provisions of Section 149(1)(b) of the Act shall not apply to the Company. If a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportions of his holdings to be represented by each proxy.

Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

266

FORM OF PROXY

FORM OF PROXY

* I/We (NRIC No./Company No. ) (FULL NAME IN CAPITAL LETTERS)

or failing whom (NRIC No. ) (FULL NAME)

(NRIC No. ) (FULL NAME)

of (FULL ADDRESS)being a *member/*members of ENVAIR HOLDING BERHAD hereby appoint * the Chairman of the meeting or

of (FULL ADDRESS)

of (FULL ADDRESS)as *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Fifteenth Annual General Meeting of the Company to be held at Small Function Room, Bukit Kemuning Golf & Country Resort, Lot 6031, Batu 7 Bukit Kemuning, 42450 Shah Alam, Selangor Darul Ehsan on Thursday, 28 June 2012 at 10.00 a.m. and at any adjournment thereof

*My/*our proxy(ies) *is/*are to vote as indicated below:

[Please indicate with (X) in the spaces provided above as to how you wish your vote to be casted. If no specific direction as to voting is given, the Proxy will vote or abstain at his(her) discretion]

Dated this .................day of.................................2012

NO.Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7

Resolution 8

Resolution 9

RESOLUTIONSTo approve the payment of Directors’ fees for the year ended 31 December 2011.

To re-elect Dato’ Meor Chek Hussein Bin Mahayuddin as Director.

To re-elect Deepak Jaikishan A/L Jaikishan Rewachand as Director.

To re-elect Mohd Anuar Bin Mohd Hanadzlah as Director.

To re-elect Yap Chi Keong as Director.

To re-elect Mohd Shukri Bin Abdullah as Director.

To re-appoint Messrs STYL Associates as the Auditors and to authorise the Board of Directors to fix their remuneration. Authority to allot shares pursuant to Section 132D of the Companies Act, 1965. Proposed Amendments to the Company’s Articles of Association.

FOR AGAINST

Number ofOrdinary shares held :

-----------------------------------------------------------------[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

Notes:1. A member of the Company who is entitled to attend and vote at this meeting is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each proxy.3. Where a member of the Company is an authorised nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. Please indicate the securities account number where applicable.4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at No. 6 Jalan Salung 33/26, Shah Alam Technology Park, Section 33, 40400 Shah Alam, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

The Company SecretaryENVAIR HOLDING BERHAD ( 412406-T)

No.6, Jalan Salung 33/26,Shah Alam Technology Park,Section 33, 40400 Shah Alam,

Selangor Darul Ehsan.Malaysia.

AFFIXSTAMPHERE

ENVAIR HOLDING BERHAD(412406-T)

No. 6, Jalan Salung 33/26, Shah Alam Technology Park,Section 33, 40400 Shah Alam, Selangor Darul Ehsan, Malaysia.

Tel: 03-5124 9818 Fax: 03-5121 6218Email: [email protected] Website: www.envair.net

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