ENVAIR HOLDING BERHAD (412406-T) (formerly known as Ruby ... · a member of the Audit, Nomination and Remuneration Committees. Currently, he is a director of Asia Bioenergy Group

Our Name, Our Promise

a n n u a l r e p o r t

2007No.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 6218 email : [email protected] Website : www.envair.net

E N V A I R H O L D I N G B E R H A D

E N V A I R H O L D I N G B E R H A D( 4 1 2 4 0 6 - T )

(formerly known as Ruby Quest Berhad)

EN

VA

IR H

OL

DIN

G B

ER

HA

D (fo

rme

rly know

n as Rub

y Que

st Berha

d) (412406-T)

AN

NU

AL REPO

RT 2007

( 4 1 2 4 0 6 - T )(formerly known as Ruby Quest Berhad)

Corporate Structure 02

5-Years Group Financial Highlights 03

Corporate Information 04

Directors’ Profile 05 - 06

Group Managing Director’s Statement 07

Corporate Governance Statement 08 - 12

Audit Committee Report 13 - 17

Statement of Internal Control 18 - 19

Additional Disclosures 20

Directors’ Report 23 - 25

Statement by Directors and Statutory Declaration 26

Report of the Auditors’ 27 Income Statements 28 Balance Sheets 29

Statements of Changes in Equity 30

Cash Flow Statements 31 Notes to the Financial Statements 32 - 54

Analysis of Shareholdings 56 - 58

List of Properties 59 Notice of Eleventh Annual General Meeting 60 - 61

Statement Accompanying 62Notice of Annual General Meeting

Form of Proxy

100%

100% 100%

100%

100%

MANUFACTURING OF WATER FILTRATION PRODUCTS FOR

COMMERCIAL & HOUSEHOLD SECTORS

Quest Filter Sdn. Bhd.

INDUSTRIAL WATER TREATMENT SYSTEM

Quest Liquid Separation Sdn. Bhd.

SYSTEM DESIGN & INTEGRATION OF CLEANROOM FACILITIES

MANUFACTURING OF COMMERCIAL & INDUSTRIAL AIR FILTERS

Vokes Air (M) Sdn. Bhd.

CLEANROOM SYSTEM Envair Technology Sdn. Bhd. Quest System & Engineering

Sdn. Bhd.

FLOORING SYSTEM & CLEANROOM EQUIPMENT

Quest Technology Sdn. Bhd. Quest Equipment &

Services Sdn. Bhd. (Northern Region)

MECHANICAL & ELECTRICAL SYSTEM

Envair Mecs Engineering Sdn. Bhd.

Envair Mecs Engineering (Penang) Sdn. Bhd.

100%

(412406-T)(formerly known as Ruby Quest Berhad)

02 03

C O R P O R A T E S T R U C T U R E

100%

100% 100%

100%

100%

MANUFACTURING OF WATER FILTRATION PRODUCTS FOR

COMMERCIAL & HOUSEHOLD SECTORS

Quest Filter Sdn. Bhd.

INDUSTRIAL WATER TREATMENT SYSTEM

Quest Liquid Separation Sdn. Bhd.

SYSTEM DESIGN & INTEGRATION OF CLEANROOM FACILITIES

MANUFACTURING OF COMMERCIAL & INDUSTRIAL AIR FILTERS

Vokes Air (M) Sdn. Bhd.

CLEANROOM SYSTEM Envair Technology Sdn. Bhd. Quest System & Engineering

Sdn. Bhd.

FLOORING SYSTEM & CLEANROOM EQUIPMENT

Quest Technology Sdn. Bhd. Quest Equipment &

Services Sdn. Bhd. (Northern Region)

MECHANICAL & ELECTRICAL SYSTEM

Envair Mecs Engineering Sdn. Bhd.

Envair Mecs Engineering (Penang) Sdn. Bhd.

100%

(412406-T)(formerly known as Ruby Quest Berhad)

(6,000)

(4,000)

(2,000)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

2003 2004 2005 2006 2007

Sales Revenue

Profit / (Loss) before Taxation

Net Profit/ (Loss) for the year

2003 2004 2005 2006 2007

Sales Revenue 8,773 14,730 26,847 27,499 22,552

Profit (Loss) before Taxation 1,285 1,692 2,272 1,925 (4,659)

Net Profit (Loss) for the year 1,030 1,421 1,716 1,432 (3,893)

02 03

5 Y E A R S G R O U P F I N A N C I A L H I G H L I G H T

04 05

Sim Keng Siong Managing Director

Lim Foo SengExecutive Director

Shinichi YamamotoIndependent Non-Executive Director

Looi Kem LoongIndependent Non-Executive Director

Koay Ben ReeIndependent Non-Executive Director(Appointed with effect from 23 February 2007)

Wong Peng YewNon-Independent Non-Executive Director

Tan Sri Dato’ Mohamed Noordin Bin HassanIndependent Non-Executive Director / Chairman(Resigned on 15 July 2007)

Board of

Name Designation Directorship KoayBenRee Chairman IndependentNon -ExecutiveDirector

LooiKemLoong Member IndependentNon -ExecutiveDirector

ShinichiYamamoto Member IndependentNon -ExecutiveDirector

LimFooSeng Member ExecutiveDirector (Resignedon30 November2007)

COMPANY SECRETARIESLimFooSeng(MIA12191)WongWeiFong(MAICSA7006751)

HEAD OFFICE ANDREGISTERED OFFICENo.6,JalanSalung33/26,ShahAlamTechnologyPark,Section33,40400ShahAlam,SelangorDarulEhsan

TelephoneNo.:0351249818FacsimileNo. :0351216218E-mailaddress:[email protected] :www.envair.net

AUDITORSYong&LeonardNo.49-4,TheHighwayCentreJalan51/20546050PetalingJayaSelangorDarulEhsan

TelephoneNo:0377818286FacsimileNo :0377820886

PRINCIPAL BANKERSPublicBankBerhadCIMBBankBerhadAmBank(M)BerhadRHBBankBerhadEONBankBerhad

SHARE REGISTRAR PFARegistrationServicesSdn.Bhd.Level13,Uptown1No.1,JalanSS21/58DamansaraUptown47400PetalingJayaSelangorDarulEhsan


SPONSORKenangaInvestmentBankBerhad(Company No: 15678-H)801,8thFloor,KenangaInternationalJalanSultanIsmail50250KualaLumpur


STOCK EXCHANGE MESDAQMarketofBursaMalaysiaSecuritiesBerhad(BursaSecurities)

DirectorsaUdITcoMMittee

C O R P O R A T E I N F O R M A T I O N

04 05

SIM KENG SIONGDirector

AMalaysian aged 36, was

appointedtotheBoardon

28January2005andistheGroup

ManagingDirector.Hejoinedthe

Groupin1993.Hehasdesigned

and successfully implemented

various sizeable cleanroom

projects throughout Malaysia.

He has more than 14 years

experience in the air filtration

system and cleanroom industry.

Mr. Sim graduated from Tunku

AbdulRahmanCollegemajoring

in Mechanical Engineering.

He is the founder of Envair

Technology Sdn. Bhd. (“ETSB”)

and Envair Mecs Engineering

Sdn Bhd (“EMECS”), two of the

wholly-owned subsidiaries of

Envair Holding Berhad (formerly

known as Ruby Quest Berhad)

(“Envair”).BothETSBandEMECS

are involved in the cleanroom

technological services which

represent the main drivers for

the Group’s business activities.

He is responsible for the overall

business operations of the

Group.

LIM FOO SENGDirector

A Malaysian aged 38, was

appointed to the Board

on 28 January 2005 and is the

Executive Director of Envair. He

has 18 years experience in the

professional and commercial

exposures.Heisamemberofthe

Malaysian Institute of Certified

PublicAccountants,aChartered

Accountant (Malaysia) and

a member of the Malaysian

InstituteofAccountants.Hehas

servedinoneoftheinternational

accounting firms, Deloitte Kassim

Chan, based in Kuala Lumpur,

from 1989 to 1995. It was then

he acquired considerable

knowledge, experience and

exposure in management

consultancy, taxation and

accounting and auditing

standards.

He left the accounting firm

in 1995 to join Arab-Malaysian

Corporation Berhad Group

(“Amcorp Group”) and was

involved in business planning,

venture capital activities,

corporate restructuring

and monitoring of portfolio

companies in his capacity as

Associate Director. He has also

served as a board member of

various portfolio companies of

AmcorpGroup.His lastposition

with Amcorp Group was Chief

Financial Officer of MCM

TechnologiesBerhad,asubsidiary

ofAmcorpGroupwhichislisted

on MESDAQ Market. At present,

he is the Corporate Affairs

DirectoroftheGroup.

SHINICHI YAMAMOTODirector

A Japanese aged 62, was


on 28 January 2005 and is an

Independent Non-Executive

Director of Envair. He is also the

Chairman of the Nomination

and Remuneration Committees

and a member of the Audit

Committee.HeholdsaBachelor

of Economics from Osaka

University, Japan. He has more

than 20 years of experience in

environmentalrelatedbusiness.In

1983to1995,heventuredintothe

businessofbuildingmaintenance,

refurbishment of water tanks

and construction of elevated

pressed steel water tanks and

secured contracts from various

local authorities and universities.

At present, he is working as a

coordinator for a few Japanese

companies, specialising in

environmental related activities

suchashightechwastedisposal

system, wastewater treatment

plant and incinerator plant. He

isalsoactingasaconsultant for

ShinMaywaIndustriesLtd,Japan.

B O A R D O F D I R E C T O RD I R E C T O R S ’ P R O F I L E

06 07

KOAY BEN REEDirector

A Malaysian aged 36, was


on 23 February 2007 and is an

Independent Non-Executive

Director of Envair. He is also

the Chairman of the Audit

Committeeandamemberofthe

Nomination and Remuneration

Committees. He graduated

from the University of Malaya

with LLB (Honours) in 1995 and

gained his admission as an

Advocate&SolicitortotheHigh

Court of Malaya in 1996. He

laterobtainedhispostgraduate

qualification, LLM from the

UniversityofWarwickin1997.Mr

Koay was a partner in one of

the leading law firms in Malaysia

before setting up Messrs Ben &

Partners. Mr Koay has extensive

corporateexperience having

advised on numerous IPOs,

mergers and acquisitions,

takeovers,debt restructurings,

fundraisingsandothercorporate

and commercial matters. He

is also a director of I-Power

Berhad.

WONG PENG YEWDirector

A Malaysian aged 57,

was appointed to the

Board on 1 February 1997.

He was re-designated from

Executive Vice Chairman

to Non-Independent Non-

Executive Director of Envair

on25August2006.Hewasbased

in the United Kingdom from

1978until1994whenhereturned

toMalaysiain1995tojoinQuest

Technology Sdn. Bhd. During

hisworkingcareer in theUnited

Kingdom, he was the Finance

Director of ARM Holdings Plc

from1990to1994.From1986to

1990,hewastheFinanceDirector

of European Silicon Structures

Ltd. He worked at Procter and

Gamble International Division

based in the United Kingdom

and reported directly to the

European Head Office in

Geneva.Priortothat,hewasthe

European Finance Manager for

CPGGroup,adivisionofGeneral

MillsInc.Hehasbeenamember

of the Institute of Directors (UK)

since1992.

Notes:

1. Family Relationship with Director and/or Major Shareholder None of the Directors has any family relationship with any director and/or major shareholder of the Company.

2. Conflict of Interest None of the Directors has any conflict of interest with the Company.

3. Conviction of Offences None of the Directors has been convicted of any offences in the past ten (10) years, other than traffic offences.

LOOI KEM LOONGDirector

AMalaysian aged 32,

was appointed to the

Boardon12January2006andis

an Independent Non-Executive

Director of Envair. He is also

a member of the Audit,

Nomination and Remuneration

Committees. Currently, he is a

directorofAsiaBioenergyGroup.

Having completed his Bachelor

in Accounting and Finance

from University of Strathclyde

(Scotland),Mr.Looicontinuedhis

articleshipwithaninternationally

affiliated audit firm. He is an

AssociateMemberoftheInstitute

of Chartered Accountants in

England and Wales and also

a member of the Malaysian

Institute of Accountants.

Having served as a manager

in AmMerchant Bank Berhad

and vice president in Newfields

Advisors Sdn. Bhd., Mr. Looi

brings with him working

experiences in audit,

accountancy, corporate

advisory and merchant

banking.

B O A R D O F D I R E C T O RD I R E C T O R S ’ P R O F I L E

06 07

Dear Shareholders,

OnbehalfoftheBoardofDirectors,IampleasedtopresenttheCorporateStatementofEnvairHoldingBerhad (formerly known as Ruby Quest Berhad)(“Envair”) for the financial year ended 31 December 2007.

FINANCIAL REVIEWFor theyeartodate, theGrouprecordedrevenueofRM22.552millionanda lossafter taxofRM3.893million as compared to the revenue and profit after tax of RM27.499 million and RM1.432 millionrecorded in the last financial year. The decrease in revenueof17.99%andthelossincurredcomparedto the last financial year were mainly due to weak market sentiments for the localcleanroom industryduring the financial year under review amidst the slowingglobalgrowthandweakeningUSeconomycoupled with oil price hikes which in turn affectedthemarketsectorsofthecleanroomservicessuchastheslowdownintheelectronicsector.

In view of the loss incurred during the financial year, the Group’s net assets stood at RM17.987 million,a decrease of RM3.893 million over the previousfinancial year of RM21.880 million.

STRATEGIC FOCUSEfforts are being undertaken by the Group toidentify and venture into new opportunities thatwill broaden the Group’s revenue base while stillfocusing on its core activities to improve profitability andcompetitiveness.

On25June2007,theGroupmanagedtoobtainalicense fromtheGovernmentofVietnamtoset-upa representative office in Ho Chi Minh City and the office was subsequently set-up in August 2007. In viewofthepositiveeconomyoutlookinVietnam,theGroupexpectsthebusinessoperationinVietnamtocontributepositivelytotheGroupinthenearfuture.

In June 2007, as part of the re-branding exercise,thenameoftheCompanyhasbeenchangedfrom“Ruby Quest Berhad” to “Envair Holding Berhad”.Theword“Envair”wasacronym,for“EnvironmentalAir” and the proposed name “Envair HoldingBerhad” ismoresuitedfortheCompany,sincetheemphasis of the Group’s business is in relation tothe provision of engineering services to the hightechnology industries which require cleanroomor contamination control technology. There-brandingexercise isalso in linewith theGroup’sintention to enhance its corporate profile for its regionalexpansionplan.

In 20 November 2007, the Group managed toobtain the ISO 9001-2000 certification for Quest FilterSdn.Bhd.(“QF”),awholly-ownedsubsidiaryofEnvair.QF,whichisinvolvedinthemanufacturingofdomestic water filtration products, has commenced its operations in the final quarter of the previous financial year. Currently, QF is still undergoing its

gestation period primarily attributable to start-upandmarketentrycostsbutweexpectimprovementoncethisbusinessgrows.

The Group also recognises the importance ofresearch and development (“R&D”) activities andduring the financial year under review, the Group hasspentRM165,000or33%ofthetotalallocationofRM500,000forR&Dexpensesfromitslistingproceedson product development as part of its on-goingstrategiestobroadenitsrevenuebaseandimproveitsprofitability. Some of the new product developments for its domestic water filtration segment are currently in the early stage of commercialisation under QF.TheGroupwillcontinuewith itsR&Deffort tokeepabreastwithmarketdevelopmentandtechnologytrendstostaycompetitive.

REVENUE ON RECOVERY STAGE AND NARROWING DOWN LOSSESEffortsarebeingundertakenbytheGrouptofurthercontrol and reduce cost of operation, to increaseefficiency and better utilisation of resources.

TheGroupmanagedtorecordahigherrevenueofRM12.489 million for the second half of the financial year ended 31 December 2007 (“2H2007”) ascompared to revenue of RM10.063 million for the first sixmonthsended30June2007(“1H2007”).

The Group also managed to narrow down theloss after taxation to RM1.499 million for 2H2007 ascompared to loss after taxation of RM2.394 millionfor1H2007.

PROSPECTIn view of the continuous uncertainties in theglobal economic environment, the Board and themanagement are constantly reviewing the entireGroup’soperationandresourcesinordertoimprovetheGroup’sperformance.

TheBoardhopesthattheGroup’sbusinessstrategieswhichincludebutnotlimitedtoregionalexpansionplanshallenableanelevationoftheGroup’sresultsback into black for the financial year ending 31 December2008.

ACKNOWLEDGEMENTThis has been a difficult year for the Group and on behalfoftheBoard,Iwishtothankallouremployeesfor their dedication and hard work. I also wish toconveytheBoard’sappreciationtoallourcustomers,bankers, business associates and shareholders fortheircontinuoussupport.

Thankyou.

SIM KENG SIONGGroup Managing Director

G R O U P M A N A G I N G D I R E C T O R ’ S S T A T E M E N T

08 09

The Board recognises the importance of corporate governance in discharging the Board’s stewardshipresponsibilitiesandtoprotectandenhancetheshareholders’value.Premisedonthis,theBoardiscommittedtoensurethathighstandardsofcorporategovernancearepractisedthroughouttheCompanyandtoapplythe principles and best practices as governed by the Listing Requirements of the MESDAQ Market of BursaMalaysiaSecuritiesBerhadandGuidanceNote11/2006onCorporateGovernance.TheCompanycontinuouslyendeavourstocomplywiththeMalaysianCodeonCorporateGovernance(“Code”).

ThefollowingstatementsetsouttheCompany’scompliancewiththeprinciplesoftheCode.

A) DIRECTORS i) The Board TheBoardisprimarilyresponsibleforthestrategicdirectionsoftheCompany.Inaddition,theBoardalso oversees the conduct of the Company’s business, whereby it devises and puts in place adequate systemsofcontrol,focusesprimarilyonthemitigationofanyforeseeableorpotentialriskbesettingthe Company.

ii) Board Balance

The Board comprises six (6) directors, of whom two (2) are executive directors and four (4) are non-executivedirectors.

Morethanone-third(1/3)ofthecurrentBoardisrepresentedbyIndependentNon-ExecutiveDirectors whoareindependentofmanagementandfreefromanybusinessorotherrelationshipwhichcould interferewiththeexerciseofindependentjudgmentontheBoard’sdeliberationsanddecisionmaking, eachofwhom,bringswithhimvastandvariedexperiences,exposureandexpertise.

The profile of each member of the current Board is set out on pages 5 to 6 of this Annual Report.

iii) Board Meetings

To ensure that the Envair Group is managed effectively and efficiently, the current Board is scheduled tomeetatleastfour(4)timesayear,withadditionalmeetingsbeingconvenedwhennecessary.Besides that, the Board also approves matters through the circulation of Directors’ Circular Resolution in accordancewiththeArticlesofAssociationoftheCompany.

ThedetailsoftheDirector’sattendancesfortheBoardMeetingsaresetoutbelow:- Name of Directors No. of meetings attended % duringthefinancialyear

TanSriDato’MohamedNoordinbinHassan 2/3 67 (Resigned on 15 July 2007) SimKengSiong 5/5 100 LimFooSeng 5/5 100 ShinichiYamamoto 5/5 100 LooiKemLoong 5/5 100 KoayBenRee(Appointed with effect from 23 February 2007) 4/4 100 WongPengYew 4/5 80

C O R P O R A T E G O V E R N A N C E S T A T E M E N T

iv) Supply of Information and Access to Advice

TheBoard shallbeprovidedwithcomprehensiveboardpapersona timelymannerprior toboard meetings. This is to ensure and enable the members of the Board to discharge their duties and responsibilitiescompetently inawell-informedmanner.Allmembersof theBoardhaveunhindered access to the advice and services of the Company Secretaries, 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 ofEnvairGroup.

08 09


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 guidelines on Training for Directors. Additionally, during the financial year under review, the Directors of the Company had attendedthe ISOAwarenessTraining.On20November2007,EnvairGroupmanagedtoobtainthe ISO 9001-2000 certification for Quest Filter Sdn Bhd, a wholly-owned subsidiary of the Company. TheDirectorswillcontinuetoundergootherrelevantprogrammestofurtherenhancetheirskillsand knowledgetoassistthemindischargingtheirdutiesasDirectors.

vi) Re-election of Directors

InaccordancewiththeCompany’sArticlesofAssociation,one-third(1/3)ofthedirectorsshallretire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in each three (3) years but shall be eligible for re-election. Directors appointed duringtheyearwillbesubject to retirementandre-electionbyshareholders in theAnnualGeneral Meeting.

Directorsoverseventy(70)yearsofagearerequiredtoretireandsubmitthemselvesforre-appointment annuallyinaccordancewithSection129(6)oftheCompaniesAct,1965.Presently,noneofthedirectors issubjecttosuchretirementandre-appointment.

vii) Board Committee

The Board has set up the following Committees to assist the Board in discharging their duties and decisionmaking:- (a) Audit Committee

TheAuditCommitteecomprisesthree(3)IndependentNon-ExecutiveDirectorsasfollows:-

Chairman : KoayBenRee (Independent Non-Executive Director) (Appointed with effect from 23 February 2007)

Members : ShinichiYamamoto (Independent Non-Executive Director)

LooiKemLoong (Independent Non-Executive Director)

LimFooSeng (Executive Director) (Resigned on 30 November 2007)

TheAuditCommitteeReportissetoutonpages13to17ofthisAnnualReport.

b) Nomination Committee

TheNominationCommitteecomprisesthefollowingmembers:-

Chairman : ShinichiYamamoto (Independent Non-Executive Director)

Members : KoayBenRee (Independent Non-Executive Director) (Appointed with effect from 23 February 2007)

LooiKemLoong (Independent Non-Executive Director) (Appointed with effect from 23 July 2007)

10 11


b) NominationCommittee(Cont’d)

ThetermsofreferenceoftheNominationCommitteeareasfollows:- • ToregularlyreviewtheBoardstructure,sizeandcomposition. • 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 competencewhichnon-executivedirectorsshouldbringtotheBoard. • ToannuallyassesstheeffectivenessoftheBoardasawhole,thecommitteeoftheBoardand contributionsofeachindividualdirectoroftheBoard.

(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 toattract,motivateand retainexecutivedirectorsofhighcalibre to theGroup.Fornon- executive directors, the level of remuneration commensurate with the level of responsibilities undertakenbythemfortheCompany.

TheRemunerationCommitteecomprisesthefollowingmembers:-

Chairman : ShinichiYamamoto (Independent Non-Executive Director) (Appointed with effect from 23 July 2007)

Members : KoayBenRee (Independent Non-Executive Director) (Appointed with effect from 23 February 2007)

LooiKemLoong (Independent Non-Executive Director) (Appointed with effect from 23 July 2007)

ThetermsofreferenceoftheRemunerationCommitteeareasfollows:-

• Toreviewanddetermine,atleastonceannually,adjustmentstotheremunerationpackage 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 sourcesonremunerationpackagesfortheequivalentjobsintheindustry. • To review and determine the quantum of performance related bonuses, benefits-in-kind and EmployeeShareOptions,ifavailable,tobegiventotheexecutivedirectors. • Toconsiderandexecutetherenewaloftheservicecontractsofexecutivedirectorsasand whendue,aswellastheservicecontractsandremunerationpackagesfornewlyappointed executivedirectorspriortotheirappointments.

B) DIRECTORS’ REMUNERATION

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

TheaggregateDirectors’ remunerationpaidorpayabletoallDirectorsoftheCompanycategorised into appropriate components for the financial year ended 31 December 2007 are as follows:-

10 11


Non-ExecutiveDirectors

ExecutiveDirectors

Total

BelowRM50,000 4 - 4

RM50,000-RM100,000 - - -

RM100,000-RM150,000 - - -

RM150,000-RM200,000 - 2 2

Number of Directors

Range of Remuneration

• Salaries - 300 300• Fees 46 - 46• Bonuses - 24 24• Payrollbasedexpenses-EPF - 41 41• Meetingallowances 12 - 12• Benefit-in-kind - 18 18 TOTAL 58 383 441

Remuneration – RM’000 Non-ExecutiveDirectors

ExecutiveDirectors Total

B) DireCtors’remuNeratioN(Cont’d)

C) RELATIONS WITH SHAREHOLDERS

The Company recognises 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 variousannouncementsmadeduringtheyear.Thesewillenabletheshareholdersandmembersofthe publictohaveanoverviewoftheGroup’sperformanceandoperations.

TheAnnualGeneralMeetingalsoprovidesanopportunityfortheshareholderstoseekandclarifyany issues relevant to the Company. Shareholders are encouraged to meet and communicate with the BoardatAnnualGeneralMeetingandtovoteonallresolutions.

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 accordancewiththeprovisionoftheCompaniesAct,1965andtheapplicableApprovedAccounting StandardsinMalaysia.

A statement by the Directors of their responsibilities in the preparation of financial statements is set outintheensuringsection.

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,whichgivetrueandfairviewofthestateofaffairsoftheCompanyandoftheresultsandcash flow of the Company for that period. In preparing those financial statements, the Directors are requiredto:- a) selectsuitableaccountingpoliciesandthenapplythemconsistently;

12 13


D) aCCouNtaBilityaNDauDit(Cont’d)

b) statewhetherapplicableaccountingstandardshavebeenfollowed; c) makejudgmentsandestimatesthatarereasonableandprudent;and d) prepare the financial statements on a going concern basis unless it is inappropriate to presume thattheCompanywillcontinueinbusiness.

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 preventionanddetectionoffraudandirregularities.

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

iii) Internal Control TheBoardacknowledgesitsresponsibilityformaintainingasoundsystemofinternalcontrol,which providesreasonableassessmentofeffectiveoperations,internalcontrolsandcompliancewiththe laws and regulations as well as with internal procedures and guidelines. A statement on internal controloftheCompanyissetoutonpages18to19ofthisAnnualReport.

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 CommitteeandtheBoard,mattersthatrequiretheBoard’sattention.

12 13

A U D I T C O M M I T T E ER E P O R T

1. COMPOSITION AND DESIGNATION OF AUDIT COMMITTEE

TheAuditCommitteecurrentlycomprisesthefollowingmembers:-

Chairman: KoayBenRee (Independent Non-Executive Director) (Appointed with effect from 23 February 2007)

Members : ShinichiYamamoto (Independent Non-Executive Director)

LooiKemLoong (Independent Non-Executive Director)

2. TERMS OF REFERENCE

1. Composition of the Audit Committee The Audit Committee shall be appointed by the Board from amongst their members, which fulfils the followingrequirements:-

(1) TheAuditCommitteemustbecomposedofno fewer thanthree(3)members. In theeventof anyvacancyintheAuditCommitteeresultinginthenon-complianceoftheabove,theCompany must fill the vacancy within three (3) months.

(2) AlltheAuditCommitteemembersmustbenon-executivedirectors,withamajorityofthembeing independentdirectors.

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

(i) mustbeamemberoftheMalaysianInstituteofAccountants;or

(ii) ifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthaveatleastthree(3) years’workingexperienceand: (a) he must have passed the examinations specified in Part I of the 1st Schedule of the AccountantsAct1967;or (b) he must be a member of one of the Associations of Accountants specified in Part II of the1stScheduleoftheAccountantsAct1967;or

(iii) fulfils such other requirements as prescribed or approved by the Exchange.

(4) NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.

(5) ThememberoftheAuditCommitteeshallelectaChairmanfromamongthemselveswhoshall beanIndependentDirector.TheChairmanoftheAuditCommitteeshouldengageonacontinuous basiswithseniormanagement,theheadofinternalauditandtheexternalauditorsinordertobe keptinformedofmattersaffectingthecompany.

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 term of office and performance oftheAuditCommitteeandeachofitsmembersatleastonceeverythree(3)yearstodetermine whether the Audit Committee has carried out its duties in accordance with its terms of reference.

2. Secretary of the Audit Committee

TheCompanySecretariesoftheCompanyshallbetheSecretariesoftheAuditCommittee.

3. Duties and Responsibilities of the Audit Committee

ThefollowingarethemaindutiesandresponsibilitiesoftheAuditCommitteecollectively:

14 15

3. DutiesandresponsibilitiesoftheauditCommittee(Cont’d)

(1) ReviewthefollowingandreportthesametotheBoardoftheCompany:

(i) withtheexternalauditors,theauditplan; (ii) withtheexternalauditors,hisevaluationofthesystemofinternalcontrols; (iii) withtheexternalauditors,hisauditreport;

(iv) theassistancegivenby theemployeesof theCompany to theexternalauditorsand the internalauditors;

(v) the adequacy of the scope, functions, competency and resources of the internal audit functionsandthatithasthenecessaryauthoritytocarryoutitswork;

(vi) the internal audit programme, processes, the results of the internal audit programme, processesorinvestigationundertakenandwhetherornotappropriateactionistakenonthe recommendationsoftheinternalauditfunction;

(vii) the quarterly results and year end financial statements, prior to the approval by the Board, focusingparticularlyon: (a) changesinorimplementationofmajoraccountingpolicychanges; (b) significant and unusual events; and (c) compliancewithaccountingstandardsandotherlegalrequirements;

(viii) any related party transaction and conflict of interest situation that may arise within theCompanyorgroupincludinganytransaction,procedureorcourseofconductthatraises questionsofmanagementintegrity;

(ix) any letter of resignation from the external auditors and any questions of resignation or dismissal;and

(x) whether there is reason (supported by grounds) to believe that the Company’s external auditorisnotsuitableforre-appointment;

(2) 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 misappropriationandencouragelegalandregulatorycompliance;

(3) AssisttheBoardinidentifyingtheprincipalrisksintheachievementoftheCompany’sobjectives andensuringtheimplementationofappropriatesystemstomanagetheserisks;

(4) RecommendtotheBoardontheappointmentandre-appointmentoftheexternalauditorsand theirauditfee,aftertakingintoconsiderationtheindependenceandobjectivityoftheexternal auditorsandthecosteffectivenessoftheaudit;

(5) Discusswiththeexternalauditorsbeforetheauditcommencesthenatureandscopeoftheaudit and ensure co-ordination where more than one audit firm is involved;

(6) Discussproblemsandreservationsarisingfromtheauditsandanymattertheauditorsmaywishto discussintheabsenceofthemanagementwherenecessary;

(7) Reviewtheexternalauditor’smanagementletterandmanagement’sresponsetherein;

(8) Inrelationtotheinternalauditfunction:- (i) reviewtheadequacyofthescope,functionsandresourcesoftheinternalauditfunction,and thatithasthenecessaryauthoritytocarryoutitswork;


14 15


3. DutiesandresponsibilitiesoftheauditCommittee(Cont’d) (ii) review the internalauditprogrammeand resultsof the internalauditprocessand,where necessary,ensurethatappropriateactionsaretakenontherecommendationsoftheinternal auditfunction; (iii) reviewanyappraisalorassessmentof theperformanceofmembersof the internalaudit function;

(iv) approve any appointment or termination of senior staff members of the internal audit function;and

(v) takecognisanceof resignationsof internalauditstaffmembersandprovidetheresigning staffmemberanopportunitytosubmithisreasonsforresigning.

(9) Consider the major findings of internal investigations and management’s response; and (10) To review the effectiveness of the internal controls and risk management processes of the Company.

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

4. Rights of the Audit Committee

Incarryingoutitsdutiesandresponsibilities,theAuditCommitteewill: • havetheauthoritytoinvestigateanymatterwithinitstermsofreference; • havetheresourceswhicharerequiredtoperformitsduties; • havefullandunrestrictedaccesstoanyinformationpertainingtotheCompany; • havedirectcommunicationchannelswith theexternalauditorsandperson(s)carryingout the internalauditfunctionoractivity; • beabletoobtainindependentprofessionalorotheradviceandtoinviteoutsiderswithrelevant experienceandexpertisetoattendtheAuditCommitteemeetings(ifrequired)andtobriefthe AuditCommittee;and • beabletoconvenemeetingswiththeexternalauditors,theinternalauditorsorboth,excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

5. Conduct of Meetings (1) The Audit Committee will meet at least four (4) times in each financial year although additional meetingsmaybecalledatanytime,atthediscretionoftheChairmanoftheAuditCommittee. (2) ThequorumshallconsistofamajorityofIndependentcommitteemembersandshallnotbeless thantwo(2). (3) RecommendationstotheAuditCommitteearesubmittedtotheBoardforapproval. (4) TheCompanySecretariesshallbeinattendanceateachAuditCommitteemeetingandrecord theproceedingsofthemeetingthereat. (5) Minutes of each meeting shall be kept as part of the statutory record of the Company upon confirmation by the Board and a copy shall be distributed to each member of the Audit Committee. (6) The Managing Director and other appropriate officer may be invited to attend where their presenceareconsideredappropriateasdeterminedbytheAuditCommitteeChairman.

16

5. Conductofmeetings(Cont’d) (7) The internal auditors and/or external auditors have the right to appear and be heard at any meetingoftheAuditCommittee. (8) Upontherequestoftheinternalauditorsand/orexternalauditors,theAuditCommitteeChairman shallalsoconveneameetingoftheAuditCommitteetoconsideranymattertheauditor(s)believes shouldbebroughttotheattentionoftheBoardortheshareholders. (9) The Audit Committee must be able to convene meetings with external auditors without the presenceoftheexecutiveboardmembersandmanagementatleasttwiceayearandwhenever deemednecessary.

(10) Where the Audit Committee is of the view that a matter reported by it to the Board has not beensatisfactorilyresolvedresultinginabreachofBursaMalaysiaSecuritiesBerhadrequirements, theAuditCommitteemustpromptlyreportsuchmattertoBursaMalaysiaSecuritiesBerhad.

(11) TheattendanceofanyparticularAuditCommitteemeetingbyotherdirectorsandemployeesof the Company shall be at the Audit Committee’s invitation and discretion and must be specific to the relevantmeeting.

3. SUMMARY OF ACTIVITIES

TheAuditCommitteeisscheduledtomeetat leastfour(4)timesayear,withadditionalmeetingsbeing convenedwhennecessary. Detailsoftheattendanceduringtheyearunderreviewareasfollows:-

Duringtheyearunderreview,thefollowingweretheactivitiesoftheAuditCommittee:

1. Reviewed the quarterly financial results and ensured that the financial reporting and disclosure requirementsofrelevantauthoritieshadbeencompliedwith,focusingparticularlyon: 1.1 changesinorimplementationofmajoraccountingpoliciesandpractices; 1.2 theon-goingconcernassumption; 1.3 significant and unusual events; and 1.4 compliancewithaccountingstandardsandotherlegalrequirements.

2. 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 managementintegrityintheordinarycourseofbusiness.

3.ReviewedtheauditstrategyandplanoftheExternalAuditors.

Name No. of meetings attended % duringthefinancialyear

LimFooSeng 5/5 100(Resignedon30November2007)ShinichiYamamoto 5/5 100LooiKemLoong 5/5 100KoayBenRee 4/4 100(Appointedwitheffectfrom23February2007)


17


4. Internal Audit Function

During the financial year, the Company does not have an internal audit department and the Audit Committeereliedondiscussionswiththeseniormanagementandexecutivedirectors,reviewofquarterly financial statements and input from the external auditors to discharge its duties. The Executive Directors throughtheirdailyinvolvementinthebusinessoperationsandattendanceatoperationalandmanagement level meetings, monitors the Company’s policies and procedures. Any significant unresolved matters that requiretheBoardofDirectors’interventionwillbereportedbytheExecutiveDirectorsaccordingly.

On27February2008, theCompanyhas set-up the InternalAuditDepartment toundertake theGroup’s internalauditfunction.Amemberoftheseniormanagementheadsthisdepartment.Thisdepartmentshall report its findings to the Audit Committee. The department shall undertake audit visits to all relevant subsidiariesoftheGrouponaregularbasis.

Theobjectivesofsuchauditvisitsaretoascertainwhetheradequatecontrolshavebeenestablishedand implementedintheGroupandtoprovidereasonableassurancethat:- • Businessobjectivesandpoliciesareadheredto; • Operations are cost effective and efficient; • Assetsandresourcesaresafeguardedandeffectivelyused; • Integrityofrecordsandinformationisprotected;and • Applicablelawsandregulationsarecompliedwith.

Audit reports are to be issued to highlight any deficiency or findings requiring the management’s attention. Suchreportswillalsoincludepracticalandcosteffectiverecommendationsaswellasproposedcorrective actionstobeadoptedbythemanagement.Follow-upauditsaretobecarriedouttoascertainwhether correctiveactionshavebeentakenbythemanagement.

5. Statement By The Audit Committee In Relation To ESOS Allocation

TheGrouphasobtainedapprovalfromtheSecuritiesCommissionforanEmployeeShareOptionScheme (“ESOS”) for the benefit of eligible employees and directors of the Group for new ordinary shares of RM0.10 each in the Company for a period of five (5) years.

ThetotalnumberofordinarysharestobeissuedbytheCompanyundertheESOSshallnotexceed20%of thetotalissuedandpaid-upordinarysharesoftheCompany.

TheESOShadbeenimplementedon8June2005.Asat31December2007,thereisnooffermadebythe Company.

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S T A T E M E N T O FI N T E R N A L C O N T R O L

INTRODUCTION

TheMalaysianCodeonCorporateGovernancestipulatesthattheBoardofDirectorsoflistedcompaniesshouldmaintaina sound systemof internalcontrol to safeguard shareholders’ investmentsand theGroup’sassets.BelowistheBoardofDirectors’StatementonInternalControlwhichhasbeenpreparedwithreferencetotheBursaSecurities“StatementonInternalControl:GuidanceforDirectorsofPublicListedCompanies”.

RESPONSIBILITIES

The Board of Directors recognises the importance of a sound system of internal control and effective riskmanagement practices to good corporate governance. The Board affirms its overall responsibility for maintaining sound systems of internal control within the Group covering financial, operational, compliance and risk management issues, and for reviewing regularly the adequacy and effectiveness of such systemswithintheGroup.SoundsystemsofinternalcontrolwillhelptosafeguardtheGroup’sassetsandshareholders’investment.

TheBoard,inthedischargeofitsstewardshipresponsibilities,iscommittedtoidentifykeyriskstowhichcompanieswithintheGroupareexposedandwillintroduceappropriatesystemsprogressivelytomanagesuchrisks.

Notwithstandingthat,thereare,however,limitationsinherentinanysystemofinternalcontrol,andsuchsystemisdesignedtomanageratherthaneliminatetheriskthatmayimpedetheachievementofbusinessobjectives.Itshouldbeappreciatedthatitcouldthereforeonlyprovidereasonableandnotabsoluteassuranceagainstmaterial misstatement of management or financial information or financial losses or frauds. It should be further noted that the cost of control procedures should not exceed the benefits to be derived from such procedures.

KEY ELEMENTS OF INTERNAL CONTROL

Some of the key control procedures have been embedded in the operations of the business with sufficient assurance mechanism to safeguard the assets of the Group and to preserve shareholders’ investment. Thefollowingkeyelementsensurethatthepropercontrolregimeismaintained:

Audit Committee

TheAuditCommitteereviewstheGroup’saccountingandreportingpoliciesandpractices,andtheadequacyandeffectivenessofthesystemsofinternalcontrol.TheAuditCommitteealsoensuresthatthereiscontinuouseffortbymanagementtoaddressandresolveareaswherecontrolweaknessesexist.

TheAuditCommitteereviewsthequarterlyresultsoftheGroupandrecommendsadoptionofsuchresultstotheBoardbeforeannouncementtoBursaSecuritiesismade.

Risk Management

During the financial year, there is no structured risk management process to assess significant risks faced by the Group. However, the findings of the external auditors and informal identification and review of risks are carriedoutduringmanagementmeetingsasanon-goingprocessforidentifying,evaluatingandmanagingthesignificant risks faced by the Group. The topics that were discussed included corporate image, environment, healthandsafety,humanresource,productquality,projectactivities,generalperformanceandcompetitors’activities.

TheBoardiscommittedtoidentifybusinessandotherrisksthatareinherentinthesectortheGroupoperatesandtoensuretheimplementationofappropriatecontrolmechanismtomanagetheserisks.Accordingly,theriskmanagementcommitteeand the internalauditdepartmentwere set-upon10December2007and27February2008,respectively.TheinternalauditdepartmentandtheriskmanagementcommitteeshallreporttotheAuditCommittee.

InassistingtheBoardtodischargeitsdutiesandresponsibilities,ithasappointedtheAuditCommitteetoexaminetheeffectivenessoftheGroup’ssystemsofinternalcontrolonbehalfoftheboard.Thisisaccomplishedthroughreview of the internal audit department’s works and risk management processes, which focused in areas

18 19

S T A T E M E N T O FI N T E R N A L C O N T R O L

riskmanagement(Cont’d)of priority as identified by risk analysis and in accordance with the audit plan and risk management policy approvedbytheAuditCommittee.

Reporting and Review

The Group has in place a management reporting mechanism whereby financial information is generated for seniormanagementreviewinatimelymanner.TheGroupManagingDirectormeetsregularlywiththeExecutiveDirector and senior management to review, discuss and resolve operational, financial, corporate and business issues.

Other Risks and Control Processes

Inadditiontotheabove,theGroupalsohasinplacethefollowingkeyelements:

• An organisation structure, with clearly defined authority limits and reporting mechanism to higher levels ofmanagementandtotheBoard,whichsupportsthemaintenanceofastrongcontrolenvironment.

• Specific responsibilities have been delegated to the relevant Board committees, all of which have formalisedtermsofreference.Thesecommitteeshavetheauthoritytoexamineallmatterswithintheir scopeandreporttotheBoardwiththeirrecommendations.

Conclusion

The system of internal control is satisfactory and has not resulted in any material losses, contingencies oruncertaintiesthatwouldrequiredisclosureintheGroup’sannualreport.TheGroupcontinuestotakemeasurestostrengthentheinternalcontrolenvironment.

TheMalaysianCodeonCorporateGovernancestipulatesthattheBoardofDirectorsoflistedcompaniesshouldmaintaina sound systemof internalcontrol to safeguard shareholders’ investmentsand theGroup’sassets.BelowistheBoardofDirectors’StatementonInternalControlwhichhasbeenpreparedwithreferencetotheBursaSecurities“StatementonInternalControl:GuidanceforDirectorsofPublicListedCompanies”.

Status Of The Utilisation Of The Initial Public Offer Proceeds

Asat31December2007,thestatusofutilisationoftheproceedsforEnvairGroupissummarisedbelow:-

Unutilised: RM’000 RM’000 RM’000 RM’000CapitalExpenditure 2,000 - 2,000 -WorkingCapital 5,948 1,219 6,083 *(135)R&Dexpenses 500 165 234 266Listingexpenses 1,500 - 1,365 *135

9,948 1,384 9,682 266

*Theunutilisedbalanceofthebudgetedlistingexpenseshadbeenutilisedforworkingcapitalpurposesduringthe financial year ended 31 December 2007.

Share Buy-backsDuring the financial year, there were no Share Buy-backs by the Company.

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

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

Material Contracts Involving Directors’ And Substantial Shareholders’ InterestTherewerenomaterialcontractsenteredbytheCompanyoritssubsidiariesinvolvingdirectors’andsubstantialshareholders’ interest in the financial year ended 31 December 2007.

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

Sanctions and /or PenaltiesTherewerenosanctionsand/orpenaltiesimposedontheCompanyanditssubsidiaries,directorsormanagementby 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 2007 other than the statutory audit fees were RM1,600.00 as disclosed in Note 10 of the financial statements.

ProfitForecast/ProfitGuaranteeThe Company did not issue any profit forecast in any public documents during the current financial year.

Revaluation Policy On Landed PropertiesTheCompanydoesnothaveanyrevaluationpolicyonlandedproperties.

Corporate Sosial Responsibility (CSR) StatementTheGroupisdrivenbythebeliefthatinpursuitofanybusinessobjective,itneedstostrikeabalancebetweenprofitability and contributions to the social and environmental responsibilities. With such belief, the Group is committed and uses its best endeavour, on an on-going basis, to integrate CSR practices into its day-to-daybusiness operations i.e constantly reviewing the staff benefits to enhance the quality of life of its employees and adoptingeco-friendlypracticessuchasminimisingtheuseofhazardouscompoundinitsmanufacturingprocessanditsengineeringservicestoprotecttheenvironment.

20

A D D I T I O N A L D I S C L O S U R E S

Unutilised balance

Cumulative utilisation as at

31 December 2007

Utilisation for the current

financialyearended31 December 2007

Approved UtilisationPurpose

(Formerly known as Ruby Quest Berhad)

REPORTS AND FINANCIAL STATEMENTSfor the year ended 31 December 2007

(412406-T)

C o n t e n t s

Directors’ Report 23 - 25

Statement by Directors and Statutory Declaration 26

Report of the Auditors’ 27 Income Statements 28 Balance Sheets 29

Statements of Changes in Equity 30

Cash Flow Statements 31 Notes to the Financial Statements 32 - 54

ENVAIR HOLDING BERHAD(formerlyknownasRubyQuestBerhad)(412406-T)(IncorporatedinMalaysia)

23

Directors’ Report The directors have pleasure in submitting their report and the audited financial statements of the Group and the Company for the financial year ended 31 December 2007. Change of NameThe Company had changed its name from Ruby Quest Berhad to Envair Holding Berhad on 22 June2007. Principal Activities TheprincipalactivitiesoftheCompanyareinvestmentsholdingandtheprovisionofmanagementservices.Theprincipal activities of the Group consist of manufacturing and distribution of air and water filters, installation of cleanroomandwatertreatmentsystemandprovidingtechnicalandmanagementservices. There have been no significant changes in the nature of these activities during the financial year. TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandlistedontheMESDAQ Market of the Bursa Malaysia Securities Berhad. Its registered office is situated at No.6, Jalan Salung 33/26,Seksyen33,ShahAlamTechnologyPark,40400ShahAlam,SelangorDarulEhsan,Malaysia. Financial Results Group Company RM RM Lossaftertaxation (3,892,639) (878,009)Reserves and Provisions All material transfers to or from reserves and provisions during the year are shown in the financial statements. Share Capital During the financial year, no allotment and issue of shares was made by the Company. Directors The directors who have held office during the period since the date of the last report are as follows: WongPengYew LimFooSeng SimKengSiong ShinichiYamamoto LooiKemLoong KoayBenRee TanSriDato’MohamedNoordinBinHassan(Resignedon15July2007)

Directors’ Interests The following directors who held office at the end of the financial year had, according to the register required to bekeptunderSection134oftheCompaniesAct,1965,aninterestinsharesoftheCompanyasstatedbelow: NumberofordinarysharesatRM0.10each At At 1.1.2007 Acquired Sold 31.12.2007InterestinsharesoftheCompany Directinterest: WongPengYew 22,745,199 - 1,848,000 20,897,199LimFooSeng 2,320,280 - - 2,320,280SimKengSiong 11,354,840 789,000 2,135,000 10,008,840ShinichiYamamoto 20,000 20,000 15,000 25,000LooiKemLoong 20,000 - - 20,000KoayBenRee - 130,000 60,000 70,000Indirectinterestbyvirtueoftheinterest heldbythespouseofSimKengSiong 32,010 - - 32,010

D I R E C T O R S ’R E P O R T

24 25

Directors’interests(Cont’d)

Byvirtueoftheabovedirectors’shareholdingsinEnvairHoldingBerhad(formerlyknownasRubyQuestBerhad),theyaredeemedtohaveaninterest intheordinarysharesofcompaniesundertheEnvairHoldingBerhad’sgroupofcompanies,totheextentoftheCompanyhasaninterest.

Directors’Benefits

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than those disclosed in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest. Neither during nor at the end of the financial year was the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of acquisition of shares in or debentures of the Company oranyotherbodycorporate.

Other Statutory Information BeforetheincomestatementsandbalancesheetsoftheGroupandtheCompanyweremadeout,thedirectorstookreasonablesteps:

(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and had satisfied themselves that all known bad debts had beenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts;and

(b) toensure thatanycurrentassets,other thandebts,whichwereunlikely to realise in theordinarycourse ofbusiness theirvaluesas shown in theaccounting recordsof theGroupand theCompanyhadbeen writtendowntoanamountwhichtheymightbeexpectedsotorealise. Atthedateofthisreport,thedirectorsarenotawareofanycircumstances: (a) which would render the amounts written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and the Company inadequate to any substantial extent; or (b) which would render the values attributed to current assets in the financial statements of the Group and theCompanymisleading;or

(c) whichhavearisenwhich renderadherence to theexistingmethodofvaluationofassetsor liabilitiesof theGroupandtheCompanymisleadingorinappropriate. Nocontingentorotherliabilityhasbecomeenforceableorislikelytobecomeenforceablewithintheperiodoftwelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affecttheabilityoftheGroupandtheCompanytomeettheirobligationsasandwhentheyfalldue. Atthedateofthisreport,theredoesnotexist: (a) any charge on the assets of the Group and the Company which has arisen since the end of the financial year which secures the liability of any other person; or (b) any contingent liability of the Group and the Company which has arisen since the end of the financial year. At thedateof this report, thedirectorsarenotawareofanycircumstancesnototherwisedealtwith in this report or the financial statements which would render any amount stated in the financial statements misleading.

D I R E C T O R S ’ R E P O R T

24 25

otherstatutoryinformation(Cont’d) Intheopinionofthedirectors: (a) the results of the Group’s and the Company’s operations during the financial year were not substantially affectedbyanyitem,transactionoreventofamaterialandunusualnature;and

(b) 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 the Company for the financial year in which this report is made.

Auditors The auditors, Yong & Leonard, have expressed their willingness to continue in office.

SignedinaccordancewitharesolutionoftheBoardofDirectors: SIM KENG SIONG LIM FOO SENGDirector Director

21April2008

D I R E C T O R S ’R E P O R T

26 27

Statement by Directors PursuanttoSection169(15)oftheCompaniesAct,1965 We,SimKengSiongandLimFooSeng,beingtwoofthedirectorsofEnvairHoldingBerhad(formerlyknownasRuby Quest Berhad), do hereby state that, in the opinion of the directors, the financial statements set out on pages28to54aredrawnupsoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompany as at 31 December 2007 and of the results and cash flows of the Group and of the Company for the yearendedonthatdateinaccordancewithMalaysianAccountingStandardsBoardapprovedaccountingstandardsforentitiesotherthanprivateentitiesandtheprovisionsoftheCompaniesAct,1965.

SignedinaccordancewitharesolutionoftheBoardofDirectors: SIM KENG SIONG LIM FOO SENGDirector Director

21April2008

Statutory Declaration PursuanttoSection169(16)oftheCompaniesAct,1965 I, Lim Foo Seng, being the director primarily responsible for the financial management of Envair Holding Berhad (formerly known as Ruby Quest Berhad), do solemnly and sincerely declare that the financial statements set out onpages28to54are,inmyopinion,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

Subscribedandsolemnlydeclaredby ) LimFooSeng ) atPetalingJayainthestateofSelangorDarulEhsan ) on21April2008 ) LIM FOO SENG Beforeme,

CommissionerForOaths

S T A T E M E N T B Y T H E D I R E C T O R S / S T A T U T O R Y D E C L A R A T I O N

26 27

Report of the Auditors to the members of ENVAIR HOLDING BERHAD (formerly known as Ruby Quest Berhad) (412406-T) We have audited the financial statements set out on pages 28 to 54. These financial statements are the responsibilityoftheCompany’sdirectors.

It is our responsibility to form an independent opinion, based on our audit, on the financial statements and to reportouropiniontoyou,asabody,inaccordancewithSection174oftheCompaniesAct1965andfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport. Weconductedouraudit inaccordancewithApprovedStandardsonAuditing inMalaysia.Thosestandardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingthe amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Inouropinion: (a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act,1965andMalaysianAccountingStandardsBoardapprovedaccountingstandardsforentitiesother thanprivateentitiesinMalaysiasoastogiveatrueandfairviewof: (i) the financial position of the Group and the Company as at 31 December 2007 and of the result and the cash flow of the Group and the Company for the year then ended; and

(ii) the matters required by Section 169 of the Companies Act 1965 to be dealt with in the financial statements;and (b) theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheGroupandthe CompanyhavebeenproperlykeptinaccordancewiththeprovisionsoftheAct. The names of the subsidiaries of which we have not acted as auditors are disclosed in Note 15 to the financial statements. We have considered the financial statements of these subsidiaries and the auditors reports thereon. 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 as required byusforthesepurposes.

The auditors' report on the financial statements of the subsidiaries were not subject to any qualification and did notincludeanyadversecommentmadeundersubsection(3)ofSection174oftheAct. YONG & LEONARD LIM TZEH FOONG FirmNumber:AF0075 ApprovalNumber:2553/03/09(J)Chartered Accountants Partner of the firm

21April2008

R E P O R T O F T H E A U D I T O R S

28 29

Income Statementsfor the year ended 31 December 2007

Group Company

2007 2006 2007 2006 Note RM RM RM RM Revenue 4 22,552,425 27,499,057 726,000 6,598,396

Otheroperatingincome 5 381,436 397,237 74,124 98,290 Impairmentofinvestmentinsubsidiary - - (603,000) (130,000) Operatingexpenses 6 (26,985,414) (25,566,486) (1,065,213) (715,128) (Loss) / Profit from operations (4,051,553) 2,329,808 (868,089) 5,851,558 Financecosts 7 (607,358) (404,636) (7,505) -

(Loss) / Profit before taxation 8 (4,658,911) 1,925,172 (875,594) 5,851,558 Taxation 11 766,272 (492,676) (2,415) (1,612,136) (Loss) / Profit for the year (3,892,639) 1,432,496 (878,009) 4,239,422

(Loss)/Earningspershare -Basic(Sen) 12 (3.97) 1.46

I N C O M E S T A T E M E N T S

28 29

Balance Sheets as at 31 December 2007 Group Company 2007 2006 2007 2006 Note RM RM RM RM Non-Current Assets Property,Plantandequipment 13 9,374,317 9,194,860 67,037 9,066 Intangibleassets 14 217,376 69,360 - - Investmentsinsubsidiaries 15 - - 3,276,006 3,379,006 Deferredtaxassets 17 842,275 104,920 - - Goodwillonconsolidation 18 - 79,815 - - 10,433,968 9,448,955 3,343,043 3,388,072

Current Assets Amountduefromcustomeroncontract 19 1,004,077 - - - Inventories 20 5,338,396 5,304,703 - - Tradereceivables 21 13,572,034 15,471,884 - - Otherreceivable,depositsandprepayments 1,233,696 2,210,646 34,596 32,079 Amountduefromsubsidiaries 22 - - 12,354,365 12,352,366 Taxrefundable 130,681 33,340 17,805 9,881 Placementwithlicensedbanks 23 3,900,000 4,191,569 800,000 1,650,000 Cashandbankbalances 1,180,895 1,337,932 29,252 11,734 26,359,779 28,550,074 13,236,018 14,056,060

Less: Current Liabilities Tradepayables 6,092,016 5,280,338 - - Otherpayablesandaccruals 306,533 524,031 79,125 85,147 Amountduetosubsidiaries 22 - - 98,038 98,516 Provisionforroyaltyexpenses - 183,110 - - Provisionfortaxation 331,624 660,297 - - Borrowings(secured) 24 -bankoverdrafts 3,029,079 2,378,529 19,438 - -others 3,811,268 1,533,976 - - 13,570,520 10,560,281 196,601 183,663

Net Current Assets 12,789,259 17,989,793 13,039,417 13,872,397

Less: Non-Current Liabilities Borrowings(secured) 24 5,234,198 5,496,802 - - Deferredtaxliabilities 25 1,764 62,042 - - 5,235,962 5,558,844 - -

17,987,265 21,879,904 16,382,460 17,260,469

Capital and Reserves Sharecapital 26 9,798,000 9,798,000 9,798,000 9,798,000 Sharepremium 7,397,536 7,397,536 7,397,536 7,397,536 Retained profits / (Accumulated losses) 791,729 4,684,368 (813,076) 64,933 Shareholders’ Equity 17,987,265 21,879,904 16,382,460 17,260,469

The annexed notes form an integral part of these financial statements

B A L A N C E S H E E T S

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Statements of Changes in Equity for the year ended 31 December 2007

Non- distributable Distributable Share Share Retained capital premium profits Total (Note 26) RM RM RM RM Group At1January2006 9,798,000 7,397,536 3,251,872 20,447,408 Profit for the year - - 1,432,496 1,432,496 At31December2006 9,798,000 7,397,536 4,684,368 21,879,904 Lossfortheyear - - (3,892,639) (3,892,639) At31December2007 9,798,000 7,397,536 791,729 17,987,265 Company

At1January2006 9,798,000 7,397,536 (4,174,489) 13,021,047 Profit for the year - - 4,239,422 4,239,422 At31December2006 9,798,000 7,397,536 64,933 17,260,469 Lossfortheyear - - (878,009) (878,009) At31December2007 9,798,000 7,397,536 (813,076) 16,382,460


S T A T E M E N T S O FC H A N G E S I N E Q U I T Y

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Cash Flow Statements for the year ended 31 December 2007 Group Company 2007 2006 2007 2006 Note RM RM RM RM Operating Activities (Loss) / Profit before taxation (4,658,911) 1,925,172 (875,594) 5,851,558 Adjustmentsfor: Depreciation 697,534 385,514 5,698 474 Amortisationofintangibleassets 16,844 - - - Impairmentlossongoodwill 79,815 95,888 - - Provisionforroyaltyexpenses (183,110) 41,775 - - Provisionfordoubtfuldebts 106,547 - - - Provisionfordiminutioninvalueinassociated company - - 603,000 130,000 Plantandequipmentwrittenoff - 496 - - Gainondisposalsofplantandequipment (59,699) (17,639) - - Lossondisposalofproperty,plantandequipment - 753 - - Baddebtsrecovered - (14,110) - - Interestincome (154,547) (217,064) (34,124) (98,290) Interestexpense 607,358 404,636 7,505 -Operating (loss) / profit before workingcapitalchanges (3,548,169) 2,605,421 (293,515) 5,883,742Amountduefromcustomers (1,004,077) - - -Inventories (33,693) (2,736,647) - -Receivables 2,801,036 864,869 (2,517) (20,462)Payables 594,180 (1,500,967) (6,022) 25,495Amountduefromsubsidiaries - - (1,999) (8,181,189)Amountduetosubsidiaries - - (478) (1,383) Cashusedinoperations (1,190,723) (767,324) (304,531) (2,293,797) Interestreceived 123,764 162,752 34,124 98,290Interestpaid (296,057) (225,218) (7,505) -Taxpaid (457,375) (1,048,128) (10,339) (1,639,423) Netcashusedinoperatingactivities (1,820,391) (1,877,918) (288,251) (3,834,930) Investing Activities 27 (1,732,097) (2,305,118) (1,063,669) (509,538) Financing Activities 28 1,394,901 (550,738) - - Netdecreaseincashandcashequivalents (2,157,587) (4,733,774) (1,351,920) (4,344,468) Cashandcashequivalentsatbeginningofyear 609,403 5,343,177 1,661,734 6,006,202 Cash and cash equivalents at end of year 29 (1,548,184) 609,403 309,814 1,661,734


C A S H F L O W S T A T E M E N T S

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Notes to the Financial Statementsfortheyearended31December2007 1. Accounting Policies

(a) Basis of preparation

The financial statements of the Group and the Company have been prepared under the historical cost convention and comply with Malaysian Accounting Standards Board approved accounting standardsforentitiesotherthanprivateentitiesandtheprovisionsoftheCompaniesAct,1965. The preparation of financial statements in conformity with the Malaysian Accounting Standards Board approved accounting standards for entities other than private entities requires the use of certain criticalaccountingestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reportedamountsofrevenuesandexpensesduringthereportedperiod.Italsorequiresdirectorsto exercisetheirjudgmentintheprocessofapplyingtheGroup’sandCompany’saccountingpolicies. Althoughtheseestimatesandjudgmentarebasedonthedirectors’bestknowledgeofcurrentevents andactions,actualresultsmaydiffer. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2.

(i) Standards, amendments to published standards and interpretations that are effective The new accounting standards, amendments to published standards and IC Interpretations, if applicable, to existing standards effective for the Group’s financial period beginning on or after 1January2007areasfollows:

FRS117 Leases FRS124 RelatedParty Allchangesinaccountingpolicieshavebeenmadeinaccordancewiththetransitionprovisions intherespectivestandards,amendmentstopublishedstandardsandinterpretations.

(ii) Standards, amendments to published standards and interpretations to existing standards that are not yet effective and have not been early adopted Thenewstandards,amendmentstopublishedstandardsandinterpretationsthataremandatory for the Group’s financial periods beginning on or after 1 January 2007 or later periods, but which theGrouphasnotearlyadopted,areasfollows: FRS 107 Cash Flow Statements (effective for accounting periods beginning on or after 1 July 2007). This standard will affect the classification and disclosure in cash flow statements. The Group will apply this standard from financial year beginning on 1 January 2008. FRS112 IncomeTaxes (effective foraccountingperiodsbeginningonorafter1July2007). This standardprescribetheaccountingtreatmentforincometaxesanddeferredtax.TheGroupwill apply this standard from financial year beginning on 1 January 2008. FRS118Revenue(effectiveforaccountingperiodsbeginningonorafter1July2007).Thisstandards established principles for recognising revenue and disclosure in the financial statement. The Group will apply this standard from financial year beginning on 1 January 2008. FRS137Provisions,ContingentLiabilitiesandContingentAssets(effectiveforaccountingperiods beginningonorafter1July2007).Thisstandardestablishedprinciplesforrecognisingandmeasuring provisions, contingent liabilities and contingent assets for the disclosure in financial statements. The Group will apply this standard from financial year beginning on 1 January 2008.

N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

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1. accountingPolicies(Cont’d) (ii) standards,amendmentstopublishedstandardsandinterpretationstoexistingstandardsthatare notyeteffectiveandhavenotbeenearlyadopted(Cont’d)

FRS139FinancialInstruments:RecognitionandMeasurement(effectivedateyettobedetermined by Malaysian Accounting Standards Board). This new standard establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. The Group will apply this standard when effective.

(b) Property, plant and equipment Property,plantandequipmentarestatedatcostlessaccumulateddepreciationandanyimpairment losses.Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems. Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateassets,as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company 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 the income statement during the financial year in which they are incurred. Freehold land is not depreciated as it has an infinite life. Other property, plant and equipment are depreciatedonastraightlinebasistowriteoffthecostofplantandequipmentovertheirestimated usefullivestotheirresidualvalueatthefollowingannualrates: Factorybuilding 2% Building 2% Renovation 2%-10% Motorvehicles 10%-20% Plantandmachineries 20%-33% Otherassets 10%-15%

Residualvaluesandusefullivesofassetsarereviewed,andadjustedifappropriate,ateachbalance sheetdate.

(c) Subsidiaries Subsidiaries are those companies in which the Group has power to exercise control over the financial and operating policies so as to obtain benefits from their activities, generally accompanying a shareholdingofmorethanonehalfofthevotingrights.Theexistenceandeffectofpotentialvoting rightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGroup controlsanotherentity.Subsidiariesareconsolidatedfromthedateonwhichcontrolistransferredto theGroupandarenolongerconsolidatedfromthedatethatcontrolceases. Subsidiariesareconsolidatedusingtheacquisitionmethodofaccounting.Undertheacquisitionmethod of accounting, the results of subsidiaries acquired or disposed of are included from the date of acquisitionuptothedateofdisposal.Atthedateofacquisition,thefairvaluesofthesubsidiaries’net assets are determined and these values are reflected in the consolidated financial statements. The difference between the cost of acquisition over the Group’s share of the fair value of the identifiable net assets of the subsidiary acquired at the date of acquisition is reflected as goodwill or reserve on consolidation. Intra-group transactions, balances and unrealised gains on transactions are eliminated. Unrealised lossesarealsoeliminatedunlesscostcannotberecovered. (d) Associates Associates are enterprises in which the Group exercises significant influence, but which it does not control. Significant influence is the power to participate in the financial and operating policy decisions oftheassociatesbutnotthepowertoexercisecontroloverthosepolicies.Investmentsinassociates are accounted for in the consolidated financial statements by the equity method of accounting.


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1. accountingPolicies(Cont’d) (d) associates(Cont’d)

EquityaccountinginvolvesrecognisingtheGroup’sshareofthepostacquisitionresultsofassociates in the income statement and its share of post acquisition movements in reserves is recognised in reserve.Thecumulativepostacquisitionmovementsareadjustedagainstthecostoftheinvestment and includes goodwill on acquisition (net of accumulated amortisation). Equity accounting is discontinuedwhenthecarryingamountof the investment inanassociate reacheszero,unless the Grouphasincurredobligationsormadepaymentsonbehalfoftheassociate. UnrealisedgainsontransactionsbetweentheGroupanditsassociatesareeliminatedtotheextent oftheGroup’s interest intheassociates;unrealisedlossesarealsoeliminatedunlessthetransaction providesevidenceon impairmentoftheassettransferred.Wherenecessary, inapplyingtheequity method, adjustments are made to the financial statements of associates to ensure consistency of accountingpolicieswiththoseoftheGroup. (e) Intangible assets

(i) Research and development Researchexpenditureisrecognisedasanexpensewhenincurred.Costsincurredondevelopment projects (relating to the design and testing of new or improved products) are recognised as intangible assets when the following criteria are fulfilled:

(a) itistechnicallyfeasibletocompletetheintangibleassetsothatitwillbeavailableforuseor sale; (b) managementintendstocompletetheintangibleassetanduseorsellit; (c) thereisanabilitytouseorselltheintangibleasset; (d) itcanbedemonstratedhowthe intangibleassetwillgenerateprobablefutureeconomic benefits; (e) adequate technical, financial and other resources to complete the development and to use orselltheintangibleassetareavailable;and (f) theexpenditureattributabletotheintangibleassetduringitsdevelopmentcanbereliably measured.

Otherdevelopmentexpendituresthatdonotmeetthesecriteriaarerecognisedasanexpense whenincurred.Developmentcostspreviouslyrecognisedasanexpensearenotrecognisedasan asset inasubsequentperiod.Capitaliseddevelopmentcostsarerecordedas intangibleassets andamortisedfromthepointatwhichtheasset isreadyforuseonastraight linebasisover its useful life, not exceeding five years.

Developmentassetsaretestedforimpairmentannually,inaccordancewithFRS136. (ii) Goodwill Goodwillrepresentstheexcessofthecostofacquisitionofsubsidiariesoverthefairvalueofthe Group’s share of the identifiable net assets at the date of acquisition.

Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment lossesongoodwillarenot reversed.Gainsand losseson thedisposalofan entityincludethecarryingamountofgoodwillrelatingtotheentitysold. (f) Impairment of assets Thecarryingamountsof theGroup’sandof theCompany’sassetsare reviewedateachbalance sheetdatetodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairment loss. Ifany such indicationexists, impairment ismeasuredbycomparing thecarryingvaluesof the assetswiththeirrecoverableamounts.Recoverableamountisthehigherofnetsellingpriceandvalue in use, which is measured by reference to discounted future cash flows. Recoverable amounts are estimatedforindividualassetsor,ifitisnotpossible,forthecash-generatingunitstowhichtheassets belong.


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1. accountingPolicies(Cont’d) (f) impairmentofassets(Cont’d)

Theimpairmentlossischargedtotheincomestatementandanysubsequentincreaseinrecoverable amountisrecognisedintheincomestatement. (g) Finance lease

Leases of plant and equipment where the Group assumes substantially all the benefits and risks of ownership are classified as finance leases. Financeleasesarecapitalisedattheinceptionoftheleaseatthelowerofthefairvalueoftheleased property or the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the income statement over the lease period soastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliabilityforeach period. Property, plant and equipment acquired under finance leases are depreciated over the estimated usefullifeoftheasset.Wherethereisnoreasonablecertaintythattheownershipwillbetransferredto theCompany,theassetisdepreciatedovertheshorteroftheleasetermanditsestimatedusefullife.

(h) Inventories Inventories are valued at the lower of cost and net realisable value determined on the first-in-first-out basis. Net realisable value is the estimated selling price in the ordinary course of business, lessthecostofcompletionandsellingexpenses. (i) Receivables

Trade and other receivables are carried at anticipated realisable value. Specific provisions are made for debts which have been identified as bad or doubtful. (j) Long term contracts When the outcome of a long time contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that is probable will be recoverable and contractcostsarerecognisedasexpenses. Whentheoutcomeofalongtermcontractcanbeestimatedreliably,contractrevenueandcontract costs are recognised over the period of the contract as revenue and expenses respectively. The Groupusesthepercentageofcompletionmethodtodeterminetheappropriateamountofrevenue andcosttorecogniseinagivenperiod;thestageofcompletionismeasuredbyreferencetocontract costsincurredforworkperformedtodatebeartotheestimatedtotalcostsforthecontract.Whenit isprobablethattotalcontractcostswillexceedtotalcontractrevenue,theexpectedlossisrecognised asanexpenseimmediately. The aggregate of the costs incurred and the profit or loss recognised in each contract is compared against the progress billings up to the year end. Where costs incurred and recognised profit (less recognisedlosses)exceedprogressbillings,thebalanceisshownasamountsduefromcustomerson longtermcontractsundercurrentassets.Whenprogressbillingsexceedcostsincurredplusrecognised profit (less recognised losses), the balance is shown as amounts due to customers on long term contracts undercurrentliabilities.


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1. accountingPolicies(Cont’d) (k) Cash and cash equivalents For the purposes of the cash flow statements, cash and cash equivalents comprise cash in hand, depositsheldatcallwithbanks,othershortterm,highlyliquidinvestmentswithoriginalmaturitiesof threemonthsor lessandbankoverdrafts.Bankoverdraftsare includedwithinborrowings incurrent liabilitiesonthebalancesheet.

(l) Share capital

Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity. Other shares are classified as equity or liability according to the economic substance of the particularinstrument.

Distribution to holders of a financial instrument classified as an equity instrument is charged directly to equity. (m) Income taxes

CurrenttaxexpenseisdeterminedaccordingtothetaxlawsofMalaysiaandincludealltaxesbased upon the taxable profits including real property gain taxes payable on disposal of properties, if any. Deferredtaxisrecognisedinfull,usingtheliabilitymethod,ontemporarydifferencesarisingbetween the amounts attributed to assets and liabilities for tax purposes and their carrying amounts in the financial statements.

Deferred tax assets are recognised to the extent that it is probable the taxable profits will be available againstwhichthedeductibletemporarydifferencesorunusedtaxlossescanbeutilised.

Taxratesenactedorsubstantivelyenactedbythebalancesheetdateareusedtodeterminedeferred tax.

(n) Provisions

ProvisionsarerecognisedwhentheGrouphasapresentlegalorconstructiveobligationasaresultof past events, when it is probable that an outflow of resources will be required to settle the obligation, andwhenareliableestimateoftheamountcanbemade. (o) Revenue recognition

Revenue is recognised upon delivery of goods, net of discounts and returns / upon rendering of services. RevenuesfromlongtermcontractsarerecognisedinaccordancewithNote1(j). Otherrevenuesearnedarerecognisedasfollows:

Gross dividend income from investment is recognised when the right to receive payment is established.

Salescommission,managementfeeandadministrativechargesandinterestincomearerecognised astheyaccrue.Rentalincomeisrecognisedonaccrualbasisinaccordancewiththesubstanceof therentalagreement. (p) Currency translation (i) Functionalandpresentationcurrency Items included in the financial statements of each of the Group’s entities are measured using thecurrencyoftheprimaryeconomicenvironmentinwhichtheentityoperates(the“functional currency”). The financial statements are presented in Ringgit Malaysia, which is the Group’s functionalandpresentationcurrency.


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1. accountingPolicies(Cont’d) (p) Currencytranslation(Cont’d)

(ii) Transactionsandbalances

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfrom settlementofsuchtransactionsandfromthetranslationatyearendexchangeratesofmonetary assetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedintheincomestatement. (q) Financial instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise underconditionsthatarepotentiallyfavourable,oranequityinstrumentofanotherenterprise. A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditionsthatarepotentiallyunfavourable. The particular recognition methods adopted for financial instruments recognised on the balance sheet isdisclosedintheindividualaccountingpolicystatementsassociatedwitheachitem. (r) Segment reporting

Segment reporting is presented for enhanced assessment of the Group’s risk and returns. Business segmentsprovideproductsorservicesthataresubjecttoriskandreturnsthataredifferentfromthose ofotherbusinesssegments.Geographicalsegmentsprovideproductsorserviceswithinaparticular economicenvironment that is subject to riskand returns thataredifferent fromthosecomponents operatinginothereconomicenvironments. Segment revenue, expense, assets and liabilities are those amounts resulting from the operating activities ofa segment thataredirectlyattributable to the segmentand the relevantportion that can be allocated on a reasonable basis to the segment. Segment revenue, expense, assets and segment liabilities are determined before intragroup balances and intragroup transactions are eliminatedaspartoftheconsolidationprocess,excepttotheextentthatsuchintragroupbalances andtransactionsarebetweengroupenterpriseswithinasinglesegment. 2. Critical accounting estimates and judgments Estimatesandjudgmentarecontinuallyevaluatedbythedirectorsandarebasedonhistoricalexperience andotherfactors, includingexpectationsoffutureeventsthatarebelievedtobereasonableunderthe circumstances. TheGroupmakesestimatesandassumptionsconcerning the future. The resultingaccountingestimates will, by definition, rarely equal the related actual results. To enhance the information content of the estimates, certain key variables that are anticipated to have material impact to the Group’s results and financial positionaretestedforsensitivitytochangesintheunderlyingparameters.Theestimatesandassumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below. (a) Estimated impairment of goodwill The Group tests goodwill for impairment annually in accordance with its accounting policy. More regularreviewsareperformedifeventsindicatethatthisisnecessary.


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2. Criticalaccountingestimatesandjudgments(Cont’d) (b) Deferred tax assets

Deferred tax asset is recognised to the extent that it is probable that future taxable profit will be availableagainstwhichthetemporarydifferencescanbeutilised.Thisinvolvesjudgmentregarding the future financial performance of the particular entity in which the deferred tax asset has been recognised.

If the projected growth rate applied in the profit projections had been lower by 10% from management’s estimatesasat31December2007,therewouldbenodeferredtaxassetsneededtobewrittendown asanexpensetotheincomestatement. (c) Long term contracts

TheGrouprecognisescontractrevenuebasedonthepercentageofcompletionmethod.Thestage ofcompletionismeasuredbyreferencetothecontractcostsincurredtodatetotheestimatedtotal costs for the contract. Significant judgment is required in determining the stage of completion, the extentofthecontractcostsincurred,theestimatedtotalcontractrevenue(forcontractsotherthan fixed price contracts) and contracts costs, as well as the recoverability of the contracts. Total contract revenuealsoincludesanestimationoftherecoverablevariationworksthatarerecoverablefromthe customers.Inmakingthejudgment,theGroupreliedonthepastexperienceandworkofspecialists. Iftheestimatedtotalcontractrevenueincrease/decreaseby10%frommanagement’sestimates,the Grouprevenuewillincrease/decreasebyRM61,000andRM61,000respectively.

Iftheestimatedtotalcontractcostsincrease/decreaseby10%frommanagement’sestimates,the Grouprevenuewilldecrease/increasebyRM55,000andRM68,000respectively.

3. Financial Risk Management

(a) Objectives and policies

The Group’s financial risk management framework whose principal objective is to minimise the Group exposure to risks and / or costs associated with the financing, investing and operating activities of the Group. The overall financial risk management objective is to ensure that the Group creates value foritsshareholders.

The task of identifying and evaluating the key business risks is undertaken by the executive board members and executive management who will be responsible for the establishment and implementation of appropriate systems to manage these risks. Various risk management actions aretakendependingontheassessmentoftheimpactandlikelihoodoftherisk. (b) Foreign currency risk The Group does not have significant foreign currency exposure to any effects of foreign currency exchange rate fluctuations as at 31 December 2007.

The Group policy is to manage all its foreign financial assets and liabilities using the best available foreigncurrencyexchangerateswhereapplicable.Transactionalexposuresincurrenciesotherthan theentity’sfunctionalcurrency,ifany,arekeptataminimallevel. (c) Interest rate risk The Group’s income and operating cash flows are substantially independent of changes in market interestrates.InterestrateexposurearisesfromtheGroup’sborrowings,andismanagedthroughthe use of fixed and floating rate debts.


3. Financialriskmanagement(Cont’d)

(d) Market risk For key product purchases, the Company establishes floating and fixed price levels that the Company considers acceptable and enters physical supply or derivative agreements, where necessary, to achievetheselevels. (e) Fair values The carrying amounts of financial assets and liabilities of the Group and Company at the balance sheetdateapproximatedtheirfairvaluesexceptassetoutbelow: Group Company Carrying Fair Carrying Fair amount value amount value RM RM RM RM

Financial assets Investmentsinsubsidiaries - - 3,276,006 ^ Amountduefromsubsidiaries - - 12,354,365 * Financial liabilities Amountduetosubsidiaries - - 98,038 * Financeleaseliabilities 1,042,876 953,369 - - Termloan1 4,121,913 - - Termloan2 467,531 # - - Termloan3 137,729 # - - ^ Itwasnotpracticablewithintheconstraintsoftimelinessandcosttoestimatereliablythefairvalueof the shares in subsidiaries. At the balance sheet date, the net tangible assets reported by the subsidiarieswashigherthanthecarryingamountabove. Itwasnotpracticablewithintheconstraintsofcosttoestimatethesefairvaluesreliably. * It is not practicable to estimate the fair values of these amounts due principally to a lack of fixed repaymenttermsenteredbythepartiesinvolvedandwithoutincurringexcessivecosts.However, theGroupandtheCompanydonotanticipatethecarryingamountsrecordedatbalancesheet date to be significantly different from the values that would eventually be received or settled. # ThecarryingamountoftheGroup’stermloansapproximatethefairvaluedueprincipallytoa floating interest rate implicit in the loans. The Company believes that the carrying amount at balance sheet date closely resembles fair value of similar type of borrowings, quoted at a floating rate.

The methods and assumptions used to estimate the fair values of the following classes of financial instrumentsareprovidedbelow:- (i) Cashandcashequivalents,tradeandotherreceivables,andtradeandotherpayables The carrying amounts approximate fair values due to the relatively short term maturity of these financial instruments.

(ii) Financeleaseliabilities The fair value of finance lease liabilities is estimated using the discounted cash flow analysis based on current incremental lending rates for similar types of lending and borrowing arrangements.

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3. Financialriskmanagement(Cont’d)

(f) Credit risk Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. It is controlled by the application of credit monitoring procedures.CreditrisksareminimisedandmonitoredviastrictlylimitingtheGroup’stradingpartiesto business partners with high creditworthiness. The Group has no significant concentrations of credit risk.

(g) Liquidityandcashflowrisks The Group actively manages its debts maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall prudent liquidity management, the Group maintains sufficient levels of cash or cash equivalents to meetitsworkingcapitalrequirements. 4. Revenue Group Company 2007 2006 2007 2006 RM RM RM RM

Invoicedvalueofgoodssoldand longtermcontracts 22,552,425 27,499,057 - - Renderingofmanagementservices tosubsidiaries - - 726,000 600,000 Dividends-subsidiaries - - - 5,998,396

22,552,425 27,499,057 726,000 6,598,396 5. Other Operating Income Baddebtsrecovered - 14,110 - - Labourandinstallationcharges - 19,700 - - Interestincome 154,547 217,064 34,124 98,290 Netrealisedgaininforeignexchange 119,292 103,568 - - Rentalincome 47,735 14,000 - - Reversalofprovisionfordiminutioninvalue - - 40,000 - Gainondisposalsofplantandequipment 59,699 17,639 - - Sundryincome 163 11,156 - -

381,436 397,237 74,124 98,290 6. Operating Expenses

Changes in inventories of finished goods (405,311) (1,509,165) - - Purchaseofrawmaterials,tradinggoods, consumablesusedandlongtermcontractcost 20,187,046 20,071,873 - - Directcost 762,816 1,411,426 - - Employee benefit expenses 3,337,994 3,004,478 660,042 514,406 Depreciation 697,534 385,514 5,698 474 Otheroperatingexpenses 2,405,335 2,202,360 399,473 200,248 26,985,414 25,566,486 1,065,213 715,128

7. Finance costs Trustreceiptsand bankers’acceptancecharges 122,663 62,997 - - Bankinterest 173,394 162,221 7,505 - Financeleaseinterest 52,873 25,077 - - Termloaninterest 258,428 154,341 - -

607,358 404,636 7,505 -


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8. (Loss)/Profitbeforetaxation Group Company 2007 2006 2007 2006 RM RM RM RM (Loss) / Profit before taxation is arrived after:- -charging Auditors’remuneration -Currentyear 50,500 57,700 7,000 7,000 -Underprovisioninprioryears 4,584 - 3,000 - Lossondisposalsofplantandequipment - 753 - - Depreciationofproperty,plant andequipment 697,534 385,514 5,689 474 Impairmentlosses -Investmentinsubsidiaries - - 603,000 130,000 -Goodwill 79,815 95,888 - - Office rental expenses 61,293 370,500 - 25,000 Provisionforroyaltyexpenses - 41,775 - - Plantandequipmentwrittenoff - 496 - - -and(crediting) Baddebtsrecovered - (14,110) - - Gainondisposalsofplantandequipment (59,696) (17,639) - - Netgaininforeignexchange (119,292) (103,568) - - Provisionforroyaltyexpenseswrittenback (183,110) - - -

9. Directors’ Remuneration The directors of the Company in office during the year were as follows:

Non Executive Directors ShinichiYamamoto LooiKemLoong WongPengYew KoayBenRee(Appointedwitheffectfrom23February2007) TanSriDato’MohamadNoordinBinHassan(Resignedon15July2007) MdHilmiBinDatukHjMdNoor(Resignedon23February2007) Executive directors LimFooSeng SimKengSiong TheaggregateamountofemolumentsreceivablebydirectorsoftheCompanyduringtheyearwereas follows: Non-executivedirectors: -Fees 58,481 60,833 58,481 60,833 Executivedirectors: -Salariesandotheremoluments 324,000 448,962 155,000 132,000 - Defined contribution plan 40,800 39,900 18,600 15,840 - Estimated money value of benefits-in-kind 17,592 18,992 8,796 -

440,873 568,687 240,877 208,673 The number of directors of the Company whose total remuneration for the financial year ended 31 December 2007fellwithinthefollowingbandsisanalysedbelow: Executive directors: Number of directors BelowRM50,000 - RM50,001-RM100,000 - RM100,001-RM200,000 2 RM200,001-RM300,000 - Non-executive directors: BelowRM50,000 4


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10. Auditors’ Remuneration

Group Company 2007 2006 2007 2006 RM RM RM RM Yong & Leonard and their affiliates Statutoryaudit(Note8) 28,000 35,200 7,000 7,000 Feesforotherservices: -reviewofstatementofinternalcontrol 1,600 1,800 1,600 1,800 andcompliancework -taxadvisory 15,800 9,200 2,200 1,000

45,400 46,200 10,800 9,800 11. Taxation MalaysianIncomeTax -Currentyear’sprovision 5,290 489,824 - 1,614,406 -Under/(over)provisioninprioryears 26,071 23,072 2,415 (2,270) -Deferredtax(Notes17and25) - Originationandreversaloftemporary differences (797,633) (20,220) - -

(766,272) 492,676 2,415 1,612,136

Taxsavingasaresultofutilisationofcurrent yearcapitalallowancesforwhichcreditis recognisedduringtheyear - 56,089 - -

The explanation of the relationship between tax (expense) / income and (loss) / profit from ordinary activities beforetaxisasfollows: Numericalreconciliationbetweentax (expense)/incomeandtheproduct of accounting (loss) / profit multiplied bytheMalaysiantaxrate (Loss) / Profit from ordinary activities beforetax (4,658,911) 1,925,172 (875,594) 5,851,558

TaxcalculatedattheMalaysiantaxrate of27%(2006:28%) (1,258,208) 539,048 (236,410) 1,638,437 Taxeffectof: -expensesnotdeductiblefortaxpurposes 260,920 251,521 195,428 56,992 -incomenotsubjecttotax (8,735) (90,955) (113) (81,155) -utilisationofpreviously unrecogniseddeferredtaxassets 112,236 (53,464) - - -deferredtaxassets/(liabilities)not recognisedduringtheyear 68,471 (8,246) 41,095 132 -deferredtaxliabilitiesunderrecognisedin prioryears 25,223 - - - -overprovisionofdeferredtaxassets inprioryears - (2,269) - - -reductionoftaxasaresultof7% (2006 : 8%) tax saving on the first RM500,000ofchargeableincomefor companieswithapaidupcapitalof RM2,500,000andbelow 7,750 (166,031) - - -under/(over)provisioninprioryears 26,071 23,072 2,415 (2,270)

(766,272) 492,676 2,415 1,612,136


42 43

11. taxation(Cont’d)

CertainsubsidiarycompaniesbeingMalaysianresidentcompanieswithpaid-upsharecapitaloflessthan RM2.5 million have applied income tax rates of 20% on the first RM500,000 and 27% (2006 : 28%) on the excessofRM500,000.IncometaxexpensefortheCompanyiscalculatedbasedontheMalaysianstatutory income tax rate of 27% (2006 : 28%) of the estimated taxable profit for the financial year. Subject to the agreement with the tax authorities, the Company has sufficient credit under Section 108 of the Income Tax Act, 1967 to frank its entire retained profits if paid out as dividends.

On21July2004,oneofthesubsidiariesobtainedpioneerstatusonitsprincipalactivityand70%ofitspioneer incomeisexemptedfromtaxationfortheperiodfrom1March2003to29February2008. Presently, Malaysian companies adopt the full imputation system. In the Budget 2008, the Government announcedtheproposaltointroducethesingletiertaxsystemforcompanieseffectivefromtheyearof assessment2008.Undertheproposedsingletiersystem,theCompanyshallnotbeentitledtodeducttaxon dividendpaid,creditedordistributedtoitsshareholders,andsuchdividendspaid,creditedordistributedby theCompanywillbeexemptedfromtaxinthehandsofshareholders.However,therewillbeatransitional periodofsixyears,expiringon31December2013,toallowcompaniestopayfrankeddividendstotheir shareholdersunder limitedcircumstances.Companiesalsohavean irrevocableoption todisregard the 108balanceandopttopaydividendsunderthesingletiersystem.Thisproposedchangeinthetaxlawalso providesforthe108balancetobelockedinasat31December2007. Duringthetransitionalperiod,theCompanycanutilisethebalanceinthe108accountasatbalancesheet date to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Bill, 2007. Subject to the agreement with the tax authorities, the Company has sufficient credits under Section 108 of the Income Tax Act, 1967 to frank its entire retained profits if paid out as dividends.

12. (Loss) / Earnings Per Share Basic (loss) / earnings per share of the Group is calculated by dividing the (loss) / profit attributable to ordinaryequityholdersoftheCompanyfortheyearbytheweightedaveragenumberofordinarysharesin issueduringtheyear. Group 2007 2006 RM RM (Loss) / Profit attributable to ordinary equity holders of the Company (3,892,639) 1,432,496 Weightedaveragenumberofordinarysharesinissue 97,980,000 97,980,000

Basic(loss)/earningspershare(sen) (3.97) 1.46

There is no potential ordinary share in issue as at balance sheet date and therefore, no diluted (loss) / earningspershareispresented.


44 45


13. Property, Plant and Equipment Furniture, Freeholdland fittingsand and factory other Tools and Motor building equipment equipment vehicles Total RM RM RM RM RM

Group Cost At1January2007 6,665,910 2,616,442 454,931 1,022,070 10,759,353 Additions 200,014 386,434 6,345 393,000 985,793 Disposals - (20,994) - (340,025) (361,019) At31December2007 6,865,924 2,981,882 461,276 1,075,045 11,384,127 Accumulated depreciation At1January2007 79,283 635,548 321,588 528,074 1,564,493 Chargefortheyear 146,128 342,334 45,118 163,954 697,534 Disposals - (12,191) - (240,026) (252,217) At31December2007 225,411 965,691 366,706 452,002 2,009,810 Net book value At31December2007 6,640,513 2,016,191 94,570 623,043 9,374,317

At31December2006 6,586,627 1,980,894 133,343 493,996 9,194,860 Depreciation charge for 2006 54,156 128,832 45,656 156,870 385,514 Office Motor Computer equipment Vehicle Total RM RM RM RM Company Cost At1January2007 6,490 3,050 - 9,540 Additions 20,080 6,589 37,000 63,669

At31December2007 26,570 9,639 37,000 73,209 Accumulated depreciation At1January2007 162 312 - 474 Chargefortheyear 1,476 1,139 3,083 5,698 At31December2007 1,638 1,451 3,083 6,172 Net book value At31December2007 24,932 8,188 33,917 67,037 At31December2006 6,328 2,738 - 9,066 Depreciation charge for 2006 162 312 - 474

44 45


13. Property,Plantandequipment(Cont’d) Group 2007 2006 RM RM Motor vehicles under finance lease: -Additionsduringtheyear 280,000 - -Netbookvalueatendofyear 589,125 493,993

Machinery under finance lease: -Additionsduringtheyear - 900,000 -Netbookvalueatendofyear 753,750 888,750

The freehold land and factory building of the Group with a net book value of RM6,640,513 (2006: RM6,586,627)havebeenpledgedassecurityforbankingfacilities(Note24).

14. Intangible Assets Development costs

Atbeginningofyear 69,360 - Additions 164,860 69,360

Less:Amortisationcharge (16,844) -

Atendofyear 217,376 69,360 Development costs principally comprise internally generated expenditure on development costs on majorproductswhereitisreasonablyanticipatedthatthecostswillberecoveredthroughfuturecommercial activity. 15. Investments in Subsidiaries Company 2007 2006 Investmentinsubsidiariesatcost-unquotedshares RM RM

Cost At1January 3,509,006 3,009,008 Add:Additionalinvestment 500,000 499,998

At31December 4,009,006 3,509,006 Accumulated Impairment At1January 130,000 - Add:Additionalimpairment 603,000 130,000

At31December 733,000 130,000 Net 3,276,006 3,379,006 Theparticularsofthesubsidiaries,allofwhichareincorporatedinMalaysia,areasfollows:- Equity interest Name of Company 2007 2006 Principal activities

Vokes Air (M) Sdn. Bhd.* 100% 100% Distribution and manufacturing of air filters.

Quest Equipment and 100% 100% Installation of cleanroom systems and sale of air filters ServicesSdn.Bhd.* andcleanroomequipment. Quest Technology 100% 100% Trading in air filters, cleanroom equipment and vinyl Sdn. Bhd.* flooring and installation of cleanroom systems.

46 47

15. investmentsinsubsidiaries(Cont’d) Equity interest Name of Company 2007 2006 Principal activities

QuestLiquid 100% 100% Selling,installation,maintenanceandservicingofwater SeparationSdn.Bhd.* treatmentequipmentandprovisionofwatertreatment services.

Quest Filter Sdn. Bhd.* 100% 100% Manufacturing and trading of water and air filters.

QuestSystemand 100% 100% Selling,installation,maintenanceandservicingofwater Engineering Sdn. Bhd. * treatment equipment and sale of cleanroom filters and equipment.

EnvairTechnology 100% 100% Installation of cleanroom and trading in related Sdn.Bhd.** material. EnvairMECSEngineering 100% 100% Mechanical, electrical contracting services and Sdn.Bhd.** engineeringworks. EnvairMECSEngineering 100% 100% Structural, mechanical, electrical contracting services (Penang)Sdn.Bhd.** and engineering works. Installation of cleanroom and trading in vinyl flooring, water and air filters. *-auditedbyYong&Leonard. **-notauditedbyYong&Leonard.

16. Investments in Associate Group Company 2007 2006 2007 2006 RM RM RM RM Non-CurrentAssets Unquotedshares,atcost 40,000 40,000 40,000 40,000 Less:Shareofpost-acquisitionlosses (34,781) (34,781) - -

5,219 5,219 40,000 40,000 Less:Disposalofassociate (5,219) - (40,000) - Less:Provisionfordiminutioninvalue - (5,219) - (40,000)

- - - - Theparticularsoftheassociate,whichisincorporatedinMalaysiaareasfollows:- Equity interest Name of company 2007 2006 Principal activities

SebquestTechnology - 40% Inactive Sdn.Bhd.** -TheCompanyhasdisposedofftheasscociateduringtheyear. **-notauditedbyYong&Leonard


46 47

17. Deferred Tax Assets Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The followingamount,determinedafterappropriateoffsetting,ifany,isshowninthebalancesheet: Group 2007 2006 RM RM Deferredtaxassetsinrespectof:- -Provisionforroyaltyfee - 51,271 -Property,plantandequipment - (12,534) -Unabsorbedtaxloss 842,275 47,310 -Unutilisedcapitalallowance - 18,873

842,275 104,920

Atbeginningofyear 104,920 38,069 Transferfromdeferredtaxliabilities(Note25) (48,267) - Creditedtoincomestatement(Note11) -Provisionsforroyaltyexpenses (51,271) 11,697 -Property,plantandequipment 12,534 (13) -Unabsorbedtaxloss 843,232 47,310 -Unutilisedcapitalallowance (18,873) 7,857

Atendofyear 842,275 104,920

The recognition of the deferred tax assets is dependent of future taxable profits in excess of profits arising fromthereversalofexistingtaxabletemporarydifferences.Theevidenceusedtosupportthisrecognition is themanagement’sprojectedplan,which shows that it isprobable thedeferred taxassetswouldbe realisedinfutureyears.

18. Goodwill on Consolidation

Cost At1Januaryand31December 175,703 175,703

Accumulated Impairment At1January 95,888 - Add:Additionalimpairment 79,815 95,888

At31December 175,703 95,888 Net book value - 79,815

Previously,goodwillarisingon theacquisitionof subsidiaries is systematicallyamortisedona straight-line basisoveraperiodof10years.UponadoptionofFRS3andFRS127,theGrouphasdiscontinuedamortising suchgoodwillandhas tested theentirecarryingamountof investment in subsidiaries for impairment in accordance with the requirement of FRS 136. Because the change in this accounting policy has been appliedprospectively,thechangehashadnoimpactonamountsreportedinprioryears. 19. Amount due from customers on contract Costincurredonlongtermcontracts 6,988,660 868,055 Progressive profit recognised 861,911 37,359

7,850,571 905,414 Less:Progressivebillings (6,846,494) (905,414)

Amountduefromcustomersoncontracts 1,004,077 -


48 49

20. Inventories Group 2007 2006 RM RM Atcost: Rawmaterials 1,545,509 1,854,226 Finishedgoods 3,792,887 2,942,147 Goodsintransit - 508,330

5,338,396 5,304,703

21. Trade receivables Tradereceivables 13,747,491 15,540,794 Less: Specific provision for doubtful debts (175,457) (68,910)

13,572,034 15,471,884 IncludedinthetradereceivablesoftheGroupisanamountofRM331,893(2006:RM644,425)owingfrom projectcustomersformorethantheallowedcreditterm.However,thedirectorsareintheopinionthatthis amountisrecoverableastheyhavereceivedpositivefeedbackfromtheultimateowneroftheprojectthat theamountoutstandingwillbesettled.

22. Amount due from / (to) subsidiaries

Amount due from / (to) subsidiaries are non-trade in nature, interest free, unsecured and has no fixed repaymentterm. 23. Placement with licensed banks Group Company 2007 2006 2007 2006 RM RM RM RM

Depositswithlicensedbanks 2,650,000 2,541,569 800,000 1,250,000 Capitalguaranteedplacementwith financial institution 1,250,000 1,250,000 - - NegotiableofDepositsRepurchase OrderAgreement - 400,000 - 400,000

3,900,000 4,191,569 800,000 1,650,000 The weighted average interest rates during the financial year and the average maturities of fixed deposits asat31December2007wereasfollows:- Group Company Weighted Average Weighted Average average maturities average maturities interest rate days interest rate days

Fixeddeposits 3.38% 197 3.05% 46 Capitalguaranteedplacementwith financial institution 2.00% 365 - - Group The placement with financial institution is capital guaranteed but the annual returns are fully variable and not guaranteed. The placement with financial institution is pledged to banks as securities for bank guaranteeandothercreditfacilities(Note24). Deposits licensed banks of RM2,350,000 (2006: RM2,541,569) is pledged to banks as securities for bank guaranteeandothercreditfacilities(Note24).


48 49

24. Borrowings (secured) Group Company 2007 2006 2007 2006 RM RM RM RM Current -Bankoverdrafts 3,029,079 2,378,529 19,438 - -Bankers’acceptancesandbillspayable 3,275,417 1,045,882 - - -Financeleaseliabilities 317,449 299,226 - - -TermLoans 218,402 188,868 - - 3,811,268 1,533,976 - -

6,840,347 3,912,505 19,438 -

Non-current Financeleaseliabilities 725,427 832,515 - - Termloans 4,508,771 4,664,287 - -

5,234,198 5,496,802 - - Bankers’ acceptances, bills payable, bank overdrafts and term loans are secured by: (a) Legalchargesoversubsidiarieslandandbuildings(Note13); (b) Pledge of fixed deposit receipts (Note 23); and (c) Jointandseveralguaranteebycertaindirectorsofasubsidiary. Group 2007 2006 RM RM Finance lease liabilities Current 317,449 299,226 Non-current 725,427 832,515

1,042,876 1,131,741 Minimum finance lease payments -notlaterthan1year 364,840 345,795 -laterthan1yearandnotlaterthan2years 367,233 394,638 -laterthan2yearsandnotlaterthan5years 462,238 547,872 -laterthan5years - 19,393

1,194,311 1,307,698 Future finance charges (151,435) (175,957)

Present value of finance lease liabilities 1,042,876 1,131,741 Present value of finance lease liabilities are repayable: -notlaterthan1year 317,449 299,226 -laterthan1yearandnotlaterthan2years 306,000 287,792 -laterthan2yearsandnotlaterthan5years 419,427 528,295 -laterthan5years - 16,428

1,042,876 1,131,741 Financeleaseliabilitiesareeffectivelysecuredastherightstotherelevantassetsreverttothecreditorsin theeventofdefault. Term loan Termloansarerepayable: -notlaterthan1year 218,402 188,868 -laterthan1yearandnotlaterthan2years 163,157 221,092 -laterthan2yearsbutnotlaterthan5years 585,900 585,174 -laterthan5years 3,759,714 3,858,021

4,727,173 4,853,155 Current 218,402 188,868 Non-Current 4,508,771 4,664,287

4,727,173 4,853,155


50 51

24. Borrowings(secured)(Cont’d) Group 2007 2006 Interest rates % % Averageeffectiveinterestrates:-

Termloan1 BLR-1.00 Fixedat3.48 Termloan2 BLR-1.00 BLR-3.75 Termloan3 7.25to8.25 7.25to8.25 Bankers’acceptances Comm+3.48 5.25 Bankoverdraft1 Fixedat5.00 Fixedat5.00 Bankoverdraft2 BLR+3.50 BLR+2.00 Bankoverdraft3 BLR+1.50 BLR+1.50 Bankoverdraft4 BLR BLR+0.75 Financelease 2.38to9.97 2.38to9.97

25. Deferred Tax Liabilities Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffcurrenttax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The followingamount,determinedafterappropriateoffsetting,ifany,isshowninthebalancesheet: RM RM Deferredtaxliabilitiesinrespectof -Property,plantandequipment 1,764 62,042 Atbeginningofyear 62,042 15,411 Less:Transfertodeferredtaxassets(Note17) (48,267) - Add:Transfer(to)/from“Taxation”(Note11) (12,011) 46,631

Atendofyear 1,764 62,042 26. Share Capital - Group and Company 2007 2006 Number RM Number RM

OrdinarysharesofRM0.10ech Authorised 250,000,000 25,000,000 250,000,000 25,000,000 Issuedandfullypaid 97,980,000 9,798,000 97,980,000 9,798,000 EmployeeShareOptionScheme(“ESOS”) The Company received approval from the Securities Commission for an ESOS for the benefit of eligible employeesof theGroup for thenewordinary sharesofRM0.10each in theCompany foraperiodof5 years. TheESOShadbeenimplementedon8June2005.Asat31December2007,thereisnooffermadebythe Company. ThemainfeaturesoftheESOSareasfollows: (a) ThetotalnumberofordinarysharestobeissuedbytheCompanyundertheESOSshallnotexceed20% of the total issued and paid-up ordinary shares of the Company; such that not more than fifty per cent (50%)of thenewsharesavailableunder theESOSshouldbeallocated, inaggregate, to theSenior ManagementoftheCompany; (b) Notmorethantenpercent(10%)ofthenewsharesavailableundertheESOSshouldbeallocatedto anyoneEligiblePerson,whoeithersinglyorcollectivelythroughpersonsconnectedwithsuchEligible Person,holdstwentypercent(20%)ormoreoftheissuedandpaid-upcapitaloftheCompany;


50 51

26. shareCapital-GroupandCompany(Cont’d)

(c) The option price under the ESOS shall not be less than initial public offer price or based on the five (5) dayweightedaveragemarketpriceofthesharesimmediatelyprecedingtheOfferDateoftheOption, withadiscountofnotmorethantenpercentum(10%),orattheparvalueoftheshares,whicheveris higher;

(d) The options granted are exercisable on the first five (5) Market Days of every calendar month or such otherdate,whichmaybedeterminedbyOptionsCommitteefromtimetotime;and (e) Thenewordinarysharesallottedandissuedundertheschemerankedparipassuinallrespectwiththe existingissuedandfullypaid-upordinarysharesofRM0.10eachintheCompany.

27. Investing Activities Group Company 2007 2006 2007 2006 RM RM RM RM

Purchaseofproperty,plantandequipment* (677,307) (1,374,499) (63,669) (9,540) Proceedsfromdisposalofproperty, plantandequipment 168,501 40,502 - - Intangibleassetsexpenditures (164,860) (69,360) - - Additions of fixed deposits pledged to financial institution (1,058,431) (901,761) (500,000) - Additionalinvestmentinsubsidiaries - - (500,000) (499,998)

Netcashusedininvestingactivities (1,732,097) (2,305,118) (1,063,669) (509,538) *Purchaseofproperty,plantandequipment Totalcostofproperty,plantandequipment 985,793 8,187,099 63,669 9,540 Less: Financed by finance lease arrangements (280,000) (800,000) - - Financedbytermloancreditor (28,486) (4,850,000) - - Capitalisationofprepayments - (1,162,600) - -

Cashused 677,307 1,374,499 63,669 9,540 28. Financing Activities Drawdown/(Repayment)of bankers’acceptances 2,229,535 (49,149) - - Repayment of finance lease liabilities (421,738) (166,625) - - Repaymentoftermloan (412,896) (295,589) - - Paymentoflistingexpenses - (39,375) - - Netcashgeneratedfrom/(usedin) financing activities 1,394,901 (550,738) - - 29. Cash and Cash Equivalents Fixeddepositswithlicensedbanks 3,900,000 3,791,569 800,000 1,250,000 Less:Fixeddepositspledged to financial institution (3,600,000) (2,541,569) (500,000) - 300,000 1,250,000 300,000 1,250,000 Shorttermunquotedinvestment,atcost - 400,000 - 400,000 Cashandbankbalances 1,180,895 1,337,932 29,252 11,734 Bankoverdrafts (3,029,079) (2,378,529) (19,438) -

(1,548,184) 609,403 309,814 1,661,734


52 53

30. Contingent Liabilities At31December2007,theCompanyhadcontingentliabilitiesinrespectofcorporateguaranteesissued to financial institutions amounting to RM16,450,000 (2006: RM15,950,000) for banking facilities extended to certainsubsidiariescompanies. At31December2007,theCompanyhadcontingentliabilitiesinrespectofcorporateguaranteesissuedto suppliersofcertainsubsidiariesinrespectofsupplyagreementstosupplyproducttothesubsidiaries.

31. Changes in Accounting Policies Thelistofnewaccountingstandards,amendmentstopublishedstandardsandinterpretationsonexisting standards that are effective for the Group and Company’s financial year beginning on or after 1 January 2007issetoutinNote2(a)(i). The adoption of FRS 117 and 124 did not have a material impact on the financial statements of the Group andCompany.

32. SignificantPostBalanceSheetEvents (i) On28February2008, theCompany throughanannouncementmadetoBursaMalaysiaSecurities Berhad(“BursaMalaysia”)thatthecompanyproposedtoundertakeaprivateplacementexercise for the issuanceofupto10%of theenlarged issuedandpaid-upcapitalofEnvairHoldingBerhad representingupto9,798,000newordinarysharesofRM0.10eachinEnvairHoldingBerhad,toinvestors to be indentified. Theproposedprivateplacementissubjecttotheapprovalsfromthefollowingauthorities:- (a) theSecuritiesCommission(“SC”)fortheProposedPrivatePlacement;

(b) theForeignInvestmentCommitteefortheProposedPrivatePlacement; (c) BursaMalaysiaforthelistingandquotationforthePlacementSharesontheMESDAQMarketof BursaMalaysia;and (d) anyotherrelevantauthorities,ifany.

On3April2008,theCompanyobtainedtheapprovalfromSContheproposedprivateplacement. (ii) On 9 April 2008, the Company entered into a Memorandum of Understanding with Welli Multi CorporationBerhadtoco-operateintheareasofjointprocessingofpalmkerneloilandengineering servicesinrelationtomechanicalandelectricalrelatedworks.

33. Segment Reporting TheGroupisprincipallyinvolvedinfourmainbusinesssegments: Investments -Incorporatinginvestmentholdingoperations. Air filtration system - Sales of filters and installation of cleanroom system. Liquid filtration system - Selling, installation, maintenance and servicing of water treatment equipment. Manufacturing - Manufacturing of air and water filters. Allintersegmenttransactionsareconductedonanarm’s-lengthbasisunderterms,conditionsandprices notmateriallydifferentfromtransactionswithunrelatedparties.


52 53

33. segmentreporting(Cont’d) (a) Primary reporting format - business segments Air Liquid filtration filtration Manu- Investment system system facturing Eliminations Group RM RM RM RM RM RM Year ended 31 December 2007 Revenue Externalrevenue - 20,351,439 751,680 1,449,306 - 22,552,425 Intersegmentrevenue 726,000 1,595,611 407,069 544,609 (3,273,289) -

Totalrevenue 726,000 21,947,050 1,158,749 1,993,915 (3,273,289) 22,552,425 Results Segmentresults (868,089) (2,558,568) (141,609) (1,006,471) 523,184 (4,051,553) Financecosts (7,505) (272,929) (3,076) (323,848) - (607,358) Taxation (2,415) 591,698 (210) 177,199 - 766,272

Lossfortheyear (3,892,639)

At 31 December 2007 Net assets Segmentassets 16,561,256 27,718,101 1,056,489 11,863,825 (18,002,873) 39,196,798 Unallocatedassets 972,956

Totalassets 40,169,754

Segmentliabilities 196,601 23,394,456 1,011,499 11,873,411 (18,002,873) 18,473,094 Unallocatedliabilities 333,388

Totalliabilities 18,806,482

Year ended 31 December 2007 Other information Capitalexpenditure 63,669 398,130 6,038 517,956 - 985,793 Depreciation andamortisation 5,698 243,410 11,773 436,653 - 697,534 Year ended 31 December 2006 Revenue Externalrevenue - 25,364,594 1,104,628 1,029,835 - 27,499,057 Intersegmentrevenue 6,598,396 3,576,861 1,994,899 592,115(12,762,271) -

Totalrevenue 6,598,396 28,941,455 3,099,527 1,621,950 (12,762,271) 27,499,057 Results Segmentresults 5,851,558 2,315,152 180,077 (52,695) (5,868,396) 2,425,696 Unallocatedcosts (95,888)

Profit from operations 2,329,808 Financecosts - (237,581) (7,365) (159,690) - (404,636) Taxation (1,612,136) (485,706) (22,941) 29,711 1,598,396 (492,676)

Profit for the year 1,432,496 At 31 December 2006 Net assets Segmentassets 13,955,245 27,130,678 1,607,931 11,599,878 (16,512,778) 37,780,954 Unallocatedassets 218,075

Totalassets 37,999,029


54

33. segmentreporting(Cont’d)

Air Liquid filtration filtration Manu- Investment system system facturing Eliminations Group RM RM RM RM RM RM

Segmentliabilities 183,663 20,022,943 1,402,155 10,300,803(16,512,778) 15,396,786 Unallocatedliabilities 722,339 Totalliabilities 16,119,125

Year ended 31 December 2006 Other information Capitalexpenditure 9,540 92,347 6,638 8,078,574 - 8,187,099 Depreciation andamortisation 474 220,407 24,994 139,639 - 385,514 Othernon-cash expenses - - 383 41,888 - 42,271 Unallocatedcostsrepresentcorporateexpenses.Segmentassetsconsistprimarilyofplantandequipment, inventories,operatingreceivablesandcash,andmainlyexcludeinvestments,deferredtaxassetsandtax refundable.Segmentliabilitiescompriseoperatingliabilitiesandexcludeprovisionfortaxationanddeferred taxliabilities. Capitalexpenditurecomprisesadditionstoplantandequipmentandinvestmentinsubsidiaries.

(b) Secondary reporting format - geographical segments No secondary segmental analysis by geographical location is presented in the current financial year, as theGroup’soperationsarelocatedmainlyinMalaysia.

34. Approval of Financial Statements The financial statements were authorised for issue by the Board of Directors in accordance with a resolutionofthedirectorson21April2008.


(Formerly known as Ruby Quest Berhad)

ANALYSIS OF SHAREHOLDINGS&

LIST OF PROPERTIES

(412406-T)

56 57

A N A L Y S I S O FS H A R E H O L D I N G S

AuthorisedShareCapital : RM25,000,000IssuedandFullyPaid-upCapital : RM9,798,000ClassofShares : OrdinarySharesofRM0.10eachVotingRights : 1VoteperOrdinaryShare

DIRECTORS’ SHAREHOLDINGS AS AT 6TH MAY 2008(per Register of Directors’ Shareholdings)

SimKengSiong

LimFooSeng

WongPengYew

ShinichiYamamoto

LooiKemLoong

KoayBenRee

Note:

1. Interest held by spouse

SUBSTANTIAL SHAREHOLDERS AS AT 6TH MAY 2008(per Register of Substantial Shareholders)

Note:1. Interest held by spouse

DirectorsNo.ofshares

10,721,240

2,320,280

20,897,199

25,000

20,000

70,000

%

10.94

2.37

21.33

0.03

0.02

0.07

Direct

SimKengSiong

WongPengYew

Directors

No.ofshares

32,010(1)

-

-

-

-

-

%

0.03

-

-

-

-

-

Indirect

No.ofshares

10,721,240

20,897,199

%

10.94

21.33

Direct

No.ofshares

32,010(1)

-

%

0.03

-

Indirect

56 57


Category

1-99

100–1,000

1,001–10,000

10,001–100,000

100,001tolessthan5%ofissuedshares

5%andaboveofissuedshares

No. of holders

6

52

485

446

105

1

1,095

Percentage(%)

0.55

4.75

44.29

40.73

9.59

0.09

100.00

ANALYSIS OF SHAREHOLDERS AS AT 6TH MAY 2008

No. of shares

271

32,460

3,278,500

16,492,660

57,278,910

20,897,199

97,980,000

Percentage(%)

0.00

0.03

3.35

16.83

58.46

21.33

100.00

Name Of Shareholders

Wong Peng Yew

Sim Keng Siong

HLG Nominee (Tempatan) Sdn BhdBeneficiary: Pledged Securities AccountForLimMuiHeng

TA Nominees (Tempatan) Sdn BhdBeneficiary: Pledged Securities AccountForSimKengSiong

AffinNominees(Tempatan)SdnBhdBeneficiary: Pledged Securities AccountForSimKengSiong(Sim0308m)

Yap Ah Seng

Lim Foo Seng

Er Ka Yan

Netval Ventures Sdn Bhd



Tan Cheng Hoy

AffinNominees(Tempatan)SdnBhdBeneficiary: Pledged Securities AccountForTanChengHoy(Tan6469c)

AffinNominees(Tempatan)SdnBhdBeneficiary: Pledged Securities AccountForErKaYan(Erk0013c)

Mohamed Noordin Bin Hassan

No. Of Shares Held

20,897,199

4,699,840

3,727,100

3,110,000

2,901,400

2,671,100

2,320,280

2,097,100

1,630,000

1,600,020

1,600,000

1,551,100

1,543,500

1,500,000

1,051,930

Percentage (%)

21.33

4.80

3.80

3.17

2.96

2.73

2.37

2.14

1.66

1.63

1.63

1.58

1.58

1.53

1.07

No

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

LIST OF TOP 30 SHAREHOLDERS AS AT 6TH MAY 2008

58 59


Name Of Shareholders

See Hong Cheen @ See Hong Chen

Kee Boon Seng

AffinNominees(Tempatan)SdnBhdBeneficiary: Pledged Securities AccountForLimLayHoon(Lim4448c)

Er Ka Wei

Chong Siew Fong

Lau Hean Hooi

Lau Mei Chin

Simon Loh Chi Yin

Phan Sin Tian

Chiew Hock Seng

Tan Hock Ley

Teh Tiong Huat

Ong Seow Ling

Kenanga Nominees (Tempatan) Sdn BhdBeneficiary: Pledged Securities AccountForLeeTeckHoe

Tan Cheng Hoy

No. Of Shares Held

1,000,000

989,300

950,000

850,000

804,000

710,000

672,000

657,790

614,800

610,000

550,000

530,000

505,000

500,000

500,000

Percentage (%)

1.02

1.01

0.97

0.87

0.82

0.72

0.69

0.67

0.63

0.62

0.56

0.54

0.52

0.51

0.51

No

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

listoFtoP30sHareHolDersasat6tHmay2008(Cont’d)

58 59

L I S T O F P R O P E R T I E S

1)EnvairTechnology Landarea: 1½-storey Tenure: RM261,665 7Sdn.Bhd. terrace Approximately office lot. The land on 2,000squarefeet. whichthe propertyisNo.11, Jalan Taboh Built-up floor area: erected is a33/22,Seksyen33 Approximately freeholdland.ShahAlamTechnology 3,000squarefeet.Park,40400ShahAlam DateofSelangorDarulEhsan acquisition: 18July2000

2)QuestFilterSdn.Bhd. Landarea: Cornerthree(3) Tenure: RM6,378,848 7 storey office Approximately blockannexed ThelandonNo.6,JalanSalung 58,578squarefeet. toaoneanda whichthe33/26,ShahAlam halfstorey propertyisTechnology Park Built-up floor area: warehouse erected is aSection33, Approximately building. freeholdland.40400ShahAlam, 66,232squarefeet.Selangor Dateof acquistion: 9March2006

Note:Therewasnorevaluationofthepropertiesduringtheyearunderreview.

Approximate Land Area/

Built-up AreaLocation Description /

Use

Tenure/ Date of

Acquisition

Net book value as at 31

December2007

Age of building (years)

ThedetailsofthelandedpropertiesoftheGroupasatthedateofthisAnnualReportaresetoutbelow:

NOTICE IS HEREBY GIVEN THATtheEleventhAnnualGeneralMeetingofEnvairHoldingBerhad(FormerlyknownasRubyQuestBerhad)willbeheldatPutraRoom,KelabGolfSultanAbdulAzizShah,No.1,RumahKelab,JalanKelabGolf13/6(Sek13),41000ShahAlam,SelangoronWednesday,25June2008at10.00a.m.,totransactthefollowingbusiness:

AS ORDINARY BUSINESS:-

AS SPECIAL BUSINESS:-

BY ORDER OF THE BOARD

LIM FOO SENG (MIA 12191)WONG WEI FONG (MAICSA 7006751)

SecretariesShah Alam3 June 2008

N O T I C E O F E L E V E N T H A N N U A L G E N E R A L M E E T I N G

1.

2.

3.

4.

5.

6.

(Resolution1)

(Resolution2)

(Resolution3)(Resolution4)

(Resolution5)

(Resolution6)

To receive the audited financial statements of the Company and of the Group for the financial year ended 31 December 2007 together with the Directors’ and Auditors’ Reports thereonTo approve the payment of Directors’ fees for the financial year ended 31 December 2007

To re-elect the following Directors who retire in accordance with Article 92 of theCompany’sArticlesofAssociation:i.SimKengSiongii.WongPengYewTo re-appointMessrsYong&Leonardas theCompany’sAuditorsand toauthorise theDirectors to fix their remuneration

To consider and if thought fit, to pass the following resolution, with or without modifications: -

ORDINARY RESOLUTION- AUTHORITY UNDER SECTION 132D OF THE COMPANIES ACT, 1965 FOR THE DIRECTORS TO ISSUE SHARES

“THATpursuanttoSection132DoftheCompaniesAct,1965,andsubjecttotheapprovalsof the relevant governmental and/or regulatory authorities, the Directors be and areherebyempoweredtoissuenewsharesintheCompanyatanytime,uponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretion,deemfit, provided that the aggregate number of shares issued pursuant to this resolution in any one financial year does not exceed 10% of the total issued share capital of the Company for the timebeingANDTHAT theDirectorsbeandarealsoempowered toobtain theapprovalfromtheBursaMalaysiaSecuritiesBerhadforthelistingofandquotationfortheadditionalsharessoissuedANDTHATsuchauthorityshallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.” TotransactanyotherbusinessofwhichduenoticeshallhavebeengiveninaccordancewiththeCompaniesAct,1965.

60 61

Notes:

(i) 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.

(ii) 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.

(iii) 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.

(iv) 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.

(v) 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 NOTE UNDER SPECIAL BUSINESS

Ordinary Resolution 6

TheOrdinaryResolution6proposedunderAgenda5, ifpassed,willgivetheDirectorsoftheCompany,fromthedateoftheforthcomingAnnualGeneralMeeting,authoritytoissueandallotnewordinarysharesprovidedthatsuchnewordinarysharesdonotexceed10%of thetotal issuedandpaid-upcapitalof theCompany,beingforsuchpurposesastheDirectorsconsiderwouldbeintheinterestoftheCompany.Thisauthority,unlessrevokedorvariedbytheCompanyinaGeneralMeeting,willexpireatthenextAnnualGeneralMeetingoftheCompany.

N O T I C E O F E L E V E N T H A N N U A L G E N E R A L M E E T I N G

60 61

S T A T E M E N T A C C O M P A N Y I N G N O T I C E O F A N N U A L G E N E R A L M E E T I N G

Furtherdetailsofindividualstandingre-electionofDirectors:-

Name Sim Keng Siong Wong Peng Yew

Age 36 57

Nationality Malaysian Malaysian

Position GroupManagingDirector Non-Independent Non-ExecutiveDirector

Qualification and working experience Details are set out Details are set out onpage05 onpage06 oftheAnnualReport oftheAnnualReport

Directoships - -Inotherpubliccompanies

Securityholdingsinthe Detailsaresetout DetailsaresetoutCompanyanditssubsidiaries onpage23 onpage23 oftheAnnualReport oftheAnnualReport

Familyrelationshipwithanydirectorand/ormajorshareholder None None

Any conflict of interest with the Company None None

Listofconvictionsforoffenceswithinthe None Nonepast 10 years other than traffic offences

62

eNVairHolDiNGBerHaD(Formerly known as Ruby Quest Berhad)(Company No. 412406-T)(Incorporated in Malaysia)

FormofProxy

I/We, of_______________________________________________________________, being a member/members of Envair Holding Berhad (Formerly known as Ruby Quest Berhad) hereby appoint

____________________________________________ of ________________________________________________________ or failing him/her, the Chairman of the Meeting as my/our proxy, to attend and vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held at Putra Room, Kelab Golf Sultan Abdul Aziz Shah, No.1, Rumah Kelab, Jalan Kelab Golf 13/6 (Sek 13), 41000 Shah Alam, Selangor on Wednesday, 25 June 2008 at 10.00 a.m. and at any adjournment thereof.

My/our proxy is to vote on the following Resolutions as indicated by an “X” in the appropriate spaces below:

RESOLUTIONS * FOR * AGAINST

* Please indicate with an “X” in the spaces provided whether you wish your votes to be cast for or against the resolution. In the absence of specific directions, your proxy will vote or abstain as he/she thinks fits.

Datedthisdayof2008.

__________________________Signature or Common Seal of Shareholders

Notes:(i) 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.

(ii) 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.

(iii) 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.

(iv) 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.

(v) 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.

To receive the audited financial statements of the Company and of the Group for the financial year ended 31 December 2007 together with the Directors’ and Auditors’ Reports thereon To approve the payment of Directors’ fees for the financial year ended 31 December 2007 To re-elect Sim Keng Siong retiring in accordance with Article 92 of the Company’s Articles of Association To re-elect Wong Peng Yew retiring in accordance with Article 92 of the Company’s Articles of Association To re-appoint Messrs Yong & Leonard as the Company’s Auditors and to authorise the Directors to fix their remuneration specialBusiness To authorise Directors to issue shares pursuant to Section 132D of the Companies Act, 1965

1.

2.

3.

4.

5.

6.

No. of shares held

CDS Account No.

CANCELLED

TheCompanySecretary

ENVAIR HOLDING BERHAD (412406-T)

(formerly known as Ruby Quest Berhad)No.6,JalanSalung33/26,

ShahAlamTechnologyPark,Section33,40400ShahAlam,

SelangorDarulEhsan

Documents

ENVAIR HOLDING BERHAD (412406-T) (formerly known as Ruby ... · a member of the Audit, Nomination and Remuneration Committees. Currently, he is a director of Asia Bioenergy Group