Edgar Filing: DECTRON INTERNATIONALE INC

SCHEDULE 14A INFORMATION
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Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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DECTRON INTERNATIONALE INC.
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(Name of Registrant as specified in its charter)

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DECTRON INTERNATIONALE INC.
4300 POIRIER BLVD
MONTREAL, QUEBEC H4R 2C5

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NOTICE OF 2004 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 24, 2004

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TO THE STOCKHOLDERS OF Dectron Internationale Inc.:

NOTICE IS HEREBY GIVEN that the 2004 Annual Meeting of Stockholders (the
"Meeting") Dectron Internationale Inc. (the "Company") will be held at HOTEL
NOVOTEL, 1180 rue de la Montagne, Montreal, H3G 1Z1 August 24, 2004 at 2:30
p.m., local time for the following purposes:

1. To elect directors to hold office for a term of one year;

2. To ratify the appointment of Schwartz Levitsky Feldman, LLP as
the Company's independent certified public accountants for the
ensuing year; and

3. To act upon such other business as may properly come before
the Meeting or any adjournment thereof.

Only stockholders of record at the close of business on August 3, 2004 are
entitled to notice of and to vote at the Meeting and any adjournments thereof.

In order to ensure the presence of a quorum at the Meeting, it is important that
Stockholders representing a majority of the voting power of all stock
outstanding be present in person or represented by their proxies. Therefore,
whether you expect to attend the Meeting in person or not, please vote your
shares by signing, filling out, dating and promptly returning the enclosed proxy
card in the enclosed self-addressed, postage-paid envelope. If you attend the
Meeting and prefer to vote in person, you can revoke your proxy.

In addition, please note that abstentions and broker non-votes are each included
in the determination of the number of shares present and voting, for purposes of
determining the presence or absence of a quorum for the transaction of business.
Neither abstentions nor broker non-votes are counted as voted either for or
against a proposal.

Dated: August 3, 2004 By Order of the Board of Directors

Ness Lakdawala
Chairman and Chief Executive Officer

DECTRON INTERNATIONALE INC.
4300 POIRIER BLVD
MONTREAL, QUEBEC H4R 2C5
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PROXY STATEMENT
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2004 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD AT HOTEL NOVOTEL, 1180 RUE DE LA MONTAGNE, MONTREAL, H3G 1Z1
ON AUGUST 24, 2004

This Proxy Statement is furnished in connection with a solicitation of proxies
by the Board of Directors of Dectron Internationale Inc. (the "Company") for use
at the 2004 Annual Meeting of Stockholders of the Company (the "Meeting") to be
held at 2:30 p.m. at HOTEL NOVOTEL, 1180 rue de la Montagne, Montreal, H3G 1Z1
on August 24, 2004, and at any adjournments thereof. Anyone giving a proxy may
revoke it at any time before it is exercised by giving the Chairman of the Board
of Directors of the Company written notice of the revocation, by submitting a
proxy bearing a later date, or by attending the Meeting and voting. This Proxy
Statement, the accompanying Notice of Meeting and form of proxy have been first
sent to the stockholders on or about August 4, 2004.

All properly executed, unrevoked proxies on the enclosed form, if returned prior
to the Meeting, will be voted in the manner specified by the Stockholder. If no
specific instruction is given, the shares represented by the proxy will be voted
in accordance with the Board of Directors' recommendations.

QUESTION AND ANSWER SUMMARY: ABOUT THE MEETING

WHAT IS BEING VOTED ON AT THE MEETING?

Our board of directors is asking shareholders to consider two items at
this Annual Meeting of Shareholders:

To elect our board of directors to hold office for a term of one year;

To ratify the appointment of Schwartz Levitsky Feldman, LLP as our
independent auditors for the ensuing year; and

To act on any other matter that may properly be submitted for approval.

WHO CAN VOTE AT THE MEETING?

Our board of directors has set August 3, 2004 as the record date for the
Meeting. Only persons holding shares of our common stock of record at the close
of business on the record date will be entitled to receive notice of and to vote
at the Meeting. Each share of our common stock will be entitled to one vote per
share on each matter properly submitted for vote to our shareholders at the
Meeting. On the record date there were 3,155,000 shares of our common stock
outstanding held by a total of approximately 58 shareholders of record.

WHAT CONSTITUTES A QUORUM FOR THE MEETING?

To have a quorum, we need one-third of the votes entitled to be cast to be
present, in person or by proxy, including votes as to which authority to vote on
any proposal is withheld, shares of stock abstaining as to any proposal, and
broker non-votes (where a broker submits a proxy but does not have authority to
vote a customer's shares of stock on one or more matters) on any proposal, will
be considered present at the Meeting for purposes of establishing a quorum for
the transaction of business at the Meeting. Each will be tabulated separately.
The shares held by Ness Lakwadala, our controlling shareholder, suffice for a
quorum to be met, and we have been informed by Mr. Lakwadala that he will be
present at the Meeting.

HOW DO I VOTE?

If you complete and properly sign the accompanying proxy card and return it to
us, it will be voted as you direct, unless you later revoke the proxy. Unless
instructions to the contrary are marked, or if no instructions are specified,
shares of stock represented by a proxy will be voted for the proposals set forth
on the proxy, and in the discretion of the persons named as proxies on such
other matters as may properly come before the Meeting. If you are a registered
shareholder, that is, if you hold your shares of stock in certificate form, and
you attend the Meeting, you may deliver your completed proxy card in person. If
you hold your shares of stock in "street name," that is, if you hold your shares
of stock through a broker or other nominee, and you wish to vote in person at
the Meeting, you will need to obtain a proxy form from the institution that
holds your shares of stock.

CAN I CHANGE MY VOTE AFTER I RETURN MY PROXY CARD?

Yes. Even after you have submitted your proxy, you may change your vote at any
time before the proxy is exercised by filing with our Secretary, at the address
indicated above, either a written notice of revocation, a duly executed proxy
bearing a later date, or if you vote in person at the Meeting. The powers of the
proxy holders will be suspended if you attend the Meeting in person and so
request. However, attendance at the Meeting will not by itself revoke a
previously granted proxy.

Any written notice of revocation sent to us must include the shareholder's name
and must be received prior to the Meeting to be effective.

WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?

Election of Nominees to the Board of Directors
----------------------------------------------

Pursuant to our bylaws, the affirmative vote of a majority of the votes cast at
the Meeting is required for the election of the individuals nominated to serve
on our board of directors. The shares of stock held by Mr. Lakwadala represent
enough votes to approve this proposal and he has informed us that he intends to
approve proposal to elect our nominees to our board of directors.

Ratification of Independent Auditors.
-------------------------------------

An affirmative vote of a majority of the votes cast at the Meeting is required
for ratification of the appointment of Schwartz Levitsky Feldman, LLP as our
independent auditors. The shares of stock held by Mr. Lakwadala represent enough
votes to approve this proposal and he has informed us that he intends to approve
the appointment of Schwartz Levitsky Feldman, LLP as our independent auditors.

Other Matters.
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If you hold your shares of stock in "street name," your broker or nominee may
not be permitted to exercise voting discretion with respect to some of the
matters to be acted upon. Thus, if you do not give your broker or nominee
specific instructions, your shares of stock may not be voted on those matters
and will not be counted in determining the number of shares of stock necessary
for approval. Shares of stock represented by such "broker non-votes" will,
however, be counted in determining whether there is a quorum.

Votes cast by proxy will be tabulated by an automated system administered by
Continental Stock Transfer & Trust Company, our transfer agent. Votes cast by
proxy or in person at the Meeting will be counted by the independent person that
we will appoint to act as election inspector for the Meeting.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information included in this Proxy Statement may contain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). This information may involve known and unknown
risks, uncertainties and other factors which may cause our actual results,
performance or achievements to be materially different from our future results,
performance or achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve assumptions and describe
the our future plans, strategies and expectations, are generally identifiable by
use of the words "may," "will," "should," "expect," "anticipate," "estimate,"
"believe," "intend" or "project" or the negative of these words or other
variations on these words or comparable terminology. These forward-looking
statements are based on assumptions that may be incorrect, and there can be no
assurance that these projections included in these forward-looking statements
will come to pass. Our actual results could differ materially from those
expressed or implied by the forward-looking statements as a result of various
factors. We undertake no obligation to update publicly any forward-looking
statements for any reason, even if new information becomes available or other
events occur in the future.

OWNERSHIP OF SECURITIES

Only stockholders of record at the close of business on August 3, 2004, the date
fixed by the Board of Directors in accordance with the Company's By-Laws, are
entitled to vote at the Meeting. As of August 3, 2004, there were issued and
outstanding 3,155,000 shares of common stock, no par value per share (the
"Common Stock").

Each outstanding share is entitled to one vote on all matters properly coming
before the Meeting. A majority of the shares of the outstanding Common Stock is
necessary to constitute a quorum for the Meeting.

The following table sets forth certain information as of August 3, 2004 with
respect to each beneficial owner of five percent (5%) or more of the outstanding
shares of Common Stock of the Company, each officer and director of the Company
and all officers and directors as a group.

AMOUNT AND NATURE OF PERCENTAGE OF SHARES
NAME AND ADDRESS (1) BENEFICIAL OWNERSHIP (2) OUTSTANDING
-------------------- ------------------------ --------------------

Ness Lakwadala 1,741,019 (3) 54.1%

Roshan Katrak 1,741,019 (4) 54.1%

Mauro Parissi 48,609 (5) 1.5%

Leena Lakwadala 125,100 (6) 3.9%

Michel Lecompte 24,600 (7) *

Gilles Richard 1,800 (8) *

Rustom M. Ghadiali - - - - - -

Dick Driggs - - - - - -

All officers and directors
as a group
(8 persons) (3) - (8) 1,941,128 59.1%

* Less than 1%.

(1) The address of each individual is c/o Dectron Internationale Inc., 4300
Poirier Blvd., Montreal, Quebec, Canada H4R 2C5.

(2) Based upon information furnished to us by the directors and executive
officers or obtained from our stock transfer books. We are informed that these
persons hold the sole voting and dispositive power with respect to the common
stock except as noted herein. For purposes of computing "beneficial ownership"
and the percentage of outstanding common stock held by each person or group of
persons named above as of the date of this annual report, any security which
such person or group of persons has the right to acquire within sixty (60) days
after such date is deemed to be outstanding for the purpose of computing
beneficial ownership and the percentage ownership of such person or persons, but
is not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person.

(3) Represents (i) 43,561 shares of Common Stock directly owned, (ii) 127,395
shares of Common Stock and 7,500 options to purchase Common Stock owned by
Roshan Katrak, Mr. Lakdawala's wife, (iii) 69,684 shares of Common Stock owned
by Roshaness Inc., a company owned by Mr. Lakdawala, and (iv) 1,492,879 owned by
3103-7195 Quebec Inc., a company owned by Mr. Lakdawala's spouse and children.

(4) Represents (i) 127,395 shares of Common Stock and 7,500 options to purchase
Common Stock directly owned, (ii) 43,561 shares of Common Stock owned by Ness
Lakdawala, Ms. Katrak's husband, (iii) 69,684 shares of Common Stock owned by
Roshaness Inc., a Company owned by Ness Lakdawala, and (iv) 1,492,879 shares
owned by 3103-7195 Quebec Inc., a company owned by Ms. Katrak and her children.

(5) Includes 2,500 options to purchase Common Stock.

(6) Includes 8,500 options to purchase Common Stock.

(7) Includes 2,000 options to purchase Common Stock

(8) Includes 1,500 options to purchase Common Stock

PROPOSAL NO. 1

ELECTION OF DIRECTORS

Seven directors are proposed to be elected at the Meeting, each to hold office
for a period of one year, or until such director's successor shall be elected
and shall qualify, subject, however to prior death, resignation, retirement,
disqualification or removal from office. Unless such authority is withheld, it
is intended that the accompanying proxy will be voted in favor of the seven
persons named below, each of whom is now serving as a director unless the
stockholder indicates to the contrary on the proxy. We expect that each of the
nominees will be available for election, but if any of them is not a candidate
at the time the election occurs, it is intended that such proxy will be voted
for the election of another nominee to be designated by the Board of Directors
to fill any such vacancy or the number of directors to be elected at this time
may be reduced by the Board of Directors.

Director Nominees - Term Expiring 2004.

NAME AGE POSITION
---- --- --------

Ness Lakwadala 70 Chairman and of the Board of Directors, President and Chief Executive
Officer

Roshan Katrak 60 Vice President of Human Relations and Director

Mauro Parissi 38 Chief Financial Officer, Secretary and Director

Leena Lakwadala 36 Executive Vice President and Director

Gilles Richard 66 Director

Rustom M. Ghadiali 67 Director

Dick Driggs 67 Director

Set forth below is a biographical description of each of our director nominees
based on information supplied by each of them.

NESS LAKDAWALA has served as the President, Chief Executive Officer and Chairman
of Dectron since our inception, and has also served as the President and Chief
Executive Officer of Dectron Inc. since 1994. Prior to joining Dectron Inc., Mr.
Lakdawala was President of Blanchard Ness Limited, a company which he founded in
1976. From 1987 to present, Mr. Lakdawala has served as the President of
Thermoplus. In January 1996, Thermoplus filed a proposal under the provisions of
the Bankruptcy Act which gave full payment to secured creditors who filed a
proof of claim. From 1987-1988, Mr. Lakdawala was Chairman of the Heating
Refrigeration Air Conditioning Institute of Canada. Mr. Lakdawala has also
served as the Governor of the American Society of Heating, Refrigeration and Air
Conditioning Engineers, Inc. ("ASHRAE"), the organization that sets ventilation
standards in Canada and the United States. Mr. Lakdawala is currently a member
of ASHRAE and the Refrigeration Service Engineers Society. Ness Lakdawala is the
husband of Roshan Katrak and the father of Leena Lakdawala.

ROSHAN KATRAK has served as Vice President of Human Relations of Dectron since
our inception, and has served in the same capacity with Dectron Inc. since 1994.
She has also served as a Director of Dectron since 1998. From 1976 to 1994, she
was a Director of Blanchard Ness Limited, and from 1987 to present has been Vice
President of Human Relations for Thermoplus. In January 1996, Thermoplus filed a
proposal under the provisions of the Bankruptcy Act which gave full payment to
secured creditors who filed a proof of claim. Mrs. Katrak received her Honors
Degree in Psychology in 1964. Roshan Katrak is the wife of Ness Lakdawala and
the mother of Leena Lakdawala.

MAURO PARISSI, C.A. has served as the Chief Financial Officer, Secretary and a
Director of Dectron since our inception, and has also served as the Controller
of Dectron Inc. since 1996. From 1995-1996, Mr. Parissi was an auditor with the
firm of Mizgala & Cie. From 1990-1995, Mr. Parissi was an auditor with the firm
of Hart, David Lloyd, F.C.A., C.I.P. Mr. Parissi is currently a member of The
Canadian Institute of Chartered Accountants and The Order of Chartered
Accountants of Quebec. Mr. Parissi received his graduate diploma in Public
Accountancy from McGill University in 1995.

LEENA LAKDAWALA has served as Executive Vice President and a Director of Dectron
since our inception, and has also served as Vice President of Production and
Administration for Dectron Inc. since 1994. She is currently a member of the
Heating Refrigeration and Air Conditioning Institute. Mrs. Lakdawala received
her B.A from Concordia University in 1993. Leena Lakdawala is the daughter of
Ness Lakdawala and Roshan Katrak.

GILLES RICHARD has served as a Director of Dectron since 2001. Mr. Richard is a
semi-retired businessman who was previously the President of Le Circuit Lincoln
Mercury, the sixth largest dealership in Canada. Mr. Richard was also involved
with partners in a distributorship of lift-truck (Mitsubishi's M-Lift), two
computer companies, which created software applications for car dealership, and
most recently the construction of commercial and residential buildings. Over the
years, Mr. Richard was a director or officer of various organizations such as
the Nada (National Automobile Association) and CADA (Canadian Automobile
Association).

RUSTOM M. GHADIALI joined Dectron Internationale as director in 2004. Mr.
Ghadiali retired from International Rectifier S.E. A. PVT Ltd., a leader in
Power Management Technology, after more than thirty-five years in various
positions within the International Rectifier Group. From 2002-2004, he was
Vice-President-Director International Rectifier S.E. A. PVT Ltd., Administration
Asian Operations. From 1994 to 2002, he was Vice-President, International
Rectifier Offshore Assembly Operations, South East Asia, India and China. Mr.
Ghadiali is a Chartered Secretary & Administrator.

DICK W. DRIGGS joined Dectron Internationale as director in 2004. Mr. Driggs
retired in 2003 as Chairman of the Board of Heat Controller, Inc. and President
of Addison Products Co. where he was in position from 1996 to 2003. He
previously held various executive positions with Addison Products, AAF-McQuay
Corporation, and Snyder General Corporation. Mr. Driggs is still active as
member of the Board of Directors for Heat Controller, Inc., Airguide
Manufacturing, LLC and Thermoguard, Triple-E USA. Mr. Driggs is a member of the
following Professional Organizations ASQC, APICS, IIE and ISA and of the
following Military Professional Organizations: MCA, MCROA, ROA, TROA and MOAA,
MCL, NL, MCMA, USNI, American Legion and VFW. Mr. Driggs retired in 1995 from
USMCR after 41 years of service and held the unique position of being the first
CWO-5 (Chief Warrant Officer) ever appointed in the USMC.

The Board has determined that Messrs. Richard, Ghadiali and Driggs are
independent directors as defined in Nasdaq Marketplace Rule 4200.

Except as set forth herein, no officer or director of our company has, during
the last five years: (i) been convicted in or is currently subject to a pending
a criminal proceeding; (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to any Federal or
state securities or banking laws including, without limitation, in any way
limiting involvement in any business activity, or finding any violation with
respect to such law, nor (iii) has any bankruptcy petition been filed by or
against the business of which such person was an executive officer or a general
partner, whether at the time of the bankruptcy of for the two years prior
thereto.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth certain information regarding compensation paid
by Dectron during each of the last three fiscal years to our Chief Executive
Officer and to each of our executive officers who earned in excess of $100,000
during each of the fiscal years ended January 31, 2004, 2003 and 2002.

NAME AND PRINCIPAL RESTRICTED STOCK ALL OTHER
POSITION YEAR SALARY(1) BONUS STOCK AWARDS OPTIONS/SAR'S COMPENSATION
-------- ---- --------- ----- ------------ ------------- ------------

Ness Lakdawala
Chairman of the Board of 2004 $142,380 -0- -0- -0- -0-
Directors, President and 2003 $142,380 -0- -0- -0- -0-
Chief Executive Officer 2002 $142,380 -0- -0- -0- -0-

(1) This reflects the aggregate salaries paid to Mr. Lakdawala during the fiscal
years presented by Dectron, Refplus and Thermoplus.

EMPLOYMENT AGREEMENTS

We entered into an employment agreement with Mr. Ness Lakdawala, our Chief
Executive Officer on October 5, 1998, the effective date of our initial public
offering. The employment agreement is for a term of two years, renewable for
additional one-year periods. The employment agreement entitled Mr. Lakdawala to
an annual salary of $200,000, adjusted annually for increases in the Consumer
Price Index. In the event that we are subject to a takeover or a change of
control event, Mr. Lakdawala is entitled to a bonus equal, on an after tax
basis, to five times his then current annual base salary. Mr. Lakdawala's
employment agreement contains a non-competition provision, which forbids him
from engaging in a competitive business during his employment and for a period
of one year thereafter. Mr. Lakdawala's employment agreement was extended for an
additional two years on the same conditions as above in October 2000 and for an
additional two years on the same conditions in October 2002. We presently intend
to renew the employment agreement with Mr. Lakwadala on substantially similar
terms as presently applicable.

We do not currently have employment agreements with any of our other officers or
directors.

OPTIONS AND STOCK APPRECIATION RIGHTS TO NAMED EXECUTIVE OFFICERS

No stock options were granted during the fiscal year ending January 31, 2004 to
Mr. Lakdawala.

AUDIT COMMITTEE

Our board of directors has an audit committee comprised of Gilles Richard. The
audit committee makes recommendations to our board of directors regarding the
independent auditors for our company, approves the scope of the annual audit
activities of our independent auditors, review audit results and will have
general responsibility for all of our auditing related matters. Mr. Cheung,
formerly a member of the audit committee, resigned as a director and member of
the audit committee on February 11, 2004.

The purpose of the Audit Committee is to assist our board of directors in the
oversight of the integrity of the consolidated financial statements of our
company, our company's compliance with legal and regulatory matters, the
independent auditor's qualifications and independence, and the performance of
our company's independent auditors. The primary responsibilities of the Audit
Committee are set forth in its charter, and include various matters with respect
to the oversight of our company's accounting and financial reporting process and
audits of the consolidated financial statements of our company on behalf of our
board of directors. The Audit Committee also selects the independent certified
public accountants to conduct the annual audit of the consolidated financial
statements of our company; reviews the proposed scope of such audit; reviews
accounting and financial controls of our company with the independent public
accountants and our financial accounting staff; and reviews and approves
transactions between us and our directors, officers, and their affiliates.

Accordingly, the Audit Committee discusses with Schwartz Levitsky Feldman, our
auditors, our audited financial statements, including among other things the
quality of our accounting principles, the methodologies and accounting
principles applied to significant transactions, the underlying processes and
estimates used by our management in our financial statements and the basis for
the auditor's conclusions regarding the reasonableness of those estimates, in
addition to the auditor's independence.

AUDIT COMMITTEE FINANCIAL EXPERT

We do not have an audit committee financial expert. It is anticipated that upon
his election as a director Mr. Ghadiali will join the Audit Committee and serve
thereon as the "audit committee financial expert."

Board Audit Committee Report

The Audit Committee has reviewed and discussed the Company's audited financial
statements for the fiscal year ended January 31, 2004 with management and has
received the written disclosures and the letter from Schwartz Levitsky Feldman,
the Company's independent auditors, required by Independence Standards Board
Standard No. 1 (Independent Discussions with Audit Committee). The Audit
Committee has also discussed with Schwartz Levitsky Feldman the Company's
audited financial statements for the fiscal year ended January 31, 2004,
including among other things the quality of the Company's accounting principles,
the methodologies and accounting principles applied to significant transactions,
the underlying processes and estimates used by management in its financial
statements and the basis for the auditor's conclusions regarding the
reasonableness of those estimates, and the auditor's independence, as well as
the other matters required by Statement on Auditing Standards No. 61 of the
Auditing Standards Board of the American Institute of Certified Public
Accountants.

Based on these discussions with Schwartz Levitsky Feldman and the results of the
audit of the Company's financial statements, the Audit Committee members
recommended unanimously to the Board of Directors that the audited financial
statements be included in the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 2004.

Board Compensation Report

EXECUTIVE COMPENSATION POLICY

Dectron's executive compensation policy is designed to attract, motivate, reward
and retain the key executive talent necessary to achieve our business objectives
and contribute to our long-term success. In order to meet these goals, Dectron's
compensation policy for our executive officers focuses primarily on determining
appropriate salary levels and providing long-term stock-based incentives. To a
lesser extent, Dectron's compensation policy also contemplates performance-based
cash bonuses. Dectron's compensation principles for the Chief Executive Officer
are identical to those of Dectron's other executive officers.

Cash Compensation. In determining its recommendations for adjustments to
officers' base salaries for Fiscal 2003, we focused primarily on the scope of
each officer's responsibilities, each officer's contributions to Dectron's
success in moving toward its long-term goals during the fiscal year, the
accomplishment of goals set by the officer and approved by the Board for that
year, our assessment of the quality of services rendered by the officer,
comparison with compensation for officers of comparable companies and an
appraisal of our financial position. In certain situations, relating primarily
to the completion of important transactions or developments, we may also pay
cash bonuses, the amount of which will be determined based on the contribution
of the officer and the benefit to Dectron of the transaction or development.

Equity Compensation. The grant of stock options to executive officers
constitutes an important element of long-term compensation for the executive
officers. The grant of stock options increases management's equity ownership in
us with the goal of ensuring that the interests of management remain closely
aligned with those of our stockholders. The Board believes that stock options in
Dectron provide a direct link between executive compensation and stockholder
value. By attaching vesting requirements, stock options also create an incentive
for executive officers to remain with us for the long term.

CHIEF EXECUTIVE OFFICER COMPENSATION

As indicated above, the factors and criteria upon which the compensation of Ness
Lakdawala, our Chief Executive Officer, is based are identical to the criteria
used in evaluating the compensation packages of the other executive officers of
Dectron. The Chief Executive Officer's individual contributions to Dectron
include his leadership role in establishing and retaining a strong management
team, developing and implementing our business plans and attracting investment
capital to Dectron. In addition, we have reviewed compensation levels of chief
executive officers at comparable companies within our industry.

OTHER COMPENSATION

Outside directors may be paid an honorarium for attending meetings of the Board
of Directors of Dectron, in an amount that management anticipates will not
exceed $500 per meeting.

PERFORMANCE GRAPH

Dectron Internationale
Comparative Investment Performance
January 31, 2004

------------------------------------------------------------------------------
1999 2000 2001
------------------------------------------------------------------------------
price value price value price value
------------------------------------------------------------------------------

Dectron Internationale Inc. 4.41 100.00 3.62 82.09 4.00 90.70

PEER GROUP
----------

Lennox International Inc. 19.19 100.00 9.63 50.18 10.39 54.14
United Technologies 58.81 100.00 52.74 89.68 74.98 127.50
York International Inc. 37.40 100.00 23.89 63.88 30.75 82.22
Emerson Electriic Inc. 56.51 100.00 54.65 96.71 76.00 134.49

Value of Peer Group at Jan 31, 100.00 75.11 99.59

INDEX
-----
Nasdaq Industrial Index 1408.01 100.00 2,199.76 156.23 1,669.81 118.59

Summary 1999 2000 2001 2002 2003 2004
------- ---- ---- ---- ---- ---- ----

Peer Group 100.00 75.11 99.59 93.55 80.36 115.88
Dectron 100.00 82.09 90.70 145.12 83.90 89.57
Nasdaq Industrial Average 100.00 156.23 118.59 98.01 71.51 118.12

--------------------------------------------------------------------------
2002 2003 2004
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price value price value price value
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Dectron Internationale Inc. 6.40 145.12 3.70 83.90 3.95 89.57

PEER GROUP
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Lennox International Inc. 10.20 53.15 12.81 66.75 16.50 85.98
United Technologies 68.73 116.87 63.58 108.11 95.54 162.46
York International Inc. 38.02 101.66 23.76 63.53 38.15 102.01
Emerson Electriic Inc. 57.94 102.53 46.93 83.05 63.90 113.08

Value of Peer Group at Jan 31, 93.55 80.36 115.88

INDEX
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Nasdaq Industrial Index 1,380.02 98.01 1,006.87 71.51 1,663.12 118.12

Summary
-------

Peer Group
Dectron
Nasdaq Industrial Average

STOCK OPTION PLANS

1999 Stock Option Plan

We have adopted a Stock Option Plan (the "1999 Plan") pursuant to which 340,000
shares of Common Stock are reserved for issuance, 3,000 options are currently
issued and outstanding.

On September 2, 1999, the Board granted options under our 1999 Plan to certain
members of our Board and certain employees. Leena Lakdawala, Roshan Katrak, and
Mauro Parissi were granted 60,000, 60,000, and 18,000, respectively. Subject to
certain limitations, the options granted are exercisable one year after
issuance. Subsequent to the one-year anniversary date of the grant, the option
holders may exercise the option up to 25% per year of the total options granted
for the following four years. Each of the options will be fully exercisable on
November 4, 2003, and expire on November 4, 2004. The exercise price of the
options is $3.00

The 1999 Plan is administered by the Board of Directors, who will determine,
among other things, those individuals who shall receive options, the time period
during which the options may be partially or fully exercised, the number of
shares of Common Stock issuable upon the exercise of the options and the option
exercise price.

The 1999 Plan is effective for a period of five years, expiring in 2003. Options
may be granted to officers, directors, consultants, key employees, advisors and
similar parties who provide us with their skills and expertise. The 1999 Plan is
designed to enable management to attract and retain qualified and competent
directors, employees, consultants and independent contractors. Options granted
under the 1999 Plan may be exercisable for up to five years, and shall be at an
exercise price all as determined by the Board. Options are non-transferable
except by the laws of descent and distribution or a change in control of
Dectron, as defined in the 1999 Plan, and are exercisable only by the
participant during his or her lifetime. Change in control includes (i) the sale
of substantially all of the assets of Dectron and merger or consolidation with
another company, or (ii) a majority of the Board changes other than by election
by the stockholders pursuant to Board solicitation or by vacancies filled by the
Board caused by death or resignation of such person.

If a participant ceases affiliation with Dectron by reason of death, permanent
disability or retirement at or after age 70, the option remains exercisable for
one year from such occurrence but not beyond the option's expiration date. Other
types of termination allow the participant three months to exercise, except for
termination for cause, which results in immediate termination of the option.

The exercise price of an option may not be less than the fair market value per
share of Common Stock on the date that the option is granted in order to receive
certain tax benefits under the Income Tax Act of Canada (the "ITA"). The ITA
requires that the exercise price of all future options will be at least 85% of
the fair market value of the Common Stock on the date of grant of the options. A
benefit equal to the amount by which the fair market value of the shares at the
time the employee acquires them exceeds the total of the amount paid for the
shares or the amount paid for the right to acquire the shares shall be deemed to
be received by the employee in the year the shares are acquired pursuant to
paragraph 7(1) of the ITA. Where the exercise price of the option is equal to
the fair market value of the shares at the time the option is granted, paragraph
110(1)(d) of the ITA allows a deduction from income equal to one quarter of the
benefit as calculated above. If the exercise price of the option is less than
the fair market value at the time it is granted, no deduction under paragraph
110(1)(d) is permitted. Options granted to any non-employees, whether directors
or consultants or otherwise will confer a tax benefit in contemplation of the
person becoming a stockholder pursuant to subsection 15(1) of the ITA.

Options under the 1999 Plan must be issued within five years from the effective
date of the 1999 Plan.

Any unexercised options that expire or that terminate upon an employee's ceasing
to be employed by Dectron become available again for issuance under the 1999
Plan.

The 1999 Plan may be terminated or amended at any time by the Board of
Directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the 1999 Plan may not be
increased without the consent of our stockholders.

2001 Stock Option Plan

We also adopted the 2001 Stock Option Plan (the "2001 Plan") pursuant to which
500,000 shares of Common Stock are reserved for issuance, 108,500 options are
currently issued and outstanding.

On January 4, 2002, the Board granted options under our 2001 Stock Option Plan
to certain members of our Board and certain employees. Leena Lakdawala, Roshan
Katrak, Mauro Parissi and Gilles Richard were granted 15,000, 15,000, 5,000 and
3,000 options, respectively. Subject to certain limitations, the options granted
are exercisable one year after issuance. Subsequent to the one-year anniversary
date of the grant, the option holders may exercise the option up to 25% per year
of the total options granted for the following four years. Each of the options
will be fully exercisable on January 4, 2006, and expire on January 4, 2007. The
exercise price of the options is $4.20

The 2001 Plan is administered by the Board of Directors, who will determine,
among other things, those individuals who shall receive options, the time period
during which the options may be partially or fully exercised, the number of
shares of Common Stock issuable upon the exercise of the options and the option
exercise price.

The 2001 Plan is effective for a period of ten years, expiring in 2011. Options
may be granted to officers, directors, consultants, key employees, advisors and
similar parties who provide us with their skills and expertise. The 2001 Plan is
designed to enable management to attract and retain qualified and competent
directors, employees, consultants and independent contractors. Options granted
under the 2001 Plan may be exercisable for up to ten years, and shall be at an
exercise price all as determined by the Board. Options are non-transferable
except by the laws of descent and distribution or a change in control of
Dectron, as defined in the 2001 Plan, and are exercisable only by the
participant during his or her lifetime. Change in control includes (i) the sale
of substantially all of the assets of Dectron and merger or consolidation with
another company, or (ii) a majority of the Board changes other than by election
by the stockholders pursuant to Board solicitation or by vacancies filled by the
Board caused by death or resignation of such person.

The exercise price of an option may not be less than the fair market value per
share of Common Stock on the day immediately preceding the date that the option
is granted in order to receive certain tax benefits under the Income Tax Act of
Canada (the "ITA"). The ITA requires that the exercise price of all future
options will be at least 85% of the fair market value of the Common Stock on the
day immediately preceding the date of grant of the options. A benefit equal to
the amount by which the fair market value of the shares at the time the employee
acquires them exceeds the total of the amount paid for the shares or the amount
paid for the right to acquire the shares shall be deemed to be received by the
employee in the year the shares are acquired pursuant to paragraph 7(1) of the
ITA. Where the exercise price of the option is equal to the fair market value of
the shares at the time the option is granted, paragraph 110(1)(d) of the ITA
allows a deduction from income equal to one quarter of the benefit as calculated
above. If the exercise price of the option is less than the fair market value at
the time it is granted, no deduction under paragraph 110(1)(d) is permitted.
Options granted to any non-employees, whether directors or consultants or
otherwise will confer a tax benefit in contemplation of the person becoming a
stockholder pursuant to subsection 15(1) of the ITA.

Options under the 2001 Plan must be issued within ten years from the effective
date of the 2001 Plan.

Any unexercised options that expire or that terminate upon an employee's ceasing
to be employed by Dectron become available again for issuance under the 2001
Plan.

The 2001 Plan may be terminated or amended at any time by the Board of
Directors, except that the number of shares of Common Stock reserved for
issuance upon the exercise of options granted under the 2001 Plan may not be
increased without the consent of our stockholders.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

We do not have a compensation committee. While we have not yet been able to
identify and appoint suitable nominees as of the date of this annual report, our
management is currently diligently pursuing candidates therefor.

SECTION 16(A) REPORTING

Under the securities laws of the United States, Dectron's directors, its
executive (and certain other) officers, and any persons holding ten percent or
more of Dectron's Common Stock must report on their ownership of Dectron's
Common Stock and any changes in that ownership to the Securities and Exchange
Commission and to the National Association of Securities Dealers, Inc.'s
Automated Quotation System. Specific due dates for these reports have been
established. During the year ended January 31, 2004 we believe that all reports
on behalf of our executive officers and directors for all transactions were
filed on a timely basis.

MEETINGS OF THE BOARD OF DIRECTORS

The Board of Directors met three times during the fiscal year ended January 31,
2004.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We lease our St. Hubert, Quebec manufacturing facility from Roshan Katrak, our
Vice President of Human Relations and the wife of Ness Lakdawala, our President,
Chairman and CEO, for a monthly rent of $3,685 per month. We believe that the
lease was made on terms no less favorable than could be obtained from
unaffiliated third parties.

We lease our Grande Allee manufacturing facilities from Investiness Inc., a
company owned by Ness Lakdawala's spouse and children, for an aggregate monthly
lease payment of $18,685. We believe that the lease was made on terms no less
favorable than could be obtained from unaffiliated third parties.

Between March 1999 and February 2003, we made loans of $147,999 to Mauro
Parissi, our Chief Financial Officer, and $179,123 to Leena Lakdawala, Executive
Vice President. The loans were used to finance purchase of the Dectron's stock
and bore interest at the Canadian prescribed interest rate of five percent (5%).
As of April 30, 2003, the loan balances of Mr. Parissi and Ms. Lakdawala were
$228,192 and $228,111, respectively. Ms. Lakdawala is Ness Lakdawala's daughter.

All future material transactions, including any loans, between Dectron and its
officers, directors, principal stockholders or affiliates of any of them have
been and will be on terms no less favorable to Dectron than those that can be
obtained from unaffiliated third parties, and will be approved in advance by a
majority of the independent and disinterested directors who had access, at
Dectron's expense, to Dectron's or independent legal counsel.

STOCKHOLDER VOTE REQUIRED

Election of each director requires the affirmative vote of the holders of a
majority of the shares of Common Stock present in person or represented by proxy
at the Annual Meeting of Stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE
BOARD OF DIRECTORS OF THE COMPANY OF EACH OF THE NOMINEES.

PROPOSAL NO. 2

RATIFICATION OF APPOINTMENT OF SCHWARTZ LEVITSKY FELDMAN, LLP, CHARTERED
ACCOUNTANTS AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Subject to ratification by the shareholders, the Board of Directors appointed
Schwartz Levitsky Feldman LLP as independent auditors to audit the financial
statements of the Company for the fiscal year ending January 31, 2005.

AUDIT FEES. The Company engaged Schwartz Levitsky Feldman as its independent
accountants in 1998. In connection with the audit of the Company's annual
financial statements for fiscal year 2004, Schwartz Levitsky Feldman billed the
Company approximately $100,953.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES AND ALL OTHER FEES.
The aggregate fees billed by Schwartz Levitsky Feldman for professional services
rendered during fiscal year 2004 relating to the review of the Company's tax
returns, consultations on accounting standards and other miscellaneous services
was $ 10,140.

The Audit Committee has considered whether provision of the services described
above under the caption "Financial Information Systems Design and Implementation
Fees and All Other Fees" is compatible with maintaining the independent
accountants' independence and has determined that such services have not
adversely affected Schwartz Levitsky Feldman's independence.

A representative of Schwartz Levitsky Feldman is expected to be present at the
Annual Meeting and will have the opportunity to make a statement, and will be
available to respond to appropriate questions from shareholders.

STOCKHOLDER VOTE REQUIRED

Ratification of the appointment of Schwartz Levitsky Feldman as independent
certified public accountants requires the affirmative vote of the holders of a
majority of the shares of Common Stock present in person or represented by proxy
at the Annual Meeting of Stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
SCHWARTZ LEVITSKY FELDMAN, LLP, CHARTERED ACCOUNTANTS AS THE COMPANY'S
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.

OTHER MATTERS

The Board of Directors does not know of any matters other than those referred to
in the notice of meeting that will be presented for consideration at the
Meeting. However, it is possible that certain proposals may be raised at the
Meeting by one or more stockholders. In such case, or if any other matter should
properly come before the Meeting, it is the intention of the person named in the
accompanying proxy to vote such proxy in accordance with his best judgment.

SOLICITATION OF PROXIES

The cost of soliciting proxies will be borne by Dectron. Solicitations may be
made by mail, personal interview, telephone, and telegram by directors, officers
and employees of Dectron. Dectron will reimburse banks, brokerage firms, other
custodians, nominees and fiduciaries for reasonable expenses incurred in sending
proxy material to beneficial owners of Dectron's capital stock.

STOCKHOLDER PROPOSALS

Proposals of stockholders of Dectron that are intended to be presented by such
stockholders at Dectron's 2005 Annual Meeting of Stockholders must be received
by Dectron no later than January 7, 2005 in order that they may be considered
for inclusion in the Proxy Statement and form of proxy relating to that Meeting.

ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION

Copies of the annual report (Form 10-K) of Dectron for the year ended January
31, 2004, as filed with the Securities and Exchange Commission (without
exhibits), and any amendments thereto, are available to stockholders free of
charge by writing to Dectron Internationale Inc., 4300 Poirier Blvd., Montreal,
Quebec H4R 2C5.

By Order of the Board of
Directors of Dectron Internationale Inc.

/s/ Ness Lakwadala
Ness Lakdawala
Chairman and Chief Executive Officer

August 3, 2004

DECTRON INTERNATIONALE INC.
ANNUAL MEETING OF SHAREHOLDERS--AUGUST 24, 2004
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned hereby appoints Ness Lakdawala, with full power of substitution,
proxy to vote all of the shares of Common Stock of the undersigned and with all
of the powers the undersigned would possess if personally present, at the Annual
Meeting of Shareholders of Dectron Internationale Inc., to be held at HOTEL
NOVOTEL, 1180 rue de la Montagne, Montreal, H3G 1Z1, Canada on August 24, 2004
at 2:30 p.m. local time and at all adjournments thereof, upon the matters
specified below, all as more fully described in the Proxy Statement dated August
3, 2004 and with the discretionary powers upon all other matters which come
before the meeting or any adjournment thereof.

THIS PROXY IS SOLICITED ON BEHALF OF DECTRON INTERNATIONALE INC.'S BOARD OF
DIRECTORS.

1. To elect the following persons to serve as directors of the Company
until the 2005 Annual Meeting of Shareholders.

- Ness Lakdawala - Roshan Katrak - Mauro Parissi

- Leena Lakdawala - Rustom M. Ghadiali - Gilles Richard

Dick Driggs

|_| FOR ALL NOMINEES |_| WITHHELD FOR ALL NOMINEES

INSTRUCTION: To withhold authority to vote for any individual, write
that nominee's name in the space provided below:

--------------------------------------------------------------------------------

2. To ratify the appointment of Schwartz Levitsky Feldman LLP as the
Company's independent accountants for the ensuing year.

|_| FOR |_| AGAINST |_| ABSTAIN

3. In their discretion, upon such other matter or matters that may
properly come before the meeting, or any adjournments thereof.

(Continued and to be signed on the other side)

(Continued from other side)

Every properly signed proxy will be voted in accordance with the specifications
made thereon. IF NOT OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR PROPOSALS
1 and 2.

The undersigned hereby acknowledges receipt of a copy of the accompanying Notice
of Meeting and Proxy Statement and hereby revokes any proxy or proxies
heretofore given.

Please mark, date, sign and mail your proxy promptly in the envelope provided.

Date: , 2004
------------------------------

(Print name of Shareholder)

Signature

Number of Shares
Note: Please sign exactly as name appears
in the Company's records. Joint
owners should each sign. When
signing as attorney, executor or
trustee, please give title as such.

PLEASE MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.