Construction Company

Mohd Azlan Iskandar Asia Champion 2008 & 2010 Malaysia No.
1 Squash Player Zecons Sponsorship Since 2003
Vision
To be a world class corporation providing excellent engineering and construction services.
Mission
We will deliver excellent engineering and construction services which meet our customers requirements through good corporate governance practices and superior technologies. We also strive to have an efficient, dedicated and trained workforce to serve our customers.
Work in progress inside the 12.5KM TBM Tunnel
CAPABILITY STATEMENT
CONTENTS
Performance Review
Financial Highlights ...........................................
05
Corporate Profile
Corporate Information ........................................ Corporate Structure ............................................ Chairmans Statement ......................................... Group Managing Director / CEOs Review ......... Profile of Directors ............................................. 06 07 08 10 12
Corporate Governance ...........................

Corporate Governance Statement ....................... Statement of Directors Responsibility ................ Statement on Internal Control ............................ Audit Committee Report .................................... Additional Compliance Information ...................
19
20 23 24 25 28
Directors Report & Audited Financial Statements ................................ 29

Analysis of Shareholdings .................................. Analysis of Warrant Holdings ............................. List of Properties ................................................. Notice of Annual General Meeting ..................... Statement Accompanying Notice of Annual General Meeting .................................... Proxy Form 105 95 98 100 102
Menara Zecon
Zecon Berhad Annual Report 2009 The First Concrete Arch Bridge In Sarawak, A 200 Meters Double 3-Lanes Carriageway
- Part of The Matang Highway To The Proposed Federal Administrative Center Project Completed In November 2009
Milestones
4
Annual Collections Exceed RM10,000,000 For The First Time - Zecon Toll Concessionaire Sdn Bhd Recorded RM10.289 million In 2009s Collections
Package 4 of Projek Skim Bekalan Air Triang, Jelebu, Negeri Sembilan. Supply And Lay 1700mm ND Raw Water Pipeline 2A & 2C - Completed In November 2009
Total Assets Earning Per Share

Sen
0 2 4 6 8 10 12
RMmillion
Revenue
RMmillion
0 50 100 150 200 250 300
100
200
300
400
500
429 11.4 11.5 3.7 0.9
142 45 79 157
421
415
Financial Highlights 2009
05 06 07 08 09 05 06 07 08 09
478
05 06 07 08 09
512 4.9
143
Net Asset Per Share

RMmillion
0 50 100
RM
Shareholders Equity
150 200
Profit Before Tax

RMmillion
0 145 155 172 173 2 4 6 8 10 12
0.0
0.5
1.0
1.5
2.0
1.65
1.7 10.1 7.3 1.3
1.76
1.44
05 06 07 08 09
05 06 07 08 09 05 06 07 08 09
1.45
1.50
179
4.8
Corporate Information
Board of Directors
Datu Dr. Hatta bin Solhi Independent Chairman Datuk Dr. Haji Yusof @ Josree bin Haji Yacob Deputy Independent Chairman Datuk Haji Zainal Abidin bin Haji Ahmad Group Managing Director/Chief Executive Officer Haji Zainurin bin Haji Ahmad Deputy Managing Director Poh Lik Gan @ Poh Li Thong Independent and Non-Executive Director Dato Haji Hamzah bin Haji Ghazalli Independent and Non-Executive Director Dato Abdul Majit bin Ahmad Khan Independent and Non-Executive Director Richard Kiew Jiat Fong Independent and Non-Executive Director Hui Kok Yuan Executive Director Haji Abg Azahari bin Abg Osman Executive Director Jamil Bin Jamaludin Executive Director Haji Saini bin Haji Ali Executive Director Ng Weng Fatt Executive Director Audit Committee Poh Lik Gan @ Poh Li Thong (Chairman) Datu Dr. Hatta bin Solhi Richard Kiew Jiat Fong Risk Management Committee Haji Zainurin bin Haji Ahmad (Chairman) Haji Abg Azahari bin Abg Osman Haji Saini bin Haji Ali Jamil bin Jamaludin Rayan ak Narong Brandon Goh Mun Han Remuneration & Nomination Committee Datu Dr. Hatta bin Solhi (Chairman) Poh Lik Gan @ Poh Li Thong Dato Haji Hamzah bin Haji Ghazalli Option Committee Datu Dr. Hatta bin Solhi (Chairman) Haji Zainurin bin Haji Ahmad Brandon Goh Mun Han Koh Fee Lee Company Secretaries Koh Fee Lee (MAICSA 7019845) Lim Poh Yen (MAICSA 7009745) Auditors Messrs Ernst & Young Room 300-303, 3rd Floor, Wisma Bukit Mata Kuching Jalan Tunku Abdul Rahman, 93100 Kuching, Sarawak. Tel : 082-243233 Fax : 082-421287 Share Registrar Symphony Share Registration Services Sdn Bhd (506293-D) Level 26, Menara Multi Purpose, Capital Square No. 8, Jalan Munshi Abdullah 50100 Kuala Lumpur. Tel : 03-2721 222 Fax : 03-2721 2530 Principal Banker Bank Muamalat Malaysia Berhad KAF Investment Bank Berhad Affin Investment Bank Berhad AmBank (M) Berhad EON Bank Berhad Public Bank Berhad RHB Bank Berhad HSBC Malaysia Berhad Malayan Banking Berhad Solicitors Reddi & Co. Advocates Azmi & Associates C.J. Eng Advocates Hisham, Sobri & Kadir Mary Bolhassan, Noreda Ahmad & Co Tang & Tang, Wahap & Ngumbang Advocates Stock Exchange Listing Bursa Malaysia Securities Berhad, Main Market Stock Code : 7028 Stock Name : ZECON Registered Office 8th Floor, Menara Zecon No. 92, Lot 393, Section 5 KTLD Jalan Satok, 93400 Kuching, Sarawak. Tel : 082-275555 Fax : 082-275500 E-mail: headoffice@myzecon.com Web-site: www.zecon.com.my Branch Office Suite 2A-11-2, Level 11, Block 2A, Plaza Sentral, Jalan Stesen Sentral 5, KL Sentral, 50470 Kuala Lumpur. Tel : 03-22723118 Fax : 03-22743656
Corporate Structure
ZECON BERHAD
100% 100% 100% Zecon Toll Concessionaire Sdn Bhd Zecon Geotechnical Services Sdn Bhd Zecon Mutiara Sdn Bhd 100% Agrowell Quarry Sdn Bhd
100%
Zecon Land Sdn Bhd
70% 51%
Zecon Demak Jaya Sdn Bhd Zecon Petra Jaya Sdn Bhd
100% 100% 100%
Zecon Australia Pty Ltd Zecon Piling Sdn Bhd Zecon International Limited 100% 100% 100% IR Concept (M) Sdn Bhd ZPM Satu Sdn Bhd Zalpoint Tanah Putih Sdn Bhd
100% 100% 100% 100% 100% 100%
Zecon Water Corporation Sdn Bhd Zecon Construction (Sarawak) Sdn Bhd Matang Highway Sdn Bhd Zecon Designtech Sdn Bhd Zecon MidEast Limited Zecon (Saudi Arabia) International Limited Zecon Assets Sdn Bhd Zecon Resources Sdn Bhd 50.1% Sarmax Sdn Bhd Zecon Dredging Sdn Bhd Teknik PS Sdn Bhd 100% TPS Medicare Sdn Bhd
100% 96% 70% 55%
51% 51% 51% 50% 35% 25.48%
Zecon Construction Sdn Bhd Zecon Fab Sdn Bhd Zecon Energy Sdn Bhd NS Water-Zecon JV Sdn Bhd L.C.S. Trading Co. Sdn Bhd Halifax Capital Berhad Subsidiary Companies Associate Companies 60% Zecon Well Services Sdn Bhd
Zecon Berhad Annual Report 2009
Chairmans Statement
Dear Shareholders On behalf of the Board of Directors (Board) and Zecon Bhd, I am please to present the 2009 Annual Report comprising the Directors Report and the Audited Financial Statement for the year ended 31 December 2009. Overview The year 2008 was not a good year for the business community throughout the world. The unprecedented financial crisis which hit the world, without much warning, was followed by a period of uncertainty throughout 2009. The business community everywhere, including Malaysia, took a cautious and low-risk approach in their efforts to expand their existing business or to venture into new areas. In other words, their confidence of sustaining the level of profitability is being seriously challenged, like never before. Thus very little or no expansion in their businesses could be expected from the business community. That is the business scenario in which the report referred to. The adverse economic situation has a direct impact on the overall economy of Malaysia which saw GDP growth plummeted to the negative for the year. In turn, it brought similar negative effect on the performance of most companies, including ZECON. Fortunately, the stimulus financial packages introduced by the Malaysian Government during the year began to show positive effects towards the third quarter of the year. The GDP improved from -6% 9n the first quarter to 4.5% in the last quarter of2009. Full recovery is expected in 2010 when the Malaysian economy is expected to grow by between 4.5% to 6%. Financial Performance Despite the adverse global economic situation, Zecon Bhd group of companies financial performance showed a slight improvement compared to the previous year. Profit after tax for the group increased slightly from less than RM1million in 2008 to RM5.9 million for 2009. The increase in profit was achieved in spite of the lower revenue (RM142 million) recorded for the year compared to RM157 million for 2008. The higher profit was partly the result of the sale of 30% equity in one ZECONs wholly-owned subsidiaries during the period under review. The fairly good financial performance of the Group was largely a result of a number of significant operational milestones achieved during the year. These include the completion of two major projects namely the Matang Highway to the Proposed Federal Administrative Centre, and Projek Skim Bekalan Air Triang (Skim B), Jelebu, Negeri Sembilan Package 4. These projects, with a combined value of RM240 million, were completed in November 2009. In this connection, I, would like to place on record the Boards appreciation and thanks to Management and project teams for the excellent job done and undivided commitment to complete the projects on schedule, despite the many challenges faced during the difficult period. New Projects and Overseas Ventures Given the global economic scenario, we are happy with our achievement during the difficult year. Things could have been better if our joint ventures in the Middle East got implemented as planned. However, a number of projects which was planned to be implemented did not take off the ground. Our partners, as well as potential clients in the Middle East, took a cautious stance resulting in the implementation of a number of property projects being postponed or cancelled in view of the dampened property market demands. The Dubai World debt crisis which surfaced during the last quarter of 2009 worsened the situation. The JV agreement between Zecon and Qatari Diar to jointly developed commercial and residential properties in Qatar and other Middle East countries has lapsed. However, looking forward, both parties are actively finalising negotiation for extension of the agreement to take advantage of the opportunities that come with the economic recovery presented in the region. At the same time, the group is in the final stage of negotiation for property development projects in Saudi Arabia. We are optimistic, these projects will bear fruits during the next few years. Zecon will continue with its strategic plan to diversify its core businesses in order to improve the groups earning and profitability. During the year, we have successfully secured 2 major projects; (1) RM132 million infrastructure project Projek Skim Bekalan Air Teriang (Skim B) Jelebu, Negeri Sembilan, Package 5 Construction of Sg. Triang Dam and Associated Works, and (2) RM182 million construction project Design, Construction, Equipping, Commissioning & Maintenance of Faculty of Medicine & Health Science (FMHS) and Institute of Health & Community Medicine (IHCM) for The Universiti Malaysia Sarawak (UNIMAS). These two new projects, together with existing ones in Sarawak and Negri Sembilan, will keep our management teams occupied during the short term period. Efforts to secure new projects for the years ahead are being intensified, with negotiations being conducted with the Syarikat Perumahan Negara, the State Housing Commission and the private sector in the State. We are confident, with the improved economic condition, the years ahead look very bright for the Group. Corporate Government Good Corporate governance has increasingly assumed a very significant role for managing business during the difficult period due to the numerous challenges being faced to achieve profitability. The ZECON Board of Directors is committed to comply with all the policies and guidelines in the Malaysia Code of Corporate Governance for all its conducts and practices of doing business. The Groups Corporate Governance Statement which contains the Internal Control and Risk Management, Financial Policies and Procedure Manual, Internal Audit Report, ISO 9001:2008 Compliance can be found in this annual report. I wish to assure shareholders that the Board and Board Committees closely monitor to ensure that management adhere to these policies and guidelines in the conduct of their business. Corporate Social Responsibility As a corporate player, ZECON is ever- conscious of contributing towards improving the environment in which it operates.. Special attention is being given to the safety working environment of project sites to ensure that our employees, including temporary workers, work in a very safe condition. Due to the safety measures being put in place, the rate of fatal accidents in the work places is almost zero. In the same line, the Board had recently approved that medical benefits be extended to all family members of all levels. This is to ensure that the welfare of our staff and members of their families are properly taken care of. For the community at large, ZECON puts aside, on a regular basis, a budget to give financial assistance to deserving students to continue their students at all levels. This assistance takes the form of scholarships for UNIMAS Engineering students, as well as financial assistance to secondary school students from low-income families who stay in Yayasan Kamajuan Insan (YAKIN) hostel and from other schools wiinh the Kuching area. In addition, our commitment to encourage excellent performance among students in tertiary institutions take the form of Zecon Excellence Awards given to the best graduating engineering students at UNIMAS and Curtin University of Technology Sarawak. While the education field is our priority in our CSR endevours, Zecon also plays a role in the filed of sports development in the State. We continue to sponsor sportpersosn who show determination to succeed in their chosen sports, One case in particular is Sarawak- born Malaysia squash player, Mohd Azlan Iskandar, who has been sponsored by our group for a number of years to encourage him to achieve his dream by entering the top 10 of the world ranking. Apart from benefiting Azlan directly, We hope this sponsorship program will inspire more sport talents, especially from Sarawak, to aim higher and excel in their chosen fields. Concluding Remark On behalf of the Board, I would like to take this opportunity to thanks all our stakeholders for their full trust in the Board and the management of Zecon to steer the Group out of troubled water. My sincere appreciation also goes to the management and staff for their continued commitment to contribute selflessly to the group performance and to maintain operations in a socially responsible manner. To my fellow Board members, a big thank you for your advises, support, comradeship and criticism, both during and after meetings, as well as for always keeping a high corporate integrity and business ethics which continue to be the keystone to the groups progress towards its vision. Lastly I wish ZECON all the best for the years ahead.
Datu Dr. Hatta Bin Solhi Independent Chairman Date: 27 MAY 2010
The fairly good financial performance of the Group was largely a result of a number of significant operational milestones achieved during the year. This include the completion of 2 major projects with a combined values of RM240 million in November 2009
Datu Dr. Hatta Bin Solhi
GROUP MANAGING DIRECTOR / CEOS REVIEW

While 2008 saw most of our focuses were on the progresses of our projects on hand and our diversification effort in overseas ventures, 2009 could have been more fruitful financially had it not been delayed and slowed-down by the uncertainty over the sustainability of the world and regional economy and financial recovery. Our toll operations had attracted more users than previous years, hitting a milestone of more than RM10.3 million in revenue or approximately RM28,200 daily average collection in 2009. Zecon Toll recorded approximately 8.2 million users in 2009 or a daily average of 22,500 users which is the highest in its 6 years operating history. We expect 2010 to be very encouraging and we have set an ambitious target of daily average collection of RM30,000 or The recent positive development in Asia and also the proactive 24,000 users per day! stimulus packages introduced timely by our Government have all added to the confidence of the investors who suffered Looking at our overseas ventures, especially at the Middle East impairment in most of their equity investment since 2008. Region, our team is currently actively involved in discussion with However, there are still more to be done. Qatar Diar on the extension of the Memorandum of Understanding which has lapsed. The slow progress and lack of activities in this Zecon Berhad recorded a lower revenue of RM143 million for region are believed to be short term due to the Dubai crisis. We the year ended 31 December 2009 as compared to RM157 in are also looking positively at the Industrial Building System (IBS) 2008, a decrease of almost 9% or RM14 million. The RM5.9 projects with the housing authorities in Saudi Arabia. million in Group profit was mainly due to the disposal of 30% equity interest in 100% subsidiary Zecon Demak Jaya Sdn Bhd Our Oil & Gas division, led by Zecon Fab Sdn Bhd and Zecon during the year. Energy Sdn Bhd have been participating in tenders related to fabrication services and, oil and gas related services. Some of We are proud to have a group of energetic leaders in our these tenders and pre-qualification exercises involved oil & gas respective divisions who spearheaded the respective projects major companies like Malaysia Marine and Heavy Engineering with the aim to minimise the effect of the negative market and Sdn Bhd and Sime Darby Engineering Sdn Bhd. We are hopeful to economic sentiments and to complete their work according to land a couple of projects from these exercises. plans. This often required extra hours and undivided dedications from top executives to everyone involved with the projects. We We anticipate the coming year to bring more excitement and hope. completed 2 major projects in 2009; (1) The RM39 million We will continue focusing on our long term strategy to improve Package 4 of Projek Skim Bekalan Air Triang (Skim B), Jelebu, profitability by diversifying our core businesses and to improve the Negeri Sembilan which involved the supply and lay 1700mm technical aspects in all our planned deliverables consistent with diameter Raw Water Pipeline, and (2) The RM201 million our mission and objectives. In summary, for the 2010 financial highway to the Proposed Federal Administrative Centre at year, we expect to improve on our revenue and profitability. Rambugan, Kuching. Both projects were physically completed according to the scheduled completion dates. I take this opportunity to firstly thank the Board of Directors for its continued trust and support in me leading Zecon in its quest During the year under review, we were awarded with 2 new to be a world class corporation in the near future. My sincere projects with a combined value of RM314 million. Package 5 gratitude to our valued shareholders, investors, bankers, customers, of the Projek Skim Bekalan Air Teriang (Skim B) Jelebu, Negeri suppliers, business associates, all our project consultants and Sembilan commenced in June 2009. This Package involves relevant Government authorities for their continuous supports and the construction of Sg. Triang Dam and associated works, it is contributions. We hope this invaluable partnership will continue valued at RM132 million and is expected to be fully completed to be fruitful and mutually beneficial. in 30 months. In October 2009, we started work on another new project, i.e. the RM182 million turnkey project that Lastly, to all employees of Zecon Group, I would like to express include Design, Construction, Equipping, Commissioning & my sincere appreciation to your unfailing effort and enthusiasm Maintenance of Faculty of Medicine & Health Science (FMHS) throughout this extraordinary and challenging year. I treasure and Institute of Health & Community Medicine (IHCM) for The the unity shown by all levels, the uncompromising focus to carry Universiti Malaysia Sarawak (UNIMAS). The current physical out the works safely and on schedule, and most importantly, completions for these two projects stand at 17% and 6% maintaining the quality of all our deliveries. respectively. Thank you. The current progresses for the other packages Under Projek Skim Bekalan Air Teriang (Skim B) are positive. The physical completion for Package 1 (construction of 12.5km TBM transfer tunnel) is 87% and Package 2 (Construction of Patesek Intake Pumping Station) is 71%. The historic punch-through for the longest tunnel of its kind in Malaysia is expected to be Datuk Haji Zainal Abidin Bin Haji Ahmad Group Managing Director / CEO completed in May 2010, another project milestone which once Date: 27 MAY 2010 again cemented our competency to complete major project of such magnitude and technical knowhow.
10
We anticipate the coming year to bring more excitement and hope. We will continue focusing on our long term strategy to improve profitability by diversifying our core businesses and to improve the technical aspects in all our planned deliverables consistent with our mission and objectives.
Datuk Haji Zainal Abidin Bin Haji Ahmad
11
Profile of Directors
Datu Dr. Hatta bin Solhi
Age Nationality Qualification : : : : : 66 Malaysian Ph.D in Political Science (Development Studies) from the University of Hawaii. Independent Chairman Datu Dr. Hatta was appointed to the Board of Directors of the Company on 24 April 2001. Prior to joining Zecon, he served as the Deputy State Secretary of Sarawak from August 1997 to November 2001 and had held several senior positions in the State and Federal Services. Member of Audit Committee Chairman of Remuneration & Nomination Committee Chairman of Option Committee Mimos Berhad Name Direct No. of shares 20,000 Indirect No. of % shares -
Position held Working experience & occupation
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries
: : :
% %
Zecon Berhad Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : : None None None None 5/5
Datuk Dr. Haji Yusof @ Josree bin Haji Yacob

Age Nationality Qualification : : : : :
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year
: : : : : : : :
54 Malaysian Degree in Doctorate (MD), UKM-1981 Master of Science in Public Health (MSc PH), NUS (Singapore) -1985 Deputy Independent Chairman Datuk Yusof was appointed to the Board of Directors of the Company on 09 June 2008. He started his career in 1981 by joining Kuala Lumpur General Hospital as Medical Officer. He was in medical field for nine (9) years until he joined political sector in 1990. During his political arena, he held various positions within the UMNO Division Sabah. He was the Member of Parliament of Sipitang, Sabah and Dewan Rakyat Deputy Speaker till February 2008. He was the Chairman of Saham Sabah Berhad and Sedcovest Holdings Sdn Bhd till 2004. Besides, he was also appointed to the Board of other private limited companies and charitable organizations. He is currently sitting in the Board of Sutera Harbour Golf and Country Club Berhad. None None None None None None None 5/5
12
Datuk Haji Zainal Abidin bin Haji Ahmad
Age Nationality Qualification : : : 52 Malaysian Master of Arts degree in Management from the University of Kent at Canterbury, England. Diploma in Accounting from the University of Kent at Canterbury, England. Bachelor of Arts from University Kebangsaan Malaysia. Group Managing Director/Chief Executive Officer Datuk Zainal was appointed to the Board of Zecon on 28 July 1994 as Director and subsequently as Executive Chairman on 30 November 1996. On 24 April 2001, he was appointed the Group Managing Director/ Chief Executive Officer. He started his career by joining the Sarawak Civil Service in 1981 until he move to private sector in 1987. Under his leadership, ZECON Group has undertaken dynamic diversification recent years and has even positioned itself for international ventures. None Sarawak Consolidated Industries Berhad (formerly known as Sarawak Concrete Industries Berhad) Name Direct No. of shares 3,655,200 30,000 34,000 49 Indirect No. of % shares 65,689,475 55.15 -
: :
: : :
% 3.07 30.0 14.2 49.0
Zecon Berhad Sarmax Sdn Bhd Teknik PS Sdn Bhd Zecon Construction Sdn Bhd Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : :
Brother to Haji Zainurin bin Haji Ahmad Director and major shareholder of Dawla Capital Sdn BHd No conflict of interest apart for the related party transactions, which have been disclosed in the Notes to the Accounts. None 3/5
Poh Lik Gan @ Poh Li Thong

Age Nationality Qualification : : :
: :
: : :
65 Malaysian B.Sc in Quantity Surveying from Reading University, London in 1969. Diploma in Quantity Surveying from College Of Estate Management, London in 1968. Fellow of the Royal Institution of Chartered Surveyors. Fellow of The Institution of Surveyors Malaysia. Independent Non-Executive Director Appointed to the Board of Directors of the Company on 25 October 2004. He began his career as an Assistant Quantity Surveyor with Philip Pank & Partners (PP&P), London in 1968. From 1969 to 1973, he was with Jabatan Kerja Raya, Sarawak in Kuching Division. Subsequently, he started Contract Services Consultants and retired in 1988 as a Senior Partner. He is currently the Project Director of Jurudaya Construction Sdn Bhd, a post which he held since 1989. Chairman of Audit Committee Member of Remuneration & Nomination Committee None Name Direct No. of shares 40,000 Indirect No. of % shares 13
% 0.04
Zecon Berhad
Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : : None None None None 5/5
Age Nationality Qualification
Dato Haji Hamzah bin Haji Ghazalli

: : : : :
: : : : : : : :
61 Malaysian Master Degree of Arts in International Affair (Management) from University of Ohio, United States. B.A. Hons from Universiti of Malaya. Independent Non-Executive Director Appointed to the Board of Directors of the Company on 26 February 2007. He was an Administrative and Diplomatic Services Officer and had served the Government of Malaysia for more than 32 years. He started his career with the Government of Malaysia in April 1973 and retired in April 2005. Prior to his retirement, he was the State Secretary of Negeri Sembilan. Member of Remuneration & Nomination Committee None None None None None None 5/5
Age Nationality Qualification Position held Working experience & occupation
Dato Abdul Majit Bin Ahmad Khan

: : : : :
Details of any board committee to which he belongs Other directorships in public companies
: :
64 Malaysian Bachelor of Economics (Hons) from University of Malaya Independent Non-Executive Director Appointed to the Board of Directors of the Company on 16 May 2007. He had served in the Prime Ministers Department and the Ministry of Foreign Affairs as well as in several mission abroad and senior position in the Ministry of Foreign Affairs for thirty-four years. He also act as the Under Secretary of West Asia and the OIC and has participated in several Ministerial and Prime Ministerial visits to West Asian Countries and OIC Meetings. He was also a Director General of ASEAN and he actively participated in the organization of the 30th ASEAN Ministerial Meeting held in Kuala Lumpur as well as the ASEAN Head of Summit and the 10+3 Summit Meetings in Malaysia. In 1998, he was appointed as the Ambassador of Malaysia to the Peoples Republic of China and concurrently accredited to the Democratic Peoples Republic of Korea until his retirement on 2 January 2005. He is currently the President of the Malaysia-China Friendship Association (PPMC), Exco Member of the Malaysia-China Business Council. None Hong Leong Islamic Bank HLG Unit Trust Bhd OSK Investment Bank Bhd
14
Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : : : None None None None None 3/5
Richard Kiew Jiat Fong
: : :
: :
: : :
56 Malaysian Richard is a fellow Member of the following: The Institute of Chartered Accountants in England and Wales; The Association of Chartered Certified Accountants, United Kingdom; and The Institute of Certified Public Accountants of Singapore. He is also a member of Malaysian Institute Accountants. Independent Non-Executive Director Richard Kiew was appointed to the Board of Directors of the Company on 01 June 2008. He has seven years working experience in England with firms of Chartered Accountants. When he came back to Malaysia, he worked as an audit manager for four years before started his own audit firm in 1986 as a sole practitioner. Member of the Audit Committee Sarawak Consolidated Industries Berhad (formerly known as Sarawak Concrete Industries Berhad) Name Direct No. of shares 63,000 Indirect No. of % shares -
% 0.05
Haji Zainurin bin Haji Ahmad

: : : :
: :
Details of any board committee to which he belongs Other directorships in public companies
: :
49 Malaysian Master of Commerce Degree in Business Administration from University of Canterbury, Christchurch, New Zealand. B Sc. in Business Administration from Indiana Institute of Technology, Indiana, USA. Diploma in Business Studies from Universiti Teknologi MARA. Deputy Managing Director Haji Zainurin was appointed to the Board on 12 June 1998. He enjoyed a 13-year tenure in finance and commercial sectors. He was the General Manager of Advance Finance Berhad (now known as Advance Establishment Berhad), Kuching prior to joining Zecon in 16 April 1999 as Executive Director. He was re-designated as Deputy Managing Director of Zecon on 01 June 2008. Chairman of Risk Management Committee Member of Option Committee Halifax Capital Berhad 15
Securities holdings in the Company and its subsidiaries : Name Direct No. of shares 525,000 Indirect No. of % shares -
% 0.44
Zecon Berhad Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : :
Brother to Datuk Haji Zainal Abidin bin Haji Ahmad None No conflict of interest apart for the related party transactions, which have been disclosed in the Notes to the Accounts. None 5/5
Ir. Hui Kok Yuan

: : : : :
: : :
60 Malaysian Bachelor degree in Civil Engineering from the University of Adelaide. Member of both Institution of Engineers Malaysia and Australia. Professional Engineer, Board of Engineers, Malaysia. Executive Director Hui Kok Yuan was appointed Executive Director of the Company on 16 February 2001. He joined Jabatan Kerja Raya (Public Works Department) Sarawak as an Executive Engineer in 1976 supervising government building projects. In 1982, he was transferred to Sarawak Land Custody and Development Authority (LCDA) as a Civil Engineer involved in the planning and design of urban development projects. In 1994, he joined the private sector where he was involved in the management and administration of commercial and housing projects. In 1993, he was awarded the Pingat Perkhidmatan Bakti by the Sarawak Government. None None Name Direct No. of shares 250,000 Indirect No. of % shares -
% 0.21
Ir. Haji Abg Azahari bin Abg Osman

Age Nationality Qualification : : :
: :
16
48 Malaysian Bachelor Degree of Science in Civil Engineering from the University of Iowa, USA in 1985. Member of Institution of Engineers, Malaysia. Professional Engineer, Board of Engineers Malaysia. Executive Director Haji Abg Azahari was appointed to the Board of Directors of the Company on 08 March 2004. He began his career by joining Jabatan Kerja Raya (JKR) in 1985 He served JKR in Kuching, Sarikei and Sibu Divisions prior to joining PPES Works (Sarawak) Sdn Bhd, a subsidiary of Cahaya Mata Sarawak Berhad (CMS). He held several senior positions within the CMS Group. He was appoint the General Manager of the Company in June 2002.
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : : : : : Member of Risk Management Committee None None None None None None 5/5
Jamil bin Jamaludin
: : : : :
49 Malaysian Advanced Diploma in Accountancy from Universiti Teknologi MARA. Member of the Malaysian Institute of Accountant. Executive Director Jamil was appointed to the Board of Directors of the Company on 08 May 2001. He was the Senior Manager with Land Custody and Development Authority, Sarawak. Prior to this, he has worked in Jabatan Audit Negara, Sarawak Economic Development Corporation and Hamden & Kiu dan Rakan-Rakan as an Accountant. Member of Risk Management Committee None None None None None None 4/5
: : : : : : :
Haji Saini bin Haji Ali
: : :
: :
48 Malaysian Bachelor of Science in Civil Engineering, Loughborough University of Technology, England in 1984. Master in Business Administration (with distinction) from the Warwick University, England in 1998.. Executive Director Haji Saini was appointed to the Board of Directors of the Company on 01 June 2008. He began his career as a Civil Engineer with the Sarawak Housing and Development Commission (SHDC) in 1983, supervising various government housing projects. Saini held several senior positions in SHDC and was made the acting Chief Executive Officer prior to his retirement from SHDC in 2002. Subsequently, he joined Zecon Berhad (Zecon) as a General Manager in 2003. In recognition of his service, Encik Saini was awarded the Ahli Mangku Negara (AMN) by the Federal Government in 1996. In the same year, he also received the Pingat Perkhidmatan Bakti (PPB) from the State Government. Member of Risk Management Committee None None
: :
17
Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : : : : : None None None None 5/5
Ir. Ng weng Fatt
: : :
: :
: : : : : : : :
49 Malaysian Graduated as a Civil/Sructural Engineer from Dublin , Ireland in 1983. A registered Professional Engineer (Malaysia) and a corporate Member of the Institution of Engineers, Malaysia since 1990. Executive Director Ng Weng Fatt was appointed to the Board of Directors of the Company on 02 March 2009. He has 25 years of consultant and construction experience. He started his career with a local consulting engineers environment mainly involved in designing civil works for highway and bridges in 1984. As a consultant he also supervised the construction of 2 packages of the North South Highway and one Jabatan Kerja Raya Federal Road project in Kuala Lumpur. In 1995, he joined an established main board construction firm specialised in heavy civil engineering works. He was involved in the construction of and completion of an underground station for the LRT-2 system in Kuala Lumpur. He also coordinated and assisted in the launching of the first Tunnel Boring Machine in KL for the LRT-2 underground system. He later became the deputy head of operation covering a wide scope of work in the construction organisation i.e. projcect development, contract/ legal, quality management and risk management. He also oversees the construction of a highway project in India where he is a member of the executive committee for the JV consortium. None None None None None None None 3/3
18
Corporate Governance
Corporate Governance Statement Statement of Directors Responsibility Statement on Internal Control Audit Committee Report Additional Compliance Information
20 23 24 25 28
19
Corporate Governance Statement

The Board of Directors of Zecon Berhad (Board) recognises the importance of good corporate governance as crucial to maintain the continued growth and success of the Group. As such the Board is committed in ensuring that Corporate Governance is observed and practised by the Company with the ultimate objective of maximising shareholder and stakeholder value. The Board is pleased to demonstrate as below on how the Company has applied the principles as set out in the Malaysian Code on Corporate Governance (Code). 1. THE BOARD OF DIRECTORS a) Composition of the Board The Board comprises of Thirteen (13) members, of which seven (7) are Executive Directors and six (6) Non-Executive Directors who are also the Independent Directors. The profiles of the Directors are set out on page 12 to 18 of the Annual Report. There is a clear division of duties between the Chairman and the Group Managing Director/Chief Executive Officer. The Chairman is mainly responsible for the orderly conduct and running of the Board while the Group Managing Director/Chief Executive Officer is overseeing the day-to-day operations of the Group and implementation of Board Policies and decisions with the support of Deputy Managing Director and the Executive Directors. The Independent Non-Executive Directors play an important role in providing independent advice, judgement, ensuring an impartial Board decision making process as well as safeguarding the interests of other parties such as the minority shareholders. The Independent Non-Executive Directors are independent of management and free of any relationship which could materially interfere with the exercise of their independent judgement. No individual or group of individuals dominates the Boards decision making. The wide mix of professional skills, management experience, financial and public service background of the Board members have resulted in an effective Board accordingly. A Senior Independent Director, Datu Dr. Hatta bin Solhi has been identified as the one to whom concerns may be conveyed. b) Appointment and Re-election The identification and appointment of new Directors undergo a process led by the Remuneration & Nomination Committee (RNC). Thereafter upon approval by the Board, the Company provides an induction programme for the new Directors to allow them to understand the business and ultimately to enable them to contribute effectively at Board meetings. The Board will ensure that all newly appointed Directors to undergo the Mandatory Accreditation Programme as required under the Main Market Listing Requirements (MLR) of Bursa Malaysia Securities Berhad (Bursa Securities) within four (4) months after their appointments. In accordance with the LR and the Articles of Association of the Company, all Directors seek re-election at least once every three years. The newly appointed Directors shall hold office only until the next Annual General Meeting and shall be eligible for re-election. c) Board Meetings The Board Meetings are held at quarterly interval with additional meetings held as and when necessary. For the current financial year ended 31 December 2009 (FY under review), the Board had met five (5) times. All Directors had complied with the minimum 50% of attendance requirement in respect of Board Meeting as stipulated in the MLR. The attendance record of each Director for the FY under review is as follows:Name of Director 1. Datu Dr. Hatta bin Solhi 2. Datuk Haji Yusof @ Josree bin Haji Yacob 3. Datuk Haji Zainal Abidin bin Haji Ahmad 4. Poh Lik Gan @ Poh Lik Thong 5. Dato Haji Hamzah bin Haji Ghazalli 6. Richard Kiew Jiat Fong 7. Dato Abdul Majit bin Ahmad Khan 8. Haji Zainurin bin Haji Ahmad 9. Hui Kok Yuan 10. Haji Abg Azahari bin Abg Osman 11. Jamil bin Jamaludin 12. Haji Saini bin Haji Ali 13. Ng Weng Fatt (Appointed on 02 March 2009) Attendance 5/5 5/5 3/5 5/5 5/5 5/5 3/5 5/5 3/5 5/5 4/5 5/5 3/3 % of Attendance 100 100 60 100 100 100 60 100 60 100 80 100 100
20

d) Directors Training All Directors have attended the Mandatory Accreditation Program in accordance with the MLR. During the FY under review, the type of training attended by the Directors were as follows:i) ii) iii) Latest Emerging Issues for Public Companies; Reassessing Risk in the Wake of Market Turmoil; National Tax Conference 2009; and The Directors will continue to undergo other relevant training programmes in order to equip themselves in the corporate regulatory developments as well as current developments of the industry. e) Supply of information The Secretaries will ensure that notices, agendas and board papers of each meeting are distributed to the directors in a timely manner prior to Board Meetings and on an ongoing basis to enable the Directors to peruse, consider, obtain additional information and seek further clarification when necessary. There is a list of matters, which are reserved specifically for Boards consideration and these include strategic plans and budgets for the Group, and business development issues. Material acquisitions and disposals of assets, and potential investments by the Group are also considered extensively at Board level. Senior Management Officers may be invited to attend Board Meetings or Committee Meetings when necessary to furnish the Board with explanations and clarifications on the matters tabled at the meetings. All Directors have full access to the advice and services of the Company Secretary and Senior Management. The Directors may obtain independent professional advice in the furtherance of their duties at the Companys expense, if necessary. The Directors will be updated by the Company Secretary on new statutory requirements relating to their duties and responsibilities. The Board will ensure that the Company Secretary attend all Board Meetings. f) Directors Remuneration The Company recognises the need to ensure that remuneration of Directors are appreciable and reflective of the responsibility and commitment that goes with Board membership. The Company has therefore adopted a remuneration structure that attempts to retain and attract the right Executive Directors needed to run the Company successfully. The remuneration of the Executive Directors is reviewed annually by the RNC and recommended for Boards approval. The Executive Directors play no part in determining their own remuneration package. In the case of Non-Executive Directors, their remuneration package is decided by the Board as a whole, individual Director do not participate in the discussion and decision of their own remuneration. The Company has provided an appropriate remuneration which reflects the experience and level of responsibilities undertaken by each NonExecutive Director. Contrary to the best practice as outlined in the Code, the Board does not wish to disclose the details of remuneration of each Directors, however in line with the MLR, the aggregate remuneration of the Directors are disclosed on page 61 of the Directors Report to the Financial Statements. 2. BOARD COMMITTEES The Board delegates specific duties and responsibilities to the respective Committees of the Board namely, Audit Committee, Remuneration & Nomination Committee and Risk Management Committee in order to augment the business and corporate efficiency. The Chairman of the relevant Board Committee will report to the Board on the key issues deliberated by the Board Committee at its Board Meeting and the minutes of the Audit Committee will also be presented to the Board for information. i) Audit Committee The primary aims on the establishment of the Audit Committee (AC) are to assist the Board in fulfilling its responsibilities relating to accounting and reporting practices of the Group and to monitor the work of the Internal Audit Function. Further details on the AC are set out in the AC Report on pages 25 to 27 of this Annual Report.
21

ii) Remuneration & Nomination Committee (RNC) The RNC which was set up on 24 May 2001 comprising of three (3) members, all of the members are Independent Non-Executive Directors. The RNC has been delegated with the following duties and responsibilities: Recommend candidates for appointment to the Board and Board Committees and recommend to the Board for decision and approval; Determine the remuneration packages of the Executive Directors and to ensure that their remuneration commensurate with their experience and performance; Review the composition of the Board and experiences and mix of skills of the directors and also to ensure that there is balance between executive, non-executive, and independent directors; Assess annually the effectiveness of the Board as a whole; and Evaluate the terms and conditions of the service contract of the Executive Directors, and recommend to the Board for approval on the extension of service contract of the Executive Directors, if necessary.
The RNC meets as and when need arises. iii) Risk Management Committee (RMC or the Committee) The RMC was set up on 24 May 2003. The members comprising of Deputy Managing Director as Chairman, three (3) Executive Directors and two (2) Heads of Division. The RMC reports its activities and findings to the AC who in turn submit its comments on the findings to the Board. The Committee is delegated with the following specific tasks:i) ii) iii) iv) Establish and maintain the risk management framework within the Group; Assess and evaluate the risk management process on a periodic basis; Set the risk appetite of the Group; and Monitor and implement action plans to mitigate high risk areas within the Group
The RMC also design the Project Managements Risks checklists which are used by subsidiary companies for the implementation of major projects. The General Manager of Internal Audit is the Secretary of the Committee and also the Administrator of the risk management software, RMSolution which are used to capture all the risk component, risk details, risk assessment, gross risk, net risk, management action plans, etc. 3. SHAREHOLDER AND INVESTOR RELATIONS The Company maintains a regular policy of disseminating information that is material for shareholders attention. In line with the regulatory requirements, various announcements, including quarterly financial results were made during the year via the Bursa link, thus provide the shareholders and the investing public with an overview of the Groups performance and operations. The Company has established a website (www.zecon.com.my) which shareholders and members of the public can access to the corporate information and updates relating to the Company and for channelling their queries. At the Annual General Meeting, the Directors welcome the opportunity to gather the views of shareholders. Notices of each general meeting are issued in a timely manner to all shareholders, and in the case of special businesses, a statement explaining the effect of the proposed resolutions is provided. All Directors are available to respond to questions from shareholders during the meeting. The external auditors are also present to provide professional and independent clarifications on issues and concerns raised by the shareholders. Our Corporate Division Personnel will provide ongoing updates on the significant developments or activities of the Group with research/financial analysts, investors and institutional shareholders. The same presentation will also be made available to the media to capture a wider readership. However, discretion was exercised during these sessions to ensure sensitive information is not disclosed before the required announcement was released to Bursa Securities. 4. ACCOUNTABILITY AND AUDIT In an attempt to produce a balanced and understandable assessment of the Companys position and prospects, particularly in the financial reports, the Directors have implemented a quality control procedure to ensure that all financial reports have been prepared based on acceptable accounting standards and policies. These financial reports also undergo a review process by the AC prior to approval by the Board. The Board understands that in order to strengthen the accountability aspect of financial reporting, the Company needs to maintain a sound system of internal control to safeguard shareholders investment and the Companys assets. Hence the Company has developed a comprehensive system of internal control comprising of clear structures and accountabilities, wellunderstood policies and procedures and budgeting and review process.
22

The effectiveness of the system of internal control is then scrutinised by an Internal Auditor, who operates independently from the activities of the Company, under the purview of the AC. Details of the internal audit activities carried out during the year are outlined on page 25 of the AC report. The Board also maintains an appropriate relationship with the Companys external auditors, through formal and transparent arrangement with the Audit Committee. These arrangements are stated on page 26 of the Audit Committee report. 5. COMPLIANCE STATEMENT The Board is satisfied that for the FY under review, the Group has complied with the best practices of as set out in the code. This Corporate Governance Statement is made in accordance with the resolution of the Board of Directors Meeting held on 26 April 2010.
Stament of Directors Responsibility

in Respect of the Financial Statements The Companies Act, 1965 requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the state of the affairs of the Group and the Company at the end of the financial year, and of the profit and cash flows of the Group and the Company for the financial year. In preparing the financial statements, the Directors are also responsible for the adoption of suitable accounting policies and their consistent use in the financial statements, supported where necessary by reasonable and prudent judgements. The Directors hereby confirm that suitable accounting policies have been consistently applied in respect of preparation of the financial statements. The Directors also confirm that the Company maintains adequate accounting records and sufficient internal controls to safeguard the assets of the Group and the Company, and to prevent and detect fraud and other irregularities. These are described more fully on page 22 of the Corporate Governance Statement. This Directors Responsibility Statement is made in accordance with resolution of the Board of Directors dated 26 April 2010.
23
Statement on Internal Control

INTRODUCTION This statement on internal control is made pursuant to paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) with regard to the Groups compliance with the principles and best practices for internal controls as provided in the Malaysian Code on Corporate Governance. RESPONSIBILITY The Board of Directors acknowledged its responsibility for maintaining a sound system of internal controls to safeguard shareholders investment and the Groups assets and for reviewing the adequacy and integrity of the system. However, it should be noted that the system of internal controls is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable but not absolute assurance against material misstatement or loss. RISK MANAGEMENT The Risk Management Framework established in May 2003, provides a structure approach in identifying, assessing and managing the key risks faced by the Group. During the year, the Group has reviewed and updated the risk assessment, which covered the full spectrum of the Groups operations. This involved reviewing and identifying the key risk exposures of the Group and providing an assessment on the risk identified, the strength of internal controls and/or action plans that mitigate and manage the risks and the residual tasks. The risk assessment is subjected to periodic review and updates. KEY PROCESS OF INTERNAL CONTROLS The key processes of internal controls of the Group can be summarized as follow: Internal Review and Audit: The system of internal controls is continually reviewed and updated. Apart from internal review on the Groups policies and procedures, the Audit Division conducts periodic internal audits and evaluate the effectiveness of the system of internal controls within the Group. The Internal Auditor provides the Audit Committee with independent and objectives reports on the state of internal controls and risk management, the extent of compliance with policies and procedures, his recommendation and the management response thereof. The Audit Committee considers the report from internal audit and from management and presents their conclusion to the Board. Financial Policies and Procedure Manual: The Group has a clear structure whereby the responsibilities and scopes of authorities are defined. This is clearly documented in the internal policies and operation procedure as set out in the Financial Policies and Procedure Manual. This manual is reviewed and updated by the management regularly. The Group has also put in place policies and procedure on tender and contracts and approved by the Board to be implemented effective 24 February 2009. Financial Reporting: Quarterly reports and annual financial statements are reviewed and approved by the Audit Committee before being recommended to the Board for approval. Performance evaluation including the comparison of actual results against estimates is carried out by the management and presented to the Board. The Board approves the quarterly reports and the annual financial statements before announcement to Bursa Securities. Operational Risk: The risks inherent in the construction activities are mainly related to market condition, procurement and tendering, execution of construction works and completion of project within the contract period. The Group Risk Management framework and risk management sub-committee at project and subsidiary level being set up with a common objective to identify, evaluate, control, mitigate and minimize risks. Construction schedules, cost of projects and quality are controlled through monthly project meeting and progress reports to the senior management. ISO 9001:2008: Regular audit to ensure compliance with all requirement of ISO 9001:2008. The ISO certification serves as a quality assurance approach where customers are assured of continuous delivery of the highest quality of products and services provided by the Group. Related Party Transaction: The Group have in place adequate procedures and processes to monitor, tract and identify related party transactions in a timely and orderly manner and such procedures and processes are review on a yearly basis or whenever the need arises. BOARDS CONCLUSION The Board of Directors is pleased to disclose that the system of internal controls and risk management process are appropriate to the Groups operations and there are no material losses incurred during the financial year as a result of any weaknesses in internal control. Nevertheless, the process in identifying, evaluating and managing the significant risks faced by the Group will be ongoing to meet any changing needs.
24
Report of Audit Committee

The Audit Committee of Zecon Berhad is pleased to present its Audit Committee (AC or Committee) Report (Report) for the year ended 31 December 2009. The Board has approved this Report via circular resolution dated 26 April 2010. 1. Composition and Meeting Attendance In line with the Corporate Governance Code, all members of the AC are independent and Non-Executive Directors. Mr. Richard Kiew Jiat Fong besides being a Member of the Malaysian Institute of accountant is also a Fellow Member of:i. ii. iii. The Institute of Chartered Accountants in England and Wales; The Association of Chartered Certified Accountants, United kingdom; and The Institute of Certified Public Accountants of Singapore.
In this respect, Zecon Berhad is in compliance with paragraph 15.09(1) of the Listing Requirement. On 12 November 2009, Dato Dr. Mohd Yahya Bin Nordin resigned as member of the Audit Committee. During the year, the AC held five (5) meetings. Committee members attendances at the meetings are as follows:Committee Members Designation Feb. 23 Poh Lik Gan Datu Dr. Hatta Bin Solhi Dato Dr. Mohd Yahya Bin Nordin (Resigned on 12 November 2009) Mr. Richard Kiew Jiat Fong 2. Activities during the year In line with the terms of reference of the Committee, the following activities were carried out:(i) External Audit Review the scope of work and audit plan for the year. Review the results of the audit, the audited financial statements and the management letter. Attending to concerns raised by the auditor without the presence of the Executive Director Recommend for the Boards consideration the appointment of external auditors and the audit fees (ii) Internal Audit Review and approve the scope of work and audit plans for the year Review the internal audit reports and discussed on the managements action taken to improve the system of internal control and any outstanding matters. Review the quarterly unaudited financial results, year end audited financial statements and recommend to the Board for consideration and approval. Review the related party transactions entered into by Zecon Group of Companies. Monitor the progress of risk management framework of Zecon Group of Companies. Chairman Independent Director Independent Director Independent Director Independent Director Absent Meetings Attendance Year 2009 Apr. 23 May 25 Aug. 12 Nov. 24 5/5 5/5 3/4 5/5 Total
(iii) Financial Statements
(iv) Related party transaction (v) 3. Risk Management
Activities of the Internal Audit Division The Internal Audit Division was established on 1 April 2002 and it reports directly to the Audit Committee. For the year 2009, the activities of the internal audit are as follows:(i) (ii) (iii) (iv) Preparation of Audit Planning Memorandum and the Internal Audit Plan for the year. Secretary to Risk Management Committee of Zecon Berhad and also Zecon Water Corporation Sdn Bhd. Secretary to AC. Conduct internal audit assignments as per Internal Audit Plan and special audit assignments on an ad-hoc basis based on the requests of the Senior Management. (v) The General Manager for Internal Audit is also the Quality Management Representative (QMR) responsible in managing the Quality Management System (ISO). (vi) Preparation of AC Report and Statement of Internal Controls for the Companys Annual Report 2009.
25

4. Terms of Reference (i) Composition a. The Committee shall be appointed by the Board and shall consist of not less than three (3) members; b. All the AC members must be non-executive directors and with a majority of them being independent directors; c. An alternate Director shall not be appointed as a member of the Committee; d. At least one member of the AC must be a member of the Malaysian Institute of Accountant; or if he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience and:i. he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or
ii. he must be a member of one (1) of the Associations of Accountants specified in Part II of the 1st Schedule of the Accountants Act 1967. e. The members of the Committee shall elect a Chairman from amongst their number who shall be an independent Director. f. If the number of members of the Committee is reduced below three (3), the Board shall within three (3) months appoint such number of new members as may be required to make up the minimum of three (3) members. (ii) Authority The Committee shall, in accordance with a procedure to be determined by the Board and at the cost of the Company:a. have the authority to investigate any matter within its terms of reference; b. have the resources which are required to perform its duties; c. have full and unrestricted access to any information pertaining to the Company; d. have direct communication channels with both the external and internal auditors; e. be able to obtain independent professional opinion or other advice; and f. be able to convene meetings with the external auditors, excluding the attendance of the executive members of the Board, whenever deemed necessary.
(iii) Duties The duties and scope of the Committee shall be to review the following and report the same to the Board;a. with the external auditors: (i) the scope of their audit plan; (ii) their evaluation of the system of internal control; (iii) the audit reports on the financial statements; (iv) the assistance given by the Companys employees to the external auditor; (v) any letter of resignation from the external auditors; and (vi) nomination of the external auditors and the determination of audit fees. b. the effectiveness of the internal control systems including the internal audit programmes, process, results of internal audit programmes, processes or investigation undertaken and whether or not appropriate actions have been taken on recommendations of internal audit functions. c. the quarterly results and year end financial statements of the Company and the Group, prior to submission to the Board for approval, focusing particularly on:(i) changes in or implementation of accounting policy; (ii) significant and unusual event; and (iii) compliance with accounting standards and other legal requirements. d. any related party transactions and conflict of interest situation that may arise within the Company or Group. e. verify the allocation of options to employees under the relevant criteria decided by the Option Committee. f. any other functions as may be agreed by the Committee and the Board or as may be required or empowered by statutory legislation or guidelines issued by the relevant governing authorities.
26

Where the Committee is of the view that any matter reported to the Board has not been satisfactorily resolved resulting in breach of the Main Market, Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities) Listing Requirements, the Committee must promptly report such matter to Bursa Securities. The Committee members term of office and performance are subject to review by the Board every three (3) years to determine whether the Committee has carried out their duties in accordance with the Terms of Reference. (iv) Frequency and Attendance The Committee shall hold at least four (4) regular meetings a year and such additional meetings as the Chairman shall decide in order to fulfill its duties. The Committee at its discretion, may invite any person to its AC meeting. A quorum for the Committee shall be two (2) members and majority of members present must be independent directors. The General Manager for Internal Audit shall be the Secretary to the AC. The Chairman shall table any material issues raised in the AC meeting at the subsequent Board Meeting of the Company.
This part has intentionally left blank.
27
Additional Compliance Information

1. 2. 3. 4. Share Buy-backs The Company did not enter into any share buy-back transaction during the financial year 2009. Options, Warrants or Convertible Securities There were no options, warrants or convertible securities issued during the financial year 2009. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme The Company did not sponsor any ADR or GDR programme during the financial year 2009. Imposition of Sanctions or Penalties There were no material sanctions or penalties imposed by the relevant regulatory bodies on the Company or its subsidiaries, directors or management during the financial year 2009. Non-Audit Fees The was no non-audit fees paid by the Company to the External Auditors, Messrs. Ernst & Young for the financial year ended 31 December 2009. Variation in results There was no variance of 10% or more between the unaudited results announced and the audited results for the financial year ended 31 December 2009. Profit Guarantee There were no transactions that require profit guarantee during the financial year ended 31 December 2009. Material Contracts There were no material contracts of the Company and its subsidiaries involving directors and substantial shareholders either still subsisting at the end of the financial year 2009 or entered into since the end of previous financial year. Revaluation Policy on Landed Properties There was no revaluation carried out on the landed properties of the Company and its subsidiaries during the financial year 2009. Recurrent Related Party Transactions of a Revenue or Trading Nature (RRPT) The Company had on 18th June 2009 obtained a Mandate from its shareholders to carry out the Recurrent Related Party Transactions of a revenue or trading nature. For the financial year ended 31 December 2009, the Company and its subsidiaries had entered into the following RRPT:Provider 1. Perunding KAZ Sdn Bhd 2. SCIB Concrete Manaufacturing Sdn Bhd 3. SCIB Concrete Manaufacturing Sdn Bhd 4. Mary Bolhassan, Noreda Ahmad & Co 5. Al-Quds Travel (Sarawak) Sdn Bhd Nature of Transaction Engineering consultancy Contract of piling works Purchase of Culvert Legal and professional services Travel agency services Recipient (RM) Zecon Dredging Sdn Bhd Zecon Land Sdn Bhd Zecon Dredging Sdn Bhd Zecon Land Sdn Bhd Amount 651,875 314,083 % 0.350 0.169 Name of Connected Person Datuk Hj Zainal Abidin bin Hj Ahmad Datuk Hj Zainal Abidin Bin Hj Ahmad Datuk Hj Zainal Abidin Bin Hj Ahmad Datuk Hj Zainal Abidin Bin Hj Ahmad & Hj Zainurin bin Hj Ahmad Datuk Hj Zainal Abidin Bin Hj Ahmad & Hj Zainurin bin Hj Ahmad
5.
6.
7. 8.
9.
10.
57,090
0.031
12,120
0.007
Zecon Berhad
1,946
0.001
Total
1,037,114
0.558
Note : Net Assets of Zecon Group as at 31 December 2009 is RM186,218,569.
28
Directors Report & Audited Financial Statements

Directors Report Statement by Directors and Statutory Declaration Report of the Auditors Income Statements Balance Sheets Consolidated Statement of Changes in Equity Company Statement of Changes in Equity Consolidated Cash Flow Statement Company Cash Flow Statement Notes to the Financial Statements 30 35 36 37 38 39 41 42 44 46
29
Directors Report
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2009. Principal activities The principal activities of the Company are foundation engineering, civil engineering and building contracting works and their related activities. The principal activities of the subsidiaries are set out in Note 16 to the financial statements. There have been no significant changes in the nature of the principal activities of the Group and of the Company during the financial year. Results Group RM 5,998,718 ========== 5,546,830 451,888 5,998,718 ========== Company RM (9,273,725) ========== (9,273,725) (9,273,725) ==========
Profit/(loss) for the year Attributable to: Equity holders of the Company Minority interests
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. Directors The names of the directors of the Company in office since the date of the last report and at the date of this report are: Datu Dr. Hatta Bin Solhi Datuk Hj. Yusof @ Josree Bin Hj. Yacob Datuk Hj. Zainal Abidin Bin Hj. Ahmad Poh Lik Gan @ Poh Li Thong Dato Dr. Mohd. Yahya Bin Nordi Dato Hj. Hamzah Bin Hj. Ghazalli Dato Abdul Majit Bin Ahmad Khan Hj. Zainurin Bin Hj. Ahmad Hui Kok Yuan Hj. Abg. Azahari Bin Abg. Osman Jamil Bin Jamaludin Richard Kiew Jiat Fong Hj. Saini Bin Hj. Ali Ng Weng Fatt Directors benefits Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options granted under the Employees Share Option Scheme. Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 9 to the financial statements or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, except as disclosed in Note 36 to the financial statements.
(Resigned on 12 November 2009)
30
Zecon BeRhAD annual report 2009
Directors Report
Remuneration and Nomination Committee The Remuneration and Nomination Committee carries out the annual review of the Groups remuneration policy in general, and determines the remuneration packages of Executive Directors of the Company. The Remuneration and Nomination Committee proposes, subject to the approval of the Board of Directors of the Company, the remuneration to be paid to each Director for his services as a Member of the Board as well as committees of the Board. The members of the Remuneration and Nomination Committee comprising the independent Non-Executive Directors of the Company who have served since the date of the last report are: Datu Dr. Hatta Bin Solhi Poh Lik Gan @ Poh Li Thong Dato Dr. Mohd. Yahya Bin Nordin Dato Hj. Hamzah Bin Hj. Ghazalli Directors interests According to register of directors shareholdings, the interests of directors in office at the end of the financial year in shares and options over shares in the Company and its related corporations during the financial year were as follows: Number of Ordinary Shares of RM1 Each Exercise of Acquired Options Sold Chairman (Resigned on 12 November 2009) (Appointed on 23 February 2010)
At 1.1.2009 The Company Direct interest Datu Dr. Hatta Bin Solhi Datuk Hj. Zainal Abidin Bin Hj. Ahmad Poh Lik Gan @ Poh Li Thong Hj. Zainurin Bin Hj. Ahmad Hui Kok Yuan Richard Kiew Jiat Fong The Company Indirect interest Datuk Hj. Zainal Abidin Bin Hj. Ahmad 65,689,475 20,000 3,655,200 40,000 525,000 250,000 63,000
At 31.12.2009
20,000 3,655,200 40,000 525,000 250,000 63,000
65,689,475
At 1.1.2009 Dawla Capital Sdn. Bhd. Datuk Hj. Zainal Abidin Bin Hj. Ahmad - direct interest
Number of Ordinary Shares of RM1 Each Exercise of Acquired Options Sold
At 31.12.2009
250,000
250,000
31
Directors Report
Directors interests (contd.) Related company At 1.1.2009 Halifax Capital Berhad Datuk Hj. Zainal Abidin Bin Hj. Ahmad - direct interest Number of Ordinary Shares of RM1 Each Exercise of Acquired Options Sold
At 31.12.2009
2,515,200
2,515,200
Teknik PS Sdn. Bhd. Datuk Hj. Zainal Abidin Bin Hj. Ahmad - direct interest Zecon Construction Sdn. Bhd. Datuk Hj. Zainal Abidin Bin Hj. Ahmad - direct interest Sarmax Sdn. Bhd. Datuk Hj. Zainal Abidin Bin Hj. Ahmad - direct interest
Number of Ordinary Shares of RM1 Each At 1.1.2009 and 31.12.2009
34,000
49
30,000 Number of Options over Ordinary Shares of RM1 Each Exercise Price At At RM 1.1.2009 Granted Exercised 31.12.2009
The Company Datuk Hj. Zainal Abidin Bin Hj. Ahmad Hj. Zainurin Bin Hj. Ahmad Hui Kok Yuan Hj. Abg. Azahari Bin Abg. Osman Jamil Bin Jamaludin
1.16 1.16 1.16 1.16 1.16
550,000 395,300 262,500 175,000 140,000
550,000 395,300 262,500 175,000 140,000
There were no other movements in shares and options of the Company or its related corporations during the financial year other than as disclosed. Datuk Hj. Zainal Abidin Bin Hj. Ahmad, by virtue of his interest in the Company, is also deemed interested in shares of all the Companys subsidiaries to the extent the Company has an interest. None of the other directors in office at the end of the financial year had an interest in shares and options in the Company or its related corporations during the financial year.
32
Directors Report
Employees share option scheme The Zecon Berhad Employees Share Options Scheme (ESOS) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 15 February 2005. The ESOS was implemented on 22 March 2005 and is to be in force for a period of 5 years from the date of implementation. The salient features and other terms of the ESOS are as follows: (a) (b) The number of new ordinary shares to be offered under the ESOS shall be subject to a maximum of 15% of the issued and paid-up share capital of the Company at any time during the existence of the ESOS. Any employee, including the Executive Directors of the Zecon Berhad group, shall be eligible to participate in the ESOS if: (i) (ii) (c) (d) the employee has been confirmed in service as a full time Executive Director or employee on the date of offer; and where the employee is not a Malaysian citizen, he must be serving the Group on a full time basis or where he is serving under an employment contract, the contract should be for a duration of at least three years; and
No option shall be granted for less than 100 shares. The price payable upon exercise of the options under the ESOS shall be at a discount of not more than 10% from the five market days weighted average market price of the Companys shares immediately preceding the date of offer or at the par value of the shares, whichever is higher.
On 16 October 2007, a total of additional 8,684,800 new ordinary shares of RM1.00 each were issued and granted listing and quotation. On 21 March 2010, the ESOS has lapsed. Other statutory information (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(ii) (b)
At the date of this report, the directors are not aware of any circumstances which would render: (i) (ii) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c) (d) (e)
At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. As at the date of this report, there does not exist: (i) (ii) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
(f )
In the opinion of the directors: (i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.
(ii)
33
Directors Report
Auditors The auditors, Ernst & Young, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the directors dated 26 April 2010.
Hj. Zainurin Bin Hj. Ahmad
34
Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965

We, Datu Dr. Hatta Bin Solhi and Hj. Zainurin Bin Hj. Ahmad, being two of the directors of Zecon Berhad, do hereby state that, in the opinion of the directors, the accompanying financial statements set out on pages 37 to 94 are drawn up in accordance with the provisions of the Companies Act, 1965 and Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2009 and of the results and the cash flows of the Group and of the Company for the year then ended. Signed on behalf of the Board in accordance with a resolution of the directors dated 26 April 2010.
Hj. Zainurin Bin Hj. Ahmad
Statutory Declaration pursuant to Section 169(16) of the Companies Act, 1965

I, Jamil Bin Jamaludin, being the Director primarily responsible for the financial management of Zecon Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 37 to 94 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by the abovenamed Jamil Bin Jamaludin at Kuching in the State of Sarawak on 26 April 2010. Before me,
Jamil Bin Jamaludin
35
Independent Auditors Report to the Members of Zecon Berhad (Incorporated in Malaysia)

Report on the financial statements We have audited the financial statements of Zecon Berhad, which comprise the balance sheets as at 31 December 2009 of the Group and of the Company, and the income statements, statements of changes in equity and cash flow statements of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 37 to 94. Directors responsibility for the financial statements The directors of the Company are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2009 and of their financial performance and cash flows for the year then ended. Report on other legal and regulatory requirements In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following: (a) (b) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and the auditors reports of all the subsidiaries of which we have not acted as auditors, which are in Note 16 to the financial statements, being financial statements that have been included in the consolidated financial statements. We are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the accounts of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.
(c)
(d)
Other matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.
ERNST & YOUNG AF: 0039 Chartered Accountants Kuching, Malaysia Date: 26 April 2010
YONG VOON KAR 1769/04/12 (J/PH) Chartered Accountant
36
Income Statements
for the year ended 31 December 2009

Group Note 2009 RM 142,569,464 (117,613,973) 24,955,491 30,039,085 (15,172,889) (15,346,974) 24,474,713 (19,559,839) (104,806) 4,810,068 1,188,650 5,998,718 ============ 2008 RM 157,172,769 (129,073,632) 28,099,137 12,634,280 (10,465,821) (15,879,439) 14,388,157 (13,295,070) 250,374 1,343,461 (332,778) 1,010,683 ============ 2009 RM 129,575,957 (119,189,397) 10,386,560 1,242,910 (11,046,093) (6,518,535) (5,935,158) (9,086,927) (15,022,085) 5,748,360 (9,273,725) ============ Company 2008 RM 124,126,108 (114,902,880) 9,223,228 8,512,759 (8,430,255) (12,562,403) (3,256,671) (7,969,637) (11,226,308) 1,689,575 (9,536,733) ============
Revenue Cost of sales Gross profit Other income Administrative expenses Other expenses Operating profit/(loss) Finance costs Share of (losses)/profit of associates Profit/(loss) before taxation Income tax expense Profit/(loss) for the year
3 4
7 10
Attributable to: Equity holders of the Company Minority interests
5,546,830 451,888 5,998,718 ============
1,009,674 1,009 1,010,683 ============
(9,273,725) (9,273,725) ============
(9,536,733) (9,536,733) ============
Earnings per share (sen): Basic, for profit for the year 11 4.93 ===== 4.93 ===== 0.92 ===== 0.92 =====
Diluted, for profit for the year
11
The accompanying notes form an integral part of the financial statements.
37
Balance Sheets
as at 31 December 2009
Note ASSETS Non-current assets Property, plant and equipment Prepaid land lease payments Land held for development Intangible assets Investment in subsidiaries Investment in associates Investment in jointly controlled entity Other investments Deferred tax assets 12 13 14(a) 15 16 17 18 19 29 36,210,464 6,229,030 126,311,486 14,623,131 674,506 4,861,201 5,216,743 18,733,721 212,860,282 20,643,599 5,965,177 36,361,581 135,966,851 43,879,752 56,008,942 298,825,902 511,686,184 ============ 2009 RM Group 2008 RM (restated) Company 2009 RM 2008 RM (restated)
Current assets Development costs Inventories Amount due from customers for contract work Trade receivables Other receivables Cash and bank balances
39,050,096 1,195,873 126,311,486 14,838,586 779,312 4,861,201 5,216,743 13,024,190 205,277,487 13,967,293 5,586,939 45,245,011 107,434,615 11,038,445 89,370,695 272,642,998 477,920,485 ============
22,842,337 6,229,030 55,694,905 175,000 1 5,216,743 5,742,775 95,900,791 2,970,000 7,243,943 79,985,116 98,629,700 36,651,735 225,480,494 321,381,285 ============
24,723,459 1,195,873 55,544,905 175,000 1 5,216,743 86,855,981 3,482,000 7,876,897 68,654,279 207,485,772 43,044,245 330,543,193 417,399,174 ============
14(b) 20 21 22 23 24
TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital Share premium Other reserves Retained earnings/(accumulated losses)
30 30 31
119,106,150 3,558,768 5,102,092 50,750,619 178,517,629 7,814,975 186,332,604
119,106,150 3,558,768 5,107,215 45,203,789 172,975,922 3,656,043 176,631,965 148,108,094 73,830,552 16,529,343 52,392,826 7,121,937 3,305,768 153,180,426 301,288,520 477,920,485 ============
119,106,150 3,558,768 5,109,686 (28,120,161) 99,654,443 99,654,443 1,128,755 113,882,556 8,934,050 68,792,454 28,899,027 90,000 220,598,087 221,726,842 321,381,285 ============
119,106,150 3,558,768 5,109,686 (18,846,436) 108,928,168 108,928,168 87,015,954 49,496,067 4,821,456 39,628,250 127,419,279 90,000 221,455,052 308,471,006 417,399,174 ============
Minority interests Total equity Non-current liabilities Borrowings Current liabilities Borrowings Amount due to customers for contract work Trade payables Other payables Current tax payable
25
75,813,553 140,270,024 13,950,672 79,412,046 9,871,545 6,035,740 249,540,027 325,353,580 511,686,184 ============
25 21 27 28
Total liabilities TOTAL EQUITY AND LIABILITIES
38
Attributable to equity holders of the Company Non-Distributable Distributable interests equity
Minority
Total
Share capital (Note 30) RM RM RM RM RM RM RM RM (Note 30) (Note 31) (Note 31) (Note 31) RM premium reserve reserves reserve earnings Total
Share
Foreign exchange
Other
Revaluation
Retained
At 1 January 2009 3,558,768 (2,471) 4,416,854 692,832 45,203,789 172,975,922
119,106,150
3,656,043
176,631,965
Foreign currency translation: (5,123) (5,123) (5,123)
Group
Net expense recognised directly 5,546,830 (5,123) (5,123) 5,546,830 451,888 (5,123) 5,998,718
in equity
Profit for the year
Total recognised income and (5,123) 5,546,830 5,541,707 451,888 5,993,595
expense for the year
Consolidated Statement of Changes in Equity
Disposal of partial interest in 3,707,044 3,707,044
subsidiary
3,558,768 (7,594) 4,416,854 692,832 50,750,619 178,517,629 7,814,975 186,332,604
At 31 December 2009
119,106,150
============ ============ ============ ============ ============ ============ ============ ============ ============
39
40
Attributable to equity holders of the Company Non-Distributable Distributable interests equity Minority Total Share capital (Note 30) RM RM RM RM RM RM RM RM (Note 30) (Note 31) (Note 31) (Note 31) RM premium reserve reserves reserve earnings Total Share Foreign exchange Other Revaluation Retained 119,106,150 3,558,768 (6,880) 4,416,854 692,832 44,194,115 171,961,839 3,431,757 175,393,596
At 1 January 2008
Foreign currency translation: 4,409 4,409 4,409
Group
Net expense recognised directly 1,009,674 4,409 4,409 1,009,674 1,009 4,409 1,010,683
in equity
Profit for the year
Total recognised income and 4,409 1,009,674 1,014,083 1,009 1,015,092
expense for the year
Consolidated Statement of Changes in Equity
Acquisition of additional 1,200,000 1,200,000
interest in subsidiary
Disposal of partial interest in (976,723) (976,723)
subsidiary
119,106,150 3,558,768 (2,471) 4,416,854 692,832 45,203,789 172,975,922 3,656,043 176,631,965
At 31 December 2008
============ ============ ============ ============ ============ ============ ============ ============ ============
Company Statement of Changes in Equity

Non-Distributable Share capital (Note 30) RM At 1 January 2009 119,106,150 Share premium (Note 30) RM 3,558,768 Other reserves (Note 31) RM 5,109,686 RM (18,846,436) Accumulated losses Total equity RM 108,928,168
Loss for the year, representing total recognised income and expense for the year At 31 December 2009 119,106,150 ============ At 1 January 2008 Loss for the year, representing total recognised income and expense for the year At 31 December 2008 119,106,150 ============ 3,558,768 ============ 5,109,686 ============ (9,536,733) (18,846,436) ============ (9,536,733) 108,928,168 ============ 119,106,150 3,558,768 ============ 3,558,768 5,109,686 ============ 5,109,686 (9,273,725) (28,120,161) ============ (9,309,703) (9,273,725) 99,654,443 ============ 118,464,901
41
Consolidated Cash Flow Statement

Note Cash Flows From Operating Activities Profit before taxation Adjustments for: Amortisation of toll concession Amortisation of prepaid land lease payments Depreciation of property, plant and equipment Gain on partial disposal of subsidiaries Loss/(gain) on disposal of property, plant and equipment Impairment in value of investment Interest expense Interest income Loss on disposal of other investment Loss on disposal of properties (Gain)/loss on foreign exchange rate Property, plant and equipment written-off Provision for doubtful debts Provision for stocks obsolescence Share of results of associates Operating profit before working capital changes Increase in development costs (Increase)/decrease in inventories Increase in amount due to customers for contract work (Increase)/decrease in receivables Increase in payables Cash (used in)/ generated from operations Interest paid Interest received Taxation paid Net cash (used in)/ generated from operating activities 4,810,068 134,504 26,843 4,228,275 (28,212,005) 6,071 19,559,839 (467,654) 182,000 (5,123) 8,016 8,519,734 104,806 8,895,374 (6,676,306) (890,238) 9,630,106 (69,893,277) 29,768,828 (29,165,513) (19,559,839) 467,654 (1,790,909) (50,048,607) 2009 RM 2008 RM (restated) 1,343,461 176,412 26,843 1,278,437 (673,608) (30,999) 9,292,832 13,295,070 (761,620) 2,329 10,000 4,409 1,600 5,882,687 382,399 (250,374) 29,979,878 (3,995,891) 900,282 8,437,183 13,106,696 10,851,648 59,279,796 (13,295,070) 761,620 (532,173) 46,214,173
16(a)
42
Consolidated Cash Flow Statement

Note Cash Flows From Investing Activities Purchase of property, plant and equipment Prepayment of land lease Proceeds from disposal of property, plant and equipment Net cash inflow on acquisition of a subsidiary Investment in jointly controlled entities Proceeds on disposal of other investments Proceeds on partial disposal of subsidiaries, net of cash received Proceeds from disposal of properties Net cash generated from/ (used in) investing activities Cash Flows From Financing Activities Repayment of term loan Repayment of hire purchase payables Repayment of bankers acceptances and revolving credit facilities Hire purchase financing obtained Proceeds from drawdown of term loan Proceeds from issuance of shares to minority interests Proceeds from drawdown of bankers acceptances and revolving credit facilities Decrease/ (increase) in fixed deposits pledged Net cash generated from/ (used in) financing activities Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 24 (123,520,153) (1,101,150) (125,000) 483,000 116,779,876 1,964,835 23,685,035 18,166,443 (9,340,241) 14,509,679 5,169,438 ============ (13,745,521) (10,192,189) (11,609,400) 84,050,000 1,200,000 (62,837,662) (13,134,772) 11,397,032 3,112,647 14,509,679 ============ (i) (4,731,969) (5,060,000) 3,892 32,000,000 330,000 22,541,923 2009 RM 2008 RM (restated) (16,939,145) 31,000 477 (4,861,200) 37,499 49,000 (21,682,369)
16(b)
16(a)
(i)
During the year, the Group acquired property, plant and equipment by the following means: 2009 RM Cash Hire purchase and finance lease arrangements 4,731,969 4,731,969 ============ 2008 RM 16,939,145 693,100 17,632,245 ============
43
Company Cash Flow Statement

Note Cash Flows From Operating Activities Loss before taxation Adjustments for: Amortisation of prepaid land lease payment Depreciation of property, plant and equipment Gain on disposal of property, plant and equipment Property, plant and equipment written-off Impairment in value of investment in associate Interest expense Interest income Loss on disposal of other investments Loss on disposal of properties Provision for doubtful debts Operating profit before working capital changes Decrease in amount due from customers for contract work Decrease/(increase) in receivables (Decrease)/increase in payables Cash generated from operations Interest paid Interest received Taxation refunded Net cash generated from operating activities Cash Flows From Investing Activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Prepayment of land lease Additional investment in subsidiaries Proceeds from disposal of other investments Proceeds from partial disposal of subsidiaries Proceeds from disposal of properties Net cash used in investing activities (15,022,085) 26,843 3,891,594 6,071 8,016 9,086,927 (415,294) 182,000 3,307,190 1,071,262 5,305,109 94,218,045 (69,356,048) 31,238,368 (9,086,927) 415,294 5,585 22,572,320 (2,588,012) 3,892 (5,060,000) (150,000) 330,000 (7,464,120) 2009 RM 2008 RM (restated) (11,226,308) 26,843 1,053,166 (30,999) 11,366,128 7,969,637 (571,196) 2,329 10,000 1,183,946 9,783,546 26,738,278 (72,508,803) 50,734,030 14,747,051 (7,969,637) 571,196 1,293,269 8,641,879 (5,519,306) 31,000 (6,902,757) 37,499 49,000 830,000 (11,474,564)
44
Company Cash Flow Statement

Note Cash Flows From Financing Activities Repayment of term loan Repayment of hire purchase payables Repayment from bankers acceptances and revolving credit facilities Proceeds from drawdown of term loan Increase in fixed deposits pledged Net cash (used in)/ generated from financing activities Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 24 (63,520,153) (598,956) (125,000) 43,079,876 (21,164,233) (6,056,033) 4,672,637 (1,383,396) ============ 2009 RM 2008 RM (restated) (13,745,521) (9,748,616) (11,609,400) 70,000,000 (26,714,378) 8,182,085 5,349,400 (676,763) 4,672,637 ============
45
Notes to the Financial Statements - 31 December 2009

1. Corporate Information The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Second Board of Bursa Malaysia Securities. The registered office is located at 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5, KTLD, Jalan Satok, 93400 Kuching, Sarawak. The principal activities of the Company are foundation engineering, civil engineering and building contracting works and their related activities. The principal activities of the subsidiaries are disclosed in Note 16 to the financial statements. There have been no significant changes in the nature of the principal activities of the Group and of the Company during the financial year. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 26 April 2010. 2. Significant Accounting Policies 2.1 Basis of preparation The financial statements comply with the provisions of the Companies Act, 1965 and Financial Reporting Standards (FRSs) in Malaysia. At the beginning of the current financial year, the Group and the Company had adopted new and revised FRSs which are mandatory for the current financial year as described fully in Note 2.3. The financial statements of the Group and of the Company have also been prepared on a historical basis. The financial statements are presented in Ringgit Malaysia (RM). 2.2 Summary of Significant Accounting Policies (a) Subsidiaries and Basis of Consolidation (i) Subsidiaries Subsidiaries are entities over in which the Group has ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity. In the Companys separate financial statements, investments in subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. The gain or loss on disposal of a subsidiary company is the difference between the net disposal proceeds and the Groups share of its net assets together with any unamortised balance of goodwill and exchange differences. (ii) Basis of Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances. Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition.
46

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (a) Subsidiaries and Basis of Consolidation (contd.) (ii) Basis of Consolidation (contd.) Any excess of the cost of the acquisition over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss. Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities share of the fair value of the subsidiaries identifiable assets and liabilities at the acquisition date and the minorities share of changes in the subsidiaries equity since then. (b) Associates Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not in control or joint control over those policies. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Under the equity method, the investment in associate is carried in the consolidated balance sheet at cost adjusted for post-acquisition changes in the Groups share of net assets of the associate. The Groups share of the net profit or loss of the associate is recognised in the consolidated profit or loss. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes. In applying the equity method, unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Groups interest in the associate. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Groups net investment in the associate. The associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Groups share of the net fair value of the associates identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Groups share of the associates profit or loss in the period in which the investment is acquired. When the Groups share of losses in an associate equals or exceeds its interest in the associate, including any longterm interests that, in substance, form part of the Groups net investment in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. The most recent available financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances. In the Companys separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. (c) Jointly Controlled Entities The Group has an interest in a joint venture which is a jointly controlled entity. A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, and a jointly controlled entity is a joint venture that involves the establishment of a separate entity in which each venturer has an interest. Investments in jointly controlled entities are accounted for in the consolidated financial statements using the equity method of accounting as described in Note 2.2(b).
47

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (c) Jointly Controlled Entities (contd.) In the Companys separate financial statements, investments in jointly controlled entities are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. (d) Intangible Assets (i) Goodwill Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. (ii) Toll Concession Zecon Toll Concessionaire Sdn. Bhd. (ZTCSB),a wholly-owned subsidiary of the Company, has entered into a Concession Agreement with the State Government of Sarawak on the 17 July 1998. In this agreement, the State Government of Sarawak commissioned ZTCSB under a privatization Scheme to design, build, operate and maintain a dual three lane carriageway (Second Kuching Bridge crossing) over the Sarawak River in Kuching, Sarawak. As part of the consideration of the construction agreement, the State Government of Sarawak granted ZTCSB the right to collect toll for the usage over the Second Kuching Bridge for a period up to 2037 and a further 19 years at the option of the State Government of Sarawak. The Group considers the cost of the toll concession as the amount forgone in respect of the consideration receivable from the State Government of Sarawak under the Concession Agreement, and is amortised over the concession period based on the following formula: Traffic volume to date Estimated total traffic volume of the concession period Cost of toll concession Accumulated amortisation
less
The information on traffic volume is derived based on independent traffic consultants reports and the carrying value of the toll concession is subject to an annual review. (e) Property, Plant and Equipment and Depreciation All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
48

2. 2.2 Significant Accounting Policies (contd.) Summary of Significant Accounting Policies (contd.) (e) Property, Plant and Equipment and Depreciation (contd.) Certain items of property, plant and equipment of the Group and of the Company have not been revalued since 1999. The directors have not adopted policy of regular revaluations of such assets and no later valuation has been recorded. As permitted under the transitional provisions of IAS 16 (Revised): Property, Plant and Equipment, these assets continue to be stated at their 1999 valuation less accumulated depreciation. The above transitional provisions are available only on the first application of the MASB Approved Accounting Standard IAS 16 (Revised): Property, Plant and Equipment which is effective for periods ending on or after 1 September 1998. By virtue of this transitional provision, an entity that had recorded its property, plant and equipment at valued amounts but had not adopted a policy of revaluation has been allowed to continue carrying those assets on the basis of their previous revaluations subject to continuity in its depreciation policy and the requirement to write down the assets to their recoverable amounts for impairment adjustments. The transitional provisions will remain in force until and unless the entity chooses to adopt a revaluation policy in place of cost policy. When that happens, FRS 116 (which supersedes IAS 16) would require revaluations to be carried out at regular intervals. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in the income statement, in which case the increase is recognised in the income statement to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in the income statement. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings. Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life at the following annual rates: % Buildings 2 Plant, machinery and equipment 10 - 15 Motor vehicles 20 Office furniture, fittings, equipment and renovation 10 - 33 1/3 Work-in-progress is not depreciated as these assets are not available for use. The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in the income statement and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings. (f) Land Held For Development And Development Costs (i) Land held for development Land held for development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses. Land held for development is reclassified as development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle. (ii) Property development costs Property development costs comprise all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities. When the financial outcome of a development activity can be reliably estimated, property development revenue and expenses are recognised in the income statement by using the stage of completion method based on certification by professional architects. The stage of completion is determined by the proportion that property development costs incurred for work performed to date bear to the estimated total property development costs.
49

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (f) Land Held For Development And Development Costs (contd.) (ii) Property development costs (contd.) Where the financial outcome of a development activity cannot be reliable estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred. Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately. Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value. The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables. (g) Construction Contracts Where the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the total of costs incurred on construction contracts plus, recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts. (h) Impairment of Non-financial Assets The carrying amounts of assets, other than construction contract assets, property development costs, inventories, and deferred tax assets, are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets recoverable amount is estimated to determine the amount of impairment loss. For goodwill, intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each balance sheet date or more frequently when indicators of impairment are identified. For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit (CGU) to which the asset belongs to. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Groups CGUs, or groups of CGUs, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. An assets recoverable amount is the higher of an assets or CGUs fair value less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset
50

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (h) Impairment of Non-financial Assets (contd.) is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis. An impairment loss is recognised in profit or loss in the period in which it arises, unless the asset is carried at a revalued amount, in which case the impairment loss is accounted for as a revaluation decrease to the extent that the impairment loss does not exceed the amount held in the asset revaluation reserve for the same asset. Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the assets recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. (i) Inventories Inventories are stated at the lower of cost and net realisable value and are valued on a first-in-first-out basis. In arriving at the net realisable value due allowance is made for all damaged, obsolete and slow-moving items. Cost of work-in-progress and finished goods include cost of raw materials, direct labour and attributable production overheads. Cost of raw materials and factory supplies include expenses incurred in bringing them to their present location and condition. The cost of unsold properties comprises cost associated with the acquisition of land, direct costs and appropriate proportions of common cost. (j) Leases (i) Classification A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classified as operating or finance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classification. All leases that do not transfer substantially all the risks and rewards are classified as operating leases, with the following exceptions: Property held under operating leases that would otherwise meet the definition of an investment property is classified as an investment property on a property-by-property basis and, if classified as investment property, is accounted for as if held under a finance lease; and Land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a finance lease, unless the building is also clearly held under an operating lease.
(ii)
Finance Leases - the Group as Lessee Assets acquired by way of hire purchase or finance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Groups incremental borrowing rate is used. Any initial direct costs are also added to the carrying amount of such assets.
51

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (j) Leases (contd.) (ii) Finance Leases - the Group as Lessee (contd.) Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment, as disclosed in Note 2.2(e). (iii) Operating Leases - the Group as Lessee Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid land lease payments and are amortised on a straight-line basis over the lease term. (iv) Operating Leases - the Group as Lessor Assets leased out under operating leases are presented on the balance sheet according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. (k) Income Tax Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the year, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirers interest in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities over the cost of the combination. (l) Employee Benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
52

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (l) Employee Benefits (contd.) (ii) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (EPF). Some of the Groups foreign subsidiaries also make contributions to their respective countries statutory pension schemes. (iii) Equity compensation benefits The Zecon Berhad Employees Share Option Scheme (ESOS) allows the Groups employees to acquire shares of the Company. No compensation cost or obligation is recognised. When the options are exercised, equity is increased by the amount of the proceeds received. (m) Foreign Currencies (i) Functional and presentation currency The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency. (ii) Foreign currency transactions In preparing the financial statements of the individual entities, transactions in currencies other than the entitys functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Nonmonetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period except for exchange differences arising on monetary items that form part of the Groups net investment in foreign operation. Exchange differences arising on monetary items that form part of the Groups net investment in foreign operation, where that monetary item is denominated in either the functional currency of the reporting entity or the foreign operation, are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in profit or loss. Exchange differences arising on monetary items that form part of the Groups net investment in foreign operation, where that monetary item is denominated in a currency other than the functional currency of either the reporting entity or the foreign operation, are recognised in profit or loss for the period. Exchange differences arising on monetary items that form part of the Companys net investment in foreign operation, regardless of the currency of the monetary item, are recognised in profit or loss in the Companys financial statements or the individual financial statements of the foreign operation, as appropriate. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.
53

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (m) Foreign Currencies (contd.) (iii) Foreign operations The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows: (n) Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date; Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (i) Property development Revenue from sale of properties is accounted for by the stage of completion method as described in Note 2.2(f ). (ii) Construction contracts Revenue from construction and other contracts is accounted for by the percentage of completion method as described in Note 2.2(g). (iii) Toll revenue Toll revenue is accounted for as at when toll is chargeable for the usage of the Second Kuching Bridge crossing. (iv) Sale of goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. (v) Dividend income Dividend income is recognised when the Groups right to receive payment is established. (vi) Interest income Interest income is recognised on a time proportion basis that reflects the effective yield on the asset.
(o)
Routine Maintenance Costs Routine maintenance costs on the toll bridge shall be charged to the income statement when incurred.
(p)
Financial Instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual agreement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.
54

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (p) Financial Instruments (contd.) (i) Cash and cash equivalents For the purposes of the Cash Flow Statement, cash and cash equivalents include cash on hand and at bank, deposits at call and short term highly liquid investments which have an insignificant risk of changes in value, net of bank overdrafts. (ii) Other non-current investments Non-current investments other than investments in subsidiaries, associates and jointly controlled entities are stated at cost less impairment losses. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the profit or loss. (iii) Receivables Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date. (iv) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (v) Interest-bearing borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. (vi) Equity instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental internal costs directly attributable to the equity transaction which would otherwise have been avoided. The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company that have not been cancelled, are classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in profit or loss on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity. (vii) Derivative financial instruments Derivative financial instruments are not recognised in the financial statements. (q) Provisions Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost.
55

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (r) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 2.3 Changes in accounting policies and future accounting standards Standards and Interpretations issued but not yet effective At the date of authorisation of these financial statements, the following new FRSs and Interpretations, and amendments to certain Standards and Interpretations were issued but not yet effective and have not been applied by the Group and the Company, which are: Effective for financial periods beginning on or after 1 July 2009 FRS 8: Operating Segments
Effective for financial periods beginning on or after 1 January 2010 FRS 4: Insurance Contracts FRS 7: Financial Instruments: Disclosures FRS 101: Presentation of Financial Statements (revised) FRS 123: Borrowing Costs FRS 139: Financial Instruments: Recognition and Measurement Amendments to FRS 1: First-time Adoption of Financial Reporting Standards and FRS 127: Consolidated and Separate Financial Statements: Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Amendments to FRS 2: Share-based Payment - Vesting Conditions and Cancellations Amendments to FRS 132: Financial Instruments: Presentation Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures and IC Interpretation 9: Reassessment of Embedded Derivatives Amendments to FRSs Improvements to FRSs (2009) IC Interpretation 9: Reassessment of Embedded Derivatives IC Interpretation 10: Interim Financial Reporting and Impairment IC Interpretation 11: FRS 2 - Group and Treasury Share Transactions IC Interpretation 13: Customer Loyalty Programmes IC Interpretation 14: FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction TR i - 3: Presentation of Financial Statements of Islamic Financial Institutions
Effective for financial periods beginning on or after 1 March 2010 Amendments to FRS 132: Financial Instruments: Presentation
Effective for financial periods beginning on or after 1 July 2010 FRS 1: First-time Adoption of Financial Reporting Standards FRS 3: Business Combinations (revised) FRS 127: Consolidated and Separate Financial Statements (amended) Amendments to FRS 2: Share-based Payment Amendments to FRS 5: Non-current Assets Held for Sale and Discontinued Operations Amendments to FRS 138: Intangible Assets Amendments to IC Interpretation 9: Reassessment of Embedded Derivatives IC Interpretation 12: Service Concession Arrangements IC Interpretation 15: Agreements for the Construction of Real Estate IC Interpretation 16: Hedges of a Net Investment in a Foreign Operation IC Interpretation 17: Distributions of Non-cash Assets to Owners
56

2. Significant accounting policies (contd.) 2.3 Changes in accounting policies and future accounting standards (contd.) Effective for financial periods beginning on or after 1 January 2011 Amendments to FRS 1 Amendments to FRS 7 Limited Exemption from Comparatives FRS 7 Disclosures for First-time Adopters (Amendment to FRS 1) Improving Disclosures about Financial Instruments (Amendment to FRS 7)
Standards and Interpretations issued but not yet effective The Group and the Company plan to adopt the above pronouncements when they become effective in the respective financial period. Unless otherwise described below, these pronouncements are expected to have no significant impact to the financial statements of the Group and the Company upon their initial application: FRS 3: Business Combinations (revised) and FRS 127: Consolidated and Separate Financial Statements (amended) FRS 3 (revised) introduces a number of changes to the accounting for business combinations occurring on or after 1 July 2010. These include changes that affect the valuation of non-controlling interest, the accounting for transaction costs, the initial recognition and subsequent measurement of a contingent consideration and business combinations achieved in stages. These changes will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs and future reported results. FRS 127 (amended) requires that a change in the ownership interest of a subsidiary (without loss of control) be accounted for as a transaction with owners in their capacity as owners and to be recorded in equity. Therefore, such transaction will no longer give rise to goodwill, nor will it give rise to a gain or loss. Furthermore, the amended Standard changes the accounting for losses incurred by the subsidiary as well as loss of control of a subsidiary. The changes by FRS 3 (revised) and FRS127 (amended) will be applied prospectively and only affect future acquisition or loss of control of subsidiaries and transactions with non-controlling interests. FRS 8: Operating Segment FRS 8 Operating Segments (effective for annual periods beginning on or after 1 July 2009), replaces FRS 1142004 Segment Reporting. The new standard requires a management approach, under which segment information is presented on the same basis as that used for internal reporting purposes. The Group will apply this standard from financial periods beginning on 1 January 2010. As this is a disclosure standard, there will be no impact on the financial position or results of the Group. FRS 101: Presentation of Financial Statements (revised) The revised FRS 101 separates owner and non-owner changes in equity. Therefore, the consolidated statement of changes in equity will now include only details of transactions with owners. All non-owner changes in equity are presented as a single line labelled as total comprehensive income. The Standard also introduces the statement of comprehensive income: presenting all items of income and expense recognised in the income statement, together with all other items of recognised income and expense, either in one single statement, or in two linked statements. The Group is currently evaluating the format to adopt. In addition, a statement of financial position is required at the beginning of the earliest comparative period following a change in accounting policy, the correction of an error or the reclassification of items in the financial statements. This revised FRS does not have any impact on the financial position and results of the Group and the Company. FRS 123: Borrowing Costs This Standard supersedes FRS 1232004: Borrowing Costs that removes the option of expensing borrowing costs and requires capitalisation of such costs that are directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognised as an expense. The adoption of this Standard will not have any impact on the financial statements of the Group and the Company, as the existing policy on borrowing costs related to qualifying assets are capitalised (Note 2.2(r)).
57

2. Significant accounting policies (contd.) 2.3 Changes in accounting policies and future accounting standards (contd.) Standards and Interpretations issued but not yet effective (contd.) FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures and Amendments to FRS 139: Financial Instruments: Recognition and Measurement, FRS 7: Financial Instruments: Disclosures The new Standard on FRS 139: Financial Instruments: Recognition and Measurement establishes principles for recognising and measuring financial assets, financial liabilities and some contracts to buy and sell non-financial items. Requirements for presenting information about financial instruments are in FRS 132: Financial Instruments: Presentation and the requirements for disclosing information about financial instruments are in FRS 7: Financial Instruments: Disclosures. FRS 7: Financial Instruments: Disclosures is a new Standard that requires new disclosures in relation to financial instruments. The Standard is considered to result in increased disclosures, both quantitative and qualitative of the Groups and Companys exposure to risks, enhanced disclosure regarding components of the Groups and Companys financial position and performance, and possible changes to the way of presenting certain items in the financial statements. In accordance with the respective transitional provisions, the Group and the Company are exempted from disclosing the possible impact to the financial statements upon the initial application. Amendments to FRSs Improvements to FRSs (2009) FRS 117 Leases: Clarifies on the classification of leases of land and buildings. The Group is still assessing the potential implication as a result of the reclassification of its unexpired land leases as operating or finance leases. For those land element held under operating leases that are required to be reclassified as finance leases, the Group shall recognise a corresponding asset and liability in the financial statements which will be applied retrospectively upon initial application. However, in accordance with the transitional provision, the Group is permitted to reassess lease classification on the basis of the facts and circumstances existing on the date it adopts the amendments; and recognise the asset and liability related to a land lease newly classified as a finance lease at their fair values on that date; any difference between those fair values is recognised in retained earnings. The Group is currently in the process of assessing the impact of this amendment.
Amendments to FRSs Improvements to FRSs (2009) (contd.) FRS 140 Investment Property: Property under construction or development for future use as an investment property is classified as investment property. Where the fair value model is applied, such property is measured at fair value. If fair value cannot be reliably determined, the investment under construction will be measured at cost until such time as fair value can be determined or construction is complete. The amendment also includes changes in terminology in the Standard to be consistent with FRS 108. The change will be applied prospectively.
2.4
Significant accounting estimate and judgement (a) Key sources of estimation uncertainty (i) Property development The Group recognises property development revenue and expenses in the income statement by using the stage of comp letion method. The stage of completion is determined by the proportion that property method development costs incurred for work performed to date bear to the estimated total property development costs. Significant judgement is required in determining the stage of completion, the extent of the property development costs incurred, the estimated total property development revenue costs, as well as the recoverability of the development projects. In making the judgement, the Group evaluates based on past experience by relying on the work of specialist. (ii) Depreciation of property, plant and equipment Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of the property, plant and equipment to be within 3 to 50 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.
58

2. Significant accounting policies (contd.) 2.4 Significant accounting estimate and judgement (contd.) (a) Key sources of estimation uncertainty (contd.) (ii) Depreciation of property, plant and equipment (contd.) The cost of plant and machinery is depreciated on a straight-line basis over the assets useful lives. Management estimates the useful lives of these plant and machinery to be within 7 to 10 years. These are common life expectancies applied in the construction industry. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. A 2.5% difference in the average useful lives of these assets from managements estimates would result in approximately 2% variance in profit for the year. (iii) Deferred tax assets Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent that it is probable that taxable profit will be available against which the losses and capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The unutilised tax losses of the Group as at balance sheet date is RM24,239,000 (2008: RM18,565,000) and unabsorbed capital allowances as at balance sheet date is RM12,053,000 (2008: RM9,906,000). 3. Revenue Group 2009 RM Construction contracts Toll concession Property development Others 131,781,835 10,289,734 334,903 162,992 142,569,464 ============ 2008 RM 147,755,075 9,195,921 221,773 157,172,769 ============ 2009 RM 129,575,957 129,575,957 ============ Company 2008 RM 124,126,108 124,126,108 ============
4.
Cost of Sales Construction contract costs Toll concession Property development Others 115,301,818 2,006,329 305,826 117,613,973 ============ 126,360,788 2,360,038 352,806 129,073,632 ============ 119,189,397 119,189,397 ============ 114,902,880 114,902,880 ============
5.
Other Income Interest income Gain on partial disposal of subsidiary Others 467,654 28,212,004 1,359,427 30,039,085 ============ 761,620 673,608 11,199,052 12,634,280 ============ 415,294 827,616 1,242,910 ============ 571,196 7,941,563 8,512,759 ============
59

6. Finance Costs Group 2009 RM 21,935,144 303,106 22,238,250 2008 RM 16,391,490 339,257 16,730,747 2009 RM 8,765,996 214,809 106,122 9,086,927 Company 2008 RM 7,973,544 237,233 106,122 8,316,899
Interest expense on: Bank borrowings Hire purchase and finance lease liabilities Interest paid to subsidiaries Total interest expense Less: Interest capitalised in qualifying assets: Costs of construction contracts (Note 21) Property development costs (Note 14) Interest expense (Note 7) 7. Profit/(Loss) Before Taxation
(1,725,077) (953,334) 19,559,839 ============
(3,435,677) 13,295,070 ============
9,086,927 ============
(347,262) 7,969,637 ============
The following amounts have been included in arriving at profit/(loss) before taxation: Group Employee benefits expense (Note 8) Non-Executive Directors remuneration (Note 9) Amortisation of toll concession (Note 15) Amortisation of prepaid land lease payments (Note 13) Auditors remuneration Statutory audit - current year - (over)/under provision in prior year Discount allowed Depreciation of property, plant and equipment (Note 12) Gain on partial disposal of subsidiaries (Note 16(a)) Impairment in value of investment Interest expense (Note 6) Interest income Loss on disposal of other investments Loss on disposal of properties Loss/(gain) on disposal of property, plant and equipment (Gain)/loss on foreign exchange Management fee paid Management fee received Property, plant and equipment written-off Provision for doubtful debts Provision for stocks obsolescence Rental expense for land and buildings Rental income from land and buildings Rental income from plant and machinery 2009 RM 12,436,784 436,500 134,504 26,843 143,800 (300) 3,000,000 4,228,275 (28,212,005) 19,559,839 (467,654) 182,000 6,071 (5,123) 4,458 (360,000) 8,016 8,519,734 503,183 (242,993) (121,522) ============ 2008 RM 8,804,509 374,500 176,412 26,843 135,500 7,900 1,278,437 (673,608) 9,292,832 13,295,070 (761,620) 2,329 10,000 (30,999) 4,409 12,342 (128,519) 1,600 5,882,687 382,399 908,222 (118,342) ============ 2009 RM 3,891,709 436,500 26,843 60,000 3,000,000 3,891,594 9,086,927 (415,294) 182,000 6,071 4,458 (360,000) 8,016 3,307,190 636,432 (329,402) ============ Company 2008 RM 3,867,251 374,500 26,843 60,000 4,600 1,053,166 11,366,128 7,969,637 (571,196) 2,329 10,000 (30,999) 12,342 (60,000) 1,183,946 636,432 (158,452) ============
60

8. Employee Benefits Expense Group Salaries, allowances, bonus and wages Directors remuneration Provident fund contributions Social security costs 2009 RM 9,054,472 2,370,616 920,046 91,650 12,436,784 ============ 335 ============ 2008 RM 5,913,949 2,133,889 700,370 56,301 8,804,509 ============ 288 ============ 2009 RM 1,647,923 2,050,516 179,468 13,802 3,891,709 ============ 47 ============ Company 2008 RM 1,727,464 1,925,641 199,923 14,223 3,867,251 ============ 55 ============
Number of employees at the end of the year
Included in employee benefits expense of the Group and of the Company are Executive Directors remuneration amounting to RM2,370,616 (2008: RM2,133,889) and RM2,050,516 (2008: RM1,925,641) respectively as further disclosed in Note 9. 9. Directors Remuneration Group 2009 RM Executive Directors remuneration Fees Other emoluments 97,200 2,273,416 2,370,616 ============ 188,100 248,400 436,500 2,807,116 ============ 2008 RM 82,400 2,051,489 2,133,889 ============ 105,700 268,800 374,500 2,508,389 ============ 2009 RM 97,200 1,953,316 2,050,516 ============ 188,100 248,400 436,500 2,487,016 ============ Company 2008 RM 82,400 1,843,241 1,925,641 ============ 105,700 268,800 374,500 2,300,141 ============ Company
Non-Executive Directors remuneration Fees Other emoluments Total Directors remuneration (Note 36)
The details of remuneration by Directors of the Company during the year are as follows: Group 2009 2008 RM RM Executive: Salaries, bonus and other emoluments 2,020,912 1,831,133 Fees 97,200 82,400 Defined contribution plan 252,504 220,356 2,370,616 2,133,889 Non-Executive: Fees 188,100 105,700 Other emoluments 248,400 268,800 2,807,116 ============ 2,508,389 ============
2009 RM 1,700,812 97,200 252,504 2,050,516 188,100 248,400 2,487,016 ============
2008 RM
1,622,885 82,400 220,356 1,925,641 105,700 268,800 2,300,141 ============
The number of directors of the Company whose total remuneration during the financial year fell within the following bands is analysed below: Number of directors Range of remuneration Executive Non-Executive 2009 2008 2009 2008 Below 50,000 RM50,001 - RM100,000 RM100,001 - RM150,000 RM150,001 - RM200,000 RM200,001 - RM250,000 RM250,001 - RM300,000 RM300,001 - RM350,000 RM600,001 - RM750,000 3 1 2 1 ============ 2 1 2 1 ============ 2 5 ============ 2 5 ============
61

10. Income Tax Expense Group 2009 RM Current income tax: Malaysian income tax Under/ (over) provision in prior years 896,915 3,623,966 4,520,881 (240,345) (5,469,186) (5,709,531) (1,188,650) ============ 2008 RM 2,350,155 (2,283,187) 66,968 37,000 236,810 (8,000) 265,810 332,778 ============ 2009 RM (5,585) (5,585) (5,742,775) (5,742,775) (5,748,360) ============ Company 2008 RM 90,000 (1,779,575) (1,689,575) (1,689,575) ============
Deferred tax (Note 29): (Over)/under provision in prior years Relating to origination and reversal of temporary differences Relating to changes in tax rates -
Total income tax expense
Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2008: 26%) of the estimated assessable profit for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the current financial year, the income tax rate applicable to the subsidiary in Australia is 30%. A reconciliation of income tax expense applicable to profit/(loss) before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company is as follows: 2009 RM 4,810,068 ============ 1,202,517 6,220,927 (8,050,452) 180,334 (4,125,597) (240,345) 3,623,966 (1,188,650) ============ (15,022,085) ============ (3,755,521) 2,132,759 (4,125,598) (5,748,360) ============ 2008 RM 1,343,461 ============ 349,300 (67,727) 3,149,438 (3,484) (842,025) 110,877 37,000 (2,283,187) (117,414) 332,778 ============ (11,226,308) ============ (2,918,840) 1,870,570 1,138,270 (1,779,575) (1,689,575) ============
Group Profit before taxation Taxation at Malaysian statutory tax rate of 25% (2008: 26%) Effect of income subject to tax rate of 20% (2008: 20%) Effect of expenses not deductible for tax purposes Effect of changes in tax rates on opening balance of deferred tax Income not subject to tax Deferred tax assets not recognised on unabsorbed capital allowances and business losses Deferred tax assets recognised on unabsorbed capital allowances and business losses (Over)/ under provision of deferred tax in prior years Under/(over) provision of income tax expense in prior years Effect of utilisation of previously unabsorbed capital allowances Income tax expense for the year Company Loss before taxation Taxation at Malaysian statutory tax rate of 25% (2008: 26%) Effect of expenses not deductible for tax purposes Deferred tax assets not recognised on unabsorbed capital allowances and business losses Deferred tax assets recognised on unabsorbed capital allowances and business losses Overprovision of income tax expense in prior years Income tax expense for the year
62

10. Income Tax Expense (contd.) Tax losses and unabsorbed capital allowances are analysed as follows: 2009 RM (i) (ii) Unutilised tax losses carried forward Unabsorbed capital allowances carried forward 24,329,000 ============ 12,053,000 ============ Group 2008 RM 2009 RM 13,954,000 ============ 10,819,000 ============ Company 2008 RM
18,565,000 ============ 9,906,000 ============
9,336,000 ============ 7,418,000 ============
The unutilised tax losses and unabsorbed capital allowances of the Group and of the Company are available for offsetting against future taxable profits subject to no substantial change in shareholdings under the Income Tax Act, 1967 and guidelines issued by the Tax Authority. 11. Earnings Per Share (a) Basic Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares in issue during the financial year. 2009 RM 5,546,830 ============ 112,496,908 ============ 2009 Sen 4.93 ============ 2008 RM 1,009,674 ============ 110,060,450 ============ 2008 Sen 0.92 ============
Profit attributable to ordinary equity holders of the Company Weighted average number of ordinary shares in issue
Basic earnings per share for: Profit for the year (b) Diluted
For the purpose of calculating diluted earnings per share, the profit for the year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, and share options granted to employees. 2009 RM 5,546,830 ============ 112,496,908 ============ 2009 Sen 4.93 ============ 2008 RM 1,009,674 ============ 110,060,450 ============ 2008 Sen 0.92 ============
Profit attributable to ordinary equity holders of the Company Weighted average number of ordinary shares in issue
Diluted earnings per share for: Profit for the year
63

12. Property, Plant and Equipment Plant, machinery Buildings and equipment RM RM Group 2009 Cost 6,651,507 2,290,000 - - 8,941,507 763,324 155,708 155,708 - - - 919,032 8,022,475 ======== 39,295,220 1,282,300 - - 40,577,520 14,658,368 5,042,048 3,341,638 1,700,410 - - 19,700,416 20,877,104 ======== 9,967,623 862,058 - - 10,829,681 5,446,953 1,471,508 328,145 1,143,363 - - 6,918,461 3,911,220 ======== 8,766,714 297,611 (15,945) (13,253) 9,035,127 4,762,323 884,358 402,784 481,574 (5,982) (5,237) 5,635,462 3,399,665 ======== 25,630,968 7,553,622 4,228,275 3,325,347 (5,982) (5,237) 33,173,371 36,210,464 ======== 64,681,064 4,731,969 (15,945) (13,253) 69,383,835 Office furnitures, Motor fittings, equipment vehicles and renovation RM RM
Total RM
At 1 January 2009 Additions Disposals Write-offs At 31 December 2009 Accumulated depreciation and impairment At 1 January 2009 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 21) Disposals Write-offs At 31 December 2009 Net carrying amount At 31 December 2009 Group 2008 Cost
5,915,507 736,000 - - 6,651,507 648,100 115,224 115,224 - - - 763,324 5,888,183 ========
28,397,439 11,011,781 - (114,000) 39,295,220 12,689,940 1,988,378 224,355 1,764,023 - (19,950) 14,658,368 24,636,852 ========
6,663,557 3,419,780 (229,714) 114,000 9,967,623 4,329,355 1,327,361 459,695 867,666 (229,713) 19,950 5,446,953 4,520,670 ======== 6,304,430 2,464,684 (2,400) - 8,766,714 3,884,256 878,867 479,163 399,704 (800) - 4,762,323 4,004,391 ======== 21,551,651 4,309,830 1,278,437 3,031,393 (230,513) 25,630,968 39,050,096 ======== 47,280,933 17,632,245 (232,114) 64,681,064
At 1 January 2008 Additions Disposals Transfers At 31 December 2008 Accumulated depreciation and impairment At 1 January 2008 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 21) Disposals Transfers At 31 December 2008 Net carrying amount At 31 December 2008
64

12. Property, Plant and Equipment (contd.) Vessels Plants, machinery and Buildings and equipment dredging RM RM RM Office furnitures Motor fittings, equipment vehicles and renovation Total RM RM RM
Company 2009 Cost
At 1 January 2009 Additions Disposals Write-offs At 31 December 2009 Accumulated depreciation At 1 January 2009 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 21) Disposals Write-offs At 31 December 2009 Net carrying amount At 31 December 2009 Company 2008 Cost
6,651,507 2,290,000 - - 8,941,507 763,324 155,708 155,708 - - - 919,032 8,022,475 =======
28,145,166 - - - 28,145,166 11,314,302 3,484,542 3,013,771 470,771 - - 14,798,844 13,346,322 ========
1,400,000 - - - 1,400,000 805,000 210,000 210,000 - - - 1,015,000 385,000 =======
4,330,463 255,621 - - 4,586,084 3,769,827 357,881 297,329 60,552 - - 4,127,708 458,376 =======
4,142,858 44,669,994 42,391 2,588,012 (15,945) (15,945) (13,253) (13,253) 4,156,051 47,228,808 3,294,082 243,024 214,786 28,238 19,946,535 4,451,155 3,891,594 559,561
(5,982) (5,982) (5,237) (5,237) 3,525,887 24,386,471 630,164 ======= 22,842,337 ========
At 1 January 2008 Additions Disposals At 31 December 2008 Accumulated depreciation At 1 January 2008 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 21) Disposals At 31 December 2008 Net carrying amount At 31 December 2008
5,915,507 736,000 - 6,651,507 648,100 115,224 115,224 - - 763,324 5,888,183 =======
23,544,726 4,600,440 - 28,145,166 10,593,022 721,280 1,276 720,004 - 11,314,302 16,830,864 ========
1,400,000 - - 1,400,000 595,000 210,000 210,000 - - 805,000 595,000 =======
4,489,677 70,500 (229,714) 4,330,463 3,483,599 515,941 443,661 72,280 (229,713) 3,769,827 560,636 =======
4,030,492 112,366 - 4,142,858 2,976,427 317,655 283,005 34,650 - 3,294,082 848,776 =======
39,380,402 5,519,306 (229,714) 44,669,994 18,296,148 1,880,100 1,053,166 826,934 (229,713) 19,946,535 24,723,459 ========
65

12. Property, Plant and Equipment (contd.) (a) During the financial year, the Group and the Company acquired property, plant and equipment at aggregate costs of RM4,731,969 (2008: RM17,632,245) and RM2,588,012 (2008: RM5,519,306), respectively, of which RM539,437 (2008: RM993,938) and RM Nil (2008: RM Nil), respectively, were acquired by means of hire purchase and finance lease arrangements. Net carrying amounts of property, plant and equipment held under hire purchase and finance lease arrangements are as follows: Plant, machinery and equipment Motor vehicles 2009 RM 5,076,228 1,423,935 6,500,163 ======== Group 2008 RM 4,027,356 1,862,820 5,890,176 ======== Company 2009 2008 RM RM 4,766,852 3,643,731 374,410 81,160 4,848,012 4,018,141 ======== ========
13.
Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 26. Certain buildings of the Group and of the Company, with net carrying amounts of RM3,867,294 (2008: RM1,646,807), are pledged for borrowings as disclosed in Note 25. Group/Company 2009 2008 RM RM 1,195,873 5,060,000 (26,843) 6,229,030 ======= 5,641,646 587,384 6,229,030 ======= 1,222,716 (26,843) 1,195,873 ======= 595,156 600,717 1,195,873 =======
Prepaid land lease payments
At 1 January Addition Amortisation for the year (Note 7) At 31 December Analysed as: Long term leasehold land Short term leasehold land
Certain land of the Group and of the Company, with net carrying amounts of RM5,060,000 (2008: RM Nil), are pledged for borrowings as disclosed in Note 25. Land Held for Property Development and Developments Costs (a) Land Held for Property Development Group 2009 Cost 1,159,125 125,152,361 126,311,486 - - - 1,159,125 125,152,361 126,311,486 ======= ========= ========= Short- term Freehold Land RM Long-term Leasehold Land RM
14.
Total RM
At 1 January/31 December Accumulated impairment losses At 1 January/31 December Carrying amount at 31 December 2009
66

14. Land Held for Property Development and Developments Costs (contd.) (a) Land Held for Property Development (contd.) Group 2008 Cost (b) At 1 January/31 December Accumulated impairment losses At 1 January/31 December Carrying amount at 31 December 2008 1,159,125 125,152,361 126,311,486 - - 1,159,125 125,152,361 126,311,486 ======= ========= ========= Short- term Freehold Land RM Long-term Leasehold Land RM
Total RM
Leasehold land with carrying values of RM33,714,909 (2008: RM33,714,909) have been pledged as security for banking facilities granted to the Group (Note 25). Development Costs Group 2009 Leasehold Development Land Costs RM RM Total RM
Cumulative development costs At 1 January 2009 Costs incurred during the year At 31 December 2009 4,837,174 - 4,837,174 9,130,119 6,982,132 16,112,251 13,967,293 6,982,132 20,949,425
Cumulative costs recognised in income statement At 1 January 2009 Recognised during the year At 31 December 2009 Development costs at 31 December 2009 2008 Cumulative development costs At 1 January 2008 Costs incurred during the year At 31 December 2008 Cumulative costs recognised in income statement At 1 January/31 December 2008 Development costs at 31 December 2008 4,837,174 - 4,837,174 - 4,837,174 ======= 5,134,228 3,995,891 9,130,119 - 9,130,119 ======== 9,971,402 3,995,891 13,967,293 - 13,967,293 ======== - - - 4,837,174 ======= - 305,826 305,826 15,806,425 ======== 305,826 305,826 20,643,599 ========
67

14. 15. Land Held for Property Development and Developments Costs (contd.) Included in property development costs incurred during the financial year are: Group 2009 2008 RM RM Interest expense (Note 6) Directors remuneration Intangible Assets 953,334 73,358 ======= - - =======
Company 2009 2008 RM RM - - ======= - =======
Group Cost
Toll Goodwill Concessions RM RM
Total RM
At 1 January 2008 Disposal of partial interest in subsidiary At 31 December 2008 Disposal of partial interest in subsidiary At 31 December 2009 Accumulated amortisation and impairment At 1 January 2008 Amortisation (Note 7) At 31 December 2008 Amortisation (Note 7) At 31 December 2009 Net carrying amount At 31 December 2008 At 31 December 2009 (a) Impairment tests for goodwill Allocation of goodwill
3,180,289 (352,217) 2,828,072 (80,951) 2,747,121 - - - - - 2,828,072 ======= 2,747,121 =======
13,117,032 - 13,117,032 - 13,117,032 930,106 176,412 1,106,518 134,504 1,241,022 12,010,514 ======== 11,876,010 ========
16,297,321 (352,217) 15,945,104 (80,951) 15,864,153 930,106 176,412 1,106,518 134,504 1,241,022 14,838,586 ======== 14,623,131 ========
Goodwill has been allocated to the Groups CGUs identified according to the business segment as follows: At 31 December 2009 Construction Property development Others At 31 December 2008 Construction Property development Others Total RM 431,685 1,948,844 366,592 2,747,121 ======== 431,685 2,029,795 366,592 2,828,072 ========
68

15. Intangible Assets (contd.) (a) Impairment tests for goodwill (contd.) Key assumptions used in value-in-use calculations The recoverable amount of the respective segment units have been determined based on a value in use calculation using the cash flow projections from financial budgets approved by senior management covering a five-year period. The discount rate used are pre-tax and reflect specific risks relating to the relevant segments. (a) Discount rates Discount rates reflect the current market assessment of the risks specific to the business segment. The discount rate was estimated based on the average percentage of a weighted average cost of capital for the industry. This rate was further adjusted to reflect the market assessment of any risk specific to the cash-generating unit for which future estimates of cash-flows have not been adjusted. With regard to the assessment of value-in-use of the segment units, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount. 16. Investment in Subsidiaries 2009 RM Unquoted shares at cost Details of the subsidiaries are as follows: Name of subsidiaries Held by the Company Zecon Toll Concessionaire Sdn. Bhd.* Zecon Water Corporation Sdn. Bhd.* Zecon Land Sdn. Bhd.* Zecon Geotechnical Services Sdn. Bhd.* Zecon Resources Sdn. Bhd.* Teknik PS Sdn. Bhd.* Zecon International Limited* Zecon Piling Sdn. Bhd.* Zecon Mutiara Sdn. Bhd.* Zecon Dredging Sdn. Bhd.* Country of incorporation Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia British Virgin Islands Malaysia Malaysia Malaysia Principle activities Operation and maintenance of toll bridge and collection of toll revenue Water related services Property development Foundation engineering and piling Property development Dormant Foundation engineering and construction Dormant Construction of medium and low cost houses Sand, dredging, earthworks and material transportation services Proportion of ownership interest 2009 2008 % % 100 100 55,694,905 ======== Company 2008 RM 55,544,905 ========
100 100 100 96 55 100
100 100 100 96 55 100
100 100 70
100 100 70
69

16. Country of incorporation Malaysia Malaysia Australia Malaysia Malaysia Malaysia Malaysia Malaysia Labuan Labuan Investment in Subsidiaries (contd.) Proportion of ownership interest 2009 2008 % % 51
Name of subsidiaries Held by the Company (contd.) Zecon Energy Sdn. Bhd.* Zecon Assets Sdn. Bhd.* Zecon Australia Pty. Ltd.** Zecon Construction Sdn. Bhd.* Zecon Construction (Sarawak) Sdn. Bhd.* Zecon Designtech Sdn. Bhd.* Zecon Fab Sdn. Bhd.* Matang Highway Sdn. Bhd.* Zecon MidEast Ltd.* Zecon (Saudi Arabia) International Ltd.*
Principle activities Energy management and other energy related services
51
Management, maintenance and rental services in relation to machineries, motor vehicles and hardware of every descriptions Dormant Dormant Dormant Dormant Dormant Special purpose vehicle for financing purposes Dormant Dormant
100
100
100 51 100 100 51 100
100 51 100 100 51 100
100 100
100 100
Held through subsidiaries: Subsidiary of Zecon Resources Sdn. Bhd. Sarmax Sdn. Bhd.* Subsidiary of Teknik PS Sdn. Bhd. TPS Medicare Sdn. Bhd.* Subsidiary of Zecon Mutiara Sdn. Bhd. Agrowell Quarry Sdn. Bhd.* Subsidiary of Zecon Land Sdn. Bhd. Zecon Petra Jaya Sdn. Bhd.* Zecon Demak Jaya Sdn. Bhd.* Malaysia Malaysia Property development Property development 51 70 51 100 Malaysia Dormant 100 100 Malaysia Dormant 100 100 Malaysia Dormant 50.1 50.1
70

16. Name of subsidiaries Held through subsidiaries (contd.): Subsidiary of Zecon International Ltd. IR Concept (M) Sdn. Bhd.* Malaysia Supplier of electrical or electronic equipment and services Property sales and management Property development 100 100 Country of incorporation Principle activities Investment in Subsidiaries (contd.) Proportion of ownership interest 2009 2008 % %
ZPM Satu Sdn. Bhd.* Malaysia Zalpoint Tanah Putih Sdn. Bhd.* Malaysia * Audited by Ernst & Young, Malaysia * * Audited by firms of auditors other than Ernst & Young
100 100
100 100
On 27 July 2009, the Group had increased the investment in Zecon Water Corporation Sdn. Bhd. by way of payment of cash consideration amounting to RM150,000. In 2008, the Company acquired additional investments in certain subsidiaries. Accordingly, the investments increased by RM6,902,198 as a result of the increase in the issued and paid-up ordinary share capital of those subsidiaries. (a) Partial disposal of subsidiaries O n 22 December 2009, the Group disposed its 30% equity interest in Zecon Demak Jaya Sdn. Bhd. for a total consideration of RM32,000,000 by way of cash. The subsidiary is reported as part of the property development segment. Land held for development Receivables Cash and bank balances Payables Net assets disposed Attributable goodwill Total disposal proceeds Gain on disposal to the Group Disposal proceeds settled by: Cash Cash inflow arising on disposals: 2009 RM
21,972,960 9,300,000 275 (27,566,191) 3,707,044 80,951 3,787,995 32,000,000 28,212,005 ======== 32,000,000 ========
Cash consideration 32,000,000 Net cash inflow of the Group 32,000,000 ======== On 19 September 2008, the Group disposed of its 49% equity interest in Zecon Energy Sdn. Bhd. for a total consideration of RM49,000 by way of cash. The subsidiary is reported as part of the others segment. Acquisition of subsidiaries On 16 June 2008, the Company acquired additional 49 ordinary shares of RM1.00 each, representing 49% of the total issued and paid-up capital in Zecon Esec-Engineering Sdn Bhd (Zecon-Esec) for a total cash consideration of RM49.00 only. With the said acquisition, Zecon Esec is a wholly-owned subsidiary of the Company. On 12 August 2008, Zecon-Esec changed its name to Zecon Assets Sdn Bhd. On 17 June 2008, the Company acquired 510 ordinary shares of RM1.00 each, representing 51% of the equity interest in Zecon Fab Sdn Bhd (formerly known as Zecon Utilities Sdn Bhd) for a total consideration of RM510.00 only, and the net cash inflow arising from such acquisition is RM477.
(b)
71

17. Investment in Associates Group 2009 2008 RM RM 12,541,128 12,541,128 (11,866,622) (11,761,816) 674,506 779,312 - 674,506 ======== - 779,312 ======== Company 2009 2008 RM RM 12,541,128 12,541,128 - - 12,541,128 12,541,128 (12,366,128) (12,366,128) 175,000 175,000 ======== ========
Unquoted shares at cost Shares of post-acquisition reserves Impairment in value of investment
Impairment in value of investment has been fully provided for the unquoted shares in the Company. Details of the associates are as follows: Name of entities L.C.S. Trading Co. Sdn. Bhd. Halifax Capital Berhad Country of incorporation Malaysia Malaysia Principle activities Trading in hardware, building materials and related products Assembly and sale of electrical and electronic products Proportion of ownership interest 2009 2008 % % 35.0 35.0 Proportion of voting 2009 2008 % % 35.0 35.0
25.5
25.5
25.5
25.5
The summarised financial information of the Groups investment in associates are: Assets and liabilities Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Results Revenue (Loss)/profit for the year
2009 RM 3,016,106 575,950 3,592,056 ======== 2,634,044 281,842 2,915,886 ========
Group 2008 RM 2,179,321 476,224 2,655,545 ======== 1,822,030 18,491 1,840,521 ========
7,239,958 5,073,909 (104,806) 250,374 ======== ========
On 8 May 2007, one of the associates, Halifax Capital Berhad (Halifax) was classified as an affected listed issuer under the category of Amended Practice Note 17 by Bursa Malaysia Securities Berhad pursuant to Paragraph 8.14C and Paragraph 2.1(a) of Practice Note no. 17/2005 of the Listing Requirements. Subsequently, on 25 July 2008, Halifax was delisted from the Main Board of the Bursa Malaysia Securities Berhad.
72

18. Investment in Jointly Controlled Entity 2009 RM Unquoted share at cost Share of post-acquisition reserves Less: Accumulated impairment losses 4,861,201 4,861,201 4,861,201 ======= Group 2008 RM Company 2009 2008 RM RM 1 1 1 ===== 1 1 1 =====
4,861,201 4,861,201 4,861,201 =======
Details of the jointly controlled entity are as follows: Name of entity NS Water-Zecon JV Sdn. Bhd. Ramco-Zecon WLL Country of incorporation Malaysia Qatar
Principle activities Dormant Dormant
Proportion of ownership interest 2009 2008 % % 50 49 50 49
On 20 March 2008, a subsidiary of the Company entered into a joint venture agreement with Ramco Trading & Contracting WLL. The Groups aggregate share of the current assets, non-current assets, current liabilities, non-current liabilities, income and expenses of the jointly controlled entities is as follows: Group 2009 2008 RM RM Assets and liabilities Current assets/Total assets 947 950 ===== ===== Current liabilities/Total liabilities Results Revenue Expenses Profit/ (loss) for the year 19. Other Investments 3,386 ===== 6,321 1,254 5,067 ===== 8,456 ===== 1,486 (1,486) =====
Group/Company 2009 2008 RM RM 316,743 316,743 400,000 716,743 4,500,000 5,216,743 ======= 275,800 ======= 316,743 316,743 400,000 716,743 4,500,000 5,216,743 ======= 241,325 =======
Quoted shares at cost Impairment in value of investment Unquoted shares at cost Subordinated Bonds Total Market value of quoted shares
The directors are of the opinion that the value of the quoted shares are not impaired and any impairment are temporary in nature. The investment in bonds relates to the Subordinated Bonds (maturity date: 20 September 2010) issued under the Primary Collateralised Loan Obligation Programme as disclosed in Note 25 to the financial statements.
73

20. Inventories 2009 RM At cost: Properties held for sale 21. Amount Due from/(to) Customers for Contract Work 5,965,177 ======= 5,586,939 ======= Group 2,970,000 ======= 3,482,000 =======
Group
2008 RM
Company 2009 2008 RM RM
2009 RM Construction contract costs incurred to date Attributable profit
2008 RM
Company 2009 2008 RM RM 393,351,299 268,582,693 29,352,356 23,267,762 422,703,655 291,850,455
448,586,322 329,476,196 47,948,944 36,151,124 496,535,266 365,627,320
Less: Progress billings
(474,124,357) (336,911,652) (424,393,762) (288,795,014) 22,410,909 28,715,668 (1,690,107) 3,055,441 ========= ========= ======== ========= 36,361,581 45,245,011 7,243,943 7,876,897
Amount due from customers for contract work Amount due to customers for contract work
Retention sum on contracts, included within trade payables (Note 27) Retention sum on contracts, included within trade receivables (Note 22)
(13,950,672) (16,529,343) 22,410,909 28,715,668 ========= ======== 7,837,188 ======== 5,784,263 ========
(8,934,050) (4,821,456) (1,690,107) 3,055,441 ======== ======== 4,741,167 ======== 4,781,476 ========
2,333,073 ========
2,333,073 ========
800,735 ========
800,735 ========
The costs incurred to date as construction contracts include the following charges made during the year: 2009 RM Depreciation of property, plant and equipment (Note 12) Hire of equipment, plant and machinery Rental expense of buildings Interest expense (Note 6) Directors remuneration Staff costs 3,325,347 411,774 191,483 1,725,077 370,944 1,445,674 ======= Group 2008 RM Company 2009 2008 RM RM 559,561 111,802 ======= 826,934 347,262 262,951 =======
3,031,393 2,611,894 157,940 3,435,677 471,200 =======
74

22. Trade Receivables 2009 RM Trade receivables Progress billings receivables Due from subsidiaries Due from associates Provision for doubtful debts Retention sums (Note 21) Trade receivables, net Group 2008 RM (restated) Company 2009 2008 RM RM (restated) 65,215,761 25,262,019
144,207,974 108,231,439 2,563,821 2,683,843 (15,821,860) 133,633,778 2,333,073 135,966,851 ========= 4,899,116 2,774,110 (10,803,123) 105,101,542 2,333,073 107,434,615 =========
2,085,052 4,027,489 16,700,735 40,051,829 2,683,843 2,774,077 (7,501,010) (4,261,870) 79,184,381 67,853,544 800,735 800,735 79,985,116 68,654,279 ======== ========
Included in trade receivables of the Group and the Company is an amount of RM4,206,185 (2008: RM8,455,525) due from a company in which the close family members of a director of the Company have substantial financial interest. The Group and the Companys normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and approved on a case-by-case basis. The Group and the Company have significant concentration of credit risk that may arise from exposures to a single debtor or to groups of debtors. However, the Board does not consider this to pose significant credit risk to the Group and the Company. The amounts due from subsidiaries and associates are unsecured, interest-free and have no fixed term of repayment. 23. Other Receivables 2009 RM Other receivables Deposits Prepayments Due from joint ventures Due from subsidiaries 36,466,022 5,343,119 1,137,457 933,154 43,879,752 ======== Group Company 2009 2008 RM RM (restated) 3,099,466 354,972 176,298 935,279 202,919,757 207,485,772 =========
2008 RM
8,162,256 2,606,863 600,368 1,653,372 1,340,542 150,479 935,279 933,154 93,285,832 11,038,445 98,629,700 ======== =========
The Group and the Company have a significant exposure to a single debtor. However, the Board does not consider this to pose significant credit risk to the Group. The amounts due from subsidiaries are unsecured, interest-free and have no fixed term of repayment. 24. Cash and Bank Balances 2009 RM Cash on hand and at banks Deposits with licensed banks Cash and bank balances 7,158,494 48,850,448 56,008,942 ======== Group 2008 RM Company 2009 2008 RM RM 605,660 36,046,075 36,651,735 ======== 6,998,170 36,046,075 43,044,245 ========
16,835,212 72,535,483 89,370,695 ========
All deposits with licensed banks of the Group and of the Company are pledged to bankers as borrowings and bankers guarantees granted to the Group and the Company.
75

24. Cash and Bank Balances (contd.) Included in the deposits with licensed banks is a sinking fund account, amounting to RM12,576,765 (2008: RM35,216,254), created for the purpose of capturing the progressive monthly remittance of funds from the project revenue account. Such funds shall be utilised towards the repayment of the Sukuk Musharakah. For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date: 2009 RM Cash on hand and at banks Bank overdrafts (Note 25) Total cash and cash equivalents 25. Borrowings 2009 RM Group 2008 RM Company 2009 2008 RM RM 605,660 6,998,170 (1,989,056) (2,325,533) (1,383,396) 4,672,637 ======== ======== Company 2009 2008 RM RM
7,158,494 16,835,212 (1,989,056) (2,325,533) 5,169,438 14,509,679 ======== ======== Group
Short-term borrowings Secured: Term loan (i) Term loan (ii) Term loan (iii) Term loan (vi)
2008 RM
183,930 138,654 20,110,509 5,000,000 25,433,093 35,000,000 1,001,461 25,794,835 2,283,040 89,512,429
178,974 357,787 5,108,737 5,645,498 35,000,000 993,880 23,830,000 2,134,521 67,603,899
183,930 138,654 20,110,509 5,000,000 25,433,093 35,000,000 1,001,461 1,690,407 63,124,961
178,974 357,787 5,108,737 5,645,498 35,000,000 993,880 1,630,036 43,269,414 1,331,653 3,500,000 1,395,000 6,226,653 49,496,067 ========
Sukuk Musharakah Bank overdrafts Revolving credits Hire purchase payables (Note 26)
Unsecured: Term loan (v) Bank overdrafts Revolving credits Bankers acceptances
Long term borrowings Secured: Term loan (i) Term loan (ii) Term loan (iii) Term loan (iv)
45,000,000 45,000,000 987,595 1,331,653 987,595 3,200,000 3,500,000 3,200,000 1,570,000 1,395,000 1,570,000 50,757,595 6,226,653 50,757,595 140,270,024 73,830,552 113,882,556 ========= ========= =========
831,643 73,700,000 74,531,643 -
981,327 78,188 5,000,000 6,059,515 35,000,000 60,000,000
831,643 831,643 297,112 297,112
981,327 78,188 5,000,000 6,059,515 35,000,000 956,439 42,015,954
Sukuk Musharakah Bai Bithaman Ajil Islamic Debt Securities Hire purchase payables (Note 26)
1,281,910 2,048,579 75,813,553 103,108,094
76

25. Borrowings (contd.) 2009 RM Group 2008 RM Company 2009 2008 RM RM
Long term borrowings (contd.) Unsecured: Term loan (v)
- 45,000,000 75,813,553 148,108,094 ========= =========
1,128,755 ========
45,000,000 87,015,954 =======
Total borrowings Bank overdrafts (Note 24) Revolving credits Bankers acceptances Term loans Sukuk Musharakah Bai Bithaman Ajil Islamic Debt Securities Hire purchase payables (Note 26) 1,989,056 2,325,533 1,989,056 2,325,533 28,994,835 27,330,000 3,200,000 3,500,000 1,570,000 1,395,000 1,570,000 1,395,000 144,964,736 56,705,013 71,264,736 56,705,013 35,000,000 70,000,000 35,000,000 70,000,000 - 60,000,000 3,564,950 4,183,100 1,987,519 2,586,475 216,083,577 221,938,646 115,011,311 136,512,021 ========= ========= ========= =========
Term loan (i) is secured by a deed of assignment over certain landed properties of the Company. Term loan (ii) is secured by way of assignment of certain plant and machinery. Term loan (iii) is secured by a way of assignment over contract proceeds receivable by the Company and a legal charge over the project and sinking fund accounts. Term loan (iv) is granted to a wholly owned subsidiary to redeem the Bai Bithaman Ajil Islamic Debt Securities and to finance the Companys purchase of land and building from an associate. The term loan is secured by a first fixed and floating charge by way of debenture over all the present and future assets, rights and interest and undertakings of the issuer, and corporate guarantee from the Company. Term loan (v) is obtained under a Primary Collateralised Loan Obligation Programme and partly secured by Subordinated Bonds as disclosed in Note 19. Term loan (vi) is secured by the contract proceeds receivable by the Company and a legal charge over the project and sinking fund account. Sukuk Musharakah is secured by way of Memorandum of Charge over the Designated Accounts, assignment of the Companys contractual rights, interest, title and benefit in the project including all proceeds arising there from and first ranking debenture comprising fixed and floating charge over the Trust Assets. A sinking fund account was created for the purpose of capturing the progressive monthly remittance of funds as disclosed in Note 24. Bai Bithaman Ajil Islamic Debt Securities are secured by a security trust deed, a first ranking fixed and floating charge by way of debenture over all present and future assets, rights, interest and undertakings, a first ranking fixed charge over the designated accounts of a subsidiary and assignment of all the contractual benefits and rights over specified agreements and insurances. The bank overdrafts of the Group and of the Company amounting to RM1,001,461 (2008: RM993,880) are secured by certain landed properties of a subsidiary. The revolving credits of the Group amounting to RM25,794,835 (2008: RM23,830,000) are secured by certain landed properties of a subsidiary, pledge by way of Memorandum of Deposit over Fixed Deposit Receipt and assignment over contract proceeds receivable by the Company from its client in respect of the project financing.
77

26. Hire Purchase Payables 2009 RM Future minimum lease payments: Not later than 1 year Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years 2,447,821 782,088 586,164 3,816,073 (251,123) 3,564,950 ======== 2,313,495 1,418,500 741,135 4,473,130 (290,030) 4,183,100 ======== 1,766,235 302,371 2,068,606 (81,087) 1,987,519 ======== 1,720,606 881,668 100,650 2,702,924 (116,449) 2,586,475 ======== Group Company 2009 2008 RM RM
2008 RM
Less: Future finance charges Present value of finance lease liabilities Analysis of present value of finance lease liabilities: Not later than 1 year Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years Less: Amount due within 12 months Due after 12 months
2,283,040 729,833 552,077 3,564,950
2,134,521 1,343,815 704,764 4,183,100
1,690,407 297,112 1,987,519
1,630,036 858,419 98,020 2,586,475
(2,283,040) (2,134,521) 1,281,910 2,048,579 ======== ========
(1,690,407) (1,630,036) 297,112 956,439 ======== ========
The Group has finance leases and hire purchase contracts for various items of property, plant and equipment (see Note 12). Other information on financial risks of hire purchase and future lease liabilities are disclosed in Note 37. 27. Trade Payables 2009 RM Trade payables Due to subcontractors on contracts Retention sums (Note 21) Due to subsidiaries 34,295,393 37,279,465 7,837,188 79,412,046 ======== Group Company 2009 2008 RM RM (restated) 22,367,627 817,698 4,781,476 11,661,449 39,628,250 ========
2008 RM
34,964,841 18,309,566 11,643,722 1,320 5,784,263 4,741,167 45,740,401 52,392,826 68,792,454 ======== =========
The normal trade credit terms granted to the Group and to the Company range from 30 to 90 days. The amount due to subsidiaries are unsecured, interest-free and have no fixed term of repayment.
78

28. Other Payables 2009 RM Sundry payables Deposits Accruals Due to subsidiaries Group Company 2009 2008 RM RM (restated)
2008 RM
5,556,416 3,786,809 1,004,322 293,802 399,992 253,292 105,642 31,702 3,915,137 3,081,836 2,149,748 1,551,049 25,639,315 125,542,726 9,871,545 7,121,937 28,899,027 127,419,279 ======== ======== ======== ========= The amount due to subsidiaries are unsecured, interest-free and have no fixed term of repayment except for an amount of RM4,063,809 (2008: RM3,982,835) due to a subsidiary, which bears interest at 3.50% (2008: 3.50%) per annum. 29. Deferred Tax 2009 RM At 1 January Recognised in income statement (Note 10) At 31 December Presented after appropriate offsetting as follows: Deferred tax assets Deferred tax liabilities (20,242,352) (14,046,237) 1,508,631 1,022,047 (18,733,721) (13,024,190) ======== ======== (6,192,976) 450,201 (5,742,775) ======== ======
Group
2008 RM
Company 2009 2008 RM RM (5,742,775) (5,742,775) ======== ======
(13,024,190) (13,290,000) (5,709,531) 265,810 (18,733,721) (13,024,190) ======== ========
The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: Deferred tax liabilities of the Group: Property plant and equipment RM At 1 January 2009 Recognised in income statement At 31 December 2009 At 1 January 2008 Recognised in income statement At 31 December 2008 820,047 688,584 1,508,631 ======= 820,047 820,047 ======= Revaluation of land RM 202,000 (202,000) ======= 210,000 (8,000) 202,000 =======
Total RM 1,022,047 486,584 1,508,631 ======= 210,000 812,047 1,022,047 =======
79

29. Deferred Tax (contd.) Deferred tax liabilities of the Company: Property plant and equipment RM 450,201 450,201 ======= ======= Unused tax losses and Unabsorbed unabsorbed industrial capital building allowances allowance RM RM At 1 January 2009 Recognised in income statement At 31 December 2009 At 1 January 2008 Recognised in income statement At 31 December 2008 Deferred tax assets of the Company: (546,237) (13,500,000) (6,196,115) (6,742,352) (13,500,000) ========= ========= (13,500,000) (546,237) (546,237) (13,500,000) ========= ========= Unutilised Unabsorbed business capital losses allowances RM RM At 1 January 2009 Recognised in income statement At 31 December 2009 At 1 January 2008 and 31 December 2008 Deferred tax assets have not been recognised in respect of the following items: 2009 RM Unutilised tax losses Unabsorbed capital allowances 10,375,000 1,234,000 11,609,000 ======== Group 2008 RM Company 2009 2008 RM RM ======== 9,336,000 7,418,000 16,754,000 ========
At 1 January 2009 Recognised in income statement At 31 December 2009 At 1 January 2008 and 31 December 2008 Deferred tax assets of the Group:
Total RM 450,201 450,201 ======= =======
Total RM (14,046,237) (6,196,115) (20,242,352) ========= (13,500,000) (546,237) (14,046,237) =========
Total RM
(3,488,349) (2,704,627) (6,192,976) (3,488,349) (2,704,627) (6,192,976) ========= ========= ========= ========= ========= =========
18,565,000 9,906,000 28,471,000 ========
The availability of the unutilised tax losses and unabsorbed capital allowances for offsetting against future taxable profit of the respective subsidiaries are subject to no substantial changes in shareholdings of those subsidiaries under Section 44(5A) and (5B) of Income Tax Act, 1967.
80

30. Share Capital and Share Premium Number of Ordinary Shares of RM1 Each Amount Share Capital Share Capital (Issued and Fully (Issued and Fully Paid) Paid) RM Share Premium RM
Group/Company At 1 January 2009 and 31 December 2009 At 1 January 2008 and 31 December 2008
119,106,150 119,106,150 ========= ========= 119,106,150 119,106,150 ========= ========= Number of Ordinary Shares of RM1 Each 2009 2008
3,558,768 ======= 3,558,768 =======
Amount 2009 2008 RM RM
Authorised share capital At 1 January/31 December (i) Employees share option scheme (ESOS) The Zecon Berhad ESOS is governed by-laws approved by the shareholders at an Extraordinary General Meeting held on 15 February 2005. The ESOS was implemented on 22 March 2005 and is to be in force for a period of 5 years from the date of implementation. At 16 October 2007, a total of 8,684,800 new ordinary shares of RM1.00 has been issued and granted listing and quotation. On 21 March 2010, the ESOS has lapsed. 31. Other Reserves Asset Revaluation Foreign ReserveCurrency Freehold Translation Land Reserve RM RM 692,832 692,832 ======= 692,832 692,832 ======= (2,471) (5,123) (7,594) ====== (6,880) 4,409 (2,471) ====== 500,000,000 500,000,000 500,000,000 500,000,000 ========= ========= ========= =========
Group At 1 January 2009 Foreign currency translation At 31 December 2009 At 1 January 2008 Foreign currency translation At 31 December 2008
Warrant Reserve RM 4,416,854 4,416,854 ======= 4,416,854 4,416,854 =======
Total Reserves RM 5,107,215 (5,123) 5,102,092 ======= 5,102,806 4,409 5,107,215 =======
81

31. Other Reserves (contd.) Asset Revaluation ReserveFreehold Land RM Warrant Reserve RM Total Reserves RM
Company At 1 January and 31 December 2009 At 1 January and 31 December 2008 The nature and purpose of each category of reserve are as follows: (a) Asset revaluation reserve
692,832 ====== 692,832 ======
4,416,854 ======= 4,416,854 =======
5,109,686 ======= 5,109,686 =======
The asset revaluation reserve is used to record increases in the fair value of freehold land and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in equity. (b) Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Groups presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Groups net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. (c) Warrant reserve On 6 March 2007, the Company has issued renounceable right issue of 44,168,540 new Warrants (Warrants) at an issue price of RM0.10 per Warrant on the basis of one (1) new Warrant for every two (2) existing ordinary shares of RM1.00 each held in the Company. The Warrants were subsequently listed on the Second Board of Bursa Malaysia Securities Berhad on 13 March 2007. 32. Capital Commitments Group/Company 2009 2008 RM RM 11,880,000 ======== ========
Capital expenditure: Approved and contracted for: Property, plant and equipment 33. Contingent Liability
On 12 April 2005, Zalpoint Tanah Putih Sdn. Bhd. (ZTPSB), a wholly-owned subsidiary of Zecon Land Sdn. Bhd. (ZLSB), which is in turn a wholly-owned subsidiary of the Company, was served with a Writ of Summons dated 30 March 2005 by Estatequest Sdn. Bhd. (Sub-developer), for damages on loss of profits totalling RM12,968,780, declaratory orders, interests and costs. According to the Sub-developer, ZTPSB had breached the Memorandum of Agreement (MOA) dated 19 August 1999 entered between ZTPSB and the said Sub-developer relating to, inter-alia, the charging of the land for the Tanah Putih Development Project (Project) by ZTPSB. The Sub-developer alleged that ZTPSB had failed to make partial redemption of the sub-lots or parcels allocated to the Sub-developer and as a result, they could not continue with the remaining development of the Project. ZTPSB had instructed their solicitors, Messrs Reddi & Co Advocates, to vigorously defend the claim made by the Sub-developer. Under the Share Sale Agreement (SSA) entered between the vendors of ZTPSB (Vendors) and ZLSB dated 15 December 2003, the Vendors had provided an indemnity clause in the SSA, to hold ZLSB harmless from and against any damages, deficiencies, losses, costs, liabilities and expenses (including legal fees and disbursements) resulting from and arising out of any breach of presentations, warranties, covenants and agreements made by the Vendors. In addition, counter-claims were made by ZTPSB on 12 May 2005 against both the Sub-developer and directors of the Subdeveloper for breach of contract and personal liability as guarantors, respectively. The full trial has been disposed of on 13 April 2009 and the Court passed judgement on 24 April 2009 dismissing the Plaintiffs claim. Both the Plaintiff and ZTPSB filed Notice of Appeal on their claims and counter claims on 7 May 2009 and 19 May 2009 respectively. As at time of reporting, the date of hearing for the cases have yet to be fixed by the Court.
82

34. Comparative figures The presentation and classification of items in the current year financial statements have been consistent with previous financial period except that certain comparative figures of the Group and the Company for the following accounts have been restated to conform with current years presentation, as follows: Previously stated RM Reclassification RM Restated RM
Group At 31 December 2008 Trade receivables Amount due from related companies Company At 31 December 2008 Trade receivables Other receivables Amount due from related companies Trade payables Other payables Amount due to related companies 35. Segmental Reporting (a) Reporting format
104,660,505 2,774,110 ========
2,774,110 107,434,615 (2,774,110) ======== ========
25,828,373 4,566,015 170,977,117 (27,966,801) (1,876,553) (62,435,629) ========
42,825,906 68,654,279 202,919,757 207,485,772 (170,977,117) (11,661,449) (39,628,250) (125,542,726) (127,419,279) 62,435,629 ======== ========
The primary segment reporting format is determined to be business segments as the Groups risks and rates of return are affected predominantly by differences in the products and services produced. No geographical analysis has been prepared as the Groups business interests are mainly located in Malaysia. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and services and different markets. (b) Business segments The Group comprises the following main business segments: (i) (ii) (iii) (iv) Construction - piling works, foundation engineering and building construction; Property development - property holding and development; Toll concession - operation and maintenance of toll bridge and collection of toll revenue; and Others - management services.
The directors are of the opinion that all inter-segment transactions having been entered into in the normal course of business and have been transacted on normal commercial terms.
83
84
Construction RM Property development RM Others RM Total RM Toll concession RM Group Eliminations RM 131,781,835 119,107,499 250,889,334 ============ 334,903 334,903 ============ 10,289,734 10,289,734 ============ 162,992 127,627 290,619 ============ (119,235,126) (119,235,126) ============ 142,569,464 142,569,464 ============ (4,131,951) 22,807,884 7,038,058 (1,239,278) 24,474,713 (19,559,839) (104,806) 4,810,068 1,188,650 5,998,718 ======== 530,929,587 257,079,884 181,181,241 23,257,316 (484,183,471)
36.
Segmental Reporting (contd.)
31 December 2009 Revenue
Sales to external customers Inter-segment sales
Total revenue
Results
Segment results
Finance costs Share of losses of associates
Profit before taxation Income tax expense
Profit for the year
31 December 2009
Assets
Segment assets Investments in associates Unallocated assets
Total assets
Liabilities 417,749,911 ============ 3,339,127 7,053,007 26,843 3,873,157 ============ 190,820,345 ============ 1,949 245,984 4,300,000 ============ 117,398,880 ============ 77,428 78,977 134,504 ============ 28,837,957 ============ 1,313,465 177,654 (429,453,513) ============ (2,000) 346,577 ============ ============
508,264,557 674,506 2,747,121 511,686,184 ========= 325,353,580 ============ 4,731,969 7,553,622 161,347 8,519,734 ============
Segment liabilities/total liabilities
Other segment information
Capital expenditure Depreciation Amortisation Other significant non-cash expenses: Provisions
36. Construction RM Property development RM Others RM Total RM Toll concession RM Group Eliminations RM
Segmental Reporting (contd.)
31 December 2008 Revenue
Sales to external customers Inter-segment sales
Total revenue
147,755,075 150,104,699 297,859,774 ============
============
9,195,921 9,195,921 ============
221,773 8,460 230,233 ============
(150,113,159) (150,113,159) ============
157,172,769 157,172,769 ============
Results 9,558,399 (526,835) 6,514,541 (1,157,948) 14,388,157
Segment results
Finance costs Share of profit of associates
Profit before taxation Income tax expense
Profit for the year
31 December 2008
(13,295,070) 250,374 1,343,461 (332,778) 1,010,683 ========
Assets 463,523,910 779,312 227,846,224 131,563,048 42,724,446 (391,344,527) -
Segment assets Investments in associates Unallocated assets
Total assets
474,313,101 779,312 2,828,072 477,920,485 ========
Liabilities 340,704,529 =========== 188,395,380 ============ 60,721,409 ============ 47,252,982 ============ (335,785,780) ============ 301,288,520 ============
Segment liabilities/total liabilities
Other segment information 16,735,274 3,709,084 26,843 2,741,321 9,292,832 =========== 4,198 260,084 ============ 211,925 153,792 65,094 176,412 2,860,391 ============ 738,981 275,568 451,449 ============ ============ 17,632,245 4,309,830 203,255 6,265,086 9,292,832 ============
Capital expenditure Depreciation Amortisation Other significant non-cash expenses: Provisions Impairment in value of investment
85
86
Amount owed by subsidiaries RM 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 12,907,924 12,170,354 826,477 28,394 1,009,141 1,127,526 2,819,566 1,161,178 120,982 121,272 43,258 40,548 191,433 348,423 7,316 6,536 122,702 131,363 4,063,809 3,982,835 423,419 422,175 56,014 56,783 106,122 106,122 319,084 15,430,562 RM Amount owed by related parties RM Amount owed to subsidiaries Amount owed to related parties RM Sales to related parties RM Other expenses from related parties RM
36.
Significant related party transactions
The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year:
Agrowell Quarry Sdn. Bhd.
IR Concept (M) Sdn. Bhd.
Sarmax Sdn. Bhd.
Teknik PS Sdn. Bhd.
TPS Medicare Sdn. Bhd.
ZPM Satu Sdn. Bhd.
Zecon Australia Pty. Ltd.
Zecon Contruction Sdn. Bhd.
Zecon Construction (Sarawak) Sdn. Bhd.
Zecon Designtech Sdn. Bhd.
Zecon Asset Sdn. Bhd.
Zecon Geotechnical Services Sdn. Bhd.
36. Amount owed by subsidiaries RM 2009 2008 2009 2008 2009 2008 106,257,677 567,391 9,151,210 7,200 7,200 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 23,882,912 32,956,333 4,900,709 93,650,445 38,172,735 20,764,547 27,422,101 2,250,446 1,968,897 45,900,754 11,661,449 14,378 13,574 2,149,661 2,192,838 10,962,282 14,589,556 555,554 524,512 95,500,200 88,262,249 28,743,929 36,010,533 900 6,634,050 6,279,562 RM Amount owed by related parties RM Amount owed to subsidiaries Amount owed to related parties RM Sales to related parties RM Other expenses from related parties RM
Significant related party transactions (contd.)
Zecon International Ltd.
Zecon Mutiara Sdn. Bhd.
Zecon Land Sdn. Bhd.
Zecon Piling Sdn. Bhd.
Zecon Resources Sdn. Bhd.
Zecon Water Corporation Sdn. Bhd.
Zecon Energy Sdn. Bhd.
Zecon Dredging Sdn. Bhd.
Zecon Toll Concessionaire Sdn. Bhd.
Zecon Demak Jaya Sdn. Bhd.
Zecon Petra Jaya Sdn. Bhd.
Zalpoint Tanah Putih Sdn. Bhd.
87
88
Amount owed by subsidiaries RM 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 2009 2008 998,722 998,722 3,876,390 8,146,390 329,795 309,135 1,578,305 1,624,239 73,384 73,384 1,669 1,669 1,030,485 1,074,785 16,076,643 38,890,651 14,482 8,059 46,232 9,184 5,993 12,272 718,701 3,303 613,168 270,624 RM Amount owed by related parties RM Amount owed to subsidiaries Amount owed to related parties RM Sales to related parties RM Other expenses from related parties RM
36.
Significant related party transactions (contd.)
Zecon Fab Sdn Bhd
Zecon (Saudi Arabia) Internation Ltd.
Zecon MidEast Ltd
Matang Highway Sdn. Bhd.
LCS Trading Co. Sdn. Bhd.
LCS Equipment Rental Sdn. Bhd.
LCS Concrete Engineering Sdn. Bhd.
Halifax Capital Bhd.
Effiway Corporation Sdn. Bhd.
Perunding KAZ Sdn Bhd.
Al Quds Travel Sdn Bhd.
SCIB Concrete Manufacturing Sdn. Bhd.
Mary Bolhassan, Noreda Ahmad & Co.
Oricon Sdn. Bhd.

36. Significant related party transactions (contd.) The fellow subsidiaries Agrowell Quarry Sdn Bhd., IR Concept (M) Sdn Bhd., Sarmax Sdn Bhd., Teknik PS Sdn Bhd., TPS Medicare Sdn Bhd., ZPM Satu Sdn. Bhd., Zecon Australia Pty Ltd., Zecon Contruction Sdn Bhd., Zecon Construction (Sarawak) Sdn Bhd., Zecon DesignTech Sdn Bhd., Zecon Asset Sdn. Bhd., Zecon Geotechnical Services Sdn Bhd., Zecon International Ltd., Zecon Mutiara Sdn Bhd., Zecon Land Sdn Bhd., Zecon Piling Sdn Bhd., Zecon Resources Sdn. Bhd., Zecon Water Corporation Sdn Bhd., Zecon Energy Sdn. Bhd., Zecon Dredging Sdn. Bhd., Zecon Toll Concessionaire Sdn. Bhd., Zecon Demak Jaya Sdn. Bhd., Zecon Petra Jaya Sdn. Bhd., Zalpoint Tanah Putih Sdn. Bhd., Zecon Fab Sdn Bhd., Zecon (Saudi Arabia) International Ltd., Zecon MidEast Ltd., and Matang Highway Sdn Bhd. are the subsidiaries of the Company. During the year, the interest expense paid to Sarmax Sdn. Bhd. is RM106,122 (2008: RM106,122). During the year, the subcontractor fees paid to Zecon Geotechnical Services Sdn. Bhd. is RM319,084 (2008: RM15,430,562). During the year, the subcontractor fees paid to Zecon Water Corporation Sdn. Bhd. is RM95,500,200 (2008: RM88,262,249). During the year, the subcontractor fees paid to and the rental income received from Zecon Dredging Sdn. Bhd. are RM28,743,929 (2008: RM36,010,533) and RM7,200 (2008: RM7,200) respectively. During the year, the purchase of toll cards paid to Zecon Toll Concessionaires Sdn. Bhd. is RM Nil (2008: RM900). There were no other transactions with the other fellow subsidiaries during the financial year (2008: RM Nil). The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties. The related parties LCS Trading Co. Sdn Bhd., LCS Metals Works Sdn Bhd., LCS Equipment Rental Sdn Bhd., LCS Concrete Engineering Sdn Bhd., and Halifax Capital Bhd. are associated companies of the Company. -Perunding KAZ Sdn. Bhd., Al Quds Travel Sdn Bhd., SCIB Concrete Manufacturing Sdn. Bhd., Oricon Sdn. Bhd., and Mary Bolhassan, Noreda Ahmad & Co. are companies in which the close family members of certain directors of the Company have substantial financial interests. Datuk Hj. Zainal Abidin Bin Hj. Ahmad and Hj. Zainurin bin Hj. Ahmad have substantial financial interests in Perunding KAZ Sdn. Bhd., Al Quds Travel Sdn Bhd., Oricon Sdn. Bhd., and Mary Bolhassan, Noreda Ahmad & Co. Datuk Hj. Zainal Abidin Bin Hj. Ahmad has substantial financial interests in SCIB Concrete Manufacturing Sdn. Bhd. During the year, the travel agency services fees paid to Al Quds Travel Sdn. Bhd. is RM5,993 (2008: RM12,272). During the year, the purchase of construction materials paid to SCIB Concrete Manufacturing Sdn. Bhd. is RM Nil (2008: RM718,701). During the year, the legal and professional fees paid to Mary Bolhassan, Noreda Ahmad & Co. is RM3,303 (2008: RM Nil). The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties. (a) Terms and conditions of transactions with related companies and related parties The sales and purchases from related companies and related parties are made at normal market prices. Outstanding balances at the year-end are unsecured, interest-free and settlement occurs in cash. There have been no guarantees provided or received for any related party or related company receivables or payables. For the year ended 31 December 2009 and 31 December 2008, the Company has not recorded any impairment of receivables relating to amounts owed by related parties and related companies. This assessment is undertaken at each financial year through examining the financial position of the related party and related company and the market in which the related party and related company operate.
89

36. Significant related party transactions (contd.) (b) Total remuneration of key management included in administrative expenses is: Group 2009 2008 RM RM Directors remuneration (Note 9) 2,807,116 ======= 2,508,389 ======= Company
2009 RM 2,487,016 =======
2008 RM
2,300,141 =======
The directors are of the opinion that all the transactions above have been entered into in the normal course of business and have been established on terms and conditions that are not materially different from those obtainable in transactions with unrelated parties. 37. Financial Instruments (a) Financial risk management objectives and policies The Groups financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Groups businesses whilst managing its interest rate, foreign exchange, liquidity and credit risks. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is and has been throughout the year under review, the Groups policy that no trading in derivative financial instruments shall be undertaken. (b) Interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Groups income and operating cash flows are substantially independent of changes in market interest rates. The Groups interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers. The Groups interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.
90
37.
Financial Instruments (contd.)
(b)
Interest rate risk (contd.)
25 26 25 25 25 25 25 6.50% - 8.00% 4.33% - 8.50% 3.12% - 3.20% 5.85% - 7.60% 4.80% - 5.40% =========== 1,989,056 28,994,835 1,570,000 25,433,093 35,000,000 ======== 160,584 ======== 172,278 ======== 184,824 ======= 2.33% - 7.75% =========== 2,283,040 ======== 729,833 ======= 340,965 ======== 135,322 ======= 75,790 ====== 198,284 ======= 8.38% 45,000,000 73,700,000 ====== 115,673 ========
The following tables set out the carrying amounts, the effective interest rates range as at the balance sheet date and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk: More Interest Within 1 1 2 2 3 3 4 4 5 than 5 Note rate range Year Years Years Years Years Years Total % RM RM RM RM RM RM RM At 31 December 2009
Group 118,700,000 3,564,950 ========= 1,989,056 28,994,835 1,570,000 26,264,736 35,000,00 ========
Fixed rate Term loans Hire purchase and finance lease liabilities
Floating rate Bank overdrafts Revolving credits Bankers acceptances Term loans Sukuk Musharakah
Company 25 26 28 25 25 25 25 25 6.50% - 8.00% 4.33% - 8.50% 3.12% - 3.20% 5.85% - 7.60% 4.80% - 5.40% =========== 1,989,056 3,200,000 1,570,000 25,433,093 35,000,000 ======== 160,584 ======== 2.35% - 4.75% 3.50% ========== 1,690,407 4,063,809 ======= 297,112 ======= 8.38% 45,000,000 ======== 172,278 ======== ======= 184,824 ======= ====== 198,283 ====== ======= 115,674 ======= 45,000,000 1,987,519 4,063,809 ======== 1,989,056 3,200,000 1,570,000 26,264,736 35,000,000 ========
Fixed rate Term loans Hire purchase and finance lease liabilities Amount due to related company
91
92
25 26 2.33% - 7.75% =========== 7.50% - 7.80% 1.50% - 6.36% 3.67% - 3.68% 6.80% - 7.60% 5.90% - 8.85% 4.80% - 5.40% =========== 35,000,000 ======== 4,000,000 20,000,000 ======== 5,000,000 15,000,000 ======== 5,000,000 ======= 2,325,533 27,330,000 1,395,000 5,645,498 5,227,872 160,584 172,278 2,134,521 ======== 1,343,815 ======= 476,879 ======== 197,080 ======= 30,805 ====== 184,824 5,000,000 ======= 8.38% 45,000,000 ====== 313,957 41,000,000 ======== 45,000,000 4,183,100 ========= 2,325,533 27,330,000 1,395,000 11,705,013 60,000,000 70,000,000 ======== 25 25 25 25 25 25
37.
Financial Instruments (contd.)
(b)
Interest rate risk (contd.)
The following tables set out the carrying amounts, the effective interest rates range as at the balance sheet date and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk: More Interest Within 1 1 2 2 3 3 4 4 5 than 5 Note rate range Year Years Years Years Years Years Total % RM RM RM RM RM RM RM At 31 December 2008
Group
Fixed rate Term loans Hire purchase and finance lease liabilities
Floating rate Bank overdrafts Revolving credits Bankers acceptances Term loans Bai Bithaman Ajil Islamic Debt Securities Sukuk Musharakah
Company 25 26 28 25 25 25 25 25 7.50% - 7.80% 5.77% - 6.36% 3.67% - 3.68% 6.80% - 7.60% 4.80% - 5.40% =========== 2,325,533 3,500,000 1,395,000 5,645,498 35,000,000 ======== 2.35% - 4.75% 3.50% ========== 1,630,036 3,982,835 ======= 858,419 ======= 5,227,872 20,000,000 ======== 8.38% 45,000,000
Fixed rate Term loans Hire purchase and finance lease liabilities Amount due to related company
98,020 ======== 160,584 15,000,000 ========
======= 172,278 =======
====== 184,824 ======
======= 313,957 =======
45,000,000 2,586,475 3,982,835 ======== 2,325,533 3,500,000 1,395,000 11,705,013 70,000,000 ========
Interest on financial instruments subject to floating interest rates is contractually repriced at intervals of less than 6 months except for term loans and floating rate loans which are repriced annually. Interests on financial instruments at fixed rates are fixed until the maturity of the instrument. The other financial instruments of the Group and the Company that are not included in the above tables are not subject to interest rate risks.

37. Financial Instruments (contd.) (c) Foreign currency risk The Group is exposed to currency risk in respect of its foreign investments in subsidiaries. These are, however, not significant. (d) Liquidity risk The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. (e) Credit risk Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring procedures. Credit risk is minimised and monitored by limiting the Groups associations to business partners with high creditworthiness. Trade receivables are monitored on an on-going basis via Group management reporting procedures. The Group has significant exposure to certain individual customers or counter parties. However, this does not pose significant credit risk to the Group. The Group does not have any other major concentration of credit risk related to any financial instruments. (f) Fair value The carrying amounts of financial assets and liabilities of the Group and Company at the balance sheet date approximated their fair values except for the followings: Note Group Financial asset Other investment - Quoted shares Financial liabilities Hire purchase payables Borrowings Company Financial asset Other investment - Quoted shares Financial liabilities Hire purchase payables Borrowings 26 25 19 316,743 ====== 1,987,519 113,023,792 ========= 275,800 ====== 1,974,236 112,954,086 ========= 316,743 ====== 2,586,475 133,925,546 ========= 241,325 ====== 2,578,156 133,488,325 ========= 26 25 19 316,743 ====== 3,564,950 212,518,627 ========= 275,800 ====== 3,286,382 195,096,603 ========= 316,743 ====== 4,183,100 217,755,546 ========= 241,325 ====== 4,187,045 189,151,085 ========= Carrying Amount RM 2009 Fair value RM Carrying Amount RM 2008 Fair value RM
93

37. Financial Instruments (contd.) (f) Fair value (contd.) The methods and assumptions used by management to determine fair values of financial instruments other than those whose carrying amounts reasonably approximate their fair values are as follows: (i) Other investments Quoted shares The fair value of quoted shares is determined by reference to stock exchange quoted market bid prices at the close of the business on the balance sheet date. (ii) Hire purchase payables The fair values of the hire purchase liabilities are estimated by discounting the future contractual cash flows at the current interest rate available to the Group and Company for similar financial instruments. (iii) Borrowings The fair value has been determined using discounted estimated cash flows. The discount rates used are the current market incremental lending rates for similar types of borrowing arrangements.
94
Analysis Of Shareholdings - as at 23 April 2010

SHARE CAPITAL Authorised Capital : RM500,000,000.00 Issued and Paid up Capital : RM119,106,150.00 : Ordinary Shares of RM1.00 each Class of Share DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 100,000 100,001 to less than 5% 5% and above TOTAL Number of Shareholders 58 165 1,060 307 26 2 1,618 Number of Shares 2,510 122,527 4,728,350 8,643,238 25,429,050 80,180,475 119,106,150 % of Shares 0.00 0.10 3.97 7.26 21.35 67.32 100.00
SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS Direct Interest No. of Shares % 65,689,475 19,174,600 15,491,100 3,655,200 55.15 16.10 13.01 3.07 Deemed Interest % No. of Shares 65,689,475* 55.15
No. Name 1. 2. 3. 4. Dawla Capital Sdn Bhd Inas Kapital Sdn Bhd Digital Network Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad
Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd
DIRECTORS INTERESTS Direct THE COMPANY Datu Dr. Hatta bin Solhi Datuk Hj Zainal Abidin bin Hj Ahmad Datuk Dr. Hj Yusoff @ Josree bin Hj Yacob Dato Hj Hamzah bin Hj Ghazalli Dato Abdul Majit bin Ahmad Khan Hj Zainurin bin Hj Ahmad Hui Kok Yuan Hj Abg Azahari bin Abg Osman Jamil bin Jamaludin Poh Lik Gan @ Poh Li Thong Richard Kiew Jiat Fong Hj Saini bin Hj Ali Ng Weng Fatt Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd 20,000 3,655,200 525,000 250,000 40,000 63,000 0.02 3.07 0.44 0.21 0.04 0.05 %
No. of Shares Held Indirect
65,689,475* -
55.15 -
95

DIRECTORS INTERESTS (contd.) Direct RELATED COMPANIES Teknik PS Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad Zecon Construction Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad Sarmax Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad 34,000 49 30,000 14.20 49.00 30.00 % No. of Shares Held Indirect %
THIRTY (30) LARGEST SHAREHOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Name Dawla Capital Sdn. Bhd. Digital Network Sdn. Bhd. HLG Nominee (Tempatan) Sdn. Bhd. Assar Asset Management Sdn. Bhd. For Assar Industri Sdn. Bhd. CIMB Group Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Bolhassan Bin Di @ Ahmad Bin Di CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB For Inas Kapital Sdn. Bhd. Zainal Abidin Bin Ahmad RHB Capital Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Bolhassan Bin Di @ Ahmad Bin Di Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Bolhassan Bin Di @ Ahmad Bin Di Victor Law Thian Teck CIMSEC Nominees (Tempatan) Sdn. Bhd. CIMB Bank For Mohamad Safri Bin Sharkawi Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Zainal Abidin Bin Ahmad Mayban Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Chee Kwok Fai Zainurin Bin Ahmad Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Hamni Bin Juni RHB Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Chu Chee Keung Shareholding 65,689,475 14,491,000 4,500,000 4,500,000 3,000,000 2,967,875 2,000,000 2,000,000 1,000,000 837,225 597,700 587,100 525,000 368,450 263,400 % 55.15 12.17 3.78 3.78 2.52 2.49 1.68 1.68 0.84 0.70 0.50 0.49 0.44 0.31 0.22
96

No. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Name Maimunah Binti Zailani Hui Kok Yuan UOBM Nominees (Asing) Sdn. Bhd. United Overseas Bank Nominees (Pte) Ltd For Gold Crystal Company Ltd Ambank (M) Berhad Pledged Securities Account For Rajalingam A/L R V R Singam Law Lee Koon Toh Beng Lee Cher Keam Mayban Securities Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Tan Sok Hui Inter-Pacific Equity Nominees (Asing) Sdn. Bhd. Pledged Securities Account For Chin Hoi @ Chin Pek Hoi Mayban Securities Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Kua Bee Keng Low Siew Ean Ong Kian Lim Khoo Lin Mayban Securities Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Seow Hee Yoong Choong Thiam Fatt TOTAL Shareholding 262,600 250,000 200,000 199,300 197,000 188,900 188,500 160,000 153,000 138,000 122,000 120,000 103,000 100,000 100,000 105,809,525 % 0.22 0.21 0.17 0.17 0.17 0.16 0.16 0.13 0.13 0.12 0.10 0.10 0.09 0.08 0.08 88.84
97
Analysis Of Warrant Holdings - as at 23 April 2010

No. of Warrants in issued Exercise Price of Warrants Expiry Date of Warrants Voting Rights Size of warrant holdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 100,000 100,001 to less than 5% 5% and above Total : : : : 44,168,540 RM1.06 05 March 2017 One Vote per warrant held Number of warrant holders 13 87 499 234 55 1 889 Number of Warrants 580 70,650 2,394,330 8,003,580 12,554,020 21,145,380 44,168,540 % of Warrants 0.00 0.16 5.42 18.12 28.42 47.88 100.00
SUBSTANTIAL WARRANT HOLDERS AS PER REGISTER OF SUSTANTIAL WARRANT HOLDERS Direct Interest No. of Warrants % 21,145,380 316,330 47.87 0.72 Deemed Interest No. of Warrants % 21,145,380* 47.87
No. Name 1. 2. Dawla Capital Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad
Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd
LIST OF DIRECTORS WARRANT HOLDINGS Direct 1. 2. Datuk Haji Zainal Abidin bin Haji Ahmad Datu Dr. Hatta bin Solhi 316,330 8,000 %
No. of Warrants Held Indirect 21,145,380* -
% 47.87 -
0.72 0.02
Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd THIRTY (30) LARGEST WARRANT HOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Name Dawla Capital Sdn. Bhd. Mohd Fauzi Bin Mohd Anuar Lee Mee Kuen Digital Network Sdn. Bhd. Kenanga Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Hamni Bin Juni OSK Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Pang Swee Chien Saw Guat Ngoh Liew Yoke Ling Leong Hon Wah Chang Van Leong Warrant Holders 21,145,380 1,000,000 961,600 633,000 615,500 500,800 481,200 383,000 380,000 350,800 % 47.88 2.26 2.18 1.43 1.39 1.13 1.09 0.87 0.86 0.79
98
Analysis Of Warrant Holdings - as at 23 April 2010

No. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Name Ong Chai Kin HDM Nominees (Tempatan) Sdn. Bhd. UOB Kay Hian Pte Ltd For The Kee Hong Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Liang Tek Ling Lee Kim Seng Yeap Mee Yoke Cimsec Nominees (Tempatan) Sdn. Bhd. CIMB Bank For Hasnandi Bin Mohamad Jennis Lam Pun Ying Affin Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Phua Sin Mo Chan Chin Sun Zainal Abidin Bin Ahmad Lee Soi Gek Mohd Hadi Bin Mohamed Anuar Tan Yee Sen HLG Nominee (Tempatan) Sdn. Bhd. Pledged Securities Account For Teo Ah Seng AIBB Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Phua Sin Mo Tan Yee Kong Mohd Seth Bin Haron Ng Boon Cheong @ Eng Boon Cheong Lee Cher Keam Mayban Securities Nominees (Tempatan) Sdn. Bhd. TOTAL Warrant Holders 306,500 260,000 245,500 230,000 225,000 200,020 200,000 200,000 200,000 188,000 182,600 176,000 175,00 171,100 170,000 168,000 167,000 165,000 159,200 158,000 30,398,200 % 0.69 0.59 0.56 0.52 0.51 0.45 0.45 0.45 0.45 0.43 0.41 0.40 0.40 0.39 0.38 0.38 0.38 0.37 0.36 0.36 68.80
99
List of Properties
LOCATION AREA TENuRE DESCRIPTION YEAR OF ACQuISITION 1999 1999 1999 1988 1991 EXISTING uSE Commercial & Residential Development Commercial & Residential Development Commercial & Residential Development Residential Vacant Land 240,629 581,647 23,169,333 33,714,909 NET BOOK VALuE 31/12/2009 (RM) 73,243,200
Lot 462, 463 & 464 , Block 15, Salak Land District, Kuching, Sarawak Lot 4871, Block 18, Salak Land Disctrict, Kuching, Sarawak Lot 742, Section 64, KTLD, Kuching, Sarawak Lot 2260, Block 233, Kuching North Land Crown Land, Lot No. 10049, 16th Mile, Simanggang Road, Kuching Town Land District Sublot No. 54, Lot 530 of Block 6, Matang Land District Sublot No.84, Title Lot 7907, Pelita Heights, Kuching Sarawak Lot No.9071, Section 64, Tabuan Dayak, Kuching Sarawak Parcel Nos 297-2-1 & 297-2-2 Commercial Tower of Parent Lots 192, 193, 293 and 296 Section 48 KTLD Kuching Sarawak Private Lot No.5, 6 & 7 Lot 1406-1463 1465 & Part of Lot 1472 of
788.0 hectare 39.2 hectare 7.9 hectare 7,831.0 sq metre 3.9 hectare 773.8 sq metre 174.2 sq metre 370.0 sq metre 647.2
Leasehold (99 years), Mixed Zone Land, expiring in Year 2098 Leasehold (99 years), Mixed Zone Land, expiring in Year 2098 Leasehold (99 years), Mixed Zone Land, expiring in Year 2098 Leasehold (60 years), Mixed Zone Land, expiring in Year 2048 Leasehold (99 years), Mixed Zone Land, expiring inYear 2054 Leasehold (60 years), Mixed Zone Land, expiring inYear 2026 Leasehold (60 years), Mixed Zone Land, expiring in Year 2054 Leasehold (60 years), Mixed Zone Land, expiring in Year 2055 Strata Title
Leasehold Land Leasehold Land Leasehold Land Leasehold Land Leasehold Land
Detached Lot
2005
Vacant Land
130,000
Double-Storey Terrace House 4-Storey Intermediate Shophouse Commercial Tower
1994
Residential 138,687
1995 2000
Office Premise 448,896
Office Premises
1,537,107
(Level 2) Riverbank Suites and sq metre
2,038.9 sq metre
Leasehold (60 years), Mixed Zone Land
3-Storey Corner Shop Houses
2005
Office Premises 2,770,000
Block 14, Salak Land District
100
List of Properties
LOCATION
AREA
TENuRE
DESCRIPTION
YEAR OF ACQuISITION
EXISTING uSE
NET BOOK VALuE 31/12/2009 (RM) 200,000 1,905,380
Lot 948, Serian Town District 95.0 sq metre
Leasehold (60 years), Mixed Zone Land Strata Title
2-Storey Corner Shop House Apartments
2002 2006
Vacant Vacant
Parcel No. 6B, 6C, 6D, 6E & 10A 717.2 Lot 264 of Block 2, Jalan Salak District Unit 1-1A, 1-2A, 1-9, 2-1, 4-1, 4-2, 5-9, 6-8, 6-9 of Block B6 & B7, Jalan Kwong Lee Bank, Kuching Parcel No. 2A-11-2, 11th Floor Plaza Sentral KL Building No. Block 2A, Lot 78, Section 70, Kuala Lumpur Parcel, A-20-01, Block A, Level 20, Suasana Sentral Condominium, Jalan Stesen Sentral 5, KL Sentral, 50470, Kuala Lumpur H.S. (D) 262661 No. P.T.D 56992 Mukim Tebrau, Daerah Johor Bahru, Negeri Johor Darul Takzim 15,679.9 sq metre 133.2 sq metre 1,400.6 sq metre 361.8 sq metre sq metre
Strata Title Strata Title
Commercial centre Office suite
2002 2006
Vacant Office Premise
2,104,938 1,611,644
Strata Title
Condominium
2008
Corporate Use
712,693
Freehold
Freehold Land
2009
Comercial Development 7,350,000
101
Notice Of Annual General Meeting

noTIce IS heReBY GIVen ThAT the Twenty-Fifth (25th) Annual General Meeting (AGM) of Zecon Berhad (Zecon or the Company) will be held at Conference Room, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak on Wednesday, 23rd June 2010 at 11.00 a.m. for the following purposes: AGenDA 1. 2. 3. To receive the Audited Financial Statements for the financial year ended 31 December 2009 and the Reports of the Directors and Auditors thereon. To approve the payment of Directors fees in respect of the financial year ended 31 December 2009 amounting to RM213,000-00. To re-elect the following Directors who retire in accordance with Article 87 of the Companys Articles of Association and being eligible, offer themselves for re-election:i) Dato Majit bin Ahmad Khan Resolution 2 Resolution 3 Resolution 4 Resolution 5 Resolution 6 Resolution 1
ii) Haji Abg Azahari bin Abg Osman iii) Jamil bin Jamaludin 4. 5. To re-elect Ng Weng Fatt who retires in accordance with Article 92 of the Companys Articles of Association and, being eligible, offer himself for re-election. To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration for the ensuing year. As Special Business To consider and if thought fit, pass the following resolutions as Ordinary Resolution:6. AUThoRITY To ISSUe ShAReS PURSUAnT To SecTIon 132D oF The coMPAnIeS AcT, 1965 THAT pursuant to Section 132D of the Companies Act, 1965 and subject always to the approval of the relevant authorities, the Directors of the Company be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit, including but not limited to such shares as may be issued pursuant to the Employees Share Option Scheme provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. 7. PRoPoSeD ReneWAL oF ShARehoLDeRS MAnDATe FoR RecURRenT ReLATeD PARTY TRAnSAcTIonS oF A ReVenUe oR TRADInG nATURe (Proposed Renewal of Shareholders Mandate) ThAT, subject always to the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities), the Company and its subsidiary companies shall be mandated to enter into the category of recurrent transactions of a revenue or trading nature and with those related parties under Section 2.3 (a) of the Circular to shareholders dated 27 May 2010, provided that the transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company. ThAT the authority conferred by the Proposed Renewal of Shareholders Mandate shall only continue to be in force until:a) b) the conclusion of the next Annual General Meeting (AGM) of the Company, at which time it will lapse, unless by a resolution passed at that meeting, the authority is renewed; the expiration of the period within which the next AGM of the Company after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or
Resolution 7
Resolution 8
102

c) revoked or varied by resolution passed by the shareholders in general meeting, whichever is earlier; AnD ThAT the Directors of the Company and its subsidiaries be and are hereby authorised to complete and do such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution. 8. PRoPoSeD ADDITIonAL ShARehoLDeRS MAnDATe FoR RecURRenT ReLATeD PARTY TRAnSAcTIonS oF A ReVenUe oR TRADInG nATURe (Proposed neW Shareholders Mandate) ThAT, subject always to the Listing Requirements of Bursa Malaysia Securities Berhad (Bursa Securities), the Company and its subsidiary companies shall be mandated to enter into the category of recurrent transactions of a revenue or trading nature and with those related parties under Section 2.3 (b) of the Circular to shareholders dated 27 May 2010, provided that the transactions are in the ordinary course of business and are on terms not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company. ThAT the authority conferred by the Proposed Additional Shareholders Mandate shall only continue to be in force until:a) b) the conclusion of the next AGM of the Company, at which time it will lapse, unless by a resolution passed at that meeting, the authority is renewed; the expiration of the period within which the next AGM of the Company after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or revoked or varied by resolution passed by the shareholders in general meeting,
c)
whichever is earlier; AnD ThAT the Directors of the Company and its subsidiaries be and are hereby authorised to complete and do such acts and things (including executing such documents as may be required) to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution. 9. To transact any other ordinary business of which due notice shall have been given in accordance with the Companys Articles of Association and the Companies Act, 1965.
By order of the Board
Koh Fee Lee (MAICSA 7019845) Lim Poh Yen (MAICSA 7009745) Company Secretaries Kuching Dated : 27 May 2010 Notes : 1. i) Appointment of Proxy A member entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company and provision of Section 149 (1) (b) of the Companies Act, 1965 shall not apply to the Company. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
ii)
103

iii) 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 an officer or attorney duly authorised. The instrument appointing a proxy must be deposited at the registered office of the Company at 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof. explanatory notes on Special Business i) ordinary Resolution 7 - Authority to issue shares pursuant to Section 132D of the companies Act, 1965 The proposed Resolution 7, if passed, will empower the Directors to issue shares up to an aggregate amount not exceeding 10% of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interests of the Company including but not limited to such shares as may be issued pursuant to the Employees Share Option Scheme approved at the Extraordinary General Meeting held on 15 February 2005. This authority unless revoked or varied at a general meeting will expire at the next Annual General Meeting. The Company has not issued any new shares pursuant to Section 132D of the Companies Act, 1965 under the general authority which was approved by the shareholders of the Company at the 24th AGM held on 18 June 2009 and which will lapse at the conclusion of the 25th AGM to be held on 27 May 2010. A renewal of this authority is being sought at the 25th AGM under Ordinary Resolution 7. ii) a) b) ordinary Resolution 8 - Proposed Renewal of Shareholders Mandate ordinary Resolution 9 - Proposed Additional Shareholders Mandate The proposed Resolutions 8 & 9, if passed, will authorise the Company and its subsidiaries to enter into recurrent transactions pursuant to Paragraph 10.09 of the Listing Requirement of Bursa Malaysia Securities Berhad involving the interests of related parties, which are of a revenue or trading nature, subject to the transactions being carried out in the ordinary course of business and on terms not to the detriment of the minority shareholders of the Company. Further information on the Proposed Renewal of Shareholders Mandate and the Proposed Additional Shareholders Mandate are set out in the Circular to shareholders dated 27 May 2010,which is despatched together with the Companys Annual Report 2009.
2.
104
Statement Accompanying Notice of Annual General Meeting
pursuant to Paragraph 8.28(2) of the Listing Requirements of Bursa Malaysia Securities Berhad
The Directors who are standing for re-election at the 25th AGM are as follows: Article 87 i) Dato Majit bin Ahmad Khan ii) Haji Abg Azahari bin Abg Osman iii) Jamil bin Jamaludin Article 92 i) Ng Weng Fatt
The details of the above Directors are set out in the Directors Biodata on pages 12 to 18 of this Annual Report and their shareholdings in the Company are set out in the Directors shareholdings which appeared on page 98 of this Annual Report.
105
ZECON BERHAD (134463-X)

(Incorporated in Malaysia)
PROXY FORM
No. of Shares
I/We
(PLEASE USE BLOCK LETTERS)
NRIC No./Passport No./Company No. of
being a member/members of ZECON BERHAD hereby appoint NRIC No./Passport No./Company No.
of or failing him/her, the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Twenty-Fifth Annual General Meeting of the Company to be held at Conference Room, 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak on Wednesday, 23 June 2010 at 11.00 a.m and any adjournment thereof. My/Our proxy is to vote as indicated below : 1. 2. 3. 4. 5. 6. 7. 8. 9. RESOLuTIONS Payment of Directors fees Re-election of Director Dato Majit bin Ahmad Khan Re-election of Director Haji Abg Azahari bin Abg Osman Re-election of Director Jamil bin Jamaludin Re-election of Director Ng Weng Fatt Appoinment of Auditors and authorising Directors to fix their remuneration Authority to issue shares pursuant to Section 132D of the Companies Act, 1965 Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions. Proposed Addtional Shareholers Mandate for Recurrent Related Party Transactions. FOR AGAINST
Please indicate with X in the appropriate spaces how you wish your vote to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.
Signed this
Notes : 1)
day of
, 2010
Signature of Shareholder
A member entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company and provision of Section 149 (1)(b) of the Companies Act, 1965 shall not apply to the Company. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. 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 an officer or attorney duly authorised. The instrument appointing a proxy must be deposited at the registered office of the Company at 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5, KTLD, Jalan Satok, 93400 Kuching, Sarawak not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
2)
3)
4)
1st fold here
STAMP
ZECON BERHAD (134463-X)

8th Floor, Menara Zecon, No. 92 Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak, Malaysia.
2nd fold here

Construction Company

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Construction Company

Uploaded by

Copyright:

Available Formats

Mohd Azlan Iskandar Asia Champion 2008 & 2010 Malaysia No.

1 Squash Player Zecons Sponsorship Since 2003

Work in progress inside the 12.5KM TBM Tunnel

Corporate Governance ...........................

Directors Report & Audited Financial Statements ................................ 29

Total Assets Earning Per Share

429 11.4 11.5 3.7 0.9

Financial Highlights 2009

Net Asset Per Share

Profit Before Tax

1.7 10.1 7.3 1.3

Zecon Land Sdn Bhd

100% 100% 100%

100% 100% 100% 100% 100% 100%

100% 96% 70% 55%

51% 51% 51% 50% 35% 25.48%

Zecon Berhad Annual Report 2009

Datu Dr. Hatta Bin Solhi

Zecon Berhad Annual Report 2009

GROUP MANAGING DIRECTOR / CEOS REVIEW

Datuk Haji Zainal Abidin Bin Haji Ahmad

Zecon Berhad Annual Report 2009

Position held Working experience & occupation

Datuk Dr. Haji Yusof @ Josree bin Haji Yacob

Position held Working experience & occupation

Position held Working experience & occupation

% 3.07 30.0 14.2 49.0

Poh Lik Gan @ Poh Li Thong

Position held Working experience & occupation

Zecon Berhad Annual Report 2009

Age Nationality Qualification

Dato Haji Hamzah bin Haji Ghazalli

Position held Working experience & occupation

Age Nationality Qualification Position held Working experience & occupation

Dato Abdul Majit Bin Ahmad Khan

Age Nationality Qualification

Richard Kiew Jiat Fong

Position held Working experience & occupation

Age Nationality Qualification

Haji Zainurin bin Haji Ahmad

Position held Working experience & occupation

Zecon Berhad Annual Report 2009

Ir. Hui Kok Yuan

Position held Working experience & occupation

Ir. Haji Abg Azahari bin Abg Osman

Position held Working experience & occupation

Age Nationality Qualification

Jamil bin Jamaludin

Position held Working experience & occupation

Age Nationality Qualification

Haji Saini bin Haji Ali

Position held Working experience & occupation

Zecon Berhad Annual Report 2009

Age Nationality Qualification

Ir. Ng weng Fatt

Position held Working experience & occupation

Zecon Berhad Annual Report 2009

Corporate Governance Statement

Corporate Governance Statement

Zecon Berhad Annual Report 2009

Corporate Governance Statement

Corporate Governance Statement

Stament of Directors Responsibility