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 ........................................ 06
Corporate Structure ............................................ 07
Chairmans Statement ......................................... 08
Group Managing Director / CEOs Review ......... 10
Profile of Directors ............................................. 12
Corporate Governance ........................... 19

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

Financial Statements ................................ 29

Analysis of Shareholdings .................................. 95
Analysis of Warrant Holdings ............................. 98
List of Properties ................................................. 100
Notice of Annual General Meeting ..................... 102
Statement Accompanying Notice of
Annual General Meeting .................................... 105
Proxy Form
Menara Zecon
Zecon Berhad Annual

Report
2009
The First
Concrete
Arch Bridge In Sarawak, A 200 Meters Double 3-Lanes Carriageway
Milestones
- Part of The Matang Highway To The Proposed Federal Administrative Center Project
Completed In November 2009
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
05 06 07 08 09
100
200
300
478
415
421
429
400
0.0
0.5
1.0
1.50
1.45
1.44
05 06 07 08 09
1.76
2.0
512
500
0.9
3.7
4.9
11.5
11.4
10
50
100
145
179
173
172
155
150
Shareholders Equity
RMmillion
Sen
Earning Per Share
200
12
05 06 07 08 09
1.65
1.5
Net Asset Per Share
RM
RMmillion
Total Assets
45
50
79
143
142
100
157
150
200
1.3
1.7
4.8
7.3
Profit Before Tax

RMmillion
RMmillion
Revenue
10.1
10
250
12
300
Financial Highlights 2009
05 06 07 08 09
05 06 07 08 09
05 06 07 08 09
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
Dato Abdul Majit bin Ahmad Khan
Richard Kiew Jiat Fong
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)
Risk Management Committee
Haji Zainurin bin Haji Ahmad (Chairman)
Haji Abg Azahari bin Abg Osman
Jamil bin Jamaludin
Rayan ak Narong
Brandon Goh Mun Han
Remuneration & Nomination Committee
Datu Dr. Hatta bin Solhi (Chairman)
Option Committee
Datu Dr. Hatta bin Solhi (Chairman)
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%
Zecon Toll Concessionaire Sdn Bhd
100%
Zecon Geotechnical Services Sdn Bhd
100%
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%
Zecon Australia Pty Ltd
100%
Zecon Piling Sdn Bhd
100%
Zecon International Limited
100%
100%
100%
IR Concept (M) Sdn Bhd

ZPM Satu Sdn Bhd
Zalpoint Tanah Putih Sdn Bhd

100%
Zecon Water Corporation Sdn Bhd
100%
Zecon Construction (Sarawak) Sdn Bhd
100%
Matang Highway Sdn Bhd
100%
Zecon Designtech Sdn Bhd
100%
Zecon MidEast Limited
100%

Zecon (Saudi Arabia)

International Limited
100%

96%
Zecon Assets Sdn Bhd
70%
Zecon Dredging Sdn Bhd
55%
Teknik PS Sdn Bhd
Zecon Resources Sdn Bhd
51%
Zecon Construction Sdn Bhd
51%
Zecon Fab Sdn Bhd
51%
Zecon Energy Sdn Bhd
50%
NS Water-Zecon JV Sdn Bhd
35%
L.C.S. Trading Co. Sdn Bhd
25.48% Halifax Capital Berhad
50.1%
Sarmax Sdn Bhd
100%
TPS Medicare Sdn Bhd
60%
Zecon Well Services Sdn Bhd
Subsidiary Companies
Associate Companies
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 Projectsand 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
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
Age
Nationality
Qualification
: 66
: Malaysian
: Ph.D in Political Science (Development Studies) from the University of
Hawaii.
Position held
: Independent Chairman
Working experience & occupation
: 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.
Details of any board committee to
: Member of Audit Committee
which he belongs Chairman of Remuneration & Nomination Committee
Chairman of Option Committee
Other directorships in public companies
: Mimos Berhad
Securities holdings in the Company and
:
Name
Direct
Indirect
its subsidiaries
No. of
No. of
%
%
shares
shares
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
:
:
:
:
20,000
: 5/5
Age
:
Nationality
:
:
Qualification

Position held
:
:
12
None
None
None
None
Datuk Dr. Haji Yusof @ Josree bin Haji Yacob

which he belongs
Securities holdings in the Company
and its subsidiaries
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
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
Position held
: 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
which he belongs
: Sarawak Consolidated Industries Berhad (formerly known as Sarawak
Concrete Industries Berhad)
:
Name
Direct
Indirect
No. of
No. of
%
%
shares
shares
Zecon Berhad
Sarmax Sdn Bhd
Teknik PS Sdn Bhd
Zecon Construction
Sdn Bhd
No. of board meetings attended in
the financial year
3,655,200
30,000
34,000
49
3.07
30.0
14.2
49.0
65,689,475
-
55.15
-
: 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

Age
:
Nationality
:
Qualification
:

Position held
:
:

:
which he belongs
:
:
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
Zecon Berhad
Direct
No. of
shares
40,000
%
0.04
Indirect
No. of
%
shares
-
13
the financial year
:
:
:
:
None
None
None
None
5/5
Age
Nationality
Qualification
:
:
:
61
Malaysian
Master Degree of Arts in International Affair (Management) from
University of Ohio, United States.
B.A. Hons from Universiti of Malaya.
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

Position held
:
:

which he belongs
the financial year
Dato Abdul Majit Bin Ahmad Khan
Age
Nationality
Qualification
Position held
:
:
:
:
:

:
which he belongs
:

14
64
Malaysian
Bachelor of Economics (Hons) from University of Malaya
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
Securities holdings in the Company and
its subsidiaries
the financial year
: None
:
:
:
:
None
None
None
None
: 3/5
Age
:
Nationality
:
Qualification
:

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
Position held
: 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
which he belongs
: Sarawak Consolidated Industries Berhad (formerly known as Sarawak
Concrete Industries Berhad)
:
Name
Direct
Indirect
No. of
No. of
%
%
shares
shares
Zecon Berhad
List of convictions for offences within
the past 10 years other than traffic offences
the financial year
:
:
:
:
63,000
0.05
None
None
None
None
: 5/5
Age
Nationality
Qualification
: 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.
Position held
: 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
which he belongs Member of Option Committee
: Halifax Capital Berhad
15
Name
Zecon Berhad
:
:
:

:
:
the financial year
Ir. Hui Kok Yuan
Age
:
Nationality
:
Qualification
:

Position held
:
:
Details of any board committee

to which he belongs
:
:
:
16
None
Name
None
None
None
None
3/5

Position held
:
:
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
:
:
:
:
:
:
:
0.44
5/5
Ir. Haji Abg Azahari bin Abg Osman

Age
Nationality
Qualification
525,000
Indirect
No. of
%
shares
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
Zecon Berhad
No. of board meetings attended
in the financial year
Direct
No. of
shares
Direct
No. of
shares
250,000
%
0.21
Indirect
No. of
%
shares
-
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
the financial year
: Member of Risk Management Committee

: None
: None
:
:
:
:
None
None
None
None
: 5/5
Jamil bin Jamaludin
Age
:
Nationality
:
Qualification
:

Position held
:
:

which he belongs
:
:
:
Relationship with substantial shareholders :
:
:
:
the financial year
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
Age
Nationality
Qualification
: 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..
Position held
: 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.
Details of any board committee to Member of Risk Management Committee
which he belongs
: None
: None
17
the financial year
Ir. Ng weng Fatt
Age
Nationality
Qualification
:
:
:
:
None
None
None
None
: 5/5
: 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.
Position held
: 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
which he belongs
: None
: None
: None
Relationship with substantial shareholders : None
: None
: None
: 3/3
the financial year
18
Corporate Governance
Corporate Governance Statement
20
Statement of Directors Responsibility
23
Statement on Internal Control
24
Audit Committee Report
25
Additional Compliance Information
28
19

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).
20
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.
Appointment and Re-election
b)
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.
Board Meetings
c)
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
% of 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
100
100
60
100
100
100
60
100
60
100
80
100
100

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)
e)
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.
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:-
The RNC meets as and when need arises.
iii)
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.
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) Establish and maintain the risk management framework within the Group;

ii) Assess and evaluate the risk management process on a periodic basis;

iii) Set the risk appetite of the Group; and

iv) 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.
22
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.

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. The Institute of Chartered Accountants in England and Wales;

ii. The Association of Chartered Certified Accountants, United kingdom; and
iii. 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
2.
Designation
Meetings Attendance Year 2009
Total
Feb. 23
Apr. 23
May 25
Aug. 12
Nov. 24
Poh Lik Gan
Chairman
Independent Director
5/5
5/5
Dato Dr. Mohd Yahya Bin Nordin

(Resigned on 12 November 2009)
Absent
3/4
Mr. Richard Kiew Jiat Fong
5/5
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.
(iii) Financial Statements
Review the quarterly unaudited financial results, year end audited financial statements and
recommend to the Board for consideration and approval.
(iv) Related party transaction
Review the related party transactions entered into by Zecon Group of Companies.
(v) Risk Management
Monitor the progress of risk management framework of Zecon Group of Companies.
3.
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.
26
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.

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.

Share Buy-backs
The Company did not enter into any share buy-back transaction during the financial year 2009.
2.

Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities issued during the financial year 2009.
3.

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.
4.

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.
5.

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.
6.

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.
7.

Profit Guarantee
There were no transactions that require profit guarantee during the financial year ended 31 December 2009.
8.

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.
9.

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.
10.

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
Nature of Transaction

Recipient
(RM)

1. Perunding KAZ
Sdn Bhd
Zecon Dredging
651,875
0.350
Sdn Bhd
Datuk Hj Zainal Abidin

bin Hj Ahmad

2. SCIB Concrete
Contract of
Zecon Land
314,083
0.169
Manaufacturing
piling works
Sdn Bhd
Sdn Bhd

3. SCIB Concrete
Purchase of
Zecon Dredging
57,090
0.031
Manaufacturing
Culvert
Sdn Bhd
Sdn Bhd

4. Mary Bolhassan,
Legal and
Zecon Land
12,120
0.007
Noreda Ahmad
professional
Sdn Bhd
& Co
services

5. Al-Quds Travel
Travel agency
Zecon
1,946
0.001
(Sarawak) Sdn Bhd
services
Berhad


Bin Hj Ahmad
28
Engineering
consultancy
Total
Amount
1,037,114
Note : Net Assets of Zecon Group as at 31 December 2009 is RM186,218,569.
0.558
Name of Connected Person

Bin Hj Ahmad
Bin Hj Ahmad &
Hj Zainurin bin
Hj Ahmad
Bin Hj Ahmad &
Hj Zainurin bin
Hj Ahmad
Directors Report & Audited

Financial Statements
Directors Report
30
Statement by Directors and Statutory Declaration
35
Report of the Auditors
36
Income Statements
37
Balance Sheets
38
Consolidated Statement of Changes in Equity
39
Company Statement of Changes in Equity
41
Consolidated Cash Flow Statement
42
Company Cash Flow Statement
44
Notes to the Financial Statements
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

Profit/(loss) for the year

Attributable to:
Equity holders of the Company
Minority interests

Group
RM
Company
RM
5,998,718
==========
(9,273,725)
==========
5,546,830
451,888

5,998,718
==========
(9,273,725)

(9,273,725)
==========
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:
Datuk Hj. Yusof @ Josree Bin Hj. Yacob
Datuk Hj. Zainal Abidin Bin Hj. Ahmad
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
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.
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:
Dato Dr. Mohd. Yahya Bin Nordin
Dato Hj. Hamzah Bin Hj. Ghazalli
Chairman
(Appointed on 23 February 2010)
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

At
of

1.1.2009
Acquired
Options
Sold
At
31.12.2009
The Company
Direct interest
20,000
20,000
3,655,200
40,000
525,000
250,000
63,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,655,200
40,000
525,000
250,000
63,000
65,689,475
65,689,475


Exercise

At
of

1.1.2009
Acquired
Options
Sold
At
31.12.2009

Datuk Hj. Zainal
Abidin Bin Hj. Ahmad
Hui Kok Yuan
The Company
Indirect interest
Datuk Hj. Zainal
Abidin Bin Hj. Ahmad
Dawla Capital Sdn. Bhd.

Datuk Hj. Zainal Abidin
Bin Hj. Ahmad
- direct interest
250,000
250,000
31
Directors Report
Directors interests (contd.)
Related company


Exercise

At
of

1.1.2009
Acquired
Options
Sold
At
31.12.2009
Halifax Capital Berhad

Bin Hj. Ahmad
- direct interest
2,515,200
2,515,200

At 1.1.2009 and 31.12.2009

Teknik PS Sdn. Bhd.

Bin Hj. Ahmad - direct interest
34,000
Zecon Construction Sdn. Bhd.

49
Sarmax Sdn. Bhd.


The Company
Bin Hj. Ahmad
Hui Kok Yuan
Hj. Abg. Azahari Bin Abg.
Osman
Jamil Bin Jamaludin
30,000
Number of Options over Ordinary Shares of RM1 Each

Exercise
Price
At
At
RM
1.1.2009
Granted
Exercised
31.12.2009
1.16
1.16
1.16
550,000
395,300
262,500
-
-
-
-
-
-
550,000
395,300
262,500
1.16
1.16
175,000
140,000
-
-
-
-
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)
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.
(b)
Any employee, including the Executive Directors of the Zecon Berhad group, shall be eligible to participate in the ESOS if:
(i)
the employee has been confirmed in service as a full time Executive Director or employee on the date of offer; and
(ii)
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
(c)
No option shall be granted for less than 100 shares.
(d)
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
(ii)
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.
(b)
At the date of this report, the directors are not aware of any circumstances which would render:
(i)
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
(ii)
the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c)
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.
(d)
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.
(e)
As at the date of this report, there does not exist:

(i)
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
(ii)
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
(ii)
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.
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.
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.
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.
Jamil Bin Jamaludin
Before me,
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)
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.
(b)
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.
(c)
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.
(d)
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.
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
36
YONG VOON KAR

1769/04/12 (J/PH)
Chartered Accountant
Income Statements
for the year ended 31 December 2009

Note

Group
Company
2009
2008
RM
RM
2009
RM
2008
RM
142,569,464
157,172,769
4
Cost of sales

Gross profit
(117,613,973)

24,955,491
(129,073,632)

28,099,137
(119,189,397)
(114,902,880)

10,386,560
9,223,228
Other income
5
Administrative expenses
Other expenses

Operating profit/(loss)

Finance costs
6
Share of (losses)/profit of
associates

Profit/(loss) before taxation
7
30,039,085
(15,172,889)
(15,346,974)

24,474,713
12,634,280
(10,465,821)
(15,879,439)

14,388,157
1,242,910
8,512,759
(11,046,093)
(8,430,255)
(6,518,535)
(12,562,403)

(5,935,158)
(3,256,671)
(19,559,839)
(13,295,070)
(104,806)

4,810,068
250,374

1,343,461
-

(15,022,085)
(11,226,308)
Income tax expense

10

Profit/(loss) for the year

1,188,650

5,998,718
============
(332,778)

1,010,683
============
5,748,360
1,689,575

(9,273,725)
(9,536,733)
============ ============
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)
(9,536,733)
-

(9,273,725)
(9,536,733)
============ ============
Earnings per share (sen):

Basic, for profit for the year
11

4.93
=====
0.92
=====
Diluted, for profit for the year

11

4.93
=====
0.92
=====
Revenue
129,575,957
(9,086,927)
124,126,108
(7,969,637)
The accompanying notes form an integral part of the financial statements.
37
Balance Sheets
as at 31 December 2009

Note
2009

RM

ASSETS
Non-current assets
12
Property, plant and equipment
Prepaid land lease payments
13
Land held for development
14(a)
Intangible assets
15
16
Investment in subsidiaries
Investment in associates
17
Investment in jointly controlled entity
18
Other investments
19
29
Deferred tax assets

Current assets
Development costs
14(b)
Inventories
20
Amount due from customers for contract work
21
Trade receivables
22
Other receivables
23
Cash and bank balances
24

TOTAL ASSETS

Group
Company
2008
2009
2008
RM
RM
RM
(restated)
(restated)
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

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

22,842,337
6,229,030
-
-
55,694,905
175,000
1
5,216,743
5,742,775

95,900,791

24,723,459
1,195,873
55,544,905
175,000
1
5,216,743
86,855,981
20,643,599
5,965,177
36,361,581
135,966,851
43,879,752
56,008,942

298,825,902

511,686,184
============
13,967,293
5,586,939
45,245,011
107,434,615
11,038,445
89,370,695

272,642,998

477,920,485
============
-
2,970,000
7,243,943
79,985,116
98,629,700
36,651,735

225,480,494

321,381,285
============
3,482,000
7,876,897
68,654,279
207,485,772
43,044,245

330,543,193
417,399,174
============
119,106,150
3,558,768
5,109,686
EQUITY AND LIABILITIES

Equity attributable to equity
holders of the Company
30
Share capital
Share premium
30
Other reserves
31
Retained earnings/(accumulated
losses)

119,106,150
3,558,768
5,102,092
119,106,150
3,558,768
5,107,215
50,750,619

178,517,629
45,203,789

172,975,922
(28,120,161)
(18,846,436)

99,654,443
108,928,168
Minority interests

Total equity

7,814,975

186,332,604

3,656,043

176,631,965

-

99,654,443

108,928,168
Non-current liabilities
25
Borrowings

75,813,553

148,108,094

1,128,755

87,015,954
Current liabilities
Borrowings
25
Amount due to customers
for contract work
21
27
Trade payables
Other payables
28
Current tax payable

140,270,024
73,830,552
113,882,556
49,496,067
13,950,672
79,412,046
9,871,545
6,035,740

249,540,027

16,529,343
52,392,826
7,121,937
3,305,768

153,180,426

8,934,050
68,792,454
28,899,027
90,000

220,598,087

4,821,456
39,628,250
127,419,279
90,000
221,455,052
Total liabilities

TOTAL EQUITY AND LIABILITIES

325,353,580

511,686,184
============
301,288,520

477,920,485
============
221,726,842

321,381,285
============
308,471,006
417,399,174
============
38
119,106,150
3,558,768
5,109,686
(Note 30)
RM
3,558,768
RM
(Note 30)
premium
(5,123)
(5,123)
(5,123)
(2,471)
RM
(Note 31)
reserve
Share Foreign exchange

reserve
4,416,854
RM
692,832
RM
(Note 31) (Note 31)
reserves
Other Revaluation
RM
Total
5,546,830
5,546,830
5,541,707
5,546,83 0
(5,123)
(5,123)
45,203,789 172,975,922
RM
earnings
Retained
RM
equity
Total
3,707,044
451,888
451,888
3,707,044
5,993,595
5,998,718
(5,123)
(5,123)
3,656,043 176,631,965
RM
interests
Minority
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
subsidiary
Disposal of partial interest in
expense for the year
Profit for the year
Total recognised income and
in equity
Net expense recognised directly
Group
Foreign currency translation:
119,106,150
capital
At 1 January 2009
Share
Non-Distributable
Distributable
Attributable to equity holders of the Company
39
40
capital
(Note 30)
RM
4,409
4,409
4,409
(6,880)
RM
(Note 31)
reserve
reserve
4,416,854
RM
RM
Total
1,009,674
1,009,674
1,014,083
1,009,674
4,409
4,409
44,194,115 171,961,839
RM
earnings
Retained
- -
692,832
RM
(Note 31) (Note 31)
reserves
Other Revaluation
RM
equity
Total
(976,723)
1,200,000
1,009
1,009
(976,723)
1,200,000
1,015,092
1,010,683
4,409
4,409
3,431,757 175,393,596
RM
interests
Minority
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 119,106,150
subsidiary
Disposal of partial interest in
interest in subsidiary
Acquisition of additional
3,558,768
RM
(Note 30)
premium
Share Foreign exchange
- -
expense for the year -
Total recognised income and
Profit for the year
in equity
Net expense recognised directly
Group
Foreign currency translation:
At 1 January 2008 119,106,150
Share
Non-Distributable
Distributable
Attributable to equity holders of the Company
Company Statement of Changes in Equity


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

Loss for the year, representing total
recognised income and expense
Loss for the year, representing total

recognised income and expense
41

42

Note
2009

RM

Cash Flows From Operating Activities
2008
RM
(restated)
Profit before taxation
4,810,068
1,343,461
Adjustments for:
Amortisation of toll concession
Amortisation of prepaid land lease payments
Depreciation of property, plant and equipment
Gain on partial disposal of subsidiaries
16(a)
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
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
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
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
(6,676,306)
(890,238)
9,630,106
(69,893,277)
29,768,828

(29,165,513)
(3,995,891)
900,282
8,437,183
13,106,696
10,851,648
59,279,796
Interest paid
Interest received
Taxation paid

Net cash (used in)/ generated from operating activities

(19,559,839)
467,654
(1,790,909)

(50,048,607)

(13,295,070)
761,620
(532,173)
46,214,173


Note
2009

RM

Cash Flows From Investing Activities
Purchase of property, plant and equipment
(i)
Prepayment of land lease
Proceeds from disposal of property, plant and
equipment
Net cash inflow on acquisition of a subsidiary
16(b)
Investment in jointly controlled entities
Proceeds on disposal of other investments
Proceeds on partial disposal of subsidiaries, net
of cash received
16(a)
Proceeds from disposal of properties

Net cash generated from/ (used in) investing activities

2008
RM
(restated)
(4,731,969)
(5,060,000)
(16,939,145)
-
3,892
-
-
-
31,000
477
(4,861,200)
37,499
32,000,000
330,000

22,541,923

49,000
(21,682,369)
(123,520,153)
(1,101,150)
(13,745,521)
(10,192,189)
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

(125,000)
483,000
116,779,876
-
(11,609,400)
84,050,000
1,200,000
1,964,835
23,685,035

18,166,443

(62,837,662)
(13,134,772)
Net (decrease)/ increase in cash and cash equivalents
(9,340,241)
11,397,032
14,509,679

5,169,438
============
3,112,647
14,509,679
============
Cash and cash equivalents at the beginning

of the year

Cash and cash equivalents at the end of the year
24

(i)
During the year, the Group acquired property, plant and equipment by the following means:
2009
RM
2008
RM

Cash

Hire purchase and finance lease arrangements

4,731,969
-

4,731,969
============
16,939,145
693,100
17,632,245
============
43


Note
2009

RM

Cash Flows From Operating Activities
44
2008
RM
(restated)
Loss before taxation
(15,022,085)
(11,226,308)
Adjustments for:
Amortisation of prepaid land lease payment
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

Operating profit before working capital changes
26,843
3,891,594
6,071
8,016
-
9,086,927
(415,294)
-
182,000
3,307,190

1,071,262
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
Decrease in amount due from customers for

contract work
Decrease/(increase) in receivables
(Decrease)/increase in payables

Cash generated from operations
5,305,109
94,218,045
(69,356,048)

31,238,368
26,738,278
(72,508,803)
50,734,030
14,747,051
Interest paid
Interest received
Taxation refunded

Net cash generated from operating activities

Cash Flows From Investing Activities
(9,086,927)
415,294
5,585

22,572,320

(7,969,637)
571,196
1,293,269
8,641,879
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

(2,588,012)
(5,519,306)
3,892
(5,060,000)
(150,000)
-
-
330,000

(7,464,120)

31,000
(6,902,757)
37,499
49,000
830,000
(11,474,564)


Note
2009

RM

Cash Flows From Financing Activities
2008
RM
(restated)
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

(63,520,153)
(598,956)
(13,745,521)
(9,748,616)
(125,000)
43,079,876
-

(21,164,233)

(11,609,400)
70,000,000
(26,714,378)
8,182,085
Net (decrease)/ increase in cash and cash equivalents
(6,056,033)
5,349,400
Cash and cash equivalents at the beginning

of the year

Cash and cash equivalents at the end of the year
24

4,672,637

(1,383,396)
============
(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
2.2
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).
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.

46
(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.

2.
Significant Accounting Policies (contd.)
2.2
Summary of Significant Accounting Policies (contd.)

(a)
Subsidiaries and Basis of Consolidation (contd.)

(ii)
(b)
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.
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.

2.2


(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)
(ii)
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.
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:
48
Goodwill
(e)
Traffic

volume to date

X

Estimated total traffic

volume of the

concession period
Cost of toll
concession
less
Accumulated
amortisation
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.
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.

2.
2.2
(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.
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
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.
(i)
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.
2.2

(f)
(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 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.
50
Land Held For Development And Development Costs (contd.)
(h)
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.
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.
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

2.
2.2

(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.
2.2

(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.

(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)
(k)
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.
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.
(l)
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.
Employee Benefits
(i)
52
The depreciation policy for leased assets is in accordance with that for depreciable property, plant and
equipment, as disclosed in Note 2.2(e).
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.

2.
2.2

(l)

Employee Benefits (contd.)

(ii)
(iii)
(m)
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.
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.
Foreign Currencies
(i)
Defined contribution plans
(ii)
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.
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.
2.2

(m)
Foreign Currencies (contd.)

(iii)
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:
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.
(n)
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)
(ii)
(iii)
(iv)
(v)
(vi)
54
Foreign operations
(o)
Property development
Revenue from sale of properties is accounted for by the stage of completion method as described in Note
2.2(f ).
Construction contracts
Revenue from construction and other contracts is accounted for by the percentage of completion method
as described in Note 2.2(g).
Toll revenue
Toll revenue is accounted for as at when toll is chargeable for the usage of the Second Kuching Bridge
crossing.
Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to
the buyer.
Dividend income
Dividend income is recognised when the Groups right to receive payment is established.
Interest income
Interest income is recognised on a time proportion basis that reflects the effective yield on the asset.
Routine Maintenance Costs

(p)
Routine maintenance costs on the toll bridge shall be charged to the income statement when incurred.
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.
Financial Instruments

2.
2.2

(p)
Financial Instruments (contd.)

(i)
(ii)
(iii)
(iv)
(v)
(vi)
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.
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.
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.
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.
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.
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)
(q)
Derivative financial instruments

Derivative financial instruments are not recognised in the financial statements.
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.
2.2
(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.
56
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
Effective for financial periods beginning on or after 1 January 2010
Effective for financial periods beginning on or after 1 March 2010
Effective for financial periods beginning on or after 1 July 2010
FRS 8: Operating Segments
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
Amendments to FRS 132: Financial Instruments: Presentation
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

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.

2.3

Changes in accounting policies and future accounting standards (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)
Amendments to FRSs Improvements to FRSs (2009) (contd.)
2.4
Standards and Interpretations issued but not yet effective (contd.)
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.
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.
Significant accounting estimate and judgement

(a)
Key sources of estimation uncertainty

(i)
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)
58

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.

2.
2.4
Significant accounting estimate and judgement (contd.)

(a)
Key sources of estimation uncertainty (contd.)

(ii)
(iii)
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.
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

Construction contracts

Toll concession


Others

4.
Group
2008
RM
Company
131,781,835
10,289,734
334,903
162,992

142,569,464
============
147,755,075
9,195,921
-
221,773

157,172,769
============
129,575,957
-
-
-

129,575,957
============
124,126,108
124,126,108
============
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
============
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
============
2009
RM
2008
RM
Cost of Sales

Construction contract costs

Toll concession


Others

5.
2009
RM
Other Income

Interest income

Gain on partial disposal of subsidiary

Others

59

6.
Finance Costs

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)

60
2009
RM
Group
2008
RM
21,935,144
303,106
-

22,238,250
16,391,490
339,257
-

16,730,747
(1,725,077)
(3,435,677)
(953,334)

19,559,839
============
-

13,295,070
============
7.
Profit/(Loss) Before Taxation
The following amounts have been included in arriving at profit/(loss) before taxation:

Group

2009
2008

RM
RM

Employee benefits expense

(Note 8)
12,436,784
8,804,509

Non-Executive Directors

remuneration (Note 9)
436,500
374,500

Amortisation of toll

concession (Note 15)
134,504
176,412

Amortisation of prepaid land

lease payments (Note 13)
26,843
26,843

Auditors remuneration

Statutory audit

- current year
143,800
135,500

- (over)/under provision

in prior year
(300)
7,900

Discount allowed
3,000,000
-

Depreciation of property, plant

and equipment (Note 12)
4,228,275
1,278,437

Gain on partial disposal of

subsidiaries (Note 16(a))
(28,212,005)
(673,608)

Impairment in value of

investment
-
9,292,832

19,559,839
13,295,070

Interest income
(467,654)
(761,620)

Loss on disposal of other

investments
-
2,329

182,000
10,000

Loss/(gain) on disposal of property,

plant and equipment
6,071
(30,999)

(Gain)/loss on foreign exchange
(5,123)
4,409

Management fee paid
4,458
12,342

Management fee received
(360,000)
(128,519)


written-off
8,016
1,600

8,519,734
5,882,687

Provision for stocks obsolescence
-
382,399

Rental expense for land and

buildings
503,183
908,222

Rental income from land

and buildings
(242,993)
(118,342)

Rental income from plant

and machinery
(121,522)
-

============
============
Company
2009
RM
8,765,996
214,809
106,122

9,086,927
-
-

9,086,927
============
2008
RM
7,973,544
237,233
106,122
8,316,899
(347,262)
7,969,637
============
Company
2009
RM
3,891,709
2008
RM
3,867,251
436,500
374,500
26,843
26,843
60,000
60,000
-
3,000,000
4,600
-
3,891,594
1,053,166
-
9,086,927
(415,294)
11,366,128
7,969,637
(571,196)
-
182,000
2,329
10,000
6,071
-
4,458
(360,000)
(30,999)
12,342
(60,000)
8,016
3,307,190
-
1,183,946
-
636,432
636,432
(329,402)
(158,452)
-
============
============

8.
Employee Benefits Expense

Salaries, allowances, bonus

and wages

Directors remuneration

Provident fund contributions

Social security costs

Number of employees at

the end of the year

2009
RM
Group
2008
RM
Company
9,054,472
2,370,616
920,046
91,650

12,436,784
============
5,913,949
2,133,889
700,370
56,301

8,804,509
============
1,647,923
2,050,516
179,468
13,802

3,891,709
============
1,727,464
1,925,641
199,923
14,223
3,867,251
============
335
============
288
============
47
============
55
============
2009
RM
2008
RM
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.
Directors Remuneration
9.

Executive Directors remuneration

Fees

Other emoluments

2009
RM
Group
2008
RM
97,200
2,273,416

2,370,616
============
82,400
2,051,489

2,133,889
============
Non-Executive Directors remuneration

Fees
188,100
105,700

Other emoluments
248,400
268,800

436,500
374,500

Total Directors remuneration

(Note 36)
2,807,116
2,508,389

============
============

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
============
Company
2009
RM
2008
RM
97,200
1,953,316

2,050,516
============
82,400
1,843,241
1,925,641
============
188,100
248,400

436,500

2,487,016
============
105,700
268,800
374,500

2,300,141
============
2009
RM
Company
2008
RM
1,700,812
97,200
252,504

2,050,516
1,622,885
82,400
220,356
1,925,641
188,100
248,400
105,700
268,800
2,487,016
============
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

2009
RM

Current income tax:

Malaysian income tax
896,915

Under/ (over) provision in

prior years
3,623,966

4,520,881

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

Group
2008
RM
2008
RM
2,350,155
(5,585)
90,000
(2,283,187)

66,968

-

(5,585)

(1,779,575)
(1,689,575)
(240,345)
37,000
(5,469,186)
-

(5,709,531)

(1,188,650)
============
236,810
(8,000)

265,810

332,778
============
(5,742,775)

(5,742,775)

(5,748,360)
============
(1,689,575)
============
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:

Group
62
Company
2009
RM
2009
RM
2008
RM


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

4,810,068
============
1,202,517
-
6,220,927
-
(8,050,452)
180,334
(4,125,597)
(240,345)
3,623,966
-

1,343,461
============
349,300
(67,727)
3,149,438
(3,484)
(842,025)
110,877
37,000
(2,283,187)
(117,414)

Income tax expense for the year

Company
(1,188,650)
============
332,778
============

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

(15,022,085)
============
(3,755,521)
2,132,759
-
(4,125,598)
-

(5,748,360)
============
(11,226,308)
============
(2,918,840)
1,870,570
1,138,270
(1,779,575)
(1,689,575)
============

10.
Income Tax Expense (contd.)
Tax losses and unabsorbed capital allowances are analysed as follows:

2009

RM

(i)
Unutilised tax losses carried forward
24,329,000

============

(ii)
Unabsorbed capital allowances

carried forward
12,053,000

============
Group
Company
2008
RM
2009
RM
2008
RM
18,565,000
============
13,954,000
============
9,336,000
============
9,906,000
============
10,819,000
============
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
2008

RM
RM

Profit attributable to ordinary equity holders of the Company
5,546,830
1,009,674

============
============

Weighted average number of ordinary shares in issue

112,496,908
============
110,060,450
============

Basic earnings per share for:

Profit for the year

(b)
Diluted
2009
Sen
2008
Sen
4.93
============
0.92
============
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.

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

2009
RM
5,546,830
============
2008
RM
1,009,674
============
112,496,908
============
110,060,450
============
2009
Sen
2008
Sen
4.93
============
0.92
============
63

12.
Property, Plant and Equipment

Office furnitures,

Plant, machinery
Motor fittings, equipment

Buildings and equipment
vehicles and renovation
Total

RM
RM
RM
RM
RM

Group

2009

Cost

At 1 January 2009
6,651,507
39,295,220
9,967,623
8,766,714
64,681,064

Additions
2,290,000
1,282,300
862,058
297,611
4,731,969

Disposals
-
-
-
(15,945)
(15,945)

Write-offs
-
-
-
(13,253)
(13,253)

At 31 December 2009
8,941,507
40,577,520
10,829,681
9,035,127
69,383,835

Accumulated depreciation

and impairment

At 1 January 2009
Depreciation charge for the year
763,324
155,708
14,658,368
5,042,048
5,446,953
1,471,508
4,762,323
884,358
25,630,968
7,553,622
Recognised in income statement (Note 7)

Capitalised in construction costs (Note 21)
155,708
-
3,341,638
1,700,410
328,145
1,143,363
402,784
481,574
4,228,275
3,325,347
Disposals
Write-offs

At 31 December 2009

Net carrying amount
-
-

919,032

-
-

19,700,416

-
-

6,918,461

(5,982)
(5,237)

5,635,462

(5,982)
(5,237)
33,173,371
At 31 December 2009

8,022,475
========
20,877,104
========
3,911,220
========
3,399,665
========
36,210,464
========

2008

Cost

47,280,933
17,632,245
(232,114)
64,681,064
Group
64
At 1 January 2008
Additions
Disposals
Transfers

At 31 December 2008

and impairment
5,915,507
736,000
-
-

6,651,507

28,397,439
11,011,781
-
(114,000)

39,295,220

6,663,557
3,419,780
(229,714)
114,000

9,967,623

6,304,430
2,464,684
(2,400)
-

8,766,714

At 1 January 2008
648,100
115,224
12,689,940
1,988,378
4,329,355
1,327,361
3,884,256
878,867
21,551,651
4,309,830
Recognised in income statement (Note 7)

Capitalised in construction costs (Note 21)
115,224
-
224,355
1,764,023
459,695
867,666
479,163
399,704
1,278,437
3,031,393
Disposals
Transfers

At 31 December 2008

Net carrying amount
-
-

763,324

-
(19,950)

14,658,368

(229,713)
19,950

5,446,953

(800)
-

4,762,323

(230,513)
25,630,968
At 31 December 2008

5,888,183
========
24,636,852
========
4,520,670
========
4,004,391
========
39,050,096
========

12.
Property, Plant and Equipment (contd.)
Office furnitures

Vessels

Plants, machinery and
Motor fittings, equipment

Buildings and equipment dredging vehicles and renovation Total

RM
RM
RM
RM
RM
RM

Company

2009
Cost
At 1 January 2009
Recognised in income statement

(Note 7)
Capitalised in construction costs
(Note 21)
2008
Cost
At 1 January 2008
Additions
Disposals

At 31 December 2008

At 1 January 2008

(Note 7)
Capitalised in construction costs
(Note 21)
At 1 January 2009
Additions
Disposals
Write-offs

At 31 December 2009

6,651,507
2,290,000
-
-

8,941,507

28,145,166
-
-
-

28,145,166

1,400,000
-
-
-

1,400,000

4,330,463
255,621
-
-

4,586,084

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

763,324
155,708
11,314,302
3,484,542
805,000
210,000
3,769,827
357,881
3,294,082
243,024
19,946,535
4,451,155
155,708
3,013,771
210,000
297,329
214,786
3,891,594
470,771
60,552
28,238
559,561
Disposals
Write-offs

At 31 December 2009

Net carrying amount
-
-

919,032

-
-

14,798,844

-
-

1,015,000

-
-

4,127,708

(5,982)
(5,982)
(5,237)
(5,237)

3,525,887 24,386,471

At 31 December 2009

Company
8,022,475
=======
13,346,322
========
385,000
=======
458,376
=======
630,164
=======
22,842,337
========
5,915,507
736,000
-

6,651,507

23,544,726
4,600,440
-

28,145,166

1,400,000
-
-

1,400,000

4,489,677
70,500
(229,714)

4,330,463

4,030,492
112,366
-

4,142,858

39,380,402
5,519,306
(229,714)
44,669,994
648,100
115,224
10,593,022
721,280
595,000
210,000
3,483,599
515,941
2,976,427
317,655
18,296,148
1,880,100
115,224
1,276
210,000
443,661
283,005
1,053,166
720,004
72,280
34,650
826,934
Disposals

At 31 December 2008

Net carrying amount
-

763,324

-

11,314,302

-

805,000

(229,713)

3,769,827

-

3,294,082

(229,713)
19,946,535
At 31 December 2008

5,888,183
=======
16,830,864
========
595,000
=======
560,636
=======
848,776
=======
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:
2009
RM
Group
2008
RM
Company
2009
2008
RM
RM
5,076,228
1,423,935

6,500,163
========
4,027,356
1,862,820

5,890,176
========
4,766,852
3,643,731
374,410
81,160

4,848,012
4,018,141
======== ========
Plant, machinery and equipment

Motor vehicles

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.
Prepaid land lease payments

13.

At 1 January
Addition
Amortisation for the year (Note 7)

At 31 December

Analysed as:
1,195,873
5,060,000
(26,843)

6,229,030
=======
1,222,716
(26,843)
1,195,873
=======
Long term leasehold land

Short term leasehold land

5,641,646
587,384

6,229,030
=======
595,156
600,717
1,195,873
=======
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.
14.
Land Held for Property Development and Developments Costs
(a)
Land Held for Property Development
Short- term

Freehold

Land

RM

Group

2009

66
Group/Company
2009
2008
RM
RM
Long-term
Leasehold
Land
RM
Total
RM
Cost
At 1 January/31 December

Accumulated impairment losses
1,159,125 125,152,361 126,311,486


Carrying amount at 31 December 2009

-
-

1,159,125 125,152,361 126,311,486
======= ========= =========

14.

Land Held for Property Development and Developments Costs (contd.)
(a)
Land Held for Property Development (contd.)

Short- term

Freehold

Land

RM

Group

2008

Cost

Accumulated impairment losses

Carrying amount at 31 December 2008

1,159,125

Long-term
Leasehold
Land
RM
Total
RM
125,152,361 126,311,486

-
-

1,159,125 125,152,361 126,311,486
======= ========= =========
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
(b)

Group
2009
Cumulative development costs
At 1 January 2009
Costs incurred during the year

At 31 December 2009

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
Leasehold Development
Land
Costs
RM
RM
Total
RM
4,837,174
-

4,837,174

9,130,119
6,982,132

16,112,251

13,967,293
6,982,132
20,949,425
-
-

-

4,837,174
=======
-
305,826

305,826

15,806,425
========
305,826
305,826
20,643,599
========
At 1 January 2008

Costs incurred during the year

At 31 December 2008

Cumulative costs recognised in income statement
4,837,174
-

4,837,174

5,134,228
3,995,891

9,130,119

9,971,402
3,995,891
13,967,293
At 1 January/31 December 2008

Development costs at 31 December 2008

-

4,837,174
=======
-

9,130,119
========
13,967,293
========
67

14.
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


953,334
-


73,358
-

=======
=======
Company
2009
2008
RM
RM
-
-
=======
-
=======
15.
Intangible Assets

Toll

Goodwill Concessions

RM
RM

Group

Cost
At 1 January 2008
3,180,289
13,117,032
16,297,321
Disposal of partial interest in subsidiary

At 31 December 2008
(352,217)

2,828,072
-

13,117,032
(352,217)
15,945,104
Disposal of partial interest in subsidiary

At 31 December 2009

Accumulated amortisation and impairment
(80,951)

2,747,121

-

13,117,032

(80,951)
15,864,153
At 1 January 2008
930,106
930,106
Amortisation (Note 7)

At 31 December 2008
-

-
176,412

1,106,518
176,412
1,106,518
Amortisation (Note 7)

At 31 December 2009

Net carrying amount
-

-

134,504

1,241,022

134,504
1,241,022
At 31 December 2008

At 31 December 2009

2,828,072
=======
2,747,121
=======
12,010,514
========
11,876,010
========
14,838,586
========
14,623,131
========
(a)
Impairment tests for goodwill
Allocation of goodwill
Goodwill has been allocated to the Groups CGUs identified according to the business segment as follows:

At 31 December 2009
Total
RM
431,685
1,948,844
366,592
2,747,121
========
Construction
Others

At 31 December 2008
Construction
Others

431,685
2,029,795
366,592
2,828,072
========
68
Total
RM

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
Company

2009
2008

RM
RM

Unquoted shares at cost

Details of the subsidiaries are as follows:

Name of subsidiaries

Held by the Company

Country of
incorporation

Principle activities

55,694,905
========
55,544,905
========
Proportion of
ownership
interest
2009
2008
%
%
Zecon Toll Concessionaire Sdn. Bhd.*

Zecon Water Corporation Sdn. Bhd.*

Zecon Land Sdn. Bhd.*

Zecon Geotechnical
Services Sdn. Bhd.*
Malaysia

Malaysia
Operation and
maintenance of toll
bridge and collection
of toll revenue

Water related services
100
100

100
100
Malaysia
100
100
Malaysia

Foundation engineering
and piling
100
100
Zecon Resources Sdn. Bhd.*
Malaysia
96
96
Teknik PS Sdn. Bhd.*
Malaysia
Dormant
55
55
Zecon International Limited*

British
Virgin
Islands
Foundation engineering
and construction
100
100
Zecon Piling Sdn. Bhd.*

Zecon Mutiara Sdn. Bhd.*

Malaysia

Malaysia

Dormant
100
100
Construction of medium
and low cost houses
100
100
Zecon Dredging Sdn. Bhd.*

Malaysia

Sand, dredging,
earthworks and
material transportation
services
70
70
69

16.
Investment in Subsidiaries (contd.)


Held by the Company (contd.)

Zecon Energy Sdn. Bhd.*

70

Country of
incorporation


Proportion of
ownership
interest
2009
2008
%
%

Malaysia

Energy management
and other energy
related services

51
51
Zecon Assets Sdn. Bhd.*

Malaysia

Management, maintenance
and rental services in
relation to machineries,
motor vehicles and
hardware of every
descriptions
100
100
Zecon Australia Pty. Ltd.**

Zecon Construction Sdn. Bhd.*

Zecon Construction (Sarawak) Sdn. Bhd.*

Zecon Designtech Sdn. Bhd.*

Zecon Fab Sdn. Bhd.*
Australia
Dormant
100
100
Malaysia
Dormant
51
51
Malaysia
Dormant
100
100
Malaysia
Dormant
100
100
Malaysia
Dormant
51
51
Matang Highway Sdn. Bhd.*

Malaysia

Special purpose vehicle

for financing purposes
100
100
Zecon MidEast Ltd.*
Labuan
Dormant
100
100
Zecon (Saudi Arabia) International Ltd.*
Labuan
Dormant
100
100
Subsidiary of Zecon Resources Sdn. Bhd.
Sarmax Sdn. Bhd.*
Malaysia
Dormant
50.1
50.1
Subsidiary of Teknik PS Sdn. Bhd.
TPS Medicare Sdn. Bhd.*
Malaysia
Dormant
100
100
Subsidiary of Zecon Mutiara Sdn. Bhd.

Malaysia
Dormant
100
100
Zecon Petra Jaya Sdn. Bhd.*

Zecon Demak Jaya Sdn. Bhd.*
Malaysia
51
51
Malaysia
70
100
Held through subsidiaries:
Agrowell Quarry Sdn. Bhd.*

Subsidiary of Zecon Land Sdn. Bhd.

16.
Investment in Subsidiaries (contd.)


Held through subsidiaries (contd.):
Proportion of
ownership
interest
2009
2008
%
%

Country of
incorporation


Malaysia

Supplier of electrical
or electronic equipment
and services
100
100
Property sales and

management


100
100

100

100

Subsidiary of Zecon International Ltd.
IR Concept (M) Sdn. Bhd.*

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
On 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.
21,972,960

9,300,000

275
(27,566,191)

3,707,044

80,951

3,787,995
32,000,000

28,212,005
========

Receivables
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:
(b)
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.
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
2009
RM
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.
71

17.
Investment in Associates

Group
2009
2008
RM
RM
Company
2009
2008
RM
RM

Shares of post-acquisition reserves

12,541,128 12,541,128
(11,866,622) (11,761,816)

674,506
779,312
12,541,128 12,541,128
-

12,541,128 12,541,128

-

674,506
========
(12,366,128) (12,366,128)

175,000
175,000
======== ========

Name of
Country of
Principle
entities
incorporation
activities

Malaysia
L.C.S. Trading
Trading in hardware,
Co. Sdn. Bhd.
building materials

and related products

-

779,312
========
Impairment in value of investment has been fully provided for the unquoted shares in the Company.
Details of the associates are as follows:
Proportion
of ownership
interest
2009
2008
%
%
35.0
35.0
Proportion
of
voting
2009
2008
%
%
35.0
35.0

Halifax Capital
Malaysia
Assembly and sale
25.5
25.5
25.5
25.5

Berhad

of electrical and

electronic products

The summarised financial information of the Groups investment in associates are:

Group

2009
2008

RM
RM

Assets and liabilities

3,016,106
2,179,321

Current assets

Non-current assets

575,950
476,224

3,592,056
2,655,545

Total assets

======== ========
72
Current liabilities
Non-current liabilities

Total liabilities

Results
Revenue
(Loss)/profit for the year

2,634,044
281,842

2,915,886
========
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.

18.
Investment in Jointly Controlled Entity
Group

2009
2008

RM
RM

Unquoted share at cost

Share of post-acquisition reserves

Less: Accumulated impairment

losses

Details of the jointly controlled entity are as follows:

Country of

Name of entity
incorporation

NS Water-Zecon JV

Sdn. Bhd.
Malaysia

Ramco-Zecon WLL
Qatar

Company
2009
2008
RM
RM
4,861,201
-

4,861,201
4,861,201
-

4,861,201
1
-

1
-

4,861,201
=======
-

4,861,201
=======
-

1
=====
1
=====

Proportion of
ownership
interest
2009
2008
%
%
Dormant
50
50
Dormant
49
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

Quoted shares at cost



Subordinated Bonds

Total

Market value of quoted shares

3,386
=====
8,456
=====
6,321
1,254
5,067
=====
1,486
(1,486)
=====
Group/Company
2009
2008
RM
RM
316,743
-

316,743
400,000

716,743
4,500,000

5,216,743
=======
316,743
316,743
400,000
716,743
4,500,000

5,216,743
=======
275,800
=======
241,325
=======
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
Group

2009
2008

RM
RM

Company
2009
2008
RM
RM
At cost:

Properties held for sale

21.
Amount Due from/(to) Customers for Contract Work
5,965,177
=======
5,586,939
=======
Group

2009
2008

RM
RM

Construction contract costs

incurred to date

Attributable profit

448,586,322 329,476,196
47,948,944 36,151,124

496,535,266 365,627,320
2,970,000
=======
3,482,000
=======
Company
2009
2008
RM
RM
393,351,299
29,352,356

422,703,655
268,582,693
23,267,762
291,850,455

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
========= ========= ======== =========

Amount due from customers

for contract work
36,361,581

Amount due to customers

for contract work (13,950,672)

22,410,909
=========
Retention sum on

contracts, included within

trade payables (Note 27)
7,837,188
========
45,245,011
7,243,943
7,876,897
(16,529,343)

28,715,668
========
(8,934,050) (4,821,456)

(1,690,107) 3,055,441
======== ========
5,784,263
========
4,741,167
4,781,476
======== ========
Retention sum on contracts,

included within trade

receivables (Note 22)
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:

Group
Company

2009
2008
2009
2008

RM
RM
RM
RM

Depreciation of property,

plant and equipment (Note 12)

Hire of equipment, plant and

machinery

Rental expense of buildings



Staff costs

74
3,325,347
3,031,393
559,561
826,934
411,774
191,483
1,725,077
370,944
1,445,674
=======
2,611,894
157,940
3,435,677
471,200
-
=======
-
-
-
111,802
-
=======
347,262
262,951
=======

22.
Trade Receivables

Group
Company

2009
2008
2009
2008

RM
RM
RM
RM

(restated)
(restated)

Trade receivables 144,207,974 108,231,439

Progress billings

receivables
2,563,821
4,899,116

Due from subsidiaries
-
-

Due from associates
2,683,843
2,774,110

Provision for doubtful debts (15,821,860) (10,803,123)

133,633,778 105,101,542

Retention sums (Note 21)
2,333,073
2,333,073

Trade receivables, net 135,966,851 107,434,615
========= =========
65,215,761 25,262,019
2,085,052
16,700,735
2,683,843
(7,501,010)

79,184,381
800,735

79,985,116
========
4,027,489
40,051,829
2,774,077
(4,261,870)
67,853,544
800,735
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

Group
Company

2009
2008
2009
2008

RM
RM
RM
RM

(restated)

Other receivables
36,466,022
8,162,256
2,606,863 3,099,466

Deposits
5,343,119
600,368
1,653,372
354,972

Prepayments
1,137,457
1,340,542
150,479
176,298

Due from joint ventures
933,154
935,279
933,154
935,279

Due from subsidiaries
-
-
93,285,832 202,919,757

43,879,752 11,038,445
98,629,700 207,485,772
======== ======== ========= =========

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

Cash on hand and at banks

Deposits with licensed banks


Group
2009
2008
RM
RM
7,158,494
48,850,448

56,008,942
========
16,835,212
72,535,483

89,370,695
========
Company
2009
2008
RM
RM
605,660
36,046,075

36,651,735
========
6,998,170
36,046,075
43,044,245
========
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.)
For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date:
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.

Cash on hand and at banks

Bank overdrafts (Note 25)

Total cash and cash equivalents

Borrowings
25.

Short-term borrowings

Group
2009
2008
RM
RM
Company
2009
2008
RM
RM
7,158,494 16,835,212
605,660 6,998,170
(1,989,056) (2,325,533)
(1,989,056) (2,325,533)

5,169,438 14,509,679
(1,383,396) 4,672,637
======== ======== ======== ========
Group
2009
2008
RM
RM
Company
2009
2008
RM
RM
Secured:

Term loan (i)

Term loan (ii)

Term loan (iii)

Term loan (vi)

Sukuk Musharakah

Bank overdrafts

Revolving credits

Hire purchase payables

(Note 26)

Unsecured:
183,930
138,654
20,110,509
5,000,000

25,433,093
178,974
357,787
5,108,737
-

5,645,498
183,930
178,974
138,654
357,787
20,110,509 5,108,737
5,000,000

25,433,093 5,645,498
35,000,000
1,001,461
25,794,835
35,000,000
993,880
23,830,000
35,000,000 35,000,000
1,001,461
993,880
-
-
2,283,040
2,134,521

89,512,429 67,603,899

1,690,407 1,630,036

63,124,961 43,269,414

Term loan (v)
45,000,000
-
45,000,000

Bank overdrafts
987,595
1,331,653
987,595

Revolving credits
3,200,000
3,500,000
3,200,000

Bankers acceptances
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
========= ========= =========

Long term borrowings

76
1,331,653
3,500,000
1,395,000
6,226,653
49,496,067
========
Secured:

Term loan (i)

Term loan (ii)

Term loan (iii)

Term loan (iv)

831,643
-
-
73,700,000

74,531,643
981,327
78,188
5,000,000
-

6,059,515
831,643
981,327
-
78,188
- 5,000,000
-

831,643 6,059,515

Sukuk Musharakah

Bai Bithaman Ajil Islamic

Debt Securities


(Note 26)

35,000,000
35,000,000
60,000,000
1,281,910
2,048,579

75,813,553 103,108,094

297,112

297,112

956,439
42,015,954

25.
Borrowings (contd.)

Long term borrowings (contd.)
2008
RM
Company
2009
2008
RM
RM

Term loan (v)
- 45,000,000

75,813,553 148,108,094
========= =========
- 45,000,000

1,128,755 87,015,954
========
=======
2009
RM
Group
Unsecured:
Total borrowings

Bank overdrafts (Note 24)
1,989,056
2,325,533

Revolving credits
28,994,835 27,330,000

Bankers acceptances
1,570,000
1,395,000

Term loans 144,964,736 56,705,013

Sukuk Musharakah
35,000,000 70,000,000

Bai Bithaman Ajil Islamic Debt Securities
- 60,000,000

Hire purchase payables (Note 26)
3,564,950
4,183,100

216,083,577 221,938,646
========= =========

Term loan (i) is secured by a deed of assignment over certain landed properties of the Company.
1,989,056
2,325,533
3,200,000
3,500,000
1,570,000
1,395,000
71,264,736 56,705,013
35,000,000 70,000,000
-
1,987,519
2,586,475

115,011,311 136,512,021
========= =========
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

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

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

Group
2009
2008
RM
RM
Company
2009
2008
RM
RM
2,447,821
2,313,495
1,766,235
782,088
1,418,500
586,164

3,816,073
741,135

4,473,130
-
100,650

2,068,606 2,702,924
(251,123) (290,030)

(81,087)
(116,449)

3,564,950
========
4,183,100
========
1,987,519 2,586,475
======== ========
2,283,040
2,134,521
1,690,407
1,630,036
729,833
1,343,815
297,112
858,419
552,077

3,564,950
704,764

4,183,100
302,371
-

1,987,519
1,720,606
881,668
98,020
2,586,475
(2,283,040) (2,134,521) (1,690,407) (1,630,036)

1,281,910
2,048,579
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

Group
Company

2009
2008
2009
2008

RM
RM
RM
RM

(restated)

Trade payables
34,295,393 34,964,841
18,309,566

Due to subcontractors on contracts
37,279,465 11,643,722
1,320

Retention sums (Note 21)
7,837,188
5,784,263
4,741,167

Due to subsidiaries
-
-
45,740,401

79,412,046 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.

78
The amount due to subsidiaries are unsecured, interest-free and have no fixed term of repayment.
22,367,627
817,698
4,781,476
11,661,449
39,628,250
========

28.
Other Payables

Group
Company

2009
2008
2009
2008

RM
RM
RM
RM

(restated)

Sundry payables
5,556,416
3,786,809
1,004,322
293,802

Deposits
399,992
253,292
105,642
31,702

Accruals
3,915,137
3,081,836
2,149,748
1,551,049

Due to subsidiaries
-
-
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

At 1 January

Recognised in income

statement (Note 10)

At 31 December

Company
2009
2008
RM
RM
(13,024,190) (13,290,000)
(5,709,531)
265,810

(18,733,721) (13,024,190)
======== ========
(5,742,775)

(5,742,775)
========
======
(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)
========
======
Presented after appropriate

offsetting as follows:

Deferred tax assets

Deferred tax liabilities

Group
2009
2008
RM
RM
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 Revaluation
equipment
of land

RM
RM
Total
RM

At 1 January 2009


At 31 December 2009

820,047
688,584

1,508,631
=======
202,000
(202,000)

-
=======
1,022,047
486,584
1,508,631
=======

At 1 January 2008


At 31 December 2008

-
820,047

820,047
=======
210,000
(8,000)

202,000
=======
210,000
812,047
1,022,047
=======
79

29.
Deferred Tax (contd.)

Deferred tax liabilities of the Company:

At 1 January 2009


At 31 December 2009

At 1 January 2008 and

31 December 2008

Deferred tax assets of the Group:
Property
plant and
equipment
Total
RM
RM
-
450,201
450,201

450,201
450,201
=======
=======
-
=======
=======
Unused tax
losses and Unabsorbed
unabsorbed
industrial

capital
building
allowances
allowance

RM
RM
Total
RM

At 1 January 2009

(546,237) (13,500,000) (14,046,237)

Recognised in income statement (6,196,115)
- (6,196,115)

At 31 December 2009 (6,742,352) (13,500,000) (20,242,352)
========= ========= =========

At 1 January 2008
- (13,500,000) (13,500,000)

(546,237)
-
(546,237)

At 31 December 2008
(546,237) (13,500,000) (14,046,237)
========= ========= =========

Deferred tax assets of the Company:

Unutilised Unabsorbed
business
capital
losses allowances
RM
RM
Total
RM

At 1 January 2009
-
-

Recognised in income statement (3,488,349)
(2,704,627) (6,192,976)

At 31 December 2009 (3,488,349)
(2,704,627) (6,192,976)
========= ========= =========


31 December 2008
-
-
========= ========= =========

Deferred tax assets have no t been recognised in respect of the following items:

Group
2009
2008
RM
RM
Company
2009
2008
RM
RM

Unutilised tax losses
10,375,000 18,565,000
- 9,336,000

Unabsorbed capital allowances
1,234,000
9,906,000
- 7,418,000

11,609,000 28,471,000
- 16,754,000
======== ======== ======== ========

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
Share

Paid)
Paid)
Premium

RM
RM

Group/Company


31 December 2009 119,106,150 119,106,150
========= =========


31 December 2008 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 500,000,000 500,000,000 500,000,000 500,000,000
========= ========= ========= =========

(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

Reserve-
Currency

Freehold Translation

Land
Reserve

RM
RM

Group

At 1 January 2009
692,832
(2,471)
Warrant
Reserve
RM
Total
Reserves
RM
4,416,854
5,107,215

Foreign currency translation

At 31 December 2009

At 1 January 2008

Foreign currency translation

At 31 December 2008

-

692,832
=======
(5,123)

(7,594)
======
-

4,416,854
=======
(5,123)
5,102,092
=======
692,832
(6,880)
4,416,854
5,102,806
-

692,832
=======
4,409

(2,471)
======
-

4,416,854
=======
4,409
5,107,215
=======
81

31.
Other Reserves (contd.)

Asset Revaluation

Reserve-
Warrant
Total
Freehold Land
Reserve
Reserves

RM
RM
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)
(b)
(c)
692,832
======
4,416,854
=======
5,109,686
=======
692,832
======
4,416,854
=======
5,109,686
=======
Asset revaluation reserve

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.
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.
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

Capital expenditure:

Approved and contracted for:


Contingent Liability
33.

11,880,000
========
========
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.
82
Group/Company
2009
2008
RM
RM
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.

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

Group

At 31 December 2008

Trade receivables 104,660,505

Amount due from related companies 2,774,110
========

Company

(a)
Restated
RM
2,774,110 107,434,615
(2,774,110)
======== ========
At 31 December 2008

Trade receivables 25,828,373

Other receivables 4,566,015

Amount due from related companies 170,977,117

Trade payables (27,966,801)

Other payables (1,876,553)

Amount due to related companies (62,435,629)
========
35.
Segmental Reporting

Reclassification
RM
(b)
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
======== ========
Reporting format
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.
Business segments
The Group comprises the following main business segments:
(i)
(ii)
(iii)
(iv)
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.
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.
83
84
36.

Construction
RM
Property
development
RM
Toll
concession
Others
RM
RM
Group
Eliminations
RM
Total
RM
Assets

Segment assets
530,929,587
257,079,884
181,181,241
23,257,316
(484,183,471)
508,264,557
Investments in associates
674,506
2,747,121
Unallocated assets

511,686,184
Total assets

=========
Liabilities

Segment liabilities/total liabilities
417,749,911
190,820,345
117,398,880
28,837,957
(429,453,513)
325,353,580

============ ============ ============ ============ ============ ============
Other segment information

Capital expenditure
3,339,127
1,949
77,428
1,313,465
-
4,731,969
Depreciation
7,053,007
245,984
78,977
177,654
(2,000)
7,553,622
26,843
-
134,504
-
-
161,347
Amortisation
Other significant non-cash expenses:
Provisions
3,873,157
4,300,000
-
346,57 7
-
8,519,734

============ ============ ============ ============ ============ ============
31 December 2009
Revenue

Sales to external customers
131,781,835
334,903
10,289,734
162,992
-
142,569,464
119,107,499
-
-
127,627
(119,235,126)
Inter-segment sales

Total revenue
250,889,334
334,903
10,289,734
290,619
(119,235,126)
142,569,464

============
============
============
============
============
============

Results

Segment results
(4,131,951)
22,807,884
7,038,058
(1,239,278)
-
24,474,713

Finance costs
(19,559,839)
(104,806)
Share of losses of associates


4,810,068
1,188,650
Income tax expense

5,998,718
Profit for the year

========
31 December 2009
Segmental Reporting (contd.)
36.

Construction
RM
Property
development
RM
Toll
concession
Others
RM
RM
Group
Eliminations
RM
Total
RM
474,313,101
779,312
2,828,072
477,920,485
========
Other segment information

Capital expenditure
16,735,274
4,198
153,792
738,981
-
17,632,245
Depreciation
3,709,084
260,084
65,094
275,568
-
4,309,830
Amortisation
26,843
-
176,412
-
-
203,255
Other significant non-cash expenses:
Provisions
2,741,321
211,925
2,860,391
451,449
-
6,265,086
9,292,832 -
-
-
-
9,292,832

=========== ============ ============ ============ ============ ============
Liabilities

Segment liabilities/total liabilities
340,704,529
188,395,380
60,721,409
47,252,982
(335,785,780)
301,288,520

=========== ============ ============ ============ ============ ============
Assets

Segment assets
463,523,910
227,846,224
131,563,048
42,724,446
(391,344,527)
779,312 - -
-
-
Investments in associates
Unallocated assets

Total assets

31 December 2008
Revenue

Sales to external customers
147,755,075
-
9,195,921
221,773
-
157,172,769
Inter-segment sales
150,104,699
-
-
8,460
(150,113,159)

Total revenue
297,859,774
-
9,195,921
230,233
(150,113,159)
157,172,769

============
============
============
============
============
============

Results

Segment results
9,558,399
(526,835)
6,514,541
(1,157,948)
-
14,388,157

Finance costs
(13,295,070)
Share of profit of associates

250,374

1,343,461
(332,778)
Income tax expense

1,010,683
Profit for the year

========
31 December 2008
Segmental Reporting (contd.)
85
86
2009
2008
2009
2008
2009
2008
2009
2008

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.

2009
2008
Zecon Geotechnical Services Sdn. Bhd.

2009
2008

Zecon Asset Sdn. Bhd.

2009
2008
2009
2008
2009
2008

Teknik PS Sdn. Bhd.

2009
2008
2009
2008
IR Concept (M) Sdn. Bhd.

2009
2008

Sarmax Sdn. Bhd.

Agrowell Quarry Sdn. Bhd.

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
-
-
-
-
423,419
422,175
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
122,702
131,363
4,063,809
3,982,835
-
-
56,014
56,783
Amount owed Amount owed

by related
to subsidiaries
parties
RM
RM
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Amount owed
to related
parties
RM
The following table provides the total amount of transactions which have been entered into with related parties for the relevant financial year:

Amount owed

by subsidiaries

RM
Significant related party transactions
36.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sales to
related
parties
RM
319,084
15,430,562
106,122
106,122
Other
expenses from
related parties
RM
Significant related party transactions (contd.)
2009
2008
2009
2008
2009
2008
2009
2008

Zecon Mutiara Sdn. Bhd.

Zecon Land Sdn. Bhd.

Zecon Piling Sdn. Bhd.

Zecon Resources Sdn. Bhd.

Zecon Water Corporation Sdn. Bhd.

2009
2008
2009
2008

Zecon Dredging Sdn. Bhd.

Zecon Toll Concessionaire Sdn. Bhd.

Zecon Demak Jaya Sdn. Bhd.

Zecon Petra Jaya Sdn. Bhd.

Zalpoint Tanah Putih Sdn. Bhd.

2009
2008
2009
2008
2009
2008
2009
2008

Zecon Energy Sdn. Bhd.

2009
2008
2009
2008

Zecon International Ltd.

-
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
-
-
14,378
13,574
2,149,661
2,192,838
-
-
-
-
6,634,050
6,279,562

Amount owed

by subsidiaries

RM
36.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Amount owed
to related
parties
RM
9,151,210
-
567,391
-
-
-
-
106,257,677
-
-
-
-
45,900,754
11,661,449
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,962,282
14,589,556
-
555,554
524,512
-
-

by related
to subsidiaries
parties
RM
RM
-
-
-
-
-
-
-
-
7,200
7,200
-
-
-
-
-
-
-
-
-
-
-
-
Sales to
related
parties
RM
-
-
900
28,743,929
36,010,533
95,500,200
88,262,249
Other
expenses from
related parties
RM
87
88
2009
2008
2009
2008
Matang Highway Sdn. Bhd.

LCS Trading Co. Sdn. Bhd.

LCS Equipment Rental Sdn. Bhd.

LCS Concrete Engineering Sdn. Bhd.

Al Quds Travel Sdn Bhd.

Mary Bolhassan,
Noreda Ahmad & Co.
Oricon Sdn. Bhd.

SCIB Concrete
Manufacturing Sdn. Bhd.
Perunding KAZ Sdn Bhd.

2009
2008
Effiway Corporation Sdn. Bhd.

2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008

Halifax Capital Bhd.

-
-
-
-
16,076,643
38,890,651
14,482
8,059
46,232
9,184
613,168
270,624
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2009
-
2008
2009
2008
2009
2008
2009
2008

Zecon MidEast Ltd

Zecon (Saudi Arabia) Internation Ltd.

2009
2008

Zecon Fab Sdn Bhd

Amount owed

by subsidiaries

RM
36.
3,876,390
8,146,390
-
-
998,722
998,722
-
-
329,795
309,135
-
-
1,578,305
1,624,239
73,384
73,384
1,669
1,669
1,030,485
1,074,785
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

by related
to subsidiaries
parties
RM
RM
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Amount owed
to related
parties
RM
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sales to
related
parties
RM
-
-
3,303
-
718,701
5,993
12,272
-
-
Other
expenses from
related parties
RM

36.
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 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)
During the year, the purchase of construction materials paid to SCIB Concrete Manufacturing Sdn. Bhd. is RM Nil (2008: RM718,701).
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.

(b)
Total remuneration of key management included in administrative expenses is:
Group

2009
2008

RM
RM


(Note 9)

Financial Instruments
(a)
90
(b)
2,508,389
=======
2,487,016
=======
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.
2,807,116
=======
Company
2009
2008
RM
RM
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.
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.
37.
Company
Fixed rate
Term loans
25
Hire purchase and finance lease

liabilities
26

Amount due to related company
28

Floating rate

Bank overdrafts
25

Revolving credits
25

Bankers acceptances
25

Term loans
25

Sukuk Musharakah
25

Group

Fixed rate

Term loans
25


liabilities
26

Floating rate

Bank overdrafts
25

Revolving credits
25

Bankers acceptances
25

Term loans
25

Sukuk Musharakah
25

1,690,407
4,063,809
=======
1,989,056
3,200,000
1,570,000
25,433,093
35,000,000
========
2.35% - 4.75%
3.50%
==========
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
========
6.50% - 8.00%
4.33% - 8.50%
3.12% - 3.20%
5.85% - 7.60%
4.80% - 5.40%
===========
45,000,000
2,283,040
========
2.33% - 7.75%
===========
8.38%
45,000,000
8.38%
-
-
-
160,584
-
========
297,112
-
=======
-
-
-
160,584
-
========
729,833
=======
-
-
-
172,278
-
========
-
-
========
-
-
-
172,278
-
========
340,965
========
-
-
-
184,824
-
=======
-
-
=======
-
-
-
184,824
-
=======
135,322
=======
118,700,000
-
-
=======
-
-
-
115,673
-
========
1,989,056
3,200,000
1,570,000
26,264,736
35,000,000
========
1,987,519
4,063,809
========
45,000,000
1,989,056
28,994,835
1,570,000
26,264,736
35,000,00
========
-
3,564,950
====== =========
73,700,000
-
-
-
-
-
198,283
115,674
-
-
======
=======
-
-
======
-
-
-
198,284
-
=======
75,790
======
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
Interest rate risk (contd.)
(b)
91
37.
92

2,325,533
27,330,000
1,395,000
5,645,498
-
35,000,000
========
-
1,630,036
3,982,835
=======
2,325,533
3,500,000
1,395,000
5,645,498
35,000,000
========
5.90% - 8.85%
4.80% - 5.40%
===========
8.38%
2.35% - 4.75%
3.50%
==========
7.50% - 7.80%
5.77% - 6.36%
3.67% - 3.68%
6.80% - 7.60%
4.80% - 5.40%
===========
2,134,521
========
2.33% - 7.75%
===========
7.50% - 7.80%
1.50% - 6.36%
3.67% - 3.68%
6.80% - 7.60%
-
-
-
5,227,872
20,000,000
========
858,419
-
=======
45,000,000
4,000,000
20,000,000
========
-
-
-
5,227,872
1,343,815
=======
45,000,000
-
-
-
160,584
15,000,000
========
98,020
-
========
5,000,000
15,000,000
========
-
-
-
160,584
476,879
========
-
-
-
172,278
-
=======
-
-
=======
5,000,000
-
=======
-
-
-
172,278
197,080
=======
-
-
-
184,824
-
======
-
-
======
5,000,000
-
=======
-
-
-
184,824
30,805
======
45,000,000
-
-
-
313,957
-
=======
-
-
=======
41,000,000
-
========
-
-
-
313,957
2,325,533
3,500,000
1,395,000
11,705,013
70,000,000
========
2,586,475
3,982,835
========
45,000,000
60,000,000
70,000,000
========
2,325,533
27,330,000
1,395,000
11,705,013
-
4,183,100
====== =========
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.
Floating rate
Bank overdrafts
25
Revolving credits
25
Bankers acceptances
25

Term loans
25

Bai Bithaman Ajil Islamic Debt

Securities
25

Sukuk Musharakah
25

Company

Fixed rate

Term loans
25


liabilities
26

Amount due to related company
28

Floating rate

Bank overdrafts
25

Revolving credits
25

Bankers acceptances
25

Term loans
25

Sukuk Musharakah
25

Group

Fixed rate

Term loans
25


liabilities
26

8.38%
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
Interest rate risk (contd.)
(b)

37.

(c)

(d)
(e)
Foreign currency risk

The Group is exposed to currency risk in respect of its foreign investments in subsidiaries. These are, however, not
significant.
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.
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
Carrying

Amount

RM

Group

Financial asset
2009
2008
Fair
value
RM
Carrying
Amount
RM
316,743
======
275,800
======
316,743
======
241,325
======
26
3,564,950
3,286,382
4,183,100
4,187,045

Borrowings
25

Company
212,518,627
=========
195,096,603
=========
217,755,546
=========
189,151,085
=========
316,743
======
275,800
======
316,743
======
241,325
======
26
1,987,519
1,974,236
2,586,475
2,578,156

Borrowings
25

113,023,792
=========
112,954,086
=========
133,925,546
=========
133,488,325
=========

Other investment

- Quoted shares
19

Financial liabilities

Financial asset

Other investment

- Quoted shares
19

Financial liabilities

Fair
value
RM
93

37.

(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

(ii)
(iii)
94
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.
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.
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.
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
Number of Shareholders
Number of Shares
% of Shares
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
58
165
1,060
307
26
2
2,510
122,527
4,728,350
8,643,238
25,429,050
80,180,475
0.00
0.10
3.97
7.26
21.35
67.32
TOTAL
1,618
119,106,150
100.00
SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS
No. Name
1.
2.
3.
4.
Dawla Capital Sdn Bhd

Inas Kapital Sdn Bhd
Digital Network Sdn Bhd
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
Note:
* Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd
DIRECTORS INTERESTS

Direct
No. of Shares Held

Indirect
THE COMPANY
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
Hj Saini bin Hj Ali
Ng Weng Fatt
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
-
-
-
65,689,475*
-
-
-
-
-
-
-
-
-
-
-
55.15
-
Note:
95

DIRECTORS INTERESTS (contd.)

Direct
No. of Shares Held

Indirect
RELATED COMPANIES
Teknik PS Sdn Bhd
34,000
14.20
Zecon Construction Sdn Bhd

49
49.00
Sarmax Sdn Bhd

30,000
30.00
THIRTY (30) LARGEST SHAREHOLDERS
96
No.

1.
Name
Shareholding
65,689,475
55.15
2.
Digital Network Sdn. Bhd.
14,491,000
12.17
3.

HLG Nominee (Tempatan) Sdn. Bhd.

Assar Asset Management Sdn. Bhd. For Assar Industri Sdn. Bhd.
4,500,000
3.78
4.

CIMB Group Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Bolhassan Bin Di @ Ahmad Bin Di
4,500,000
3.78
5.

CIMSEC Nominees (Tempatan) Sdn. Bhd.

CIMB For Inas Kapital Sdn. Bhd.
3,000,000
2.52
6.
Zainal Abidin Bin Ahmad
2,967,875
2.49
7.

RHB Capital Nominees (Tempatan) Sdn. Bhd.

2,000,000
1.68
8.

Kenanga Nominees (Tempatan) Sdn. Bhd.

2,000,000
1.68
9.
Victor Law Thian Teck
1,000,000
0.84
10.

CIMSEC Nominees (Tempatan) Sdn. Bhd.

CIMB Bank For Mohamad Safri Bin Sharkawi
837,225
0.70
11.


Pledged Securities Account For Zainal Abidin Bin Ahmad
597,700
0.50
12.

Mayban Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Chee Kwok Fai
587,100
0.49
13.

14.

Zainurin Bin Ahmad
525,000
0.44

Pledged Securities Account For Hamni Bin Juni
368,450
0.31
15.

RHB Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Chu Chee Keung
263,400
0.22

No.

16.
Name
Shareholding
Maimunah Binti Zailani
262,600
0.22
17.
Hui Kok Yuan
250,000
0.21
18.

UOBM Nominees (Asing) Sdn. Bhd.

United Overseas Bank Nominees (Pte) Ltd For Gold Crystal Company Ltd
200,000
0.17
19.

Ambank (M) Berhad

Pledged Securities Account For Rajalingam A/L R V R Singam
199,300
0.17
20.
Law Lee Koon
197,000
0.17
21.
Toh Beng
188,900
0.16
22.
Lee Cher Keam
188,500
0.16
23.

Mayban Securities Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Tan Sok Hui
160,000
0.13
24.

Inter-Pacific Equity Nominees (Asing) Sdn. Bhd.

Pledged Securities Account For Chin Hoi @ Chin Pek Hoi
153,000
0.13
25.


Pledged Securities Account For Kua Bee Keng
138,000
0.12
26.
Low Siew Ean
122,000
0.10
27.
Ong Kian Lim
120,000
0.10
28.
Khoo Lin
103,000
0.09
29.


Pledged Securities Account For Seow Hee Yoong
100,000
0.08
30.
Choong Thiam Fatt
100,000
0.08
TOTAL
105,809,525
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
:
:
:
:
44,168,540
RM1.06
05 March 2017
One Vote per warrant held
Size of warrant holdings
Number of warrant holders
Number of Warrants
% of Warrants
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
13
87
499
234
55
1
580
70,650
2,394,330
8,003,580
12,554,020
21,145,380
0.00
0.16
5.42
18.12
28.42
47.88
Total
889
44,168,540
100.00
SUBSTANTIAL WARRANT HOLDERS AS PER REGISTER OF SUSTANTIAL WARRANT HOLDERS
No. Name
1.
2.
Dawla Capital Sdn Bhd

Direct Interest
No. of Warrants
%
21,145,380
316,330
Deemed Interest
No. of Warrants
%
47.87
0.72
-
21,145,380*
47.87
Note:
LIST OF DIRECTORS WARRANT HOLDINGS

Direct
1.
2.
No. of Warrants Held

Indirect
316,330
0.72
21,145,380*
47.87
8,000
0.02
Note:
THIRTY (30) LARGEST WARRANT HOLDERS
98
No.

Name
Warrant Holders
1.
2.
Mohd Fauzi Bin Mohd Anuar
21,145,380
47.88
1,000,000
2.26
3.
Lee Mee Kuen
961,600
2.18
4.
Digital Network Sdn. Bhd.
633,000
1.43
5.


Pledged Securities Account For Hamni Bin Juni
615,500
1.39
6.

OSK Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Pang Swee Chien
500,800
1.13
7.
Saw Guat Ngoh
481,200
1.09
8.
Liew Yoke Ling
383,000
0.87
9.
Leong Hon Wah
380,000
0.86
10.
Chang Van Leong
350,800
0.79
Analysis Of Warrant Holdings - as at 23 April 2010

No.

11.
Name
Ong Chai Kin
306,500
0.69
12.

HDM Nominees (Tempatan) Sdn. Bhd.

UOB Kay Hian Pte Ltd For The Kee Hong
260,000
0.59
13.

Inter-Pacific Equity Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Liang Tek Ling
245,500
0.56
14.
Lee Kim Seng
230,000
0.52
15.
Yeap Mee Yoke
225,000
0.51
16.

17.

18.

19.

20.

21.

22.

23.

24.

Cimsec Nominees (Tempatan) Sdn. Bhd.

CIMB Bank For Hasnandi Bin Mohamad Jennis
200,020
0.45
Lam Pun Ying
200,000
0.45
Affin Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Phua Sin Mo
200,000
0.45
Chan Chin Sun
200,000
0.45
Zainal Abidin Bin Ahmad
188,000
0.43
Lee Soi Gek
182,600
0.41
Mohd Hadi Bin Mohamed Anuar
176,000
0.40
175,00
0.40
HLG Nominee (Tempatan) Sdn. Bhd.

Pledged Securities Account For Teo Ah Seng
171,100
0.39
25.

26.
AIBB Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account For Phua Sin Mo
170,000
0.38
Tan Yee Kong
168,000
0.38
27.
Mohd Seth Bin Haron
167,000
0.38
28.
Ng Boon Cheong @ Eng Boon Cheong
165,000
0.37
29.
Lee Cher Keam
159,200
0.36
30.
158,000
0.36
TOTAL
30,398,200
68.80
Tan Yee Sen
Warrant Holders
99
List of Properties
LOCATION
Area
Tenure
DESCRIPTION
YEAR OF
EXISTING

ACQUISITION USE

Lot 462, 463 & 464 , Block 15,
788.0
Leasehold (99 years),
Leasehold Land
1999
Commercial &
Salak Land District,
hectare
Mixed Zone Land,
Residential
Kuching, Sarawak
expiring in Year 2098
Development
Lot 4871, Block 18,
39.2
Leasehold Land
1999
Commercial &
Salak Land Disctrict,
hectare
Mixed Zone Land,
Residential
Kuching, Sarawak
Development
Lot 742, Section 64,
7.9
Leasehold Land
1999
Commercial &
KTLD, Kuching,
hectare
Mixed Zone Land,
Residential
Sarawak
Development
Leasehold Land
1988
Residential
Lot 2260, Block 233,
7,831.0
Kuching North Land
sq metre
Mixed Zone Land,
Leasehold Land
1991
Vacant Land
Crown Land,
3.9
Lot No. 10049, 16th Mile,
hectare
Mixed Zone Land,
Simanggang Road,
expiring inYear 2054
Sublot No. 54, Lot 530
773.8
of Block 6, Matang Land
sq metre
Mixed Zone Land,
District
expiring inYear 2026
Sublot No.84, Title Lot 7907,
174.2
Double-Storey
1994
Pelita Heights, Kuching
sq metre
Mixed Zone Land,
Terrace House
Sarawak
Lot No.9071, Section 64,
370.0
Tabuan Dayak,
sq metre
Mixed Zone Land,
Kuching Sarawak
Parcel Nos 297-2-1 & 297-2-2
647.2
Strata Title
NET BOOK VALUE

31/12/2009
(RM)

73,243,200
33,714,909
23,169,333

240,629
581,647
Kuching Town Land District

Detached Lot
2005
Vacant Land
130,000
Residential
138,687
4-Storey
1995
Office Premise
448,896
Office Premises
1,537,107
Intermediate
Shophouse
Commercial Tower
2000
(Level 2) Riverbank Suites and sq metre

Commercial Tower of Parent
Lots 192, 193, 293 and 296
Section 48 KTLD
Kuching Sarawak

Private Lot No.5, 6 & 7
2,038.9
Lot 1406-1463
sq metre
Mixed Zone Land
3-Storey Corner
2005
Office Premises
2,770,000
Shop Houses
1465 & Part of Lot 1472 of

Block 14, Salak Land District
100
List of Properties
LOCATION
Area
Tenure
DESCRIPTION
YEAR OF
EXISTING

ACQUISITION USE

Lot 948, Serian Town District 95.0
Mixed Zone Land
Shop House
Strata Title
Apartments
2006
Vacant
Commercial
2002
Vacant
sq metre
Parcel No. 6B, 6C, 6D, 6E & 10A 717.2

Lot 264 of Block 2,
sq metre
Jalan Salak District
2-Storey Corner
2002
Vacant
NET BOOK VALUE

31/12/2009
(RM)
200,000
1,905,380
Unit 1-1A, 1-2A, 1-9, 2-1,

4-1, 4-2, 5-9, 6-8, 6-9
of Block B6 & B7,
1,400.6
Strata Title
Jalan Kwong Lee Bank,
sq metre
centre
2,104,938
Kuching
Parcel No. 2A-11-2,
361.8
Strata Title
Office suite
2006
Office Premise
1,611,644
11th Floor Plaza Sentral
sq metre
Strata Title
Condominium
2008
Corporate Use
712,693
Freehold
2009
Comercial
Land
Development
KL Building No. Block 2A,

Lot 78, Section 70,
Kuala Lumpur
Parcel, A-20-01, Block A,
133.2
Level 20, Suasana
sq metre
Sentral Condominium,
Jalan Stesen Sentral 5,
KL Sentral, 50470,
Kuala Lumpur
H.S. (D) 262661
15,679.9
Freehold
No. P.T.D 56992
sq metre

7,350,000
Mukim Tebrau,
Daerah Johor Bahru,
Negeri Johor Darul Takzim
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.
To receive the Audited Financial Statements for the financial year ended 31 December 2009 and the
Reports of the Directors and Auditors thereon.
2.
To approve the payment of Directors fees in respect of the financial year ended 31 December 2009
amounting to RM213,000-00.
3.
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
ii) Haji Abg Azahari bin Abg Osman
Resolution 3
iii) Jamil bin Jamaludin
Resolution 4
4.
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.
Resolution 5
5.
To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix
their remuneration for the ensuing year.
Resolution 6
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 Directorsof the Company be and are hereby empowered to issue shares
in the Company from time to time andupon 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 untiltheconclusion 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) 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;
b) 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
102
Resolution 1
Resolution 7
Resolution 8

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) 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;
b) 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
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.
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.
Appointment of Proxy
i)
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.
ii)
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.
103

iii)
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.
iv)
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. 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 suchpurposesasthe Directors consider would
be in the interests of the Company including but not limited to such shares as may beissued pursuant to the Employees
Share Option Scheme approved at the ExtraordinaryGeneralMeeting held on 15 February 2005. This authority unless
revokedor variedata 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) Ordinary Resolution 8 - Proposed Renewal of Shareholders Mandate
b) Ordinary Resolution 9 - Proposed Additional Shareholders Mandate
104
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.
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 :FOR
RESOLUTIONS
1.
Payment of Directors fees
2.
Re-election of Director Dato Majit bin Ahmad Khan
3.
Re-election of Director Haji Abg Azahari bin Abg Osman
4.
Re-election of Director Jamil bin Jamaludin
5.
Re-election of Director Ng Weng Fatt
6.
Appoinment of Auditors and authorising Directors to fix their remuneration
7.
Authority to issue shares pursuant to Section 132D of the Companies Act, 1965
8.
Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions.
9.
Proposed Addtional Shareholers Mandate for Recurrent Related Party Transactions.
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 :
day of

, 2010

Signature of Shareholder
1)
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.
2)
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.
3)
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.
4)
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.
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

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Mohd Azlan Iskandar

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