Construction

Zecon Berhad annual report 2008
It is pleasing to report on another profitable year for Zecon Group with improved revenue of RM157 million. 2008 has been a year filled with activities, domestically we saw significant progress in our projects on hand, namely the Matang-Rambungan Expressway in Kuching and the Triang Water Supply Scheme in Jelebu, Negeri Sembilan. Our international operation has been equally active with recruitments, deployment of manpower and mobilisation of machineries taking place during the year. It was the validation for all of us to see that the dedication and commitment from the respective project teams which had resulted in achieving the scheduled progresses in spite of the price hike in construction materials in most part of the year 2008. We continue to actively pursue opportunities to diversify our business. This desire, together with our calculative approach has begun to bear fruit for our international operations. On 21 January 2009, Zecon signed a Memorandum of Understanding with Qatari Diar, one of the biggest developers in Qatar which is owned by Qatar Investment Authority, to combine resources and expertise and to exchange technology know-how for any potential development projects in Qatar and the Gulf region. The signing represents the first step towards bringing in potential projects in the region and it is also the reward of a string of cautious approaches assumed by the Group to ensure our understanding of the market and business environment and engaging into projects with relatively low risk profile. In addition to the above, we have also been active in seeking potential joint venture projects in Saudi Arabia and the surrounding region. At the time of this report, several projects and joint venture proposals have been studied and will soon be finalized and announced accordingly. Construction and Infrastructure still being our major business segment contributed more than 80% of overall gross revenue for the year. We are still on course to secure approximately RM1 billion potential projects pending final approval as reported last year, namely, (1) Triang Water Supply Scheme, Package 5, (2) UNIMAS Faculty of Medical and Health Science and (3) Syarikat Perumahan Negara Berhad Petra Indah Housing Scheme. Matang Rambungan Expressway, Matang, Kuching, Sarawak Our Matang Highway project reached a significant milestone in 2008 and is expected to be 100% completed in May 2009. This RM201 million 18 km two-lane double carriageway from Kuching city, Sarawak to the proposed new Federal Administrative Centre near Matang, located 20 km northwest of the city of Kuching, was a variation from the original 25 km. The 7 km was replaced by the revised route whereby this part of the road will be lengthened by another 13.3 km and narrowed into a two-lane single carriageway (Revised Matang Route) with a contract sum of RM124 million. The 18 km original route is now waiting for its official completion announcement whereas the Revised Matang Route was 7.5% completed as at the end of 2008 and is expected to be fully completed in 2011. This expressway besides linking Kuching city to the proposed Federal Administrative Centre, also serves to improve the traffic connectivity and together with the Revised Matang Route, will provide an alternative means to enter Kuching city without encountering congestion at the Petra Jaya roundabout. Triang Water Supply Scheme, Jelebu, Negeri Sembilan Triang Water Supply Scheme, another active project on hand in Negeri Sembilan also progressed as planned. As at the date of the printing of this report, the physical completions for each of the Packages are 56% for Package 1, 32% for Package 2 and 48% for Package 4.
Included in this project is a 12.5km long transfer tunnel which reserves a special mention. The tunnel which runs through a mountain is the first of its kind for a water supply scheme in Malaysia and the second tunneling project after the Smart Tunnel in Kuala Lumpur. Once completed, the tunnel will become the longest in Malaysia. Except for the tunneling for which we have engaged a Korean subcontractor, all other infrastructure works are undertaken by Zecon. We expect some form of technology transfer arising from our ties with our Koreans counterpart. Toll Our Toll division continues to improve, as we optimistically predicted last year to have the daily users to exceed 20,000 barriers. We are pleased to note that approximately 7,558,840 users were recorded for the year ended 31 December 2008, an average of 20,709 users per day. A total of 7.12 million users were recorded last year corresponding period, thus recording a 6% increase. Revenue continues to increase each year since the official commencement in 2003 with RM9.19 million recorded for the year under review, a 7% increase as compared to RM8.61 million in the preceding year. The main contributor to the increase in revenue is the introduction of our reload package for the prepaid Toll cards which commenced in July 2008. A total of RM1.23 million was received from the combination of new and reloaded prepaid card, almost RM0.5 million more than the RM747,430 sold last year. With the expected increase in the demand for reload package and our focus on prepaid cards, the revenue and users are anticipated to rise. Property Development The current low interest rates especially for home buyers has led us to launch Phase 2 of our Vista Tunku Project in Petra Jaya, Kuching, consisting of 41 units of Double Storey Terrace houses as well as planning for the recommencement of the City Bridge Commercial Centre located at Jalan Tanah Puteh, Kuching soon. Outlook Despite the global economic uncertainties and weak forecasts across all major markets, Malaysias well-planned transfer of power and the successful installation of its 6th Prime Minister will certainly boost the market and investors confidence overall. Progressing With The Nation, I believe that Zecon is strategically positioned to explore and seize potential opportunities available in the new era. However, the newly released growth forecast by Bank Negara of between -1% and 1% means the outlook remains weak. Despite these uncertainties, we will continue to be innovative in our approach and seek growth including expansion into new markets both domestically and internationally. Besides nearly RM1 billion potential book orders mentioned above, we are also hopeful that our Private Finance Initiative (PFI) proposals to the Government will be successful with the RM7 billion budget allocated under the recent Mini-Budget for PFI and off-budget projects. Lastly, I would like to thank our committed people of all ranks, without them, all progress would not have been materialized; our shareholders and the board of directors for your belief and contribution towards our ambition. I strongly believe that with your continuous support, Zecon will be progressing in the right direction to becoming a world class multi-disciplined contractor, developer and concessionaire.
Datuk Haji Zainal Abidin bin Haji Ahmad Group Managing Director/Chief Executive Officer Date: 26 May 2009
11
From left to right: Ir. Haji Abang Azahari bin Abang Osman (Executive Director), Haji Saini bin Haji Ali (Executive Director), Datuk Dr. Haji Yusof @ Josree bin Yacob (Deputy Independent Chairman), Dato Abdul Majit bin Ahmad Khan (Independent Non-Executive Director), Richard Kiew Jiat Fong (Independent Non-Executive Director), Dato Haji Hamzah bin Haji Ghazalli (Independent Non-Executive Director), Datu Dr. Hatta bin Solhi (Independent Chairman), Poh Lik Gan @ Poh Li Thong (Indenpendent Non-Executive Director), Datuk Haji Zainal Abidin bin Haji Ahmad (Group Managing Director/CEO), Dato Dr. Mohd Yahya bin Nordin (Independent Non-Executive Director), Ir. Hui Kok Yuan (Executive Director), Jamil bin Jamaludin (Executive Director), Haji Zainurin bin Haji Ahmad (Deputy Managing Director), Ir. Ng Weng Fatt (Executive Director, not in the picture)
12
Profile Of Directors
Datu Dr. Hatta bin Solhi
Age Nationality Qualification Position held Working experience & occupation : 65 : Malaysian : Ph.D in Political Science (Development Studies) from the University of Hawaii. : Independent Chairman : Datu Dr. Hatta was appointed to the Board of Directors of the Company on 24 April 2001. Prior to joining Zecon, he served as the Deputy State Secretary of Sarawak from August 1997 to November 2001 and had held several senior positions in the State and Federal Services.
Details of any board committee to which he belongs : Member of Audit Committee Chairman of Remuneration & Nomination Committee Chairman of Option Committee Other directorships in public companies Securities holdings in the Company and its subsidiaries : None : Name 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 : None : None : None : None Direct No. of shares 20,000 % 0.02 Indirect No. of shares % -
No. of board meetings attended in the financial year : 5/5
Datuk Dr. Haji Yusof @ Josree bin Haji Yacob

Age Nationality Qualification Position held Working experience & occupation : 53 : 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 : Sutera Harbour Golf and Country Club Berhad : None : None : None : None
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest
List of convictions for offences within the past 10 years : None other than traffic offences No. of board meetings attended in the financial year : 2/3
13
Datuk Haji Zainal Abidin bin Haji Ahmad
Age Nationality Qualification : 51 : Malaysian : Master of Arts degree in Management from the University of Kent at Canterbury, England. : Diploma in Accounting from the University of Kent at Canterbury, England. : Bachelor of Arts from University Kebangsaan Malaysia. : Group Managing Director/Chief Executive Officer : Datuk Zainal was appointed to the Board of Zecon on 28 July 1994 as Director and subsequently as Executive Chairman on 30 November 1996. On 24 April 2001, he was appointed the Group Managing Director/Chief Executive Officer. He started his career by joining the Sarawak Civil Service in 1981 until he move to private sector in 1987. Under his leadership, ZECON Group has undertaken dynamic diversification recent years and has even positioned itself for international ventures. ` : Sarawak Concrete Industries Berhad : Name Zecon Berhad Sarmax Sdn Bhd Teknik PS Sdn Bhd Zecon Construction Sdn Bhd Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences Direct No. of shares 3,655,200 30,000 34,000 49 % 3.07 30.0 14.2 49.0 Indirect No. of shares % 65,689,475 55.15 -
Position held Working experience & occupation
Details of any board committee to which he belongs : None Other directorships in public companies Securities holdings in the Company and its subsidiaries
: 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
Haji Zainurin bin Haji Ahmad

Age Nationality Qualification : 48 : Malaysian : Master of Commerce Degree in Business Administration from University of Canterbury, Christchurch, New Zealand. : B Sc. in Business Administration from Indiana Institute of Technology, Indiana, USA. : Diploma in Business Studies from Universiti Teknologi MARA. : Deputy Managing Director : Haji Zainurin was appointed to the Board on 12 June 1998. He enjoyed a 13-year tenure in finance and commercial sectors. He was the General Manager of Advance Finance Berhad (now known as Advance Establishment Berhad), Kuching prior to joining Zecon in 16 April 1999 as Executive Director. He was re-designated as Deputy Managing Director of Zecon on 01 June 2008.
Details of any board committee to which he belongs : Chairman of Risk Management Committee Member of Option Committee Other directorships in public companies Securities holdings in the Company and its subsidiaries : Halifax Capital Berhad : Name Zecon Berhad Direct No. of shares 525,000 % 0.44 Indirect No. of shares % -
14
Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : Brother to Datuk Haji Zainal Abidin bin Haji Ahmad : None : No conflict of interest apart for the related party transactions, which have been disclosed in the Notes to the Accounts. : None : 4/5
Poh Lik Gan @ Poh Li Thong

Age Nationality Qualification : 64 : 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 Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : None : None : None : None : 5/5 Direct No. of shares 40,000 Indirect No. of shares % -
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries
% 0.04
Dato Dr. Mohd Yahya bin Nordin

Age Nationality Qualification : 59 : Malaysian : Ph.D (Local Government) Wales, United Kingdom (1987). M.Sc. (Town Planning) Wales, United Kingdom (1980). Bachelor of Social Science (Hons), Universiti Sains Malaysia (1973). Diploma in Public Administration from Universiti Malaya (1976).
: Independent Non-Executive Director : Appointed to the Board of Directors of the Company on 26 January 2007. He had served the Government of Malaysia for more than 32 years until his mandatory retirement on December 2005. Apart from his formal duties as a public official, he was also involved in the activities of professional bodies in which he was a Registered Town Planner with the Board of Town Planners Malaysia. : Member of the Audit Committee Member of Remuneration & Nomination Committee : None
Details of any board committee to which he belongs Other directorships in public companies
15
Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences No. of board meetings attended in the financial year : None : None : None : None : None : 4/5
Dato Haji Hamzah bin Haji Ghazalli

Age Nationality Qualification : 59 : Malaysian : Master Degree of Arts in International Affair (Management) from University of Ohio, United States. B.A. Hons from Universiti of Malaya. : Independent Non-Executive Director : Appointed to the Board of Directors of the Company on 26 February 2007. He was an Administrative and Diplomatic Services Officer and had served the Government of Malaysia for more than 32 years. He started his career with the Government of Malaysia in April 1973 and retired in April 2005. Prior to his retirement, he was the State Secretary of Negeri Sembilan. : Halifax Capital Berhad : None : None : None : None : None
Details of any board committee to which he belongs : None Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences
Dato Abdul Majit Bin Ahmad Khan

Age Nationality Qualification Position held Working experience & occupation : 63 : Malaysian : Bachelor of Economics (Hons) from University of Malaya : Independent Non-Executive Director : Appointed to the Board of Directors of the Company on 16 May 2007. He had served in the Prime Ministers Department and the Ministry of Foreign Affairs as well as in several mission abroad and senior position in the Ministry of Foreign Affairs for thirty-four years. He also act as the Under Secretary of West Asia and the OIC and has participated in several Ministerial and Prime Ministerial visits to West Asian Countries and OIC Meetings. He was also a Director General of ASEAN and he actively participated in the organization of the 30th ASEAN Ministerial Meeting held in Kuala Lumpur as well as the ASEAN Head of Summit and the 10+3 Summit Meetings in Malaysia.
16
: 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. Details of any board committee to which he belongs : None Other directorships in public companies : Hong Leong Islamic Bank HLG Unit Trust Bhd OSK Investment Bank Bhd : None : None : None : None : None
Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences
Richard Kiew Jiat Fong

Age Nationality Qualification : 55 : Malaysian : Richard is a fellow Member of the following: The Institute of Chartered Accountants in England and Wales; The Association of Chartered Certified Accountants, United Kingdom; and The Institute of Certified Public Accountants of Singapore. He is also a member of Malaysian Institute Accountants. : Independent Non-Executive Director : Richard Kiew was appointed to the Board of Directors of the Company on 01 June 2008. He has seven years working experience in England with firms of Chartered Accountants. When he came back to Malaysia, he worked as an audit manager for four years before started his own audit firm in 1986 as a sole practitioner. : Member of the Audit Committee : Sarawak Concrete Industries Berhad : Name Zecon Berhad Relationship with directors Relationship with substantial shareholders Conflict of interest : None : None : None Direct No. of shares 63,000 % 0.05 Indirect No. of shares % -
17
Ir. Hui Kok Yuan
Age Nationality Qualification : 59 : Malaysian : Bachelor degree in Civil Engineering from the University of Adelaide. Member of both Institution of Engineers Malaysia and Australia. Professional Engineer, Board of Engineers, Malaysia. : Executive Director : Hui Kok Yuan was appointed Executive Director of the Company on 16 February 2001. He joined Jabatan Kerja Raya (Public Works Department) Sarawak as an Executive Engineer in 1976 supervising government building projects. In 1982, he was transferred to Sarawak Land Custody and Development Authority (LCDA) as a Civil Engineer involved in the planning and design of urban development projects. In 1994, he joined the private sector where he was involved in the management and administration of commercial and housing projects. In 1993, he was awarded the Pingat Perkhidmatan Bakti by the Sarawak Government. : None : None : Name Zecon Berhad Relationship with directors Relationship with substantial shareholders Conflict of interest : None : None : None Direct No. of shares 250,000 % 0.21 Indirect No. of shares % -
Ir. Haji Abg Azahari bin Abg Osman

Age Nationality Qualification : 47 : 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. : None : None : None : None : None : None
Details of any board committee to which he belongs : Member of Risk Management Committee Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences
18
Jamil bin Jamaludin
Age Nationality Qualification Position held Working experience & occupation : 48 : 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
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest
Haji Saini bin Haji Ali

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. : 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 which he belongs : Member of Risk Management Committee Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest List of convictions for offences within the past 10 years other than traffic offences : None : None : None : None : None : None
19
Ir. Ng Weng Fatt
Age Nationality Qualification : 48 : Malaysian : Graduated as a Civil/Structural Engineer from University of Dublin , Ireland in 1983. A registered Professional Engineer (Malaysia) and a corporate Member of the Institution of Engineers, Malaysia since 1990. : Executive Director : Ng Weng Fatt was appointed to the Board of Directors of the Company on 02 March 2009. He has 25 years of consultant and construction experience. He started his career with a local consulting engineers environment mainly involved in designing civil works for highway and bridges in 1984. As a consultant he also supervised the construction of 2 packages of the North South Highway and one Jabatan Kerja Raya Federal Road project in Kuala Lumpur. In 1995, he joined an established main board construction firm specialised in heavy civil engineering works. He was involved in the construction of and completion of an underground station for the LRT-2 system in Kuala Lumpur. He also coordinated and assisted in the launching of the first Tunnel Boring Machine in KL for the LRT-2 underground system. He later became the deputy head of operation covering a wide scope of work in the construction organisation i.e. projcect development, contract/legal, quality management and risk management. He also oversees the construction of a highway project in India where he is a member of the executive committee for the JV consortium. Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries Relationship with directors Relationship with substantial shareholders Conflict of interest : None : None : None : None : None : None
List of convictions for offences within the past 10 years : None other than traffic offences No. of board meetings attended in the financial year : None
20
Corporate Governance
All Zecon Groups 2,000 acres of land banks are situated in prime locations within 7.5km from city center
Proposed Petra Indah Development Project (Artist Impression)
Corporate Governance Statement Statement of Directors Responsibility Statement on Internal Control Audit Committee Report Additional Compliance Information
22 25 26 27 30
21
Corporate Governance Statement

The Board of Directors of Zecon Berhad (Board) recognises the importance of good corporate governance as crucial to maintain the continued growth and success of the Group. As such the Board is committed in ensuring that Corporate Governance is observed and practised by the Company with the ultimate objective of maximising shareholder and stakeholder value.The Board is pleased to demonstrate as below on how the Company has applied the principles as set out in the Malaysian Code on Corporate Governance (Code). 1. THE BOARD OF DIRECTORS a) Composition of the Board The Board comprises of Fourteen (14) members, of which seven (7) are Executive Directors and seven (7) Non-Executive Directors who are also the Independent Directors. The profiles of the Directors are set out on page 13 to 20 of this Annual Report. There is a clear division of duties between the Chairman and the Group Managing Director/Chief Executive Officer. The Chairman is mainly responsible for the orderly conduct and running of the Board while the Group Managing Director/Chief Executive Officer is overseeing the day-to-day operations of the Group and implementation of Board Policies and decisions with the support of Deputy Managing Director and the Executive Directors. The Independent Non-Executive Directors play an important role in providing independent advice, judgement, ensuring an impartial Board decision making process as well as safeguarding the interests of other parties such as the minority shareholders. The Independent Non-Executive Directors are independent of management and free of any relationship which could materially interfere with the exercise of their independent judgement. No individual or group of individuals dominates the Boards decision making. The wide mix of professional skills, management experience, financial and public service background of the Board members have resulted in an effective Board accordingly. A Senior Independent Director, Datu Dr. Hatta bin Solhi has been identified as the one to whom concerns may be conveyed. b) Appointment and Re-election The identification and appointment of new Directors undergo a process led by the Remuneration & Nomination Committee (RNC). Thereafter upon approval by the Board, the Company provides an induction programme for the new Directors to allow them to understand the business and ultimately to enable them to contribute effectively at Board meetings.The Board will ensure that all newly appointed Directors to undergo the Mandatory Accreditation Programme (MAP) as required under the Listing Requirements (LR) 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 reelection. c) Board Meetings The Board Meetings are held at quarterly interval with additional meetings held as and when necessary. For the current financial year ended 31 December 2008 (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 LR. The attendance record of each Director for the FY under review is as follows:Name of Director 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Datu Dr. Hatta bin Solhi Datuk Haji Yusof @ Josree bin Haji Yacob (@) Datuk Haji Zainal Abidin bin Haji Ahmad Poh Lik Gan @ Poh Lik Thong Dato Dr. Mohd Yahya bin Nordin Dato Haji Hamzah bin Haji Ghazalli Richard Kiew Jiat Fong (#) Dato Abdul Majit bin Ahmad Khan Haji Zainurin bin Haji Ahmad Ir. Hui Kok Yuan Ir. Haji Abg Azahari bin Abg Osman Jamil bin Jamaludin Haji Saini bin Haji Ali (#) Ir. Ng Weng Fatt (*) Attendance 5/5 2/3 4/5 5/5 4/5 5/5 3/3 4/5 4/5 5/5 3/5 5/5 2/3 % of Attendance 100 67 80 100 80 100 100 80 80 100 60 100 67 -
22

Notes: (@) Appointed on 09.06.2008 (#) Appointed on 01.06.2008 (*) Appointed on 02.03.2009 d) Directors Training All Directors inclusive of the newly appointed Directors have attended the MAP in accordance with the LR. During the FY under review, the type of training attended by the Directors were as follows:i) ii) iii) iv) v) vi) Managing Strategic Corporate Planning; Effective Chairmanship; The Art of Living (Managing and Mitigating Stress); Enhancing Team Success; National Tax Conference 2008; and 2009 Budget Seminar
Dato Dr. Mohd Yahya bin Nordin was unable to attend any training during the year due to his heavy work commitment. The Directors will continue to undergo other relevant training programmes in order to equip themselves in the corporate regulatory developments as well as current developments of the industry. e) Supply of information The Secretaries will ensure that notices, agendas and board papers of each meeting are distributed to the directors in a timely manner prior to Board Meetings and on an ongoing basis to enable the Directors to peruse, consider, obtain additional information and seek further clarification when necessary. There is a list of matters, which are reserved specifically for Boards consideration and these include strategic plans and budgets for the Group, and business development issues. Material acquisitions and disposals of assets, and potential investments by the Group are also considered extensively at Board level. Senior Management Officers may be invited to attend Board Meetings or Committee Meetings when necessary to furnish the Board with explanations and clarifications on the matters tabled at the meetings. All Directors have full access to the advice and services of the Company Secretaries 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 Secretaries 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 Non-Executive 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 LR, the aggregate remuneration of the Directors are disclosed on page 68 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 (AC), RNC and Risk Management Committee (RMC) in order to augment the business and corporate efficiency.
23

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 AC will also be presented to the Board for information. a) Audit Committee The primary aims on the establishment of the 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 27 to 29 of this Annual Report. b) Remuneration & Nomination Committee The RNC which was set up on 24 May 2001 comprising of three (3) members, all of them are Independent Non-Executive Directors. The RNC has been delegated with the following duties and responsibilities: Recommend candidates for appointment to the Board and Board Committees and recommend to the Board for decision and approval; Determine the remuneration packages of the Executive Directors and to ensure that their remuneration commensurate with their experience and performance; Review the composition of the Board and experiences and mix of skills of the directors and also to ensure that there is balance between executive, non-executive, and independent directors; Assess annually the effectiveness of the Board as a whole; and Evaluate the terms and conditions of the service contract of the Executive Directors, and recommend to the Board for approval on the extension of service contract of the Executive Directors, if necessary.
The RNC meets as and when need arises. For the FY under review, the RNC had met three (3) times with all members attended. c) Risk Management 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 RMC is delegated with the following specific tasks:i) ii) iii) iv) Establish and maintain the risk management framework within the Group; Assess and evaluate the risk management process on a periodic basis; Set the risk appetite of the Group; and Monitor and implement action plans to mitigate high risk areas within the Group
The RMC also design the Project Managements Risks checklists which are used by subsidiary companies for the implementation of major projects. The General Manager of Internal Audit is the Secretary of the RMC and also the Administrator of the risk management software, RMSolution which are used to capture all the risk component, risk details, risk assessment, gross risk, net risk, management action plans, etc. 3. SHAREHOLDER AND INVESTOR RELATIONS The Company maintains a regular policy of disseminating information that is material for shareholders attention. In line with the regulatory requirements, various announcements, including quarterly financial results were made during the year via the Bursa Link, thus provide the shareholders and the investing public with an overview of the Groups performance and operations. The Company has established a website (www.zecon.com.my) which shareholders and members of the public can access to the corporate information and updates relating to the Company and for channelling their queries. At the Annual General Meeting, the Directors welcome the opportunity to gather the views of shareholders. Notices of each general meeting are issued in a timely manner to all shareholders, and in the case of special businesses, a statement explaining the effect of the proposed resolutions is provided. All Directors are available to respond to questions from shareholders during the meeting. The external auditors are also present to provide professional and independent clarifications on issues and concerns raised by the shareholders. Our Corporate Division Personnel will provide ongoing updates on the significant developments or activities of the Group with research/financial analysts, investors and institutional shareholders. The same presentation will also be made available to the media to capture a wider readership. However, discretion was exercised during these sessions to ensure sensitive information is not disclosed before the required announcement was released to Bursa Securities.
24

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, well-understood 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 pages 27 and 28 of the AC report. The Board also maintains an appropriate relationship with the Companys external auditors, through formal and transparent arrangement with the AC. These arrangements are stated on page 28 of the AC 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 dated 28 April 2009.
Statement 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 item 4 of this page. This Directors Responsibility Statement is made in accordance with resolution of the Board of Directors dated 28 April 2009.
25
Statement on Internal Control

This statement of Internal Control by the Board is made pursuant to paragraph 15.27(b) of the Bursa Malaysia Securities Berhads Listing Requirements (LR) with respect to the Groups compliance with the principles and the best practices for internal controls as provided in the Malaysian Code of Corporate Governance. This statement had been reviewed by the External Auditors, Ernst & Young as required under paragraph 15.24 of the LR. Internal Control The Board has implemented an internal control system that is designed to identify and manage the risks in meeting the Groups business objectives. The scope of control covers not only financial controls, but also operational and compliance controls as well as risk management. Due to the inherent limitations in any system of internal control, these systems are designed to manage, rather than eliminate the risks of failure to achieve business objectives. Accordingly, the system can only provide reasonable but not absolute assurance against material misstatements or losses. The key elements of the Groups internal control system are described as follows:1. Organisational structure with defined lines of responsibilities, delegation of authorities, segregation of duties and information flow for all aspects of the business. This is clearly documented in internal policies and operation procedures as set out in the Financial Policies and Procedures Manual. The manual is reviewed and updated by the management regularly. The implementation of risk management framework and risk checklist specifically for projects and the regular reviews by Risk Management Committee (RMC) enhance and also strengthen the internal controls in respect to the business operations of the Group. Regular audits to ensure compliance with all requirements of ISO9001:2000. The ISO 9001 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. Independent appraisals by internal auditors to ensure ongoing compliance with policies, procedures, standards and legislations whilst assessing the effectiveness of the Groups system of financial, compliance and operational controls. Policies and procedures on related party transactions (RPT) had been put in place and a review of RPT has been a permanent agenda in the Audit Committee (AC) Meetings.
2.
3.
4.
5.
Risk Management Framework The Group has in place an ongoing process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives. This is a continuous process, subject to regular review, evaluating and managing the significant risks by the RMC. The role of the RMC, comprising of Executive Directors and Head of Departments would include periodic reviews and reporting on the status of risk mitigation actions, new risks identified and risks that have changed characteristics and corresponding controls. On a half yearly basis, a consolidated risk management report summarising the significant risks and status of action plans of the respective divisions are presented to the AC for review, deliberation and recommendation for endorsement by the Board. Internal Audit The Internal Audit Division (IAD) of the Group carries out its functions independently and provides the AC and the Board with sufficient assurance of the adequacy and integrity of the internal controls system. On a quarterly basis, the IAD submits audit reports and plans status for review by the AC. Included in the reports are recommended corrective measures to address weaknesses in the internal controls. The IAD has been adequately resourced with experienced personnel. This statement does not include the state of internal controls in joint ventures and associated companies, which have not been dealt with as part of the Group. The Board is of the opinion that the current system of internal controls in place throughout the Group is sufficient to safeguard the Groups interest and is pleased to report that no major findings were discovered to indicate weaknesses in the internal controls.
26
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 2008. The Board has approved this Report via its circular resolution dated 28 April 2009. 1. Composition and Meeting Attendance In line with the Corporate Governance Code, all four (4) members of the AC are independent and Non-Executive Directors. Mr. Richard Kiew Jiat Fong (AC member) besides being a Member of the Malaysian Institute of accountant is also a Fellow Member of the following:i. ii. iii. The Institute of Chartered Accountants in England and Wales; The Association of Chartered Certified Accountants, United kingdom; and The Institute of Certified Public Accountants of Singapore.
In this respect, Zecon Berhad is in compliance with paragraph 15.10(1) of the Bursa Malaysia Securities Berhads Listing Requirement (LR). During the year, the AC held five (5) meetings. Committee members attendances at the meetings are as follows:-
Committee Members
Designation Feb. 18
Meetings Attendance Year 2008 Apr. 15 May 22 Absent Aug. 11 Nov. 21
Total
Poh Lik Gan Datu Dr. Hatta Bin Solhi Jamil Bin Jamaludin (Resigned on 1/6/2008) Dato Dr. Mohd Yahya Bin Nordin Richard Kiew Jiat Fong (Appointed w.e.f 1/6/2008)
Chairman Independent Director Independent Director Executive Director Independent Director Independent Director
Absent -
5/5 5/5 2/3 4/5 2/2
2.
Activities during the year In line with the terms of reference of the Committee, the following activities were carried out:(i) External Audit Review the scope of work and audit plan for the year. Review the results of the audit, the audited financial statements and the management letter. Attending to concerns raised by the auditor without the presence of the Executive Director Recommend for the Boards consideration the appointment of external auditors and the audit fees Review and approve the scope of work and audit plans for the year Review the internal audit reports and discussed on the managements action taken to improve the system of internal control and any outstanding matters. Review the quarterly unaudited financial results, year end audited financial statements and recommend to the Board for consideration and approval. Review the related party transactions entered into by Zecon Group of Companies. Monitor the progress of risk management framework of Zecon Group of Companies.
(ii)
Internal Audit
(iii) Financial Statements
(iv) Related party transaction (v) 3. Risk Management
Activities of the Internal Audit Division The Internal Audit Division was established on 1 April 2002 and it reports directly to the AC. For the year 2008, the activities of the internal audit are as follows:(i) (ii) 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.
27

(iii) Secretary to AC. (iv) 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 2008. 4. Terms of Reference (i) Composition a. b. c. d. The Committee shall be appointed by the Board and shall consist of not less than three (3) members; All the AC members must be non-executive directors and with a majority of them being independent directors; An alternate Director shall not be appointed as a member of the Committee; 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. ii. he must have passed the examinations specified in Part 1 of the 1st Schedule of the Accountants Act 1967; or 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. 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.
f.
(ii) Authority The Committee shall, in accordance with a procedure to be determined by the Board and at the cost of the Company:a. b. c. d. e. f. have the authority to investigate any matter within its terms of reference; have the resources which are required to perform its duties; have full and unrestricted access to any information pertaining to the Company; have direct communication channels with both the external and internal auditors; be able to obtain independent professional opinion or other advice; and 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.
28

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. 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. any related party transactions and conflict of interest situation that may arise within the Company or Group. verify the allocation of options to employees under the relevant criteria decided by the Option Committee. 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.
c.
d. e. f.
Where the Committee is of the view that any matter reported to the Board has not been satisfactorily resolved resulting in breach of the LR, the Committee must promptly report such matter to BMSB. 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.
29
Additional Compliance Information

1. Share Buy-backs The Company did not enter into any share buy-back transaction during the financial year 2008. 2. Options, Warrants or Convertible Securities There were no options, warrants or convertible securities issued during the financial year 2008. 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 2008. 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 2008. 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 2008. 6. Variation in results The variance between the unaudited results previously announced and the audited results for the financial year ended 31 December 2008 are as follows:Unaudited results (RM000) 1,008 (411) 597 Audited results (RM000) 1,010 (1) 1,009
Profit For The Year Minority Interest Net Profit For The Year After Minority Interest
The deviation in the Groups Net Profit After Minority Interest for the year ended 31 December 2008 arose from the difference in minority interest amount as reported by the Groups Auditor. 7. Profit Guarantee There were no transactions that require profit guarantee during the financial year ended 31 December 2008. 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 2008 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 2008. 10. Recurrent Related Party Transactions of a Revenue or Trading Nature (RRPT) The Company had on 09 June 2008 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 2008, the Company and its subsidiaries had entered into the following RRPT:Provider 1 Al-Quds Travel (Sarawak) Sdn Bhd 2 SCIB Concrete Manaufacturing Sdn Bhd 3 SCIB Concrete Manaufacturing Sdn Bhd Total Nature of Transaction Travel agency services Recipient Zecon Berhad Amount (RM) 12,272 % 0.007 Name of Connected Person Datuk Haji Zainal Abidin Bin Haji Ahmad & Haji Zainurin bin Haji Ahmad Datuk Haji Zainal Abidin Bin Haji Ahmad Datuk Haji Zainal Abidin Bin Haji Ahmad
Purchase of Roofing Tile Purchase of Culvert
Zecon Land Sdn Bhd Zecon Dredging Sdn Bhd
6,981
0.004
711,720
0.411
730,973
0.423
30
Zecon Berhads Corporate Social Responsibility Reporting 2008
Mohd Azlan Iskandar Worlds No12 squash player Under Zecons sponsorship since 2003
31

Zecon Groups 2nd Report on Corporate Social Responsibility (CSR)
This is the second year which we report on Zecon Group lever CSR. Last year we disclosed our CSR Definition, Objectives, Initiatives, Monitoring and Reporting. The activities in 2008 mainly focused on integrating our CSR work and to promote and involve our people in the entire organisation. This CSR Report offers an overview of the responsible business practice and social commitment which we hope in a long run will lift our brand value and recognition for our business and our society. Zecon CSR 2008 focus on people in the organization, not only should the organisation be responsible to the public, the community and the environment of its operations, it should also be responsible to its employees, to ensure that they are being treated fairly and just, and that they have access to their basic need and protect them from any hazardous conditions at all time.
Activities
2008 saw Zecons CSR continued to be under monitoring from top management, most CSR Initiatives were achieved except for the Trees Planting event which was being postponed. As Charity Begins At Home, it is vital to ensure that our people are fully aware of the importance of environmental issues like recycling and saving energy, understand our CSR Objectives and Policies. Our emphasis for the 12 months under review has been to cultivate the knowledge into habit with practice which will be implemented through our Zecon Green Initiatives programme which aimed to transform our people into environmental ambassadors so that they can bring positive influence and greater awareness to all those they encountered in their respective line of duties. The Group also maintains its ambition in academic field with the 2 main excellence awards and scholarship to University of Sarawak Malaysia (UNIMAS) and Curtin University of Technology. In sport, Zecon continued what it had accomplished since 2003 with the signing of the extension of corporate sponsorship with Mohd Azlan Iskandar for another year. The new extension continues to provide performance incentive bonuses based on tournament wins which is much needed for Azlan to stay competitive by participating in as many tournaments as possible. The welfare and safety of our employees is one of the key elements in the Zecons CSR definition. In October, Menara Zecon which houses Zecon Berhad Corporate Head Office is located, was declared a Smoke-Free Building. Smoking is strictly prohibited inside the entire building. The move, besides to support the Governments effort to eradicate smoking among Malaysians, also aimed to make our work place healthier for our people. Zecon Green Initiatives program has also been approved by the Board and will be kickoff in the 2nd Quarter of 2009. This program will give Zecon Group employees of all ranks opportunity to transform environmental knowledge and theories into real actions including but not limited to activities like 3 Rs (Reduce, Reuse & Recycle) practice; Say No To Plastic Bags campaign; and, Energy-Saving exercise. Zecon Group always believe that saving the environment of its community and the areas of its business activities must start from within the organization, our people must believe that our actions and effort will bring positive return in a greater scale eventually. With that, it is our priority to improve and to increase the internal knowledge sharing and internal reporting on CSR-related activities.
32
ZECONS CSR Activities & The Next Step

Activities in 2008 UNIMAS Scholarship Programme - Since 2006 ZECON BERHAD Excellence Awards for UNIMAS Faculty of Engineering students - Since 2003 Sponsoring Mohd Azlan Iskandar, Malaysias National & World 12th ranked Squash player - Since 2003 Providing Industries Training - Each year Zecon Berhad and its subsidiaries accepted and provide training for students under this program Love-In-The-Box Community Event - Zecon Groups staff of all ranks contributed gifts for underprivileged children in this yearly event. Next Step Maintain
Maintain
Maintain
Social
Maintain
Maintain
Adopting a school in our local community by year 2009
Zecon Berhad Group-Level Environmental Policies Environment
On going Resume Tree Planting event in association with non governmental/profit organization in 2009
Incorporating CSR into the Code of Conducts, including non-discriminatory policies Workplace No Smoking Workplace
On going
Maintain Conducting Group-Level Employees Survey & Dialog
33
Zecon Berhads Corporate Social Responsibility Framework
ZECONS CSR Definition ZECONs CSR is a commitment involving a series of voluntary initiatives which will benefit the local society, environment and workplace where our organization operates. ZECONS CSR forms an integral part of our organizations business processes and corporate strategies; it goes beyond charity, corporate press coverage and simply compliance of law. ZECONS CSR involves stakeholders and the commitment of the entire organisations workforce. ZECONS CSR Objectives To be an organization trusted by society To enrich our society and protect the environment in which we operate by carrying out our operations responsibly To improve our working environment by respecting diversity and human rights, offering equal opportunity and eradicating discrimination, all for improving the integrity of our workforce In a long run, to achieve brand recognition and tangible financial value (profitability and investment potential) through a successfully implemented CSR Programme ZECON CSR Initiatives Offering scholarship for University of Malaysia Sarawak (UNIMAS) and/or local universities needy achievers Providing academic excellence awards to encourage top achievers of UNIMAS and/or local universities, especially those from the Faculty of Engineering Sponsoring our CSR Icon, Mohd Azlan Iskandar, national and world top 12 ranked squash player, in pursuing his ambition Continuing to provide Workplace training for local universities students under Industries Training Programme Adopting local school by the year 2009 Maintaining our Tree Planting event as part of our overall green campaign Sponsoring Post Graduates of local universities to enter into Research & Development for greener solution for Contractors and Developers in reducing their environmental footprints ZECONS CSR Monitoring and Reporting CSR manager to monitor and document CSR activities and development systematically To produce annual CSR Report for the review and adoption of Zecon Berhads Board of Directors To disclose CSR Statement, activities and prospects in the Annual Report
We would welcome suggestions for further improvement of Zecon Groups CSR disclosure. headoffice@myzecon.com
34
Directors Report & Audited Financial Statements
University Malaysia Sarawak new campus
Directors Report Statement by Directors and Statutory Declaration Report of the Auditors Income Statements Balance Sheets Consolidated Statement of Changes in Equity Company Statement of Changes in Equity Consolidated Cash Flow Statement Company Cash Flow Statement Notes to the Financial Statements
36 41 42 43 44 45 47 48 50 52
35
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 2008. 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 17 to the financial statements. There have been no significant changes in the nature of the principal activities of the Group and of the Company during the financial year. Results Group RM 1,010,683 ========== 1,009,674 1,009 1,010,683 ========== Company RM (9,536,733) ========== (9,536,733) (9,536,733) ==========
Profit/(loss) for the year Attributable to: Equity holders of the Company Minority interests
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statement. In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature. Directors The names of the directors of the Company in office since the date of the last report and at the date of this report are: Datu Dr. Hatta Bin Solhi Datuk Haji Yusof @ Josree Bin Haji Yacob Datuk Haji Zainal Abidin Bin Haji Ahmad Haji Zainurin Bin Haji Ahmad Poh Lik Gan @ Poh Li Thong Dato Dr. Mohd. Yahya Bin Nordin Dato Haji Hamzah Bin Haji Ghazalli Dato Abdul Majit Bin Ahmad Khan Ir. Hui Kok Yuan Ir. Haji Abg. Azahari Bin Abg. Osman Jamil Bin Jamaludin Richard Kiew Jiat Fong Haji Saini Bin Haji Ali Ir. 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 37 to the financial statements. (Appointed on 9 June 2008)
(Appointed on 1 June 2008) (Appointed on 1 June 2008) (Appointed on 2 March 2009)
36
Directors Report
Remuneration and Nomination Committee The Remuneration and Nomination Committee carries out the annual review of the Groups remuneration policy in general, and determines the remuneration packages of Executive Directors of the Company. The Remuneration and Nomination Committee proposes, subject to the approval of the Board of Directors of the Company, the remuneration to be paid to each Director for his services as a Member of the Board as well as committees of the Board. The members of the Remuneration and Nomination Committee comprising the independent Non-Executive Directors of the Company who have served since the date of the last report are: Datu Dr. Hatta Bin Solhi Poh Lik Gan @ Poh Li Thong Dato Dr. Mohd. Yahya Bin Nordin Directors interests According to register of directors shareholdings, the interests of directors in office at the end of the financial year in shares and options over shares in the Company and its related corporations during the financial year were as follows: Number of Ordinary Shares of RM1 Each Exercise of Acquired Options Sold Chairman
At 1.1.2008 The Company Direct interest Datu Dr. Hatta Bin Solhi Datuk Haji Zainal Abidin Bin Haji Ahmad Poh Lik Gan @ Poh Li Thong Haji Zainurin Bin Haji Ahmad Hui Kok Yuan Jamil Bin Jamaludin Richard Kiew Jiat Fong The Company Indirect interest Datuk Haji Zainal Abidin Bin Haji Ahmad 37,093,300 20,000 7,413,000 40,000 525,000 250,000 40,000 -
At 31.12.2008
1,691,700 63,000
(5,449,500 ) (40,000 ) -
20,000 3,655,200 40,000 525,000 250,000 63,000
28,740,175
(144,000 )
65,689,475
At 1.1.2008 Dawla Capital Sdn. Bhd. Datuk Hj. Zainal Abidin Bin Hj. Ahmad - direct interest
Number of Ordinary Shares of RM1 Each Exercise of Acquired Options Sold
At 31.12.2008
250,000
250,000
37
Directors Report
Directors interests (contd.) Related company At 1.1.2008 Halifax Capital Berhad Datuk Haji Zainal Abidin Bin Haji Ahmad - direct interest Number of Ordinary Shares of RM1 Each Exercise of Acquired Options Sold
At 31.12.2008
2,515,200
2,515,200
Teknik PS Sdn. Bhd. Datuk Haji Zainal Abidin Bin Haji Ahmad - direct interest Zecon Construction Sdn. Bhd. Datuk Haji Zainal Abidin Bin Haji Ahmad - direct interest Sarmax Sdn. Bhd. Datuk Haji Zainal Abidin Bin Haji Ahmad - direct interest
Number of Ordinary Shares of RM1 Each At 1.1.2008 and 31.12.2008
34,000
49
30,000 Number of Ordinary Shares of RM1 Each At 1.1.2008 Granted Exercised At 31.12.2008
The Company Datuk Haji Zainal Abidin Bin Haji Ahmad Haji Zainurin Bin Haji Ahmad Hui Kok Yuan Haji Abg. Azahari Bin Abg. Osman Jamil Bin Jamaludin
Exercise Price RM
1.16 1.16 1.16 1.16 1.16
550,000 395,300 262,500 175,000 140,000
550,000 395,300 262,500 175,000 140,000
There were no other movements in shares and options of the Company or its related corporations during the financial year other than as disclosed. Datuk Haji Zainal Abidin Bin Haji 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.
38
Directors Report
Employees share option scheme The Zecon Berhad Employees Share Options Scheme (ESOS) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 15 February 2005. The ESOS was implemented on 22 March 2005 and is to be in force for a period of 5 years from the date of implementation. The salient features and other terms of the ESOS are as follows: (a) (b) The number of new ordinary shares to be offered under the ESOS shall be subject to a maximum of 15% of the issued and paid-up share capital of the Company at any time during the existence of the ESOS. Any employee, including the Executive Directors of the Zecon Berhad group, shall be eligible to participate in the ESOS if: (i) (ii) (c) (d) the employee has been confirmed in service as a full time Executive Director or employee on the date of offer; and where the employee is not a Malaysian citizen, he must be serving the Group on a full time basis or where he is serving under an employment contract, the contract should be for a duration of at least three years; and
No option shall be granted for less than 100 shares. The price payable upon exercise of the options under the ESOS shall be at a discount of not more than 10% from the five market days weighted average market price of the Companys shares immediately preceding the date of offer or at the par value of the shares, whichever is higher.
On 16 October 2007, a total of additional 8,684,800 new ordinary shares of RM1.00 each were issued and granted listing and quotation. Other statutory information (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(ii) (b)
At the date of this report, the directors are not aware of any circumstances which would render: (i) (ii) the amount written off for bad debts or the amount of the provision for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; and the values attributed to the current assets in the financial statements of the Group and of the Company misleading.
(c) (d) (e)
At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. As at the date of this report, there does not exist: (i) (ii) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
(f )
In the opinion of the directors: (i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the financial year in which this report is made.
(ii)
39
Directors Report
Significant events Details of significant events are disclosed in Note 39 to the financial statements. 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 28 April 2009
Datu Dr. Hatta Bin Solhi
Datuk Haji Zainal Abidin Bin Haji Ahmad
40
Statement by Directors pursuant to Section 169(15) of the Companies Act, 1965

We, Datu Dr. Hatta Bin Solhi and Datuk Haji Zainal Abidin Bin Haji 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 43 to 99 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 2008 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 28 April 2009
Datu Dr. Hatta Bin Solhi
Datuk Haji Zainal Abidin Bin Haji Ahmad
Statutory Declaration pursuant to Section 169(16) of the Companies Act, 1965

I, Jamil Bin Jamaludin, being the Director primarily responsible for the financial management of Zecon Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on pages 43 to 99 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 28 April 2009 Before me,
Jamil Bin Jamaludin
41
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 2008 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 43 to 99. 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 2008 and of their financial performance and cash flows for the year then ended. Report on other legal and regulatory requirements In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following: (a) (b) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act. We are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the accounts of the subsidiaries were not subject to any qualification and did not include any comment required to be made under Section 174(3) of the Act.
(c)
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: 28 April 2009
YONG VOON KAR 1769/04/10 (J/PH) Partner
42
Income Statements
for the year ended 31 December 2008

Note Revenue Cost of sales Gross profit Other income Administrative expenses Other expenses Operating profit/(loss) Finance costs Share of profit/(loss) of associates Profit/(loss) before taxation Income tax expense Profit/(loss) for the year 6 5 3 4 2008 RM Group 2007 RM 78,561,157 (57,308,839 ) 21,252,318 20,313,504 (15,585,280 ) (2,234,247 ) 23,746,295 (15,388,452 ) (1,066,333 ) 7,291,510 (3,066,386 ) 4,225,124 ============ 2008 RM Company 2007 RM
157,172,769 (129,073,632 ) 28,099,137 12,634,280 (10,465,821 ) (15,879,439 ) 14,388,157 (13,295,070 ) 250,374 1,343,461 (332,778 ) 1,010,683 ============
124,126,108 (114,902,880 ) 9,223,228 8,512,759 (8,430,255 ) (12,562,403 ) (3,256,671 ) (7,969,637 ) (11,226,308 ) 1,689,575 (9,536,733 ) ============
39,025,100 (36,838,758 ) 2,186,342 4,242,683 (9,325,289 ) (1,043,676 ) (3,939,940 ) (10,027,205 ) (13,967,145 ) 230,415 (13,736,730 ) ============
7 10
Attributable to: Equity holders of the Company Minority interests
1,009,674 1,009 1,010,683 ============
4,177,720 47,404 4,225,124 ============
(9,536,733 ) (9,536,733 ) ============
(13,736,730 ) (13,736,730 ) ============
Earnings per share (sen): Basic, for profit for the year Diluted, for profit for the year 11 11 0.92 ============ 0.92 ============ 3.72 ============ 3.74 ============
The accompanying notes form an integral part of the financial statements.
43
Balance Sheets
as at 31 December 2008
Note ASSETS Non-current assets Property, plant and equipment Prepaid land lease payments Land held for development Intangible assets Investment in subsidiaries Investment in associates Investment in jointly controlled entity Other investments Deferred tax assets 13 14 15(a) 16 17 18 19 20 31 2008 RM Group 2007 RM 2008 RM Company 2007 RM
Current assets Development costs Inventories Amount due from customers for contract work Trade receivables Other receivables Amount due from related companies Cash and bank balances
39,050,096 1,195,873 126,311,486 14,838,586 779,312 4,861,201 5,216,743 13,024,190 205,277,487 13,967,293 5,586,939 45,245,011 104,660,505 11,038,445 2,774,110 89,370,695 272,642,998 477,920,485 ============
25,729,282 1,222,716 126,311,486 15,367,215 9,821,770 1 5,256,571 13,290,000 196,999,041 9,971,402 6,879,620 45,414,671 79,874,734 54,931,894 2,656,191 18,845,698 218,574,210 415,573,251 ============
24,723,459 1,195,873 55,544,905 175,000 1 5,216,743 86,855,981 3,482,000 7,876,897 25,828,373 4,566,015 170,977,117 43,044,245 255,774,647 342,630,628 ============
21,084,254 1,222,716 48,691,148 11,541,128 1 5,256,571 87,795,818 4,322,000 28,966,785 20,346,368 12,625,430 97,074,850 14,690,164 178,025,597 265,821,415 ============
15(b) 21 22 23 24 25 26
TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to equity holders of the Company Share capital Share premium Other reserves Retained earnings/(accumulated losses)
32 32 33 34
119,106,150 3,558,768 5,107,215 45,203,789 172,975,922 3,656,043 176,631,965
119,106,150 3,558,768 5,102,806 44,194,115 171,961,839 3,431,757 175,393,596 137,014,886 39,437,467 11,293,213 36,805,333 11,857,782 3,770,974 103,164,769 240,179,655 415,573,251 ============
119,106,150 3,558,768 5,109,686 (18,846,436) 108,928,168 108,928,168 87,015,954 49,496,067 4,821,456 27,966,801 1,876,553 62,435,629 90,000 146,686,506 233,702,460 342,630,628 ============
119,106,150 3,558,768 5,109,686 (9,309,703) 118,464,901 118,464,901 76,054,227 29,271,028 29,569,940 6,912,866 5,062,147 486,306 71,302,287 147,356,514 265,821,415 ============
Minority interests Total equity Non-current liabilities Borrowings Current liabilities Borrowings Amount due to customers for contract work Trade payables Other payables Amount due to related companies Current tax payable 27
148,108,094 73,830,552 16,529,343 52,392,826 7,121,937 3,305,768 153,180,426 301,288,520 477,920,485 ============
27 22 29 30 25
Total liabilities TOTAL EQUITY AND LIABILITIES
44
Attributable to equity holders of the Company Non-Distributable Distributable interests equity
Minority
Total
Share capital (Note 32) RM RM RM RM RM RM RM (Note 33) (Note 33) (Note 33) (Note 34) RM premium reserve reserves reserve earnings Total
Share
Foreign exchange
Other
Revaluation
Retained
Note RM
(Note 32)
At 1 January 2008 3,558,768 (6,880 ) 4,416,854 692,832 44,194,115 171,961,839
119,106,150
3,431,757
175,393,596
Foreign currency translation: 4,409 1,009,674 1,009,674 4,409 4,409 4,409 4,409 1,009,674 1,014,083 1,009 1,009 1,200,000 (976,723) 4,409 4,409 1,010,683 1,015,092 1,200,000 (976,723)
Group
Net expense recognised directly in equity
Profit for the year
Consolidated Statement of Changes in Equity
Total recognised income and expense for the year
Acquisition of additional interest in subsidiary
Disposal of partial interest in subsidiary
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
============ ============ ============ ============ ============ ============ ============ ============ ============
45
46
Attributable to equity holders of the Company Non-Distributable Distributable interests equity Minority Total Share premium (Note 32) RM RM RM RM RM RM RM RM (Note 33) (Note 33) (Note 33) (Note 34) reserve reserves reserve earnings Total Share Foreign exchange Other Revaluation Retained RM
capital
Note
(Note 32)
At 1 January 2007 24,253,470 (6,207 ) 692,832 42,449,497 155,726,672
88,337,080
2,479,816
158,206,488
Foreign currency translation: Group (673 ) 4,177,720 4,177,720 (2,433,102 ) (673 ) (673 ) (673) (673) 4,177,720 4,177,047 (2,433,102)
47,404 47,404 -
(673 ) (673 ) 4,225,124 4,224,451 (2,433,102 )
Net expense recognised directly in equity
Profit for the year
Total recognised income and expense for the year
Dividends
12
Consolidated Statement of Changes in Equity
Issue of ordinary shares: 1,389,568 (22,084,270) 4,416,854 10,074,368 4,416,854 904,537 10,074,368 4,416,854 904,537
Pursuant of ESOS
8,684,800
Bonus issue -
22,084,270
Issue of warrants
Disposal of partial interest in subsidiary
3,558,768 (6,880 ) 4,416,854 692,832 44,194,115 171,961,839 3,431,757 175,393,596
At 31 December 2007
119,106,150
============ ============ ============ ============ ============ ============ ============ ============ ============
Company Statement of Changes in Equity

Non-Distributable
Distributable
Note
Share capital (Note 32) RM 119,106,150
Share premium (Note 32) RM 3,558,768
(Accumulated losses) Other retained reserves earnings/ (Note 33) (Note 34) RM RM 5,109,686 (9,309,703)
Total equity RM 118,464,901
At 1 January 2008 Loss for the year, representing total recognised income and expense for the year
3,558,768 ============
5,109,686 ============
(9,536,733) (18,846,436) ============
(9,536,733) 108,928,168 ============
At 31 December 2008
119,106,150 ============
At 1 January 2007 Loss for the year, representing total recognised income and expense for the year Dividends Issue of ordinary shares pursuant to: Bonus issue Employee Share Option Scheme (ESOS) Issue of warrants At 31 December 2007 12
88,337,080
24,253,470
692,832
6,860,129
120,143,511
(13,736,730) (2,433,102)
(13,736,730) (2,433,102)
22,084,270 8,684,800 119,106,150 ============
(22,084,270) 1,389,568 3,558,768 ============
4,416,854 5,109,686 ============
(9,309,703) ============
10,074,368 4,416,854 118,464,901 ============
47
Consolidated Cash Flow Statement

Note Cash Flows From Operating Activities Profit before taxation Adjustments for: Amortisation of toll concession Amortisation of prepaid land lease payments Depreciation of property, plant and equipment Gain on disposal of subsidiaries Gain on disposal of property, plant and equipment Gross dividend income Impairment in value of investments Interest expense Interest income Loss on disposal of other investments Loss on foreign exchange rate Property, plant and equipment written-off Provision for doubtful debts Provision for stocks obsolescence Reversal of provision for doubtful debts Share of results of associates Operating profit before working capital changes Decrease in land held for development Increase in development costs Decrease in inventories Increase in amount due to customers for contract work Decrease/(increase) in receivables Increase in payables Decrease in amount due to related companies Cash generated from operations Interest paid Interest received Taxation (paid)/refunded Net cash generated from/(used in) operating activities 2008 RM 1,343,461 176,412 26,843 1,278,437 (673,608 ) (30,999 ) 9,292,832 13,295,070 (761,620 ) 2,329 4,409 1,600 5,882,687 382,399 (250,374 ) 29,969,878 (3,995,891 ) 910,282 8,437,183 13,224,615 10,851,648 (117,919 ) 59,279,796 (13,295,070 ) 761,620 (532,173 ) 46,214,173 2007 RM 7,291,510 264,017 26,843 2,789,759 (15,957,601 ) (1,938,678 ) (20,685 ) 15,388,452 (207,761 ) 13,830 74,326 1,509,388 (362,475 ) 1,066,333 9,937,258 17,917,040 (3,166,017 ) 180,790 1,881,731 (93,063,345 ) 70,928,761 4,616,218 (15,388,452 ) 207,761 921,623 (9,642,850 )
17(a)
48
Consolidated Cash Flow Statement

Note Cash Flows From Investing Activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Net cash inflow on acquisition of a subsidiary Investment in jointly controlled entities Proceeds on disposal of other investments Proceeds on disposal of subsidiaries, net of cash received Net dividends received Net cash (used in)/generated from investing activities Cash Flows From Financing Activities Repayment of term loan Repayment of hire purchase payables Repayment of bankers acceptances and revolving credit facilities Proceeds from drawdown of term loan Proceeds from issuance of shares Proceeds from issuance of shares to minority interests Proceeds from issuance of warrants Dividends paid (Increase)/decrease in fixed deposits pledged Net cash used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 26 (i) 17(b) 2008 RM (16,939,145) 31,000 477 (4,861,200) 37,499 49,000 (21,682,369) (13,745,521) (10,192,189) (11,609,400) 84,050,000 1,200,000 (62,837,662) (13,134,772) 11,397,032 3,112,647 14,509,679 ============ 2007 RM (1,590,192 ) 1,615,097 532,834 20,040,376 15,100 20,613,215 (5,486,374 ) (1,880,254 ) (19,776,600 ) 8,336,800 10,074,368 4,416,854 (2,433,102 ) 776,098 (5,972,210 ) 4,998,155 (1,885,508 ) 3,112,647 ============
17(a)
(i)
During the year, the Group acquired property, plant and equipment by the following means:
2008 RM
2007 RM 1,590,192 781,418 2,371,610 ============
Cash Hire purchase and finance lease arrangements
16,939,145 693,100 17,632,245 ============
49
Company Cash Flow Statement

Note Cash Flows From Operating Activities Loss before taxation Adjustments for: Amortisation of prepaid land lease payment Depreciation of property, plant and equipment Gain on disposal of property, plant and equipment Gross dividend income Impairment in value of investment in associate Interest expense Interest income Loss on disposal of other investments Provision for doubtful debts Loss on foreign exchange Operating profit/(loss) before working capital changes Decrease in inventories Decrease/(increase) in amount due from customers for contract work Decrease in receivables (Decrease)/increase in payables Decrease in amount due to related companies Cash generated from operations Interest paid Interest received Taxation refunded Net cash generated from operating activities Cash Flows From Investing Activities Purchase of property, plant and equipment Proceeds from disposal of property, plant and equipment Additional investment in subsidiaries Proceeds from disposal of other investments Proceeds from disposal of subsidiaries and associates Net dividends received Net cash (used in)/generated from investing activities (i) 2008 RM (11,226,308) 26,843 1,053,166 (30,999) 11,366,128 7,969,637 (571,196) 2,329 1,183,946 9,773,546 840,000 26,738,278 1,393,464 (6,639,452) (16,528,785) 15,577,051 (7,969,637) 571,196 1,293,269 9,471,879 (5,519,306) 31,000 (6,902,757) 37,499 49,000 (12,304,564) 2007 RM (13,967,145 ) 26,843 1,337,212 (1,672,428 ) (20,685 ) 10,027,205 (147,090 ) 13,830 949,267 75,000 (3,377,991 ) (3,017,038 ) 21,269,153 27,048,467 (18,617,418) 23,305,173 (10,027,205) 147,090 1,630,009 15,055,067 (267,507 ) 1,278,870 (149,000 ) 532,834 15,100 1,410,297
50
Company Cash Flow Statement

Note Cash Flows From Financing Activities Repayment of term loan Repayment of hire purchase payables Repayment from bankers acceptances and revolving credit facilities Proceeds from drawdown of term loan Proceeds from issuance of shares Proceeds from issuance of warrants Dividends paid Increase in fixed deposits pledged Net cash generated from/(used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 26 2008 RM (13,745,521) (9,748,616) (11,609,400) 70,000,000 (26,714,378) 8,182,085 5,349,400 (676,763) 4,672,637 ============ 2007 RM (5,486,374 ) (1,602,916 ) (19,776,600 ) 8,336,800 10,074,368 4,416,854 (2,433,102 ) (4,079,631 ) (10,550,601 ) 5,914,763 (6,591,526 ) (676,763 ) ============
(i)
During the year, the Company acquired property, plant and equipment by the following means:
2008 RM
2007 RM 267,507 267,507 ============
Cash Hire purchase and finance lease arrangements
5,519,306 5,519,306 ============
51
Notes to the Financial Statements - 31 December 2008

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 17 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 28 April 2009. 2. Significant Accounting Policies 2.1 Basis of preparation The financial statements comply with the provisions of the Companies Act, 1965 and Financial Reporting Standards (FRSs) in Malaysia. At the beginning of the current financial year, the Group and the Company had adopted new and revised FRSs which are mandatory for the current financial year as described fully in Note 2.3. The financial statements of the Group and of the Company have also been prepared on a historical basis. The financial statements are presented in Ringgit Malaysia (RM). 2.2 Summary of Significant Accounting Policies (a) Subsidiaries and Basis of Consolidation (i) Subsidiaries Subsidiaries are entities over in which the Group has ability to control the financial and operating policies so as to obtain benefits from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity. In the Companys separate financial statements, investments in subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. Intra-group transactions, balances and resulting unrealised gains are eliminated on consolidation and the consolidated financial statements reflect external transactions only. Unrealised losses are eliminated on consolidation unless costs cannot be recovered. The gain or loss on disposal of a subsidiary company is the difference between the net disposal proceeds and the Groups share of its net assets together with any unamortised balance of goodwill and exchange differences. (ii) Basis of Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries are prepared for the same reporting date as the Company. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated financial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.
52

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (a) Subsidiaries and Basis of Consolidation (contd.) (ii) Basis of Consolidation (contd.) 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. Any excess of the cost of the acquisition over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill. Any excess of the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss. Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group. It is measured at the minorities share of the fair value of the subsidiaries identifiable assets and liabilities at the acquisition date and the minorities share of changes in the subsidiaries equity since then. (b) Associates Associates are entities in which the Group has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but not in control or joint control over those policies. Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting. Under the equity method, the investment in associate is carried in the consolidated balance sheet at cost adjusted for post-acquisition changes in the Groups share of net assets of the associate. The Groups share of the net profit or loss of the associate is recognised in the consolidated profit or loss. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes. In applying the equity method, unrealised gains and losses on transactions between the Group and the associate are eliminated to the extent of the Groups interest in the associate. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Groups net investment in the associate. The associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate. Goodwill relating to an associate is included in the carrying amount of the investment and is not amortised. Any excess of the Groups share of the net fair value of the associates identifiable assets, liabilities and contingent liabilities over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Groups share of the associates profit or loss in the period in which the investment is acquired. When the Groups share of losses in an associate equals or exceeds its interest in the associate, including any longterm interests that, in substance, form part of the Groups net investment in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate. The most recent available financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not coterminous with those of the Group, the share of results is arrived at from the last audited financial statements available and management financial statements to the end of the accounting period. Uniform accounting policies are adopted for like transactions and events in similar circumstances. In the Companys separate financial statements, investments in associates are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.
53

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (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). In the Companys separate financial statements, investments in jointly controlled entities are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss. (d) Intangible Assets (i) Goodwill Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Groups interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following the initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. (ii) Toll Concession Zecon Toll Concessionaire Sdn. Bhd. (ZTCSB),a wholly-owned subsidiary of the Company, has entered into a Concession Agreement with the State Government of Sarawak on the 17 July 1998. In this agreement, the State Government of Sarawak commissioned ZTCSB under a privatization Scheme to design, build, operate and maintain a dual three lane carriageway (Second Kuching Bridge crossing) over the Sarawak River in Kuching, Sarawak. As part of the consideration of the construction agreement, the State Government of Sarawak granted ZTCSB the right to collect toll for the usage over the Second Kuching Bridge for a period up to 2037 and a further 19 years at the option of the State Government of Sarawak. The Group considers the cost of the toll concession as the amount forgone in respect of the consideration receivable from the State Government of Sarawak under the Concession Agreement, and is amortised over the concession period based on the following formula: Traffic volume to date Estimated total traffic volume of the concession period Cost of toll concession Accumulated amortisation
less
The information on traffic volume is derived based on independent traffic consultants reports and the carrying value of the toll concession is subject to an annual review.
54

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (e) Property, Plant and Equipment and Depreciation All items of property, plant and equipment are initially recorded at cost. Subsequent costs are included in the assets carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred. Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Certain items of property, plant and equipment of the Group and of the Company have not been revalued since 1999. The directors have not adopted policy of regular revaluations of such assets and no later valuation has been recorded. As permitted under the transitional provisions of IAS 16 (Revised): Property, Plant and Equipment, these assets continue to be stated at their 1999 valuation less accumulated depreciation. The above transitional provisions are available only on the first application of the MASB Approved Accounting Standard IAS 16 (Revised): Property, Plant and Equipment which is effective for periods ending on or after 1 September 1998. By virtue of this transitional provision, an entity that had recorded its property, plant and equipment at valued amounts but had not adopted a policy of revaluation has been allowed to continue carrying those assets on the basis of their previous revaluations subject to continuity in its depreciation policy and the requirement to write down the assets to their recoverable amounts for impairment adjustments. The transitional provisions will remain in force until and unless the entity chooses to adopt a revaluation policy in place of cost policy. When that happens, FRS 116 (which supersedes IAS 16) would require revaluations to be carried out at regular intervals. Any revaluation surplus is credited to the revaluation reserve included within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in the income statement, in which case the increase is recognised in the income statement to the extent of the decrease previously recognised. A revaluation deficit is first offset against unutilised previously recognised revaluation surplus in respect of the same asset and the balance is thereafter recognised in the income statement. Upon disposal or retirement of an asset, any revaluation reserve relating to the particular asset is transferred directly to retained earnings. Depreciation of property, plant and equipment is provided for on a straight-line basis to write off the cost of each asset to its residual value over the estimated useful life at the following annual rates: % Buildings 2 Plant, machinery and equipment 10 - 15 Motor vehicles 20 Office furniture, fittings, equipment and renovation 10 - 33 1/3 Work-in-progress is not depreciated as these assets are not available for use. The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in the income statement and the unutilised portion of the revaluation surplus on that item is taken directly to retained earnings. (f) Land Held For Development And Development Costs (i) Land held for development Land held for development consists of land where no development activities have been carried out or where development activities are not expected to be completed within the normal operating cycle. Such land is classified within non-current assets and is stated at cost less any accumulated impairment losses. Land held for development is reclassified as development costs at the point when development activities have commenced and where it can be demonstrated that the development activities can be completed within the normal operating cycle.
55

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (f) Land Held For Development And Development Costs (contd.) (ii) Property development costs 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. Where the financial outcome of a development activity cannot be reliable estimated, property development revenue is recognised only to the extent of property development costs incurred that is probable will be recoverable, and property development costs on properties sold are recognised as an expense in the period in which they are incurred. Any expected loss on a development project, including costs to be incurred over the defects liability period, is recognised as an expense immediately. Property development costs not recognised as an expense are recognised as an asset, which is measured at the lower of cost and net realisable value. The excess of revenue recognised in the income statement over billings to purchasers is classified as accrued billings within trade receivables and the excess of billings to purchasers over revenue recognised in the income statement is classified as progress billings within trade payables. (g) Construction Contracts Where the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by using the stage of completion method. The stage of completion is measured by reference to the proportion of contract costs incurred for work performed to date to the estimated total contract costs. Where the outcome of a construction contract cannot be reliably estimated, contract revenue is recognised to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognised as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately. When the total of costs incurred on construction contracts plus, recognised profits (less recognised losses), exceeds progress billings, the balance is classified as amount due from customers on contracts. When progress billings exceed costs incurred plus, recognised profits (less recognised losses), the balance is classified as amount due to customers on contracts. (h) Impairment of Non-financial Assets The carrying amounts of assets, other than investment property, construction contract assets, property development costs, inventories, deferred tax assets and non-current assets (or disposal groups) held for sale, 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.
56

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (h) Impairment of Non-financial Assets (contd.) 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 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.
57

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (j) Leases (contd.) (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. Lease payments are apportioned between the finance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period. The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment, as disclosed in Note 2.2(e). (iii) Operating Leases - the Group as Lessee Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis. In the case of a lease of land and buildings, the minimum lease payments or the up-front payments made are allocated, whenever necessary, between the land and the buildings elements in proportion to the relative fair values for leasehold interests in the land element and buildings element of the lease at the inception of the lease. The up-front payment represents prepaid land lease payments and are amortised on a straight-line basis over the lease term. (iv) Operating Leases - the Group as Lessor Assets leased out under operating leases are presented on the balance sheet according to the nature of the assets. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. (k) Income Tax Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the profit or loss for the year, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirers interest in the net fair value of the acquirees identifiable assets, liabilities and contingent liabilities over the cost of the combination.
58

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (l) Employee Benefits (i) Short term benefits Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. (ii) Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities or funds and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (EPF). Some of the Groups foreign subsidiaries also make contributions to their respective countries statutory pension schemes. (iii) Equity compensation benefits The Zecon Berhad Employees Share Option Scheme (ESOS) allows the Groups employees to acquire shares of the Company. No compensation cost or obligation is recognised. When the options are exercised, equity is increased by the amount of the proceeds received. (m) Foreign Currencies (i) Functional and presentation currency The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency. (ii) Foreign currency transactions In preparing the financial statements of the individual entities, transactions in currencies other than the entitys functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary 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.
59

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (m) Foreign Currencies (contd.) (ii) Foreign currency transactions (contd.) 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. (iii) Foreign operations The results and financial position of foreign operations that have a functional currency different from the presentation currency (RM) of the consolidated financial statements are translated into RM as follows: (n) Assets and liabilities for each balance sheet presented are translated at the closing rate prevailing at the balance sheet date; Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions; and All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: (i) Property development Revenue from sale of properties is accounted for by the stage of completion method as described in Note 2.2(f ). (ii) Construction contracts Revenue from construction and other contracts is accounted for by the percentage of completion method as described in Note 2.2(g). (iii) Toll revenue Toll revenue is accounted for as at when toll is chargeable for the usage of the Second Kuching Bridge crossing. (iv) Sale of goods Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. (v) Dividend income Dividend income is recognised when the Groups right to receive payment is established. (vi) Interest income Interest income is recognised on a time proportion basis that reflects the effective yield on the asset.
(o)
Routine Maintenance Costs Routine maintenance costs on the toll bridge shall be charged to the income statement when incurred.
60

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (p) Financial Instruments Financial instruments are recognised in the balance sheet when the Group has become a party to the contractual provisions of the instrument. Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual agreement. Interest, dividends and gains and losses relating to a financial instrument classified as a liability, are reported as expense or income. Distributions to holders of financial instruments classified as equity are recognised directly in equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. (i) Cash and cash equivalents For the purposes of the Cash Flow Statement, cash and cash equivalents include cash on hand and at bank, deposits at call and short term highly liquid investments which have an insignificant risk of changes in value, net of bank overdrafts. (ii) Other non-current investments Non-current investments other than investments in subsidiaries, associates and jointly controlled entities are stated at cost less impairment losses. On disposal of an investment, the difference between net disposal proceeds and its carrying amount is recognised in the profit or loss. (iii) Receivables Receivables are carried at anticipated realisable values. Bad debts are written off when identified. An estimate is made for doubtful debts based on a review of all outstanding amounts as at the balance sheet date. (iv) Payables Payables are stated at cost which is the fair value of the consideration to be paid in the future for goods and services received. (v) Interest-bearing borrowings All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. (vi) Equity instruments Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared. The transaction costs of an equity transaction are accounted for as a deduction from equity, net of tax. Equity transaction costs comprise only those incremental internal costs directly attributable to the equity transaction which would otherwise have been avoided. The consideration paid, including attributable transaction costs on repurchased ordinary shares of the Company that have not been cancelled, are classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in profit or loss on the sale, re-issuance or cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales consideration and the carrying amount is recognised in equity. (vii) Derivative financial instruments Derivative financial instruments are not recognised in the financial statements.
61

2. Significant Accounting Policies (contd.) 2.2 Summary of Significant Accounting Policies (contd.) (q) Provisions Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as finance cost. (r) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 2.3 Changes in accounting policies and effects arising from adoption of new and revised FRSs On 1 January 2008, the Group and the Company adopted the following revised FRS, Amendment to FRS and Interpretations: FRS 107 FRS 111 FRS 112 FRS 118 FRS 120 FRS 134 FRS 137 Amendment to FRS 121 IC Interpretation 1 IC Interpretation 2 IC Interpretation 5 IC Interpretation 6 IC Interpretation 7 IC Interpretation 8 : : : : : : : : : : : : : : Cash Flow Statements Construction Contracts Income Taxes Revenue Accounting for Government Grants and Disclosure of Government Assistance Interim Financial Reporting Provisions, Contingent Liabilities and Contingent Assets The Effects of Changes in Foreign Exchanges Rates - Net investments in a Foreign Operation Changes in Existing Decommissioning, Restoration and Similar Liabilities Members Shares in Co-operative Entities and Similar Instruments Rights to Interests arising from Decommissioning, Restoration and Environment Rehabilitation Funds Liabilities arising from Participating in a Specific Market - Waste Electrical and Electronic Equipment Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinflationary Economies Scope of FRS 2
The revised FRS, Amendment to FRS and Interpretations above do not have significant impact on the financial statements of the Group or of the Company.
62

2. Significant Accounting Policies (contd.) 2.4 Standards and Interpretations issued but not yet effective (contd.) At the date of authorisation of these financial statements, the following new FRS and Interpretations were issued but not yet effective and have not been applied by the Group and the Company: Effective for financial periods beginning FRS and Interpretations on or after FRS 4 FRS 7 FRS 8 FRS 139 IC Interpretation 9 IC Interpretation 10 : : : : : : Insurance Contracts Financial Instruments : Disclosures Operating Segments Financial Instruments : Recognition and Measurement Reassessment of Embedded Derivatives Interim Financial Reporting and Impairment 1 January 2010 1 January 2010 1 July 2009 1 January 2010 1 January 2010 1 January 2010
The new FRS and Interpretations above are expected to have no significant impact on the financial statements of the Group or of the Company upon their initial application except for the changes in disclosures arising from the adoption of FRS 8. The Group and the Company are exempted from disclosing the possible impact, if any, to the financial statements upon the initial application of FRS 7 and FRS 139. 2.5 Significant accounting estimate and judgement (a) Key source of estimate uncertainty Property development The Group recognises property development revenue and expenses in the income statement by using the stage of completion 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. Depreciation of property, plant and equipment Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management estimates the useful lives of the property, plant and equipment to be within 3 to 10 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. 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.
63

3. Revenue 2008 RM Construction contracts Toll concession Property development Others 147,755,075 9,195,921 221,773 157,172,769 ========= 126,360,788 2,360,038 352,806 129,073,632 ========= 761,620 11,872,660 12,634,280 ======== 2008 RM 16,391,490 339,257 16,730,747 Group Company
2007 RM
2008 RM 124,126,108 124,126,108 ========= 114,902,880 114,902,880 ========= 571,196 7,941,563 8,512,759 ======== 2008 RM 7,973,544 237,233 106,122 8,316,899
2007 RM
4.
Cost of Sales Construction contract costs Toll concession Property development Others
37,971,914 8,612,397 31,850,000 126,846 78,561,157 ======== 35,694,743 2,234,936 19,261,041 118,119 57,308,839 ======== 207,761 20,685 20,085,058 20,313,504 ======== Group 2007 RM
39,025,100 39,025,100 ======== 36,838,758 36,838,758 ======== 147,090 20,685 4,074,908 4,242,683 ======== Company 2007 RM
5.
Other Income Interest income Gross dividend income (Note 7) Others
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 22) Interest expense (Note 7) 7. Profit/(Loss) Before Taxation
17,475,265 415,528 17,890,793
11,295,420 356,807 106,122 11,758,349
(3,435,677) 13,295,070 ========
(2,502,341) 15,388,452 ========
(347,262) 7,969,637 ========
(1,731,144) 10,027,205 ========
The following amounts have been included in arriving at profit/(loss) before taxation: 2008 RM 8,804,509 374,500 176,412 26,843 135,500 7,900 1,278,437 (673,608) Group 2007 RM 2008 RM 3,867,251 374,500 26,843 60,000 4,600 1,053,166 Company 2007 RM
Employee benefits expense (Note 8) Non-Executive Directors remuneration (Note 9) Amortisation of toll concession (Note 16) Amortisation of prepaid land lease payments (Note 14) Auditors remuneration Statutory audit - current year - under/(over) provision in prior year Depreciation of property, plant and equipment (Note 13) Gain on disposal of subsidiaries (Note 17(a)) Gross dividend income (Note 5)
6,180,323 69,300 264,017 26,843 128,404 (1,300) 2,789,759 (15,957,601) (20,685)
4,208,683 69,300 26,843 60,000 1,337,212 (20,685)
64

7. Profit/(Loss) Before Taxation (contd.) The following amounts have been included in arriving at profit/(loss) before taxation: (contd.) Group 2008 RM Hire of plant and machinery Impairment in value of investments in associate Interest expense (Note 6) Interest income Loss on disposal of other investments Loss on foreign exchange Management fee paid Management fee received Property, plant and equipment written-off Provision for doubtful debts Provision for stocks obsolescence Reversal of provision for doubtful debts Gain on disposal of property, plant and equipment Rental expense for land and buildings Rental income from land and buildings 8. Employee Benefits Expense Group 2008 RM Salaries, allowances, bonus and wages Directors remuneration Provident fund contributions Social security costs 2007 RM 2008 RM Company 2007 RM 9,292,832 13,295,070 (761,620) 2,329 4,409 12,342 (128,519) 1,600 5,882,687 382,399 (30,999) 908,222 (118,342) ======== 2007 RM 13,277 15,388,452 (207,761) 13,830 74,326 5,642 (29,341) 1,509,388 (362,475) (1,938,678) 728,970 (213,672) ======= 2008 RM 11,366,128 7,969,637 (571,196) 2,329 12,342 (60,000) 1,183,946 (30,999) 636,432 (158,452) ====== Company 2007 RM 13,277 10,027,205 (147,090) 13,830 75,000 5,642 949,267 (1,672,428) 661,136 (213,071) =======
5,913,949 2,133,889 700,370 56,301 8,804,509 =======
3,544,387 2,183,580 413,845 38,511 6,180,323 =======
1,727,464 1,925,641 199,923 14,223 3,867,251 =======
1,800,392 2,183,580 209,524 15,187 4,208,683 =======
Number of employees at the end of the year
288 =======
202 ========
55 =======
59 =======
Included in employee benefits expense of the Group and of the Company are Executive Directors remuneration amounting to RM2,133,889 (2007: RM2,183,580) and RM1,925,641 (2007: RM2,183,580) respectively as further disclosed in Note 9.
65

9. Directors Remuneration Group 2008 RM Executive Directors remuneration Fees Other emoluments 2007 RM 2008 RM Company 2007 RM
82,400 2,051,489 2,133,889
99,961 2,083,619 2,183,580
82,400 1,843,241 1,925,641
99,961 2,083,619 2,183,580
Non-Executive Directors remuneration Fees Other emoluments
Total Directors remuneration (Note 37)
105,700 268,800 374,500 2,508,389 =======
69,300 69,300 2,252,880 =======
105,700 268,800 374,500 2,300,141 =======
69,300 69,300 2,252,880 =======
The details of remuneration by Directors of the Company during the year are as follows: Group 2008 RM Executive: Salaries, bonus and other emoluments Fees Defined contribution plan 1,831,133 82,400 220,356 2,133,889 105,700 268,800 2,508,389 ======= 2007 RM 1,885,163 99,961 198,456 2,183,580 69,300 2,252,880 ======= 2008 RM 1,622,885 82,400 220,356 1,925,641 105,700 268,800 2,300,141 ======= Company 2007 RM 1,885,163 99,961 198,456 2,183,580 69,300 2,252,880 =======
Non-Executive: Fees Other emoluments
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 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 2 1 2 1 ==== Executive 2007 1 3 1 ==== Non-Executive 2008 2007 2 5 ==== 3 ====
66

10. Income Tax Expense Group 2008 RM Current income tax: Malaysian income tax Overprovision in prior years 2,350,155 (2,283,187) 66,968 37,000 236,810 (8,000) 265,810 332,778 ======= 2007 RM 3,310,444 (58) 3,310,386 (236,000) (8,000) (244,000) 3,066,386 ======== 2008 RM 90,000 (1,779,575) (1,689,575) (1,689,575) ======= Company 2007 RM 5,585 5,585 (236,000) (236,000) (230,415) =======
Deferred tax (Note 31): Under/(over)provision in prior years Relating to origination and reversal of temporary differences Relating to changes in tax rates
Total income tax expense
Domestic income tax is calculated at the Malaysian statutory tax rate of 26% (2007: 27%) of the estimated assessable profit for the year. The domestic statutory tax rate will be reduced to 25% from the current years rate of 26% with effect from the year of assessment 2009. The computation of deferred tax as at 31 December 2008 has reflected these changes. 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: 2008 RM Group Profit before taxation Taxation at Malaysian statutory tax rate of 26% (2007: 27%) Effect of income subject to tax rate of 20% (2007: 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 Under/(over)provision of deferred tax in prior years Overprovision of income tax expense in prior years Effect of utilisation of previously unabsorbed capital allowances Income tax expense for the year Company Loss before taxation Taxation at Malaysian statutory tax rate of 26% (2007: 27%) Effect of expenses not deductible for tax purposes Income not subject to tax Deferred tax assets not recognised on unabsorbed capital allowances and business losses Overprovision of deferred tax in prior years Overprovision of income tax expense in prior years Income tax expense for the year (11,226,308) ======== (2,918,840) 1,870,570 1,138,270 (1,779,575) (1,689,575) ======= (13,967,145) ======== (3,771,129) 974,423 (44,898) 2,847,189 (236,000) (230,415) ======= 1,343,461 ======= 349,300 (67,727) 3,149,438 (3,484) (842,025) 110,877 37,000 (2,283,187) (117,414) 332,778 ======= 7,291,510 ======== 1,968,707 (77,974) 3,532,962 483,088 (4,395,323) 2,237,293 (236,000) (58) (446,309) 3,066,386 ======= 2007 RM
67

10. Income Tax Expense (contd.) Tax losses and unabsorbed capital allowances are analysed as follows: Group 2008 RM (i) Unutilised tax losses carried forward (Note 31) 18,565,000 ======== 9,906,000 ======= 2007 RM 28,170,000 ======== 6,351,000 ======= 2008 RM 9,336,000 ======== 7,418,000 ======= Company 2007 RM 17,248,000 ======= 4,656,000 =======
(ii) Unabsorbed capital allowances carried forward (Note 31)
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. 2008 RM 1,009,674 ======= 110,060,450 ========= 2008 Sen Basic earnings per share for: Profit for the year (b) Diluted For the purpose of calculating diluted earnings per share, the profit for the year attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares in issue during the financial year have been adjusted for the dilutive effects of all potential ordinary shares, and share options granted to employees. 2008 RM 1,009,674 ======= 110,060,450 ========= 2008 Sen Diluted earnings per share for: Profit for the year 0.92 ==== 2007 RM 4,177,720 ======== 111,567,933 ======== 2007 Sen 3.74 ==== 0.92 ==== 2007 RM 4,177,720 ======== 112,305,841 ======== 2007 Sen 3.72 ====
Profit attributable to ordinary equity holders of the Company
Weighted average number of ordinary shares in issue
Profit attributable to ordinary equity holders of the Company
Weighted average number of ordinary shares in issue
68

12. Dividends Dividends in respect of year 2008 2007 RM RM Recognised during the year: Interim dividend for 2008: Nil (2007: 3% less 27% taxation, on 111,100,550 ordinary shares (2.19 sen net per ordinary share)) ======= 13. Property, Plant and Equipment Plant, machinery Buildings and equipment RM RM Group 2008 Cost At 1 January 2008 Additions Disposals Transfers At 31 December 2008 Accumulated depreciation and impairment At 1 January 2008 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 22) 648,100 115,224 115,224 12,689,940 1,988,378 224,355 1,764,023 4,329,355 1,327,361 459,695 867,666 3,884,256 878,867 479,163 399,704 21,551,651 4,309,830 1,278,437 3,031,393 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 47,280,933 17,632,245 (232,114) 64,681,064 Office furnitures, Motor fittings, equipment vehicles and renovation RM RM Dividends recognised in year 2008 2007 RM RM
2,443,102 =======
=======
2,443,102 =======
Total RM
Disposals Transfers At 31 December 2008 Net carrying amount At 31 December 2008
763,324
(19,950) 14,658,368
(229,713) 19,950 5,446,953
(800) 4,762,323
(230,513) 25,630,968
5,888,183 =======
24,636,852 ========
4,520,670 =======
4,004,391 =======
39,050,096 ========
69

13. Property, Plant and Equipment (contd.) Plant, machinery Buildings and equipment RM RM Group 2007 Cost At 1 January 2007 Additions Disposals Disposal of subsidiaries (Note 17(a)) At 31 December 2007 8,261,656 (2,346,149) 5,915,507 30,659,723 744,080 (107,756) (2,898,608) 28,397,439 8,770,162 791,087 (948,153) (1,949,539) 6,663,557 6,924,944 836,443 (68,801) (1,388,156) 6,304,430 54,616,485 2,371,610 (3,470,859) (6,236,303) 47,280,933 Motor vehicles RM Office furnitures, fittings, equipment and renovation Total RM RM
Accumulated depreciation and impairment At 1 January 2007 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 22) Disposals Disposal of subsidiaries (Note 17(a)) At 31 December 2007 Net carrying amount At 31 December 2007 5,267,407 ======= 15,707,499 ======== 2,334,202 ======= 2,420,174 ======= 25,729,282 ======== 732,917 164,999 164,999 (249,816) 648,100 10,846,234 3,818,025 957,752 2,860,273 (66,824) (1,907,495) 12,689,940 5,737,740 1,389,222 997,138 392,084 (919,865) (1,877,742) 4,329,355 4,098,391 781,649 669,870 111,779 (43,388) (952,396) 3,884,256 21,415,282 6,153,895 2,789,759 3,364,136 (1,279,893) (4,737,633) 21,551,651
70

13. Property, Plant and Equipment (contd.) Vessels Plants, machinery and Buildings and equipment dredging RM RM RM Company 2008 Cost At 1 January 2008 Additions Disposals At 31 December 2008 Accumulated depreciation At 1 January 2008 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 22) Disposals At 31 December 2008 Net carrying amount At 31 December 2008 2007 Cost At 1 January 2007 Additions Disposals At 31 December 2007 Accumulated depreciation At 1 January 2007 Depreciation charge for the year Recognised in income statement (Note 7) Capitalised in construction costs (Note 22) Disposals At 31 December 2007 Net carrying amount At 31 December 2007 5,267,407 ======= 12,951,704 ======== 805,000 ======= 1,006,078 ======= 1,054,065 ======== 21,084,254 ======== 732,917 164,999 164,999 (249,816) 648,100 7,794,266 2,798,756 588 2,798,168 10,593,022 385,000 210,000 210,000 595,000 2,955,051 751,200 562,391 188,809 (222,652) 3,483,599 2,544,121 432,306 399,234 33,072 2,976,427 14,411,355 4,357,261 1,337,212 3,020,049 (472,468) 18,296,148 8,261,656 (2,346,149) 5,915,507 23,544,726 23,544,726 1,400,000 1,400,000 4,580,175 156,892 (247,390) 4,489,677 3,919,877 110,615 4,030,492 41,706,434 267,507 (2,593,539) 39,380,402 5,888,183 ======= 16,830,864 ======== 595,000 ======= 560,636 ======= 848,776 ======= 24,723,459 ======== 648,100 115,224 115,224 763,324 10,593,022 721,280 1,276 720,004 11,314,302 595,000 210,000 210,000 805,000 3,483,599 515,941 443,661 72,280 (229,713) 3,769,827 2,976,427 317,655 283,005 34,650 3,294,082 18,296,148 1,880,100 1,053,166 826,934 (229,713) 19,946,535 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 Office furnitures Motor fittings, equipment vehicles and renovation Total RM RM RM
71

13. Property, Plant and Equipment (contd.) (a) During the financial year, the Group and the Company acquired property, plant and equipment at aggregate costs of RM17,632,245 (2007: RM2,371,610) and RM5,519,306 (2007: RM267,507), respectively, of which RM993,938 (2007: RM781,418) and RM Nil (2007: 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: Group 2008 RM Plant, machinery and equipment Motor vehicles 4,027,356 1,862,820 5,890,176 ======== 2007 RM 13,296,831 1,742,342 15,039,173 ======== 2008 RM 3,643,731 374,410 4,018,141 ======== Company 2007 RM 12,869,582 787,747 13,657,329 ========
Details of the terms and conditions of the hire purchase and finance lease arrangements are disclosed in Note 28. Certain buildings of the Group and of the Company, with net carrying amounts of RM1,646,807 (2007: RM1,681,970), are pledged for borrowings as disclosed in Note 27. 14. Prepaid land lease payments Group/Company 2008 2007 RM RM At 1 January Amortisation for the year (Note 7) At 31 December Analysed as: Long term leasehold land Short term leasehold land 595,156 600,717 1,195,873 ======= 608,666 614,050 1,222,716 ======= 1,222,716 (26,843) 1,195,873 ======= 1,249,559 (26,843) 1,222,716 =======
15.
Land Held for Property Development and Developments Costs (a) Land Held for Property Development Short- term Freehold Land RM Group 2008 Cost At 1 January/31 December 2008 Accumulated impairment losses At 1 January/31 December 2008 Carrying amount at 31 December 2008 1,159,125 ======= 125,152,361 ========= 126,311,486 ========= 1,159,125 125,152,361 126,311,486 Long-term Leasehold Land RM
Total RM
72

15. Land Held for Property Development and Developments Costs (contd.) (a) Land Held for Property Development (contd.) Short- term Freehold Land RM Group 2007 Cost At 1 January 2007 Disposal At 31 December 2007 Accumulated impairment losses At 1 January/31 December 2007 Carrying amount at 31 December 2007 1,159,125 ======= 125,152,361 ========= 126,311,486 ========= 1,159,125 1,159,125 143,069,401 (17,917,040) 125,152,361 144,228,526 (17,917,040) 126,311,486 Long-term Leasehold Land RM
Total RM
Leasehold land with carrying values of RM33,714,909 (2007: RM33,714,909) have been pledged as security for banking facilities granted to the Group (Note 27). (b) Development Costs Leasehold Land RM Group 2008 Cumulative development costs At 1 January 2008 Costs incurred during the year At 31 December 2008 Cumulative costs recognised in income statement At 1 January/31 December 2008 Development costs at 31 December 2008 2007 Cumulative development costs At 1 January 2007 Costs incurred during the year At 31 December 2007 Cumulative costs recognised in income statement At 1 January/31 December 2007 Development costs at 31 December 2007 4,837,174 ======= 5,134,228 ======= 9,971,402 ======== 4,837,174 4,837,174 3,332,476 1,801,752 5,134,228 8,169,650 1,801,752 9,971,402 4,837,174 ======= 9,130,119 ======== 13,967,293 ======== 4,837,174 4,837,174 5,134,228 3,995,891 9,130,119 9,971,402 3,995,891 13,967,293 Development Costs RM Total RM
73

16. Intangible Assets Goodwill RM Group Cost At 1 January 2007 Disposal of partial interest in subsidiary At 31 December 2007 Disposal of partial interest in subsidiary At 31 December 2008 Accumulated amortisation and impairment At 1 January 2007 Amortisation (Note 7) At 31 December 2007 Amortisation (Note 7) At 31 December 2008 Net carrying amount At 31 December 2007 At 31 December 2008 17. Investment in Subsidiaries Company 2008 2007 RM RM 55,544,905 48,691,148 ======== ======== 3,180,289 ======= 2,828,072 ======= 12,186,926 ======== 12,010,514 ======== 15,367,215 ======== 14,838,586 ======== 666,089 264,017 930,106 176,412 1,106,518 666,089 264,017 930,106 176,412 1,106,518 3,519,040 (338,751) 3,180,289 (352,217) 2,828,072 13,117,032 13,117,032 13,117,032 16,636,072 (338,751) 16,297,321 (352,217) 15,945,104 Toll Concessions RM Total RM
Unquoted shares at cost Details of the subsidiaries are as follows:
Name of subsidiaries Held by the Company Zecon Toll Concessionaire Sdn. Bhd.* Zecon Water Corporation Sdn. Bhd.* Zecon Land Sdn. Bhd.* Zecon Geotechnical Services Sdn. Bhd.*
Country of incorporation
Principle activities
Proportion of ownership interest 2008 2007 % % 100 100 100 100
Malaysia Malaysia Malaysia Malaysia
Operation and maintenance of toll 100 bridge and collection of toll revenue Water related services Property development Foundation engineering and piling 100 100 100
74

17. Investment in Subsidiaries (contd.) Proportion of ownership interest 2008 2007 % % 96 55 100 100 100 70 51 100 96 55 100 100 100 70 100 51
Name of subsidiaries Held by the Company Zecon Resources Sdn. Bhd.* Teknik PS Sdn. Bhd.* Zecon International Limited* Zecon Piling Sdn. Bhd.* Zecon Mutiara Sdn. Bhd.* Zecon Dredging Sdn. Bhd.* Zecon Energy Sdn. Bhd.* Zecon Assets Sdn. Bhd.* (formerly known as Zecon-Esec Engineering Sdn. Bhd.)
Malaysia Malaysia British Virgin Islands Malaysia Malaysia Malaysia Malaysia Malaysia
Property development Dormant Foundation engineering and construction Dormant Construction of medium and low cost houses Sand, dredging, earthworks and services Energy management and other energy related services Management, maintenance and rental services in relation to machineries, motor vehicles and hardware of every descriptions Dormant Dormant Dormant Dormant Dormant Special purpose vehicle for financing purposes Dormant Dormant
Zecon Australia Pty. Ltd.** Zecon Construction Sdn. Bhd.* Zecon Construction (Sarawak) Sdn. Bhd.* Zecon Designtech Sdn. Bhd.* Zecon Fab Sdn. Bhd.** Matang Highway Sdn. Bhd. * Zecon MidEast Ltd. * Zecon (Saudi Arabia) International Limited *
Australia Malaysia Malaysia Malaysia Malaysia Malaysia Labuan Labuan
100 51 100 100 51 100 100 100
100 51 100 -
75

17. Investment in Subsidiaries (contd.) Proportion of ownership interest 2008 2007 % %
Name of subsidiaries Held through subsidiaries:
Subsidiary of Zecon Resources Sdn. Bhd. Sarmax Sdn. Bhd.* Subsidiary of Teknik PS Sdn. Bhd. TPS Medicare Sdn. Bhd.* Subsidiary of Zecon Mutiara Sdn. Bhd. Agrowell Quarry Sdn. Bhd.* Zecon Designtech Sdn. Bhd.*(i) Subsidiary of Zecon Land Sdn. Bhd. IR Concept (M) Sdn. Bhd.* Zecon Designtech Sdn. Bhd.*(ii) ZPM Satu Sdn. Bhd.* Zecon Petra Jaya Sdn. Bhd.* Zalpoint Tanah Putih Sdn. Bhd.* Zecon Demak Jaya Sdn. Bhd.* Subsidiary of Zecon International Ltd. IR Concept (M) Sdn. Bhd.* Malaysia Supplier of electrical or electronic equipment and services Property sales and management Property development 100 Malaysia Malaysia Malaysia Malaysia Malaysia Malaysia Supplier of electrical or electronic equipment and services Dormant Property sales and management Property development Property development Property development 51 100 100 50 100 51 100 100 Malaysia Malaysia Dormant Dormant 100 100 50 Malaysia Dormant 100 100 Malaysia Dormant 50.1 50.1
ZPM Satu Sdn. Bhd.* Zalpoint Tanah Putih Sdn. Bhd.* * ** (i) (ii)
Malaysia Malaysia
100 100
Audited by Ernst & Young, Malaysia Audited by firms of auditors other than Ernst & Young The remaining 50% is held by Zecon Land Sdn. Bhd. The remaining 50% is held by Zecon Mutiara Sdn. Bhd.
During the year, 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.
76

17. Investment in Subsidiaries (contd.) (a) Disposal of subsidiaries 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. On 19 December 2007, the Group disposed of its 100% equity interest in Zecon Engineering Works Sdn. Bhd. for a total consideration of RM1,000,000 by way of cash. The subsidiary was previously reported as part of the construction segment. On 31 December 2007, the Group disposed of its 49% equity interest in Zecon Petra Jaya Sdn. Bhd. for a total consideration of RM17,600,000 by way of cash. The subsidiary is reported as part of the property development segment. On 24 July 2007, the Group disposed of its 100% equity interest in Zecon Energy International Limited for a total consideration of RM570,000 by way of cash. The subsidiary was previously reported as part of the others segment. 2008 RM Property, plant and equipment Land held for development Receivables Cash and bank balances Payables Amount due to bankers Lease payables Amount due to customers for contract works Amount due to related companies Deferred tax liability Net (liabilities)/assets disposed Attributable goodwill 10,476 37,697 (28,833) (996,165) (976,825) 352,217 (624,608) 49,000 673,608 ======== Disposal proceeds settled by: Cash 49,000 ===== 2007 RM 1,498,670 16,520,306 90,665,549 123,813 (67,260,805) (991,900) (70,001) (20,018,834) (15,756,150) (1,837,000) 2,873,648 338,751 3,212,399 19,170,000 15,957,601 ======== 19,170,000 ========
Total disposal proceeds Gain on disposal to the Group
Cash inflow arising on disposals: Cash consideration Cash and cash equivalents of subsidiaries disposed Net cash inflow of the Group (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. 49,000 49,000 ===== 19,170,000 870,376 20,040,376 ========
77

18. Investment in Associates Group 2008 RM Quoted shares in Malaysia, at cost Unquoted shares at cost Shares of post-acquisition reserves Impairment in value of investment 12,366,128 175,000 12,541,128 604,312 13,145,440 (12,366,128) 779,312 ======== 2007 RM 12,366,128 175,000 12,541,128 (1,719,358) 10,821,770 (1,000,000) 9,821,770 ======== 2008 RM 12,366,128 175,000 12,541,128 12,541,128 (12,366,128) 175,000 ======== Company 2007 RM 12,366,128 175,000 12,541,128 12,541,128 (1,000,000) 11,541,128 ========
Group 2008 RM Market value of quoted shares ======== 2007 RM 2,604,388 ======== 2008 RM ========
Company 2007 RM 2,604,388 =======
Impairment in value of investment has been fully provided for the quoted shares due to the unfavourable market value and the delisting of the investment during the year. Details of the associates are as follows: Proportion of ownership interest 2008 2007 % % 35.0 35.0 Proportion of voting 2008 2007 % % 35.0 35.0
Name of entities L.C.S. Trading Co. Sdn. Bhd.
Country of incorporation Malaysia
Principle activities Trading in hardware, building materials and related products Assembly and sale of electrical and electronic products
Halifax Capital Berhad
Malaysia
25.5
25.5
25.5
25.5
The summarised financial information of the Groups investment in associates are: Group 2008 RM Assets and liabilities Current assets Non-current assets Total assets Current liabilities Non-current liabilities Total liabilities Results Revenue Profit/(loss) for the year 2,179,321 476,224 2,655,545 ======= 1,822,030 18,491 1,840,521 ======= 5,073,909 250,374 ======== 2007 RM 2,504,928 4,656,104 7,161,032 ======== 5,817,491 365,786 6,183,277 ======== 8,761,135 (1,066,333) ========
78

18. Investment in Associates (contd.) 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. 19. Investment in Jointly Controlled Entity Group 2008 RM 2007 RM 2008 RM Company 2007 RM
Unquoted share at cost Share of post-acquisition reserves
Less: Accumulated impairment losses
4,861,201 4,861,201 4,861,201 ========
1 1 1 =====
1 1 1 =====
1 1 1 =====
Details of the jointly controlled entity are as follows: Proportion of ownership interest 2008 2007 % % 50 50 49 -
Name of entity NS Water-Zecon JV Sdn. Bhd. Ramco-Zecon WLL
Country of incorporation Malaysia Qatar
Principle activities Dormant Dormant
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 2008 2007 RM RM Assets and liabilities Current assets/Total assets 950 950 ===== ===== Current liabilities/Total liabilities Results Expenses 8,456 ===== 1,486 ===== 6,238 ===== 1,608 =====
79

20. Other Investments Group/Company 2008 2007 RM RM Quoted shares at cost Impairment in value of investment 316,743 316,743 400,000 716,743 4,500,000 5,216,743 ======= 241,325 ======= 1,556,571 (1,200,000) 356,571 400,000 756,571 4,500,000 5,256,571 ======= 342,348 =======
Unquoted shares at cost
Subordinated Bonds Total
Market value of quoted shares
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 27 to the financial statements. 21. Inventories Group 2008 RM At cost: Materials and supplies Finished goods Spare parts Properties held for sale Others 5,586,939 5,586,939 ======= 93,230 268,779 20,390 6,426,939 70,282 6,879,620 ======= 3,482,000 3,482,000 ======= 4,322,000 4,322,000 ======= 2007 RM 2008 RM Company 2007 RM
22.
Amount Due from/(to) Customers for Contract Work Group 2008 RM 469,179,540 36,724,571 505,904,111 (477,188,443) 2007 RM 340,031,534 17,356,592 357,388,126 (186,666,668) 2008 RM 268,582,693 23,267,762 291,850,455 (288,795,014) Company 2007 RM 151,523,264 16,132,039 167,655,303 (138,688,518)
Construction contract costs incurred to date Attributable profit
Less: Progress billings Value of payments in kind received under the Concession Agreement - land - toll concession
28,715,668 ========= 45,245,011 (16,529,343) 28,715,668 =========
(123,482,968) (13,117,032) 34,121,458 ========= 45,414,671 (11,293,213) 34,121,458 ========
3,055,441 ======== 7,876,897 (4,821,456) 3,055,441 ========
28,966,785 ========= 28,966,785 28,966,785 ========
Amount due from customers for contract work Amount due to customers for contract work
80

22. Amount Due from/(to) Customers for Contract Work (contd.) Group 2008 RM Retention sum on contracts, included within trade payables (Note 29) Retention sum on contracts, included within trade receivables (Note 23) 5,784,263 ======== 2,333,073 ======== 2007 RM 634,779 ======== 2,238,400 ======== 2008 RM 4,781,476 ======== 800,735 ======== Company 2007 RM 174,774 ======== 800,735 ========
The costs incurred to date as construction contracts include the following charges made during the year: Group 2008 RM Depreciation of property, plant and equipment (Note 13) Hire of equipment, plant and machinery Rental expense of buildings Interest expense (Note 6) Directors remuneration 23. Trade Receivables Trade receivables Progress billings receivables Provision for doubtful debts 108,231,439 4,899,116 (10,803,123) 102,327,432 2,333,073 104,660,505 ========= 75,321,471 7,994,915 (5,680,052) 77,636,334 2,238,400 79,874,734 ========= 25,262,019 4,027,489 (4,261,870) 25,027,638 800,735 25,828,373 ======== 16,462,512 7,116,784 (4,033,663) 19,545,633 800,735 20,346,368 ======== 3,031,393 2,611,894 157,940 3,435,677 471,200 ======= 2007 RM 3,364,136 1,072,937 75,180 2,502,341 ======= 2008 RM 826,934 347,262 262,951 ======= Company 2007 RM 3,020,049 1,048,987 40,000 1,731,144 =======
Retention sums (Note 22) Trade receivables, net
Included in trade receivables of the Group and the Company is an amount of RM8,146,390 (2007: RM8,146,390) 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. 24. Other Receivables Group 2008 RM Other receivables Deposits Prepayments Amount due from joint ventures 8,162,256 600,368 1,340,542 935,279 11,038,445 ======== 2007 RM 47,512,491 754,120 1,285,308 5,379,975 54,931,894 ======== 2008 RM 3,099,466 354,972 176,298 935,279 4,566,015 ======== Company 2007 RM 6,703,879 324,567 217,009 5,379,975 12,625,430 ========
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.
81

25. Amount Due from/(to) Related Companies Group 2008 RM Amount due from - subsidiaries - associates 2,774,110 2,774,110 2,774,110 ======= 2007 RM 2,656,191 2,656,191 2,656,191 ======= Company 2008 2007 RM RM 168,203,007 2,774,110 170,977,117 (62,435,629) 108,541,488 ======== 94,418,659 2,656,191 97,074,850 (5,062,147) 92,012,703 ========
Amount due to subsidiaries
The amounts due from subsidiaries and associates are unsecured, interest-free and have no fixed term of repayment. The amount due to subsidiaries and associates are unsecured, interest-free and have no fixed term of repayment except for an amount of RM3,982,835 (2007: RM3,903,708) due to a subsidiary, which bears interest at 3.50% (2007: 3.50%) per annum. 26. Cash and Bank Balances Group 2008 RM Cash on hand and at banks Deposits with licensed banks Cash and bank balances 16,835,212 72,535,483 89,370,695 ======== 2007 RM 9,147,877 9,697,821 18,845,698 ======== Company 2008 2007 RM RM 6,998,170 36,046,075 43,044,245 ======== 5,358,467 9,331,697 14,690,164 ========
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. Included in the deposits with licensed banks is a Sinking Fund Account, amounting to RM35,216,254, created for the purpose of capturing the progressive monthly remittance of funds from the project revenue account. Such funds shall be utilised towards the repayment of the Sukuk Musharakah. For the purpose of the cash flow statements, cash and cash equivalents comprise the following as at the balance sheet date: Group 2008 RM Cash on hand and at banks Bank overdrafts (Note 27) Total cash and cash equivalents 16,835,212 (2,325,533) 14,509,679 ======== 2007 RM 9,147,877 (6,035,230) 3,112,647 ======== Company 2008 2007 RM RM 6,998,170 (2,325,533) 4,672,637 ======== 5,358,467 (6,035,230) (676,763) ========
82

27. Borrowings Group 2008 RM Short-term borrowings Secured: Term loan (i) Term loan (ii) Term loan (iii) 178,974 357,787 5,108,737 5,645,498 35,000,000 993,880 23,830,000 2,134,521 67,603,899 1,028,684 361,302 3,336,800 4,726,786 3,518,230 20,780,000 2,391,051 31,416,067 178,974 357,787 5,108,737 5,645,498 35,000,000 993,880 1,630,036 43,269,414 1,028,684 361,302 3,336,800 4,726,786 3,518,230 11,000,000 2,004,612 21,249,628 2007 RM 2008 RM Company 2007 RM
Sukuk Musharakah Bank overdrafts Revolving credits Hire purchase payables (Note 28)
Unsecured: Bank overdrafts Revolving credits Bankers acceptances 1,331,653 3,500,000 1,395,000 6,226,653 73,830,552 ========= 2,517,000 3,500,000 2,004,400 8,021,400 39,437,467 ========= 1,331,653 3,500,000 1,395,000 6,226,653 49,496,067 ======== 2,517,000 3,500,000 2,004,400 8,021,400 29,271,028 ========
Long term borrowings Secured: Term loan (i) Term loan (ii) Term loan (iii) Term loan (iv) 981,327 78,188 5,000,000 6,059,515 35,000,000 60,000,000 2,048,579 103,108,094 1,154,806 368,942 5,000,000 14,200,000 20,723,748 60,000,000 11,291,138 92,014,886 981,327 78,188 5,000,000 6,059,515 35,000,000 956,439 42,015,954 1,154,806 368,942 5,000,000 14,200,000 20,723,748 10,330,479 31,054,227
Sukuk Musharakah Bai Bithaman Ajil Islamic Debt Securities Hire purchase payables (Note 28)
Unsecured: Term loan (v) 45,000,000 148,108,094 ========= 45,000,000 137,014,886 ========= 45,000,000 87,015,954 ======== 45,000,000 76,054,227 ========
83

27. Borrowings (contd.) Total borrowings Bank overdrafts (Note 26) Revolving credits Bankers acceptances Term loans Sukuk Musharakah Bai Bithaman Ajil Islamic Debt Securities Hire purchase payables (Note 28) 2,325,533 27,330,000 1,395,000 56,705,013 70,000,000 60,000,000 4,183,100 221,938,646 ========= 6,035,230 24,280,000 2,004,400 70,450,534 60,000,000 13,682,189 176,452,353 ========= 2,325,533 3,500,000 1,395,000 56,705,013 70,000,000 2,586,475 136,512,021 ========= 6,035,230 14,500,000 2,004,400 70,450,534 12,335,091 105,325,255 =========
Term loan (i) is secured by a deed of assignment over certain landed properties of the Company. Term loan (ii) is secured by way of assignment of certain plant and machinery. Term loan (iii) is secured by a way of assignment over contract proceeds receivable by the Company and a legal charge over the project and sinking fund accounts. Term loan (iv) is secured by way of pledging the shares of a subsidiary, assignment over a designated account of a subsidiary and assignment of rights over specific agreement and certain landed properties. This security was subsequently discharged on 13 May 2008. Term loan (v) is obtained under a Primary Collateralised Loan Obligation Programme and partly secured by Subordinated Bonds as disclosed in Note 20. 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 26. 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 RM993,880 (2007: RM3,518,230) are secured by certain landed properties of a subsidiary. The revolving credits of the Group and of the Company amounting to RM23,830,000 and RM Nil (2007: RM20,780,000 and RM11,000,000), respectively, 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. 28. Hire Purchase Payables Group 2008 RM Future minimum lease payments: Not later than 1 year Later than 1 year and not later than 2 years Later than 2 years and not later than 5 years 2,313,495 1,418,500 741,135 4,473,130 2,742,890 2,098,790 9,402,514 14,244,194 1,720,606 881,668 100,650 2,702,924 2,270,592 1,711,393 8,735,340 12,717,325 2007 RM 2008 RM Company 2007 RM
84

28. Hire Purchase Payables (contd.) Group 2008 RM Less: Future finance charges Present value of finance lease liabilities (290,030) 4,183,100 ======== 2007 RM (562,005) 13,682,189 ======== 2008 RM (116,449) 2,586,475 ======== Company 2007 RM (382,234) 12,335,091 ========
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 2,134,521 1,343,815 704,764 4,183,100 (2,134,521) 2,048,579 ======== 2,391,051 1,948,372 9,342,766 13,682,189 (2,391,051) 11,291,138 ======== 1,630,036 858,419 98,020 2,586,475 (1,630,036) 956,439 ======== 2,004,612 1,613,752 8,716,727 12,335,091 (2,004,612) 10,330,479 ========
Less: Amount due within 12 months Due after 12 months
The Group has finance leases and hire purchase contracts for various items of property, plant and equipment (see Note 13). Other information on financial risks of hire purchase and future lease liabilities are disclosed in Note 38. 29. Trade Payables Group 2008 RM Trade payables Due to subcontractors on contracts Retention sums (Note 22) 34,964,841 11,643,722 5,784,263 52,392,826 ======== 2007 RM 20,502,639 15,667,915 634,779 36,805,333 ======== 2008 RM 22,367,627 817,698 4,781,476 27,966,801 ======== Company 2007 RM 13,727,251 15,667,915 174,774 29,569,940 =======
The normal trade credit terms granted to the Group and to the Company range from 30 to 90 days. 30. Other Payables Group 2008 RM Sundry payables Deposits Accruals 3,786,809 253,292 3,081,836 7,121,937 ======== 2007 RM 7,637,866 261,552 3,958,364 11,857,782 ======== 2008 RM 293,802 31,702 1,551,049 1,876,553 ======== Company 2007 RM 5,007,450 37,202 1,868,214 6,912,866 =======
85

31. Deferred Tax Group 2008 RM At 1 January Recognised in income statement (Note 10) Disposal of subsidiary (Note 17(a)) At 31 December Presented after appropriate offsetting as follows: Deferred tax assets Deferred tax liabilities (14,046,237) 1,022,047 (13,024,190) ======== (13,500,000) 210,000 (13,290,000) ======== ====== ====== (13,290,000) 265,810 (13,024,190) ======== 2007 RM (11,209,000) (244,000) (1,837,000) (13,290,000) ======== 2008 RM ====== Company 2007 RM 236,000 (236,000) ======
The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are as follows: Deferred tax liabilities of the Group: Property plant and equipment RM At 1 January 2008 Recognised in income statement At 31 December 2008 At 1 January 2007 Recognised in income statement Disposal of subsidiary (Note 17(a)) At 31 December 2007 Deferred tax liabilities of the Company: At 1 January and 31 December 2008 At 1 January 2007 Recognised in income statement At 31 December 2007 Deferred tax assets of the Group: Unused tax losses and unabsorbed capital allowances RM (546,237) (546,237) ========= ========= Unabsorbed industrial building allowance RM (13,500,000) (13,500,000) ========= (13,500,000) (13,500,000) ========= ======= 219,844 (219,844) ======= ======= 247,925 (247,925) ======= ======= 467,769 (467,769) ======= 820,047 820,047 ======= 2,056,844 (219,844) (1,837,000) ======= Revaluation of land RM 210,000 (8,000) 202,000 ======= 465,925 (255,925) 210,000 ======= Total RM 210,000 812,047 1,022,047 ======= 2,522,769 (475,769) (1,837,000) 210,000 =======
Other payables RM At 1 January 2008 Recognised in income statement At 31 December 2008 At 1 January 2007 Recognised in income statement At 31 December 2007 ======= (231,769) 231,769 =======
Total RM (13,500,000) (546,237) (14,046,237) ========= (13,731,769) 231,769 (13,500,000) =========
86

31. Deferred Tax (contd.) Deferred tax assets of the Company: Unabsorbed Other industrial payables building allowance RM RM At 1 January and 31 December 2008 ====== (231,769) 231,769 ======= ====== =======
Total RM ====== (231,769) 231,769 =======
At 1 January 2007 Recognised in income statement At 31 December 2007
Deferred tax assets have not been recognised in respect of the following items: Group 2008 RM Unutilised tax losses (Note 10) Unabsorbed capital allowances (Note 10) 18,565,000 9,906,000 28,471,000 ======== 2007 RM 28,170,000 6,351,000 34,521,000 ======== 2008 RM 9,336,000 7,418,000 16,754,000 ======== Company 2007 RM 17,248,000 4,656,000 21,904,000 ========
As at 31 December 2008, the deferred tax assets are not recognised as it is not probable that future taxable profit will be available against which the unutilised tax losses and unabsorbed capital allowances can be utilised. 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. 32. 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 119,106,150 119,106,150 3,558,768 ========= ========= ======= 88,337,080 88,337,080 24,253,470
At 1 January 2008 and 31 December 2008
At 1 January 2007 Ordinary shares issued pursuant to : Bonus Issue Employees Share Option Scheme (ESOS) At 31 December 2007
22,084,270 8,684,800 119,106,150 =========
22,084,270 8,684,800 119,106,150 =========
(22,084,270) 1,389,568 3,558,768 =======
87

32. Share Capital and Share Premium (contd.) Number of Ordinary Shares of RM1 Each 2008 2007 Authorised share capital At 1 January/31 December 500,000,000 ========= 500,000,000 ========= 500,000,000 ========= 500,000,000 ========= Amount 2008 RM 2007 RM
(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.
(ii)
Bonus issue On 23 January 2007, the Company undertook a bonus issue of 22,084,270 new ordinary shares of RM1.00 each on the basis of one (1) new share for every four (4) existing shares held in the Company. The Bonus Issue has been granted listing and quotation on the Second Board of Bursa Malaysia Securities Berhad on 5 February 2007.
33.
Other Reserves Asset Revaluation ReserveFreehold Land RM Foreign Currency Translation Reserve RM
Group
Warrant Reserve RM
Total Reserves RM
At 1 January 2008 Foreign currency translation At 31 December 2008
692,832 692,832 ======= 692,832 692,832 ======
(6,880) 4,409 (2,471) ====== (6,207) (673) (6,880) ======
4,416,854 4,416,854 ======= 4,416,854 4,416,854 =======
5,102,806 4,409 5,107,215 ======= 686,625 (673) 4,416,854 5,102,806 ======= Total Reserves RM
At 1 January 2007 Foreign currency translation Issue of warrants At 31 December 2007
Asset Revaluation ReserveWarrant Freehold Land Reserve RM RM Company At 1 January and 31 December 2008 692,832 ====== 692,832 692,832 ====== 4,416,854 ======= 4,416,854 4,416,854 =======
5,109,686 ======= 692,832 4,416,854 5,109,686 =======
At 1 January 2007 Issue of warrants At 31 December 2007
88

33. Other Reserves (contd.) The nature and purpose of each category of reserve are as follows: (a) 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. (b) Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Groups presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Groups net investment in foreign operations, where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation. (c) Warrant reserve On 6 March 2007, the Company has issued renounceable right issue of 44,168,540 new Warrants (Warrants) at an issue price of RM0.10 per Warrant on the basis of one (1) new Warrant for every two (2) existing ordinary shares of RM1.00 each held in the Company. The Warrants were subsequently listed on the Second Board of Bursa Malaysia Securities Berhad on 13 March 2007. 34. Retained Earnings Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of the shareholders (single tier system). However, there is a transitional period of six years, expiring on 31 December 2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies also have an irrevocable option to disregard the 108 balance and opt to pay dividends under the single tier system. The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2008 in accordance with Section 39 of the Finance Act 2008. The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional period, the Company may utilise the credit in the 108 balance as at 31 December 2008 and 2007 to distribute cash dividend payments to ordinary shareholdings as defined under the Finance Act 2007. 35. Contingent Liabilities Group 2008 RM Unsecured corporate guarantees given to banks for credit facilities granted to subsidiaries (a) ======== 2007 RM ====== 2008 RM ======== Company 2007 RM 70,000,000 =========
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 Subdeveloper. Under the Share Sale Agreement (SSA) entered between the vendors of ZTPSB (Vendors) and ZLSB dated 15 December 2003, the Vendors had provided an indemnity clause in the SSA, to hold ZLSB harmless from and against any damages, deficiencies, losses, costs, liabilities and expenses (including legal fees and disbursements) resulting from and arising out of any breach of presentations, warranties, covenants and agreements made by the Vendors. In addition, counter-claims were made by ZTPSB on 12 May 2005 against both the Sub-developer and directors of the Subdeveloper for breach of contract and personal liability as guarantors, respectively. The full trial has been disposed of on 13 April 2009 and the Court passed judgement on 24 April 2009 dismissing the Plaintiffs claim.
89

36. Segmental Reporting (a) 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. (b) Business segments The Group comprises the following main business segments: (i) (ii) (iii) (iv) Construction - piling works, foundation engineering and building construction; Property development - property holding and development; Toll concession - operation and maintenance of toll bridge and collection of toll revenue; and Others - management services.
The directors are of the opinion that all inter-segment transactions having been entered into in the normal course of business and have been transacted on normal commercial terms.
90
36. Construction RM Property development RM Others RM Total RM Toll concession RM Group Eliminations RM
Segmental Reporting (contd.)
31 December 2008 Revenue Sales to external customers Inter-segment sales 147,755,075 150,104,699 297,859,774 ============ 9,558,399 (526,835) 6,514,541 (1,157,948) 14,388,157 ============ 9,195,921 9,195,921 ============ 221,773 8,460 230,233 ============ (150,113,159) (150,113,159) ============ 157,172,769 157,172,769 ============
Total revenue
Results Segment results
Finance costs Share of profit of associates
Profit before taxation Income tax expense
Profit for the year
(13,295,070) 250,374 1,343,461 (332,778) 1,010,683 ============
31 December 2008 463,523,910 779,312 227,846,224 131,563,048 42,724,446 (391,344,527) -
Assets Segment assets Investments in associates Unallocated assets
Total assets
474,313,101 779,312 2,828,072 477,920,485 ============ 60,721,409 ============ 153,792 65,094 176,412 47,252,982 ============ 738,981 275,568 (335,785,780) ============ 301,288,520 ============ 17,632,245 4,309,830 203,255
Liabilities Segment liabilities/total liabilities 340,704,529 ============ 16,735,274 3,709,084 26,843 2,741,321 9,292,832 ============ 188,395,380 ============ 4,198 260,084 211,925 ============
Other segment information Capital expenditure Depreciation Amortisation Other significant non-cash expenses: Provisions Impairment in value of investment
2,860,391 ============
451,449 ============
============
6,265,086 9,292,832 ============
91
92
Construction RM Property development RM Others RM Total RM Toll concession RM Group Eliminations RM 37,971,914 21,399,467 59,371,381 ============ (9,360,301) 27,611,169 6,042,267 (546,840) 31,850,000 31,850,000 ============ 8,612,397 8,612,397 ============ 126,846 126,846 ============ (21,399,467) (21,399,467) ============ 78,561,157 78,561,157 ============ 23,746,295 (15,388,452) (1,066,333) 7,291,510 (3,066,386) 4,225,124 ============
36.
Segmental Reporting (contd.)
31 December 2007
Revenue Sales to external customers Inter-segment sales
Total revenue
Results Segment results
Finance costs Share of loss of associates
Profit before taxation Income tax expense
Profit for the year
31 December 2007 300,290,239 9,821,770 218,455,921 191,525,093 2,761,773 (310,461,834) -
Assets Segment assets Investments in associates Unallocated assets
Total assets 194,668,716 ============ 2,264,209 5,763,083 26,843 1,049,388 ============ 179,605,156 ============ 5,753 265,186 ============ 121,828,948 ============ 94,557 35,156 264,017 ============ 6,135,873 ============ 7,091 90,470 460,000 ============ (262,059,038) ============ ============
Liabilities Segment liabilities/total liabilities
402,571,192 9,821,770 3,180,289 415,573,251 ============ 240,179,655 ============ 2,371,610 6,153,895 290,860 1,509,388 ============
Other segment information Capital expenditure Depreciation Amortisation Other significant non-cash expenses: Provisions

37. Significant Related Party Transactions Significant related party transactions entered into by the Group and the Company are as follows: 2008 RM (i) Transactions with subsidiaries: Income Management fee income Rental income Expenditure Sub-contract works extended Interest expense (ii) 7,200 ============ 124,272,782 106,122 ============ 481,153 7,200 ============ 19,982,094 106,122 ============ Company
2007 RM
Transactions with companies in which the close family members of certain directors of the Company have substantial financial interests: 2008 RM Group 2007 RM 2008 RM Company 2007 RM
Expenditure Consultancy services fee paid to Perunding KAZ Sdn. Bhd. (Note a) Travelling costs paid to Al-Quds Travel (Note a) Purchase of culverts and roofing pile from SCIB Concrete Manufacturing Sdn. Bhd. (Note b) (a) (b) (iii)
12,272
22,000 4,778
12,272
3,974
718,701 ============
============
============
============
Datuk Hj. Zainal Abidin Bin Hj. Ahmad and Hj. Zainurin bin Hj. Ahmad have substantial financial interests in this company Datuk Hj. Zainal Abidin Bin Hj. Ahmad has substantial financial interests in this company
Compensation of key management personnel: The remuneration of directors during the year were as follows: 2008 RM Group 2007 RM 2008 RM Company 2007 RM
Directors remuneration (Note 9)
2,508,389 ============
2,252,880 ============
2,300,141 ============
2,252,880 ============
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.
93

38. Financial Instruments (a) Financial risk management objectives and policies The Groups financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Groups businesses whilst managing its interest rate, foreign exchange, liquidity and credit risks. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is and has been throughout the year under review, the Groups policy that no trading in derivative financial instruments shall be undertaken. (b) Interest rate risk Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. As the Group has no significant interest-bearing financial assets, the Groups income and operating cash flows are substantially independent of changes in market interest rates. The Groups interest-bearing financial assets are mainly short term in nature and have been mostly placed in fixed deposits or occasionally, in short term commercial papers. The Groups interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fixed and floating rate borrowings.
94
38.
Financial Instruments (contd.)
(b)
Interest rate risk (contd.)
The following tables set out the carrying amounts, the effective interest rates range as at the balance sheet date and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk: More Interest Within 1 12 23 34 45 than 5 Note rate range Year Years Years Years Years Years Total % RM RM RM RM RM RM RM At 31 December 2008
Group 27 28 27 27 27 27 27 27 7.50% - 7.80% 1.50% - 6.36% 3.67% - 3.68% 6.80% - 7.60% 2,325,533 27,330,000 1,395,000 5,645,498 5,227,872 160,584 172,278 184,824 8.38% 45,000,000 45,000,000
Fixed rate Term loans Hire purchase and finance lease liabilities
2.33% - 7.75% 2,134,521 1,343,815 476,879 197,080 30,805 4,183,100 ============ ============ ============ ============ ============ ============ ============ ============ 313,957 2,325,533 27,330,000 1,395,000 11,705,013
Floating rate Bank overdrafts Revolving credits Bankers acceptances Term loans Bai Bithaman Ajil Islamic Debt Securities Sukuk Musharakah
Company 27 28 25 27 27 27 27 27 8.38% 45,000,000 -
5.90% - 8.85% 4,000,000 5,000,000 5,000,000 5,000,000 41,000,000 60,000,000 4.80% - 5.40% 35,000,000 20,000,000 15,000,000 70,000,000 ============ ============ ============ ============ ============ ============ ============ ============
Fixed rate Term loans Hire purchase and finance lease liabilities Amount due to related company
45,000,000
Floating rate Bank overdrafts Revolving credits Bankers acceptances Term loans Sukuk Musharakah
2.35% - 4.75% 1,630,036 858,419 98,020 2,586,475 3.50% 3,982,835 3,982,835 ============ ============ ============ ============ ============ ============ ============ ============ 7.50% - 7.80% 2,325,533 2,325,533 5.77% - 6.36% 3,500,000 3,500,000 3.67% - 3.68% 1,395,000 1,395,000 6.80% - 7.60% 5,645,498 5,227,872 160,584 172,278 184,824 313,957 11,705,013 4.80% - 5.40% 35,000,000 20,000,000 15,000,000 70,000,000 ============ ============ ============ ============ ============ ============ ============ ============
95
96
8.38% 45,000,000 45,000,000 2.33% - 7.75% 2,391,051 1,948,372 978,898 8,266,873 96,995 13,682,189 ============ ============ ============ ============ ============ ============ ============ ============ 7.75% - 8.25% 5.88% - 8.50% 3.61% - 3.85% 3.48% - 8.50% 6,035,230 24,280,000 2,004,400 4,726,786 19,637,898 147,940 158,714 170,272 608,924 6,035,230 24,280,000 2,004,400 25,450,534 5.90% - 8.85% 4,000,000 5,000,000 5,000,000 46,000,000 60,000,000 ============ ============ ============ ============ ============ ============ ============ ============
38.
Financial Instruments (contd.)
(b)
Interest rate risk (contd.)
The following tables set out the carrying amounts, the effective interest rates range as at the balance sheet date and the remaining maturities of the Groups and the Companys financial instruments that are exposed to interest rate risk (contd.): More Interest Within 1 12 23 34 45 than 5 Note rate range Year Years Years Years Years Years Total % RM RM RM RM RM RM RM
At 31 December 2007
Group
Fixed rate Term loans Hire purchase and finance lease liabilities
27
28
Floating rate Bank overdrafts Revolving credits Bankers acceptances Term loans Bai Bithaman Ajil Islamic Debt Securities
27 27 27 27
27
Company 8.38% 45,000,000
27
45,000,000
Fixed rate Term loans Hire purchase and finance lease liabilities Amount due to related company
28 25
Floating rate Bank overdrafts Revolving credits Bankers acceptances Term loans
2.35% - 4.75% 2,004,612 1,613,752 624,107 8,092,620 12,335,091 3.50% 3,903,708 3,903,708 ============ ============ ============ ============ ============ ============ ============ ============ 7.75% - 8.25% 6,035,230 6,035,230 5.88% - 7.05% 14,500,000 14,500,000 3.61% - 3.83% 2,004,400 2,004,400 3.48% - 8.50% 4,726,786 19,637,898 147,940 158,714 170,272 608,924 25,450,534 ============ ============ ============ ============ ============ ============ ============ ============
27 27 27 27
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.

38. Financial Instruments (contd.) (c) Foreign currency risk The Group is exposed to currency risk in respect of its foreign investments in subsidiaries. These are, however, not significant. (d) Liquidity risk The Group manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that refinancing, repayment and funding needs are met. As part of its overall liquidity management, the Group maintains sufficient levels of cash or cash convertible investments to meet its working capital requirements. In addition, the Group strives to maintain available banking facilities at a reasonable level to its overall debt position. (e) Credit risk Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit approvals, limits and monitoring procedures. Credit risk is minimised and monitored by limiting the Groups associations to business partners with high creditworthiness. Trade receivables are monitored on an on-going basis via Group management reporting procedures. The Group has significant exposure to certain individual customers or counter parties. However, this does not pose significant credit risk to the Group. The Group does not have any other major concentration of credit risk related to any financial instruments. (f) Fair value The carrying amounts of financial assets and liabilities of the Group and Company at the balance sheet date approximated their fair values except for the followings: 2008 Carrying Fair Amount value RM RM 2007
Note Group Hire purchase payables Company Hire purchase payables
Carrying Amount RM
Fair value RM
28
4,183,100 4,187,045 13,682,189 13,682,189 ============ ============ ============ ============ 2,586,475 2,578,156 12,335,091 12,335,091 ============ ============ ============ ============
28
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) Hire purchase payables The fair values of the hire purchase liabilities are estimated by discounting the future contractual cash flows at the current interest rate available to the Company for similar financial instruments.
97

39. Significant events (a) Proposed Disposal of Zecon Toll Concessionaire Sdn Bhd (ZTCSB) On 5 June 2007, the Company announced the proposed disposal of the entire equity interest in ZTCSB to Halifax Capital Berhad (Halifax) comprising 1,000,000 ordinary shares of RM1.00 each for a total sale consideration of approximately RM106.19 million to be satisfied by the issuance of 50,000,000 new ordinary shares of RM0.10 each in Halifax and the remaining RM101.19 million as settlement of the outstanding amount due to ZTCSB by the Company and its subsidiaries (Zecon Group). On 20 September 2007, the Company announced the revised sale consideration for the proposed disposal of the entire equity interest in ZTCSB to Halifax to be RM42.0 million to be satisfied by the issuance of 420,000,000 new ordinary shares of RM0.10 each in Halifax. On 16 July 2008, MIDF Amanah Investment Bank Berhad (MIDF) on behalf of the Company has announced that the Board of Directors of the Company has decided to abort the Proposed Disposal. (b) Proposed Private Placement Of Up To Ten Percent (10%) Of The Issued And Paid-Up Share Capital Of The Company At A Price To Be Determined Later (Proposed Private Placement) The Proposed Private Placement which was announced to Bursa Securities Malaysia Berhad (Bursa) on 29 August 2007, had been approved by the Securities Commission (SC) vide its letter dated 31 October 2007. On 23 April 2008, the SC has approved an extension of time of six months from 1 May 2008 to 31 October 2008 for the implementation of the Private Placement. On 30 October 2008, MIDF, on behalf of the Board of Directors of the Company (Board) has informed Bursa that the Board has decided to abort the Private Placement in view that the current market price of the ordinary shares of the Company is below its par value, making it unfeasible to implement the Private Placement. (c) Proposed Transfer Of The Listing Of And Quotation For The Entire Issued And Paid-Up Capital of Zecon From The Second Board To The Main Board of Bursa (Proposed Transfer of Listing) On 24 March 2008, MIDF on behalf of the Company has announced to Bursa that the Board has decided to abort the Proposed Transfer of Listing. (d) Offer by Dawla Capital Sdn Bhd and Datuk Hj Zainal Abidin bin Hj Ahmad (collectively referred to as the Joint Offerors ) to Acquire Zecon Berhads Shares and Warrants On 15 July 2008, the Company announced on the receipt of a Notice of Voluntary Offer (Notice) from MIDF, on behalf of Dawla Capital Sdn Bhd (Dawla) and Datuk Hj Zainal Abidin bin Hj Ahmad (Datuk Zainal) (collectively known as Joint Offerors) to acquire:(i) (ii) (iii) all the remaining ordinary shares of RM1.00 each in the Company which are not held by the Joint Offerors for a cash consideration of RM0.50 per share; all the new Companys shares that may be allotted and issued pursuant to the exercise of the outstanding 2007/2017 warrants (Warrant(s) ) which are not held directly by the Joint Offerors for a cash consideration of RM0.50 each; all the new Companys share that may be issued by the Company arising from the exercise of any outstanding options granted pursuant to the Companys share option scheme for a cash consideration of RM0.50 per offer share; and all outstanding warrants in the Company which are not held directly by the Joint Offerors, for a cash consideration of RM0.01 per Warrant
(iv)
(Collectively referred to as the Offer) On 24 July 2008, the Company announced on the appointment of PM Securities Sdn Bhd (PM Securities) as the Independent Adviser to advise the Independent Directors, minority shareholders and minority warrant holders of the Company in relation to the Offer subject to the approval of the SC. On 1 August 2008, the Company announced that SC had vide its letter dated 1 August 2008 approved the appointment of PM Securities as the Independent Adviser of the Company pursuant to the Offer.
98

39. Significant events (contd.) d) Offer by Dawla Capital Sdn Bhd and Datuk Hj Zainal Abidin bin Hj Ahmad (collectively referred to as the Joint Offerors ) to Acquire Zecon Berhads Shares and Warrants (contd.) On 5 August 2008, the Company announced that the Joint Offerors had, through MIDF, informing the Board that they have yet to receive clearance from the SC on the Offer Document. On 8 August 2008, the Company announced that MIDF, on behalf of the Joint Offerors, advised the Board that the SC had vide its letter dated 7 August 2008, informing that the Offer Document is still pending its clearance. In relation to Paragraph 13(7) of the Malaysian Code on Take-Overs and Mergers 1998, the time frame for the dispatch of the Offer Document on or before 5 August 2008 is no longer applicable. On 8 October 2008, the Company announced that it has been informed by the Joint Offerors that the Offer Document has been posted to the shareholders, warrant holders and the option holders of the Companys Employees Share Option Scheme. On 17 October 2008, the Company announced that the Independent Advice Circular in relation to the Offer has been dispatched to the shareholders of the Company. On 29 October 2008, the Company received a press notice from MIDF, on behalf of the Joint Offerors, informing that the Joint Offerors and the persons acting in concert with the Joint Offerors collectively hold 52.53% of the issued and paidup share capital of the Company. Accordingly, the Offer has become unconditional as to the level of acceptances on 29 October 2008. In view of the above, the Offer shall remain open for acceptances until 12 November 2008 and all other terms and conditions of the Offer remain unchanged. On 12 November 2008 (the closing date), the Joint Offerors and the persons acting in concert with the Joint Offerors collectively hold 62.86% of the issued and paid-up share capital of the Company.
99
Analysis Of Shareholdings - as at 28 April 2009

SHARE CAPITAL Authorised Capital : RM500,000,000.00 Issued and Paid up Capital : RM119,106,150.00 Class of Share : Ordinary Shares of RM1.00 each DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 100,000 100,001 to less than 5% 5% and above TOTAL Number of Shareholders 60 178 1,098 310 25 3 1,674 Number of Shares 2,560 131,977 4,886,550 8,797,238 28,780,275 76,507,550 119,106,150 % of Shares 0.00 0.11 4.10 7.39 24.16 64.23 100.00
SUBSTANTIAL SHAREHOLDERS AS PER REGISTER OF SUBSTANTIAL SHAREHOLDERS Direct Interest No. of Shares % 65,689,475 19,174,600 15,491,100 3,655,200 55.15 16.10 13.01 3.07 Deemed Interest No. of Shares % 65,689,475* 55.15
No. Name 1. 2. 3. 4. Dawla Capital Sdn Bhd Inas Kapital Sdn Bhd Digital Network Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad
Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd
DIRECTORS INTERESTS Direct THE COMPANY Datu Dr. Hatta bin Solhi Datuk Haji Zainal Abidin bin Haji Ahmad Datuk Dr. Haji Yusoff @ Josree bin Haji Yacob Dato Haji Hamzah bin Haji Ghazalli Dato Dr. Mohd Yahya bin Nordin Dato Abdul Majit bin Ahmad Khan Haji Zainurin bin Haji Ahmad Hui Kok Yuan Haji Abg Azahari bin Abg Osman Jamil bin Jamaludin Poh Lik Gan @ Poh Li Thong Richard Kiew Jiat Fong Haji Saini bin Haji Ali Ng Weng Fatt Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd 20,000 3,655,200 525,000 250,000 40,000 63,000 %
No. of Shares Held Indirect
0.02 3.07 0.44 0.21 0.04 0.05 -
65,689,475* -
55.15 -
100

DIRECTORS INTERESTS (contd.) Direct RELATED COMPANIES Teknik PS Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad Zecon Construction Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad Sarmax Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad 34,000 49 30,000 14.20 49.00 30.00 % No. of Shares Held Indirect
THIRTY (30) LARGEST SHAREHOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Name Dawla Capital Sdn Bhd MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Dawla Capital Sdn Bhd Digital Network Sdn Bhd Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Digital Network Sdn Bhd HLG Nominee (Tempatan) Sdn Bhd Assar Asset Management Sdn Bhd for Assar Industri Sdn Bhd CIMB Group Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Bolhassan bin Di @ Ahmad bin Di CIMSEC Nominees (Tempatan) Sdn Bhd CIMB for Inas Kapital Sdn Bhd Zainal Abidin bin Ahmad RHB Capital Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Bolhassan bin Di @ Ahmad bin Di Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Bolhassan bin Di @ Ahmad bin Di CIMSEC Nominees (Tempatan) Sdn Bhd CIMB Bank for Mohamad Safri bin Sharkawi Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Zainal Abidin bin Ahmad Mayban Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Chee Kwok Fai Zainurin bin Ahmad Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Hamni bin Juni Shareholding 37,596,300 28,093,175 10,818,075 4,672,925 4,500,000 4,500,000 3,000,000 2,967,875 2,000,000 2,000,000 837,225 597,700 587,100 525,000 368,450 % 31.57 23.59 9.08 3.92 3.78 3.78 2.52 2.49 1.68 1.68 0.70 0.50 0.49 0.44 0.31
101

No. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Name RHB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Chu Chee Keong Hui Kok Yuan UOBM Nominees (Asing) Sdn Bhd United Bank Nominees (Pte) Ltd for Gold Crystal Company Ltd Law Lee Koon Toh Beng Lee Cher Keam Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Tan Sok Hui Ong Keh Oon Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Kua Bee Keng Low Siew Ean Ong Kian Lim Khoo Lin Kuok Min Giat Mayban Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Sewo Hee Yoong Choong Thiam Fatt TOTAL Shareholding 293,400 250,000 200,000 197,000 188,900 188,500 160,000 148,000 138,000 122,000 120,000 118,000 100,200 100,000 100,000 105,487,825 % 0.25 0.21 0.17 0.17 0.16 0.16 0.13 0.12 0.12 0.10 0.10 0.10 0.08 0.08 0.08 88.56
102
Analysis Of Warrant Holdings - as at 28 April 2009

No. of Warrants in issued Exercise Price of Warrants Expiry Date of Warrants Voting Rights Size of warrant holdings Less than 100 100 to 1,000 1,001 to 10,000 10,001 100,000 100,001 to less than 5% 5% and above TOTAL : : : : 44,168,540 RM1.06 05 March 2017 One Vote per warrant held Number of warrant holders 13 87 537 237 51 1 926 Number of Warrants 580 71,750 2,558,530 7,736,080 14,710,980 19,090,620 44,168,540 % of Warrants 0.0 0.16 5.79 17.51 33.31 43.22 100.00
SUBSTANTIAL WARRANT HOLDERS AS PER REGISTER OF SUSTANTIAL WARRANT HOLDERS Direct Interest No. of Warrants % 21,145,380 316,330 47.87 0.72 Deemed Interest No. of Warrants % 21,145,380* 47.87
No. Name 1. 2. Dawla Capital Sdn Bhd Datuk Haji Zainal Abidin bin Haji Ahmad
Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd
LIST OF DIRECTORS WARRANT HOLDINGS Direct 1. 2. Datuk Haji Zainal Abidin bin Haji Ahmad Datu Dr. Hatta bin Solhi 316,330 8,000 %
No. of Warrants Held Indirect 21,145,380* -
% 47.87 -
0.72 0.02
Note: * Deemed interested by virtue of his interest in Dawla Capital Sdn Bhd THIRTY (30) LARGEST WARRANT HOLDERS No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Name Dawla Capital Sdn Bhd MIDF Amanah Investment Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Dawla Capital Sdn Bhd Mohd Fauzi bin Mohd Anuar Lee Mee Kuen Mohd Hadifaar bin Yaacob Digital Network Sdn Bhd Kenanga Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Hamni bin Juni OSK Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Pang Swee Chien Liew Yoke Ling Saw Guat Ngoh Warrant Holders 19,090,620 2,054,760 932,900 891,600 664,100 633,000 615,500 570,800 454,000 431,200 % 43.22 4.65 2.11 2.02 1.50 1.43 1.39 1.29 1.03 0.98
103
Analysis Of Warrant Holdings - as at 28 April 2009

No. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Name Ong Chai Kin Cheah Chee Liang Ong Ban Chuan Leong Hon Wah Ngoi Leong Ee HDM Nominees (Tempatan) Sdn Bhd UOB Kay Hian Pte Ltd for The Kee Hong Lee Kim Seng Yeap Mee Yoke Ng Boon Cheong @ Eng Boon Cheong CIMSEC Nominees (Tempatan) Sdn Bhd CIMB Bank for Hasnandi bin Mohamad Jennis Lam Pun Ying CIMSEC Nominees (Tempatan) Sdn Bhd CIMB Bank for Teh Chong Jin Affin Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Phua Sin Mo Zainal Abidin bin Ahmad Lee Soi Gek Tan Yeek Seng Abd Hazis bin Omar HLG Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Teo Ah Seng AIBB Nominees (Tempatan) Sdn Bhd Pledged Securities Account for Phua Sin Mo Tan Yee Kong TOTAL Warrant Holders 379,500 370,000 328,400 277,500 270,000 260,000 230,000 225,000 205,000 200,020 200,000 200,000 200,000 188,000 182,600 175,000 172,600 171,100 170,00 168,000 30,908,200 % 0.85 0.84 0.74 0.63 0.61 0.59 0.52 0.51 0.46 0.45 0.45 0.45 0.45 0.43 0.41 0.40 0.39 0.39 0.38 0.38 69.95
104
List of Properties
LOCATION AREA TENURE DESCRIPTION YEAR OF ACQUISITION EXISTING USE NET BOOK VALUE 31/12/2008 (RM) 73,243,200
Lot 462, 463 & 464 , Block 15, Salak Land District, Kuching, Sarawak Lot 4871, Block 18, Salak Land Disctrict, Kuching, Sarawak Lot 742, Section 64, KTLD, Kuching, Sarawak Lot 2260, Block 233, Kuching North Land
788.0 hectare
Leasehold (99 years), Mixed Zone Land, expiring in Year 2098
Leasehold Land
1999
Commercial & Residential Development
39.2 hectare
Leasehold Land
1999
33,714,909
7.9 hectare
Leasehold Land
1999
23,169,333
7,831.0 sq metre
Leasehold Land
1988
Residential
240,629
Crown Land, Lot No. 10049, 16th Mile, Simanggang Road, Kuching Town Land District Sublot No. 54, Lot 530 of Block 6, Matang Land District Sublot No.84, Title Lot 7907, Pelita Heights, Kuching Sarawak Lot No.9071, Section 64, Tabuan Dayak, Kuching Sarawak Parcel Nos 297-2-1 & 297-2-2 Commercial Tower of Parent Lots 192, 193, 293 and 296 Section 48 KTLD Kuching Sarawak Private Lot No.5, 6 & 7 Lot 1406-1463 1465 & Part of Lot 1472 of Block 14, Salak Land District
3.9 hectare
Leasehold (99 years), Mixed Zone Land, expiring inYear 2054
Leasehold Land
1991
Vacant Land
595,156
773.8 sq metre
Leasehold (60 years), Mixed Zone Land, expiring inYear 2026
Detached Lot
2005
Vacant Land
130,000
174.2 sq metre
Double-Storey Terrace House
1994
Residential
141,836
370.0 sq metre
4-Storey Intermediate Shophouse Commercial Tower
1995
Office Premise
458,881
647.2
Strata Title
2000
Office Premises
1,598,978
(Level 2) Riverbank Suites and sq metre
2,038.9 sq metre
Leasehold (60 years), Mixed Zone Land
3-Storey Corner Shop Houses
2005
Office Premises
2,770,000
105
List of Properties
LOCATION
AREA
TENURE
DESCRIPTION
YEAR OF ACQUISITION
EXISTING USE
NET BOOK VALUE 31/12/2008 (RM) 200,000
Lot 948, Serian Town District
95.0 sq metre
Leasehold (60 years), Mixed Zone Land
2-Storey Corner Shop House
2002
Vacant
Unit 1 & 6, Level 3, Lot 3754, 3771 and 4598 all of Block 11 Muara Tebas Land District Parcel No. 6B, 6C, 6D, 6E & 10A Lot 264 of Block 2, Jalan Salak District Unit 1-1A, 1-2A, 1-9, 2-1, 4-1, 4-2, 5-9, 6-8, 6-9 of Block B6 & B7, Jalan Kwong Lee Bank, Kuching Parcel No. 2A-11-2, 11th Floor Plaza Sentral KL Building No. Block 2A, Lot 78, Section 70, Kuala Lumpur Parcel, A-20-01, Block A, Level 20, Suasana Sentral Condominium, Jalan Stesen Sentral 5, KL Sentral, 50470, Kuala Lumpur 133.2 sq metre Strata Title Condominium 2008 Corporate Use 727,413 361.8 sq metre Strata Title Office suite 2006 Office Premise 1,646,807 1,400.6 sq metre Strata Title Commercial centre 2002 Vacant 2,104,938 717.2 sq metre Strata Title Apartments 2006 Vacant 1,945,920 255.8 Strata Title Apartments 2005 Corporate Use 512,000 (almalgamated into Lot 9645) sq metre
106
Notice Of Annual General Meeting

NOTICE IS HEREBY GIVEN THAT the Twenty-Fourth (24th) Annual General Meeting 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 Thursday, 18th June 2009 at 11.30 a.m. for the following purposes:
AGENDA 1. To receive the Audited Financial Statements for the financial year ended 31 December 2008 and the Reports of the Directors and Auditors thereon. To approve the payment of Directors fees in respect of the financial year ended 31 December 2008 amounting to RM184,800-00. To re-elect/elect the following Directors who retire in accordance with following Articles of the Companys Articles of Association and being eligible, offer themselves for re-election/election:a) Article 87 i) ii) iii) b) Datu Dr. Hatta bin Solhi; Datuk Haji Zainal Abidin bin Haji Ahmad; and Haji Zainurin bin Haji Ahmad Resolution 2 Resolution 3 Resolution 4 Resolution 1
2.
3.
Article 92 i) ii) iii) Datuk Dr. Haji Yusof @ Josree bin Haji Yacob; Richard Kiew Jiat Fong; and Haji Saini bin Haji Ali Resolution 5 Resolution 6 Resolution 7 Resolution 8
4.
To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to fix their remuneration for the ensuing year.
As Special Business To consider and if thought fit, pass the following resolutions as Ordinary Resolution:5. AUTHORITY TO ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965 THAT pursuant to Section 132D of the Companies Act, 1965 and subject always to the approval of the relevant authorities, the Directors of the Company be and are hereby empowered to issue shares in the Company from time to time and upon such terms and conditions and for such purposes as the Directors may deem fit, including but not limited to such shares as may be issued pursuant to the Employees Share Option Scheme provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on the Bursa Malaysia Securities Berhad and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. 6. 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 of the Circular to shareholders dated 26 May 2009, 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; the expiration of the period within which the next AGM of the Company after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (But shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Companies Act, 1965); or Resolution 10 Resolution 9
b)
107
Notice Of Annual General Meeting

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. 7. 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 : 26 May 2009 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. 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. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. The instrument appointing a proxy must be deposited at the registered office of the Company at 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
ii) iii)
iv)
2.
Explanatory Notes on Special Business i) Ordinary Resolution 9 Authority to issue shares pursuant to Section 132D of the Companies Act, 1965 The proposed Resolution 9, if passed, will empower the Directors to issue shares up to an aggregate amount not exceeding 10% of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interests of the Company including but not limited to such shares as may be issued pursuant to the Employees Share Option Scheme approved at the Extraordinary General Meeting held on 15 February 2005. This authority unless revoked or varied at a general meeting will expire at the next Annual General Meeting. ii) Ordinary Resolution 10 Proposed renewal of shareholders mandate for recurrent related party transactions of a revenue or trading nature (Proposed Renewal of Shareholders Mandate) The proposed Resolution 10, 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 is set out in the Circular to Shareholders dated 26 May 2009,which is despatched together with the Companys Annual Report 2008.
108
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/election at the 24th Annual General Meeting are as follows: Article 87 i) ii) iii) Datu Dr. Hatta bin Solhi Datuk Haji Zainal Abidin bin Haji Ahmad Haji Zainurin bin Haji Ahmad
Article 92 i) ii) iii) Datuk Dr. Haji Yusof @ Josree bin Haji Yacob Richard Kiew Jiat Fong Haji Saini bin Haji Ali
The details of the above Directors are set out in the Directors Biodata on pages 13 to 20 of this Annual Report and their shareholdings in the Company are set out in the Directors shareholdings which appear on page 100 of this Annual Report.
109
This page has been intentionally left blank
110
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-Fourth 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 Thursday, 18 June 2009 at 11.30 a.m and any adjournment thereof. My/Our proxy is to vote as indicated below :RESOLUTIONS 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Payment of Directors fees Re-election of Director Datu Dr. Hatta bin Solhi Re-election of Director Datuk Haji Zainal Abidin bin Haji Ahmad Re-election of Director Haji Zainurin bin Haji Ahmad Re-election of Director Datuk Dr. Haji Yusof @ Josree bin Haji Yacob Re-election of Director Richard Kiew Jiat Fong Re-election of Director Haji Saini bin Haji Ali Appointment of Auditors and authorising Directors to fix their remuneration Authority to issue shares pursuant to Section 132D of the Companies Act, 1965 Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions. FOR AGAINST
Please indicate with X in the appropriate spaces how you wish your vote to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.
Signed this
Notes : 1)
day of
, 2009 Signature of Shareholder
A member entitled to attend and vote at this meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy need not be a member of the Company and provision of Section 149 (1)(b) of the Companies Act, 1965 shall not apply to the Company. Where a member appoints more than one proxy, the appointment shall be invalid unless he specifies the proportions of his shareholdings to be represented by each proxy. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing, or if the appointor is a corporation, either under its Common Seal or under the hand of an officer or attorney duly authorised. The instrument appointing a proxy must be deposited at the registered office of the Company at 8th Floor, Menara Zecon, No. 92, Lot 393, Section 5, KTLD, Jalan Satok, 93400 Kuching, Sarawak not less than forty-eight (48) hours before the time appointed for holding the meeting or any adjournment thereof.
2)
3)
4)
111
1st fold here
STAMP
ZECON BERHAD (134463-X)

8th Floor, Menara Zecon, No. 92 Lot 393, Section 5 KTLD, Jalan Satok, 93400 Kuching, Sarawak, Malaysia.
2nd fold here
Construction | Infrastructure | Property Development | Water Infrastructure | Toll Concession
Other Certifications, licenses and memberships include: Pusat Khidmat Kontraktor Class A Bumiputra Unit Pendaftaran Kontraktor Negeri Sarawak Construction Industries Development Board Grade G7 Master Builders Association Malaysia Federation of Public Listed Companies Sarawak Housing Developers Association Malaysian International Chamber of Commerce and Industry Registered Supplier of Equipment and Services to Petronas and its Subsidiaries

Construction

Diunggah oleh

Informasi Dokumen

Judul Asli

Hak Cipta

Format Tersedia

Bagikan dokumen Ini

Bagikan atau Tanam Dokumen

Opsi Berbagi

Apakah menurut Anda dokumen ini bermanfaat?

Apakah konten ini tidak pantas?

Hak Cipta:

Format Tersedia

Construction

Diunggah oleh

Hak Cipta:

Format Tersedia

Zecon Berhad annual report 2008

Zecon Berhad annual report 2008

No. of board meetings attended in the financial year : 5/5

Datuk Dr. Haji Yusof @ Josree bin Haji Yacob

Position held Working experience & occupation

No. of board meetings attended in the financial year : 4/5

Haji Zainurin bin Haji Ahmad

Position held Working experience & occupation

Zecon Berhad annual report 2008

Poh Lik Gan @ Poh Li Thong

Position held Working experience & occupation

Dato Dr. Mohd Yahya bin Nordin

Position held Working experience & occupation

Dato Haji Hamzah bin Haji Ghazalli

Position held Working experience & occupation

No. of board meetings attended in the financial year : 5/5

Dato Abdul Majit Bin Ahmad Khan

Zecon Berhad annual report 2008

No. of board meetings attended in the financial year : 4/5

Richard Kiew Jiat Fong

Position held Working experience & occupation

Position held Working experience & occupation

Ir. Haji Abg Azahari bin Abg Osman

Position held Working experience & occupation

No. of board meetings attended in the financial year : 3/5

Zecon Berhad annual report 2008

Haji Saini bin Haji Ali

Position held Working experience & occupation

No. of board meetings attended in the financial year : 2/3

Position held Working experience & occupation

Zecon Berhad annual report 2008

Proposed Petra Indah Development Project (Artist Impression)

Corporate Governance Statement

Zecon Berhad annual report 2008

Corporate Governance Statement

Corporate Governance Statement

Zecon Berhad annual report 2008

Corporate Governance Statement

Statement of Directors Responsibility

Statement on Internal Control

Zecon Berhad annual report 2008

Report of Audit Committee

Meetings Attendance Year 2008 Apr. 15 May 22 Absent Aug. 11 Nov. 21

5/5 5/5 2/3 4/5 2/2

(iii) Financial Statements

(iv) Related party transaction (v) 3. Risk Management

Report of Audit Committee

Zecon Berhad annual report 2008

Report of Audit Committee

Additional Compliance Information

Purchase of Roofing Tile Purchase of Culvert

Zecon Land Sdn Bhd Zecon Dredging Sdn Bhd

Zecon Berhads Corporate Social Responsibility Reporting 2008

Zecon Berhads Corporate Social Responsibility Reporting 2008

Zecon Berhads Corporate Social Responsibility Reporting 2008

Zecon Berhad annual report 2008

ZECONS CSR Activities & The Next Step

Adopting a school in our local community by year 2009

Zecon Berhad Group-Level Environmental Policies Environment

Maintain Conducting Group-Level Employees Survey & Dialog

Zecon Berhads Corporate Social Responsibility Framework

Directors Report & Audited Financial Statements

University Malaysia Sarawak new campus