Documente Academic
Documente Profesional
Documente Cultură
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 % -
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
Profile Of Directors
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 -
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
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
Profile Of Directors
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
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries
% 0.04
: 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
Profile Of Directors
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
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
16
Profile Of Directors
: 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
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries
List of convictions for offences within the past 10 years : None other than traffic offences No. of board meetings attended in the financial year : 3/3
17
Profile Of Directors
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 % -
Details of any board committee to which he belongs Other directorships in public companies Securities holdings in the Company and its subsidiaries
List of convictions for offences within the past 10 years : None other than traffic offences No. of board meetings attended in the financial year : 5/5
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
Profile Of Directors
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
List of convictions for offences within the past 10 years : None other than traffic offences No. of board meetings attended in the financial year : 5/5
19
Profile Of Directors
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
Corporate Governance Statement Statement of Directors Responsibility Statement on Internal Control Audit Committee Report Additional Compliance Information
22 25 26 27 30
21
22
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 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
This Corporate Governance Statement is made in accordance with the resolution of the Board of Directors dated 28 April 2009.
25
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
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
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 -
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
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
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
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
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
6,981
0.004
711,720
0.411
730,973
0.423
30
Mohd Azlan Iskandar Worlds No12 squash player Under Zecons sponsorship since 2003
31
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
Maintain
Maintain
Social
Maintain
Maintain
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
33
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 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)
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 ) -
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
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
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
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.
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
40
Subscribed and solemnly declared by the abovenamed Jamil Bin Jamaludin at Kuching in the State of Sarawak on 28 April 2009 Before me,
41
(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
42
Income Statements
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
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 ============
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 5,102,806 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
44
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)
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
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)
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 -
Dividends
12
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
At 31 December 2007
119,106,150
Non-Distributable
Distributable
Note
(Accumulated losses) Other retained reserves earnings/ (Note 33) (Note 34) RM RM 5,109,686 (9,309,703)
At 1 January 2008 Loss for the year, representing total recognised income and expense for the year
3,558,768 ============
5,109,686 ============
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)
(9,309,703) ============
47
17(a)
48
17(a)
(i)
During the year, the Group acquired property, plant and equipment by the following means:
2008 RM
49
50
(i)
During the year, the Company acquired property, plant and equipment by the following means:
2008 RM
51
52
53
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
55
56
57
58
59
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
61
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
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
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.
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
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)
64
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
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 =======
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
Deferred tax (Note 31): Under/(over)provision in prior years Relating to origination and reversal of temporary differences Relating to changes in tax rates
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
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 ====
68
2,443,102 =======
=======
2,443,102 =======
Total RM
763,324
(19,950) 14,658,368
(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
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
71
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
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
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
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
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.)
Country of incorporation
Principle activities
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 *
100 51 100 -
75
Country of incorporation
Principle activities
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
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
Group 2008 RM Market value of quoted shares ======== 2007 RM 2,604,388 ======== 2008 RM ========
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
Principle activities Trading in hardware, building materials and related products Assembly and sale of electrical and electronic products
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
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 -
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
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)
Less: Progress billings Value of payments in kind received under the Concession Agreement - land - toll concession
Amount due from customers for contract work Amount due to customers for contract work
80
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 =======
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
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
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
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
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 ========
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
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 =======
86
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 2007 Ordinary shares issued pursuant to : Bonus Issue Employees Share Option Scheme (ESOS) At 31 December 2007
87
(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
5,102,806 4,409 5,107,215 ======= 686,625 (673) 4,416,854 5,102,806 ======= Total Reserves RM
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 =======
88
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
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
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
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 ============
============
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.
31 December 2007
Total revenue
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) ============ ============
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
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
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
94
38.
(b)
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
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.
(b)
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
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.
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
(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
99
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 %
65,689,475* -
55.15 -
100
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
102
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 %
% 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
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 Land
1999
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 Land
1991
Vacant Land
595,156
773.8 sq metre
Detached Lot
2005
Vacant Land
130,000
174.2 sq metre
1994
Residential
141,836
370.0 sq metre
1995
Office Premise
458,881
647.2
Strata Title
2000
Office Premises
1,598,978
2,038.9 sq metre
2005
Office Premises
2,770,000
105
List of Properties
LOCATION
AREA
TENURE
DESCRIPTION
YEAR OF ACQUISITION
EXISTING USE
95.0 sq metre
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
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
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.
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
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
110
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
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
STAMP
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