Dear Valued Shareholders,
On behalf of the Board of Directors, we are pleased to present the Annual Report and Audited Financial Statements of the Group for the financial year ended (“FYE”) 31 December 2024. We would like to express our sincere gratitude for your continued support and understanding as we navigate a particularly challenging period in the history of Zelan Berhad.
Group Results
During the year under review, Zelan Group faced substantial financial challenges, reflected in its financial performance. Revenue recorded at RM40.2 million increased by 32.5% compared to the previous year of RM30.3 million, primarily due to an increase in asset management and asset replacement works in our concession project known as Centre for Foundation Studies (Phase 3) at IIUM’s Gambang Campus in Pahang.
Zelan Group recorded loss before tax and zakat of RM247.9 million in FY2024. This loss before tax and zakat was primarily due to the impairment of trade receivable of an arbitration award against a project owner of the Group’s project in Abu Dhabi, United Arab Emirates (“UAE”).
Significant efforts have been made to recover the awarded sum, including execution proceedings filed in the Execution Court of Abu Dhabi, UAE with the assistance of solicitors and relevant authorities both in Abu Dhabi, UAE and Malaysia. Diplomatic channels have also been engaged in the efforts to recover the awarded sum. Despite these ongoing efforts, the Group has assessed the recoverability of the awarded sum and determined that there is an uncertainty regarding the recoverability of the awarded sum. Given the prolonged nature of the recovery process and the inherent challenges involved, the Group has decided to fully impair the awarded sum of RM252.0 million. Nevertheless, the Group remains committed to exhausting all available avenues for recovery and will continue to make new efforts to recover the arbitration award against the project owner in Abu Dhabi, UAE.
This impairment reflects a prudent and conservative approach in line with applicable financial reporting standards, ensuring that the financial statements provide a fair and accurate representation of the Group’s financial position. However, this impairment has led our shareholders’ equity to fall to (RM93.1 million), below 25% of our issued capital and has triggered the Prescribed Criteria under Paragraph 2.1(a) of Practice Note 17 (“PN17”) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”).