ZELAN BHD — Interim / Quarterly Report 2026

May 20, 2026

ZELAN

ZELAN BERHAD

(COMPANY NO: 197601001688 (27676-V)

INCORPORATED IN MALAYSIA

QUARTERLY REPORT ON THE CONSOLIDATED RESULTS FOR THE FIRST QUARTER ENDED 31ST MARCH 2026

(The figures in the Quarterly Report have not been Audited)

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ZELAN BERHAD

Company No.: 197601001688 (27676-V)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

THE FIGURES HAVE NOT BEEN AUDITED

	Notes	INDIVIDUAL QUARTER		CUMULATIVE QUARTER
		Quarter ended 31/03/2026 RM'000	Quarter ended 31/03/2025 RM'000	Period ended 31/03/2026 RM'000	Period ended 31/03/2025 RM'000
Revenue	9	8,112	6,878	8,112	6,878
Cost of sales		(3,223)	(2,301)	(3,223)	(2,301)
Gross profit		4,889	4,577	4,889	4,577
Other income		42	1,740	42	1,740
Finance income		131	128	131	128
Discounting on trade receivables and trade payables		(63)	(114)	(63)	(114)
Accretion in carrying value of receivables		3,384	3,821	3,384	3,821
Administrative and operating expenses		(3,104)	(1,787)	(3,104)	(1,787)
Finance costs on borrowings		(4,481)	(5,391)	(4,481)	(5,391)
Profit before zakat and taxation		798	2,974	798	2,974
Tax expense	16	(777)	(803)	(777)	(803)
Net profit for the period		21	2,171	21	2,171
Other comprehensive income:
Total items that will be reclassified subsequently to profit or loss :
Exchange difference from translation of foreign operations		355	906	355	906
Total comprehensive profit for the period		376	3,077	376	3,077
Profit for the period attributable to:
- Equity holders of the parent	20	21	2,171	21	2,171
- Non-controlling interests		-	-	-	-
		21	2,171	21	2,171
Total comprehensive income for the period attributable to:
- Equity holders of the parent		376	3,077	376	3,077
- Non-controlling interests		-	-	-	-
		376	3,077	376	3,077
Earnings per share :
Basic earnings per share attributable to equity holders of the Company (sen)	20	0.00	0.26	0.00	0.26

The above unaudited Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2025.

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ZELAN BERHAD

Company No.: 197601001688 (27676-V)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

| | Notes | Unaudited
As at
31/03/2026 | Audited
As at
31/12/2025 |
| --- | --- | --- | --- |
| | | RM'000 | RM'000 |
| NON-CURRENT ASSETS | | | |
| Property, plant and equipment | | 2,157 | 2,177 |
| Rights-of-use assets | | 261 | 320 |
| Investment properties | | 20,610 | 20,610 |
| Receivables, deposits and prepayments | | 243,180 | 251,960 |
| Deposits, cash and bank balances (restricted) | | 53,475 | 51,398 |
| | | 319,683 | 326,465 |
| CURRENT ASSETS | | | |
| Receivables, deposits and prepayments | | 62,985 | 61,235 |
| Tax recoverable | | 13 | 12 |
| Deposits, cash and bank balances | | 3,578 | 3,093 |
| | | 66,576 | 64,340 |
| LESS: CURRENT LIABILITIES | | | |
| Trade and other payables | | 148,912 | 147,044 |
| Borrowings | 18 | 95,873 | 94,807 |
| Current tax liabilities | | 9,770 | 9,449 |
| | | 254,555 | 251,300 |
| NET CURRENT LIABILITIES | | (187,979) | (186,960) |
| TOTAL ASSETS LESS CURRENT LIABILITIES | | 131,704 | 139,505 |
| EQUITY AND LIABILITIES | | | |
| CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS
OF THE COMPANY | | | |
| Share capital | | 84,495 | 84,495 |
| Reserves | | (222,179) | (222,555) |
| | | (137,684) | (138,060) |
| Non-controlling interests | | (331) | (331) |
| TOTAL EQUITY | | (138,015) | (138,391) |
| NON-CURRENT LIABILITIES | | | |
| Other liabilities | | 38,713 | 37,029 |
| Borrowings | 18 | 231,006 | 240,867 |
| | | 269,719 | 277,896 |
| TOTAL EQUITY AND NON-CURRENT LIABILITIES | | 131,704 | 139,505 |
| Net liabilities per share (RM) | | (0.16) | (0.16) |

The above Unaudited Condensed Consolidated Statement of Financial Position should be read in conjunction with the Audited Financial Statement for the financial year ended 31 December 2025.

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ZELAN BERHAD
Company No.: 197601001688 (27676-V)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Attributable to equity holders of the parent
	Share Capital RM'000	Foreign Exchange Reserve RM'000	Capital Reserve * RM'000	General Reserve * RM'000	Revaluation Reserve* RM'000	(Accumulated Losses) / Retained Earnings RM'000	Sub - total RM'000	Non-controlling interests RM'000	Total Equity RM'000
Three months to 31 March 2026
Balance as at 1 January 2026	84,495	17,197	35,458	4,261	1,155	(280,626)	(138,060)	(331)	(138,391)
Profit for the financial period	-	-	-	-	-	21	21	-	21
Other comprehensive income:
Foreign currency translation differences - net movement	-	355	-	-	-	-	355	-	355
Total comprehensive income for the financial period	-	355	-	-	-	21	376	-	376
Balance as at 31 March 2026	84,495	17,552	35,458	4,261	1,155	(280,605)	(137,684)	(331)	(138,015)
Three months to 31 March 2025
Balance as at 1 January 2025	84,495	1,942	35,458	4,261	1,155	(220,077)	(92,766)	(331)	(93,097)
Profit for the financial period	-	-	-	-	-	2,171	2,171	-	2,171
Other comprehensive income:
Foreign currency translation differences - net movement	-	906	-	-	-	-	906	-	906
Total comprehensive income for the financial period	-	906	-	-	-	2,171	3,077	-	3,077
Balance as at 31 March 2025	84,495	2,848	35,458	4,261	1,155	(217,906)	(89,689)	(331)	(90,020)

• These reserves relate to net gain from disposals of investment in shares, issue of bonus shares by a subsidiary out of post-acquisition reserves and transfer of profits to a statutory reserve by certain overseas subsidiaries

The above Unaudited Condensed Consolidated Statement of Changes in Equity should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2025.

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ZELAN BERHAD

Company No.: 197601001688 (27676-V)

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

	Period Ended 31/03/2026 RM'000	Period Ended 31/03/2025 RM'000
OPERATING ACTIVITIES
Profit before taxation and zakat	798	2,974
Adjustments for:
Accretion of interest in carrying value of long term receivables	(3,384)	(3,821)
Allowance for impairment loss on financial assets and contract assets	-
Depreciation of property, plant and equipment	21	14
Depreciation of right-of-use assets	59	43
Discounting on trade receivables and trade payables	63	114
Fair value gain on investment properties	-
Finance costs	4,481	5,391
Finance income	(131)	(128)
	1,907	4,587
Changes in working capital :
Receivables	7,974	11,656
Payables	6,032	(734)
Cash generated from operations	15,913	15,509
Tax paid	(582)	(546)
Net cash flows generated from operating activities	15,331	14,963
INVESTING ACTIVITIES
Purchase of property, plant and equipment	(1)	(17)
Interest received from deposits and investments	131	128
Net cash flows generated from investing activities	130	111
FINANCING ACTIVITIES
Interest paid	(4,083)	(4,705)
Repayments of borrowings	(9,173)	(9,800)
Additional deposits pledged as security	(2,077)	(1,664)
Net cash flows used in financing activities	(15,333)	(16,169)
Net movement in cash and cash equivalents	128	(1,095)
Cash and cash equivalents at the beginning of the financial period	3,093	3,851
Currency translation differences	337	883
Cash and cash equivalents at the end of the financial period	3,558	3,639
Cash & cash equivalents at the end of the period:
Cash and bank balances	3,578	3,661
Less: Bank overdraft	(20)	(22)
	3,558	3,639

The above Unaudited Consolidated Statement of Cash Flows should be read in conjunction with the Audited Financial Statements for the financial year ended 31 December 2025.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

1. Basis of Preparation

The condensed consolidated interim financial statements ("Condensed Report") is unaudited and has been prepared in accordance with the applicable disclosure requirements of the Malaysian Financial Reporting Standards ("MFRS") 134: Interim Financial Reporting issued by the Malaysian Accounting Standards Board ("MASB") and Paragraph 9.22 and Appendix 9B of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Bursa Securities").

The Condensed Report are prepared on a going concern basis, notwithstanding of Zelan Berhad and its subsidiaries ("the Group") being an affected issuer under PN17 after it triggered Paragraph 8.04 of the Main Market Listing Requirements and Paragraph 2.1(d) of the PN17 on the assumption that the Group is able to turnaround on successful implementation and completion of its regularisation plan.

The Condensed Report should be read in conjunction with the audited financial statements for the financial year ended 31 December 2025. These explanatory notes attached to the Condensed Report provide an explanation of events and transactions that are significant to an understanding of the changes in the financial position and performance of the Group since the financial year ended 31 December 2025.

The Condensed Report are presented in Ringgit Malaysia ("RM") and all values are rounded to the nearest thousand ("RM'000").

1. Significant Accounting Policies

The significant accounting policies and methods of computation adopted for the Condensed Report are consistent with those adopted in the most recent audited financial statements for the financial year ended 31 December 2025. The adoption of the following amendments to MFRS that are mandatory for annual periods beginning on or after 1 January 2026.

Description	Effective for annual periods beginning on or after
Annual Improvements to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards	1 January 2026
Annual Improvements to MFRS 7 Financial Instruments: Disclosures	1 January 2026
Annual Improvements to MFRS 9 Financial Instruments (IFRS 9 as issued by IASB in July 2014)	1 January 2026
Annual Improvements to MFRS 10 Consolidated Financial Statements	1 January 2026
Annual Improvements to MFRS 107 Statement of Cash Flows	1 January 2026
Amendments to MFRS 9 and MFRS 7 Amendments to the Classification and Measurement of Financial Instruments	1 January 2026
MFRS 18 Presentation and Disclosure in Financial Statements	1 January 2027
MFRS 19 Subsidiaries without Public Accountability: Disclosures	1 January 2027
MFRS 121 The Effect of Changes in Foreign Exchange Rates	1 January 2027
MFRS 129 Financial Reporting in Hyperinflationary Economies	1 January 2027
Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture	Deferred

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

3. Auditors’ Report on Preceding Annual Financial Statements

The Group’s External Auditors, Nexia SSY PLT, have expressed a disclaimer of opinion on the Group’s Audited Financial Statements for the financial year ended 31 December 2025.

The auditors’ basis for disclaimer of opinion has been disclosed in the Independent Auditors’ Report section of the Group’s Annual Report for the year ended 31 December 2025 (page 162 to page 165).

In relation to disclaimer of opinion disclosed in the Independent Auditors’ Report mentioned above, the Group has taken necessary steps as stated below: -

Material uncertainty as regards going concern

(a) Practice Note 17 (“PN 17”)

The Company (Zelan Berhad) has appointed Malacca Securities Sdn. Bhd. on 21 March 2025 as the Principal Advisor for the Regularisation Plan pursuant to PN17 of the Listing Requirement.

Bursa Securities, vide its letter dated 31 October 2025, has further granted an extension of time of six (6) months up to 30 April 2026 for the Company to submit its Regularisation Plan to the relevant regulatory authorities for approval.

On 21 April 2026, the Company submitted an application to Bursa Securities for a further extension of time to submit its Regularisation Plan. As at the date of this announcement, the Company’s extension of time application is pending Bursa Securities’ approval.

In the interim, the Company is continuing to finalise the Proposed Regularisation Plan, including progressing the necessary steps following the approval of the Scheme of Arrangement by 100.00% in value of creditors present and voting at the court-convened creditors’ meeting held on 20 April 2026.

On 29 April 2026, Zelan Construction Sdn Bhd commenced its Creditors Voluntary Liquidation.

On 15 May 2026, Zelan Holdings (M) Sdn Bhd (“Zelan Holdings”) commenced its Creditors Voluntary Liquidation.

(b) Borrowings

The Group has complied with the monthly repayment schedule as per the approved Rescheduling Agreement dated 15 December 2023.

In view of the Proposed Scheme of Arrangement started in October 2025, the Group discontinued its monthly repayment schedule and will make a full settlement amount to the financier upon completion of the Proposed Scheme of Arrangement.

The borrowings in relation to the approved Rescheduling Agreement dated 15 December 2023 is attributable to Zelan Holdings. The Scheme of Arrangement (“SOA”) proposed by Zelan Holdings was withdrawn as Zelan Holdings was unable to secure the support of its major Class 1 scheme creditors.

Upon commencement of the liquidation process on 15 May 2026, Zelan Holdings is expected to cease to be consolidated within the Zelan Group. The Groups intends to settle the borrowings via Zelan Berhad pursuant to the Company’s SOA, on a net basis after the agreed haircut, utilising proceeds to be raised from the issuance of new shares as per the proposed Regularisation Plan.

As there are no further enforceable corporate guarantees and/or creditor claims against the Group in respect of the said borrowings subsequent to the settlement by Zelan Berhad to the financier, the Group does not expect any further material financial obligation arising from its Borrowings.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

(c) Use of the going concern assumption

The Group is of the opinion that the Proposed Regularisation Plan once finalised and implemented after obtaining the approval from relevant authorities will enable the Group to generate sufficient cash flows to meet its obligations and continue sustainable and viable operations.

1. Seasonal or Cyclical Factors

The Group's operations were not materially affected by any seasonal or cyclical factors.

1. Unusual Items

There was no unusual item affecting assets, liabilities, equity, net income or cash flows during the current financial period because of their nature, size or incidence.

1. Changes in Estimates of Amount Reported Previously

There was no change in estimates of amounts that have had a material effect on the results in the current financial period.

1. Debt and Equity Securities

There was no issuance, cancellation, repurchase, resale and repayment of debt and equity securities for the current financial period.

1. Dividend

For the current financial period, no dividend has been declared.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

9. Segmental Reporting

Segment analysis for the current financial quarter ended 31 March 2026 is as follows: 9 i)

| | Asset Management Services
RM '000 | Others
RM '000 | Total
RM '000 |
| --- | --- | --- | --- |
| Revenue | | | |
| Segment revenue | 7,483 | 629 | 8,112 |
| | 7,483 | 629 | 8,112 |
| Results | | | |
| Segment profit /(loss) | 6,627 | (1,348) | 5,279 |
| Finance costs | (3,865) | (616) | (4,481) |
| Profit / (Loss) before zakat
and taxation | 2,762 | (1,964) | 798 |
| Tax expense | (663) | (114) | (777) |
| Net profit / (loss) after zakat
and taxation | 2,099 | (2,078) | 21 |

9 ii)

| | Quarter ended
31/03/2026
RM'000
RM'000 | Quarter ended
31/03/2025
RM'000
RM'000 |
| --- | --- | --- |
| Asset Management Services | 7,483 | 6,297 |
| Others | 629 | 581 |
| | 8,112 | 6,878 |

The Group's revenue from contracts with customers is all derived from within Malaysia and are recognized over time.

10. Material Events Subsequent to the End of the Reporting Period

Other than mentioned in Note 3(a) and Note 11 there was no material event subsequent to the end of the current financial period.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

11. Changes in Composition of the Group

There was no change in the composition of the Group during the current financial period except for the following: -

On 29 April 2026, Zelan Construction Sdn Bhd commenced its Creditors Voluntary Liquidation.

On 15 May 2026, Zelan Holdings (M) Sdn Bhd commenced its Creditors Voluntary Liquidation.

12. Changes in Contingent Liabilities or Contingent Assets

There are no contingencies for the financial period.

13. Review of Performance

(i) Financial review for the current quarter and financial year to date

	Individual Quarter		Cumulative Period
	Current Quarter	Preceding Year Corresponding Quarter	Variance	Current Period	Preceding Year Corresponding Period	Variance
	31/03/2026	31/03/2025		31/03/2026	31/03/2025
	RM '000	RM '000	RM '000	RM '000	RM '000	RM '000
Revenue	8,112	6,878	1,234	8,112	6,878	1,234
Operating profit	5,279	8,365	(3,086)	5,279	8,365	(3,086)
Finance cost	(4,481)	(5,391)	910	(4,481)	(5,391)	910
Profit before zakat and taxation ("PBTZ")	798	2,974	(2,176)	798	2,974	(2,176)

The Group's revenue of RM8.1 million for the current quarter ended 31 March 2026 was slightly higher than the revenue of RM6.9 million registered in the same quarter of Financial Year 2025("FY 2025") by RM1.2 million. The higher revenue is mainly due to increase in revenue from local projects.

The Group reported a profit before zakat and taxation ("PBZT") of RM0.8 million in the current quarter under review compared to a profit before zakat and taxation ("PBZT") of RM3.0 million in the corresponding quarter of FY2025. The lower PBZT in the current quarter compared to the corresponding quarter of FY2025 is mainly due to inclusion in the previous quarter one off payment collection.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

ii) Financial review for current quarter compared with immediate preceding quarter

	Individual Quarter
	Quarter ended 31/03/2026	Quarter ended 31/12/2025	Variance
	RM '000	RM '000	RM '000
Revenue	8,112	7,305	807
Profit / (Loss) before zakat	798	(2,868)	3,666

In the current quarter ended 31 March 2026, the Group reported higher revenue of RM8.1 million compared to the preceding quarter revenue of RM7.3 million, due to additional revenue from local project.

In the current quarter ended 31 March 2026, the Group reported a profit before taxation of RM0.8 million compared to the preceding quarter loss before taxation of RM2.9 million mainly due to additional provision of taxation in the preceding quarter.

1. Prospects

The Group, together with its professional advisors, is finalizing a Proposed Regularization Plan to improve its financial conditions and performance. As part of its Proposed Regularization Plan, the Group has completed a Court-Convened meeting of the creditors of Zelan Berhad on 20 April 2026. The scheme of arrangement presented in the Zelan Berhad's court-convened creditors' meeting had been approved by the requisite majority in value of the creditors present and voting at the court-convened meeting, obtaining a 100.00% in value approval. The Company will next be filing the necessary application to seek for the Court's sanction of the proposed scheme of arrangement.

As part of the Group's Proposed Regularization Plan, Zelan Construction Sdn Bhd and Zelan Holdings (M) Sdn Bhd commenced their Creditors Voluntary Liquidation on 29 April 2026 and 15 May 2026, respectively.

The Group is of the opinion that the above Proposed Regularisation Plan once finalised and implemented after obtaining the approval from relevant authorities will enable the Group to generate sufficient cash flows to meet its obligations and continue sustainable and viable operations.

In the meantime, the Group remains cautious and committed to improve operational efficiencies and enhancing profitability. The Group's prospects remain contingent on the successful implementation of the Proposed Regularisation Plan and obtaining the requisite approvals from relevant authorities.

1. Profit Forecast or Profit Guarantee

There was no profit forecast published for the current financial period.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

16. Taxation

	Individual Quarter		Cumulative Quarter
	Current year quarter 31/03/2026 RM '000	Preceding year corresponding quarter 31/03/2025 RM '000	Twelve months ended 31/03/2026 RM '000	Twelve months ended 31/03/2025 RM '000
Malaysian income tax - current	(777)	(803)	(777)	(803)
Tax expense	(777)	(803)	(777)	(803)

For the financial period ended 31 March 2026, the taxation charge arose mainly from certain profit-making subsidiary companies and certain expenses which are not deductible for income tax purposes.

17. Status of Corporate Proposals Announced

Except as mentioned in note 3 (a) there is no outstanding corporate proposal announced up to the date of this announcement.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

1. Borrowings

Details of the Group's borrowings as at 31 March 2026 are as follows:

	As at 31.03.2026
	Short term borrowings		Long term borrowings		Total borrowings
	Foreign denomination	RM denomination	Foreign denomination	RM denomination	Foreign denomination	RM denomination
Secured
Term loan	AED '000	RM '000	AED '000	RM '000	AED '000	RM '000
	52,715	58,077	-	-	52,715	58,077
Islamic financing	-	37,489	-	231,006	-	268,495
Unsecured
Lease Liabilities	-	287	-	-	-	287
Bank Overdraft	18	20	-	-	18	20
	52,733	95,873	-	231,006	52,733	326,879
^Exchange rate: AED1 = RM1.1017
	As at 31.12.2025
	Short term borrowings		Long term borrowings		Total borrowings
	Foreign denomination	RM denomination	Foreign denomination	RM denomination	Foreign denomination	RM denomination
Secured
Term loan	AED '000	RM '000	AED '000	RM '000	AED '000	RM '000
	52,148	57,666	-	-	52,148	57,666
Islamic financing	-	36,882	-	240,751	-	277,633
Lease Liabilities	-	239	-	116	-	355
Bank Overdraft	18	20	-	-	18	20
	52,166	94,807	-	240,867	52,166	335,674
^Exchange rate: AED1 = RM1.1058

• AED - The United Arab Emirates Dirham
  ** RM - Ringgit Malaysia

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

1. Changes in Material Litigation

Details of the significant litigations during the financial quarter are as follows:

Projects in Malaysia

(a) In relation to a project in Malaysia, a subsidiary company, Zelan Construction Sdn. Bhd. ("ZCSB") had filed a Notice of Arbitration dated 25 March 2019 against its sub-contractor. The subcontractor had on 24 April 2019 filed a response and counterclaim for RM19,418,937 against ZCSB for the unpaid certified invoices, retention sum, outstanding variation order and GST.

On 30 May 2025, ZCSB received a decision from the Tribunal via Final Award dated 26 May 2025 in relation to the arbitration against the sub-contractor. In the Final Award, the Tribunal has dismissed all ZCSB's claims against the sub-contractor and ordered the following:-

i. ZCSB is to pay the subcontractor the sum of RM5,786,911.29 being the balance unpaid sum under the Subcontractor Progress Payment Certificates.
ii. Further to subparagraph (i) above, ZCSB is to pay LKSB pre-award interest at:

a) 5% per annum on RM1,081,280.88 from 31.12.2015 until the date of the Final Award.
b) 5% per annum on RM4,570,763.02 from 5.2.2016 until the date of the Final Award.
c) 5% per annum on RM113,666.90 from 28.2.2016 until the date of the Final Award.
d) ZCSB is to pay the sub-contractor the sum of RM103,709.99 being the balance unpaid sum for Approved Variations.
e) ZCSB is to pay the sub-contractor the sum of RM6,564,122.80 being the release of the 1st moiety of retention sum.
f) Further to subparagraph (iv) above, ZCSB is to pay the sub-contractor pre-award interest at 5% per annum on RM6,564,122.80 from 13.2.2016 until the date of the Final Award.
g) ZCSB is to pay the sub-contractor the sum of RM6,564,122.80 being the release of the 2nd, moiety of retention sum.
h) Further to subparagraph (vi) above, ZCSB is to pay the sub-contractor pre-award interest at 5% per annum on RM6,564,122.80 from 6.2.2018 until the date of the Final Award.
i) ZCSB is to pay the sub-contractor the sum of RM509,881.03 on account of Additional Variations.

ZCSB is to pay the sub-contractor the sum of RM2,827,272.19 in respect of costs and expenses.

ZCSB is to pay the sub-contractor post-award interest at the rate of 5% per annum on all sums awarded from the date of the Final Award until full realisation.

In view of the above, the Group has recognised the allowance for impairment loss on financial assets of RM38,241,466.52 and arbitration award (counterclaims) of RM24,151,014.64 in the financial result for the financial year ended 31 December 2025.

ZCSB has been placed under interim liquidation with effect from 29 April 2026. Accordingly, any recovery by the sub-contractor pursuant to the arbitration award must be made through the liquidator of ZCSB.

(b) In relation to a project in Malaysia, a subsidiary company, ZCSB had issued a Notice of Arbitration dated 8 March 2019 to a consultant in respect of the disputes and differences under the Consultancy Services Agreement dated 9 May 2013.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

1. Changes in Material Litigation (Continued)

Details of the significant litigations during the financial year are as follows: (continued)

Projects in Malaysia (continued)

(b) (continued)

ZCSB claims for the following:-

(i) Declaration that a consultant has breached its obligations under the Contract;
(ii) Payment for the refund on value of cost savings for deviation items amounting to RM5,969,352;
(iii) Cost in rectifying the non-conformance/deviation items in the sum of RM43,057,017;
(iv) Payment for electricity charges paid by ZCSB on behalf of client from February 2016 until June 2019 in the sum of RM3,446,341;
(v) Payment for ZCSB's loss of income from January 2016 until 30 June 2018 Amounting to RM138,959,161; and
(vi) General damages, cost of Arbitration proceeding and other cost the Arbitrator deems appropriate.

ZCSB filed its Statement of Case to the AIAC on 12 April 2021 and the consultant then filed its Statement of Defence and Counterclaim on 28 May 2021. ZCSB filed its Reply to Defence and Defence to Counterclaim on 25 June 2021 and the consultant filed its Rejoinder on 23 July 2021.

Arbitration completed on 23 September 2024. The Arbitrator directed parties to file the followings:

(i) Notes of Proceedings on 16 December 2024.
(ii) Both parties to file Written Submission on or before 7 March 2025.
(iii) Both parties to file Written Submission in Reply on or before 4 May 2025.

Parties have complied with (i) to (iii) above.

ZCSB requested Application to Expunge towards the consultant's Submission in Reply to the Arbitrator and the Arbitrator directed as follows:

(i) ZCSB to submit the Submission to Expunge on or before 10 July 2025.
(ii) The consultant to submit the Submission in Reply on or before 24 July 2025.
(iii) ZCSB to reply to the consultant's Submission in Reply on or before 31 July 2025.
(iv) Rejoinder shall only be allowed with the leave of the Tribunal.

Parties had complied with (i) to (iii) above.

On 5 August 2025, the consultant requested to the Tribunal to file the followings:

(i) A brief reply to ZCSB's Submissions-In-Reply to Expunge certain paragraphs of the subcontractor's submission in reply; and
(ii) A discovery application for the arbitral award rendered in (a) above.

ZCSB recorded its objections to both the consultant's request to submit further submissions and particularly against the discovery application for the arbitral award.

The consultant further sought to file an application for security for costs and the Arbitrator on 5 April 2026 has allowed the request.

Pursuant to the above, the consultant filed a Notice of Application for further security for costs on 20 April 2026 and ZCSB to file a respond by 4 May 2026.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

19. Changes in Material Litigation (Continued)

Details of the significant litigations during the financial year are as follows: (continued)

Projects in Malaysia (continued)

(b) (continued)

Oral clarification for security for cost and ZCSB’s Application to Expungement is fixed on 16 July 2026.

ZCSB has been placed under interim liquidation with effect from 29 April 2026. ZCSB is presently seeking the necessary approval to proceed with the arbitration. Further, the sub-contractor will be required to obtain the necessary leave from the Court in order to proceed with its counterclaim against ZCSB. Any outcome from the recovery of arbitration award by the sub-contractor against ZCSB is not expected to have any material impact on Zelan Group.

(c) In relation to a project in Malaysia, a subsidiary company, ZCSB and its consortium partner, Hasrat Sedaya Sdn. Bhd known as Zelan-Hasrat Sedaya Consortium (ZHSC) had issued a Notice of Arbitration dated 24 March 2025 to its project employer in respect of the disputes and differences of the Variation Claim and Loss and Expense claim. Subsequently, both parties has agreed to appoint a single Arbitrator to preside over this matter.

Upon appointment of the Arbitrator, the ZHSC (Claimant) and the project employer (Respondent) have agreed on the procedural timeline as follows:

• (i) Claimant to submit the Statement of Claim on 19 September 2025
• (ii) Respondent to submit the Statement of Defence and Counterclaim 14 November 2025
• (iii) Claimant to submit the Statement of Reply and Defence to Counterclaim 5 December 2025
• (iv) Respondent to submit Statement of Reply to Defence to Counterclaim 9 January 2026

ZHSC has proceeded to file its Statement of Case on 19 September 2025. ZHSC is seeking the following reliefs in the Arbitration:

• (i) payment by the Respondent of the sum of RM 30,194,903.91 for Variation works;
• (ii) Payment by the Respondent of RM 44,594,989.10 (or any other sum determined by the Tribunal) for the loss and expense incurred by the Claimants for the EOT period granted between 14.3.2017 till 30.6.2019 or any part of this period premised on the Contract or as common law;
• (iii) Damages;
• (iv) payment by the Respondent of interest on the sums stated in (a) to (h) above at 6% or as determined by the Tribunal for the period pre-award;
• (v) post-award till actual payment as determined by the Tribunal;
• (vi) payment of damages to be assessed for the period after 30.6.2019 till the issuance of the CPC;
• (vii) interest thereon at 6% or determined by the Tribunal for period pre- award and post-award till actual payment interest as determined by the Tribunal;
• (viii) costs; and
• (ix) any further or other reliefs as deemed just and reasonable by the Tribunal.

The parties further filed the following:

• (i) Claimant filed Statement of Case on 19 September 2025.
• (ii) Respondent filed Statement of Defence and Counterclaim on 28 November 2025.
• (iii) Claimant filed Reply to Defence and Defence to Counterclaim on 2 February 2026.
• (iv) Respondent filed Reply to Defence and Counterclaim on 16 March 2026.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

19. Changes in Material Litigation (Continued)

Details of the significant litigations during the financial year are as follows: (continued)

Projects in Malaysia (continued)

(c) continued

Hearing for this matter has been fixed on the following dates:

(i) 9 to 10 June 2027;
(ii) 14 to 17 June 2027; and
(iii) 9 to 12 August 2027.

ZCSB has been placed under interim liquidation with effect from 29 April 2026. ZCSB is presently seeking the necessary approval to proceed with the arbitration. Further, the project employer will be required to obtain the necessary leave from the Court in order to proceed with its counterclaim against ZCSB. Any outcome from this arbitration is not expected to have any material impact on Zelan Group.

(d) On 19 August 2025, a sub-contractor appointed by ZCSB commenced three (3) adjudication proceedings under the Construction Industry Payment and Adjudication Act ("CIPAA") 2012 to recover the outstanding sums for work done, retention, and performance guarantee sum in relation to construction works carried out under three (3) separate packages awarded via Letter of Award dated 1 June 2018, 8 October 2018, and 27 November 2018 respectively. The total amount claimed by the sub-contractor in the adjudications amounts to RM6,279,439.71. Details of the adjudication claims are as follows:

(i) Adjudication 1: RM2,341,384.53
(ii) Adjudication 2: RM2,990,563.25
(iii) Adjudication 3: RM947,491.93

On 23 October 2025, ZCSB received the adjudication decision whereby ZCSB is required to pay sub-contractor the amount of RM6,171,674.52 comprising of the following:

(i) Adjudication Decision 1: RM2,255,172.47
(ii) Adjudication Decision 2: RM2,969,010.12
(iii) Adjudication Decision 3: RM947,491.93

On 3 November 2025, ZCSB was served with three (3) Originating Summons filed by the subcontractor for the enforcement of the adjudication decisions in the High Court pursuant to Orders 7, 28, and 69A, Rules 2 and 5, and Order 92, Rule 4 of the Rules of Court 2012. The amounts claimed in the Originating Summons are as follows:

(i) Registration and Enforcement of Adjudication Decision 1: RM2,255,172.47
(ii) Registration and Enforcement of Adjudication Decision 2: RM2,969,010.12
(iii) Registration and Enforcement of Adjudication Decision 3: RM947,491.93

The High Court on 20 November 2025 allowed the sub-contractor's applications to register and enforce the adjudication decision.

On 24 November 2025, the sub-contractor filed Notice of Application for garnishment to ZCSB and the application was allowed by Court on 24 December 2025. The amount garnished was nominal.

The sub-contractor further filed another garnishment application to ZCSB and the application was allowed by Court on 19 January 2026. The amount garnished was nominal.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

19. Changes in Material Litigation (Continued)

Details of the significant litigations during the financial year are as follows: (continued)

Projects in Malaysia (continued)

(d) continued

ZCSB has been placed under interim liquidation with effect from 29 April 2026. Any further outcome in relation to the adjudication decision against ZCSB is not expected to have any material impact on Zelan Group.

Projects Overseas

(e) In relation to a project in Abu Dhabi, a subsidiary company, Zelan Holdings (M) Sdn Bhd ("ZHM") was served with an Originating Summons ("OS") on 5 July 2023 by the sub-contractor. The subcontractor is applying for the High Court to recognise the Award dated 30 December 2019 for the principal sum of AED28,934,208.90 (RM36,804,313.72) in respect of the claim against ZHM regarding the project in Abu Dhabi as binding from the date of the Arbitration award on 30 December 2019. The OS was fixed for case management on 31 October 2023.

On 7 March 2025, the High Court dismissed the sub-contractor's application with costs of RM20,000 payable by the sub-contractor to ZHM and the subcontractor had on 3 April 2025 filed an appeal to the High Court against the said decision.

The Court of Appeal fixed case management on 4 July 2025 and directed as follows:

(i) Parties to file the Special Bundle, Written Submissions & Bundle of Authorities, Executive Summary and Common Core Bundle (if any) on or before 12 March 2026;
(ii) Parties to file the Submissions in Reply (if any) on or before 26 March 2026;
(iii) Next Case Management is fixed on 26 March 2026 to monitor the compliance of the Case Management Directions; and
(iv) Hearing is fixed on 10 April 2026.

On 2 October 2025, ZHM has filed an application for leave to summon a scheme meeting with their scheme creditors for the purpose of considering the proposed Scheme of Arrangement ("SOA application") in Court. Upon filing of the SOA application, ZHM further moved for a restraining order ("RO").

On 1 December 2025, the Court further granted an ad interim RO until the disposal of the SOA application. In lieu of the RO granted in favour of ZHM, all filing directions were set aside and that the Hearing which was originally fixed on 10 April 2026 was vacated.

Next Case Management is fixed on 29 April 2026 for parties to update on the status of the Hearing of the Respondent's Application in respect of the SOA and the RO. However, on 4 May 2026, ZHM has proceeded to withdraw its application for SOA.

Further to the above and following the withdrawal of ZHSB's SOA application on 4 May 2026, whereby the ad interim restraining order was accordingly discharged, the Court on 12 May 2026 directed as follows:

(i) Written Submissions to be filed by 23 December 2026;
(ii) Submissions in Reply to be filed by 6 January 2027;
(iii) Case management is fixed on 7 January 2027; and
(iv) Hearing is fixed on 21 January 2027.

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

19. Changes in Material Litigation (Continued)

Details of the significant litigations during the financial year are as follows: (continued)

Projects Overseas (continued)

(e) continued

ZHM has been placed under interim liquidation with effect from 15 May 2026. The sub-contractor will be required to obtain the necessary leave from the court in order to proceed with the appeal. Any outcome from this appeal against ZHM is not expected to have any material impact on Zelan Group.

(f) In relation to a project in Abu Dhabi, a subsidiary company, ZHM was served with an Originating Summons ("OS") on 23 July 2025 by a consultant of the project. The consultant was appointed by ZHM on 31 January 2018 to provide quantum and delay expert services to ZHM, in respect of an arbitration in Abu Dhabi.

The consultant commenced legal proceedings in Abu Dhabi and subsequently obtained an execution order against ZHM on 24 January 2021 in the amount of AED 925,160.00 comprised the followings:

(i) AED 875,000.00 – Judgment sum
(ii) AED 40,000.00 – Court Fees
(iii) AED 60.00 – Writ of Execution
(iv) AED 7,000.00 – Expenses-Expert Costs
(v) AED 100.00 – Expenses-Publication Costs
(vi) AED 3,000.00 – Execution Fees

The consultant is applying to the High Court of Malaysia for a judgment to be entered against ZHM based on the judgment obtained by the consultant in the Court of Appeal and Court of Cassation in Abu Dhabi.

The consultant served on ZHM the Originating Summons on 25 July 2025. Case management of the originating summon was fixed on 24 August 2025. During the case management, the Court has directed as follows:

(i) ZHM is to file the Affidavit in Reply by 25 August 2025.
(ii) The consultant is to file the Affidavit in Reply by 19 September 2025.
(iii) Both parties are to file written submissions simultaneously by 31 October 2025.
(iv) Both parties are to file reply submissions simultaneously by 14 November 2025.
(v) The hearing of the Originating Summons is fixed before on 26 November 2025.

Parties have complied complied with (i) and (ii) above.

On 2 October, ZHM has filed an application for Scheme of Arrangement (SOA) and Restraining Order (RO). Upon filing of the application of the SOA and RO, no proceedings may be commenced or continued against ZHM until the application is decided by the Court, or until the lapse of 2 months from the date of filing of the application, whichever is earlier.

ZHM, through its solicitors, notified the Court on 7 October 2025 of its application for a Scheme of Arrangement ("SOA") and the grant of a RO. Pursuant to the RO granted in connection with the SOA application, the proceedings in this matter have been stayed. However, on 4 May 2026, ZHM has proceeded to withdraw its application for SOA.

Following the withdrawal of ZHSB's SOA application on 4 May 2026, whereby the ad interim restraining order was accordingly discharged, the Court on 7 May 2026 directed as follows:

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ZELAN BERHAD
Company No: 197601001688 (27676-V)

1. Changes in Material Litigation (Continued)

Details of the significant litigations during the financial year are as follows: (continued)

Projects Overseas (continued)

(f) continued

(i) Simultaneous filing of Written Submissions by 25 June 2026;
(ii) Simultaneous filing of Reply Submissions by 9 July 2026; and
(iii) Decision/Hearing is fixed on 23 July 2026.

ZHM has been placed under interim liquidation with effect from 15 May 2026. The sub-contractor will be required to obtain the necessary leave from the court in order to proceed with the appeal. Any outcome from this appeal against ZHM is not expected to have any material impact on Zelan Group.

1. Earnings Per Share

The basic earnings per share is calculated based on the Group's profit attributable to the equity holders of the Company, divided by the number of ordinary shares in issue during the financial period:-

	Individual Quarter		Cumulative	Quarter
	Current year quarter	Preceding year quarter	Current year-to-date	Preceding year-to-date
	31/03/2026	31/03/2025	31/03/2026	31/03/2025
Profit attributable to equity holders of the company (RM'000)	21	2,171	21	2,171
Number of ordinary shares in issue ('000)	844,895	844,895	844,895	844,895
Basic earnings per share (sen)	0.00	0.26	0.00	0.26

1. Authorisation for Issue

The interim financial report was authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 21 May 2026.

By order of the Board

Jamalia Sheridan binti Khotib
Secretary

Kuala Lumpur
21 May 2026

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