Tysan : 2021 Interim Report

TYSAN HOLDINGS LIMITED

泰 昇 集 團 控 股 有 限 公 司

(Incorporated in Bermuda with limited liability)

(Stock Code : 687)

Interim Report

2021

Tysan Holdings Limited

Contents

	Pages
Management Discussion and Analysis	2
Corporate Governance	4
Other Information	5
Unaudited Condensed Interim Financial Statements
Consolidated Statement of Profit or Loss	9
Consolidated Statement of Comprehensive Income	10
Consolidated Statement of Financial Position	11
Consolidated Statement of Changes in Equity	13
Consolidated Statement of Cash Flows	15
Notes to Unaudited Condensed Interim Financial Statements	17
Corporate Information	30

INTERIM REPORT 2021

1

Tysan Holdings Limited

Management Discussion and Analysis

The board (the "Board") of directors (the "Directors") of Tysan Holdings Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2021. During the period under review, the Group recorded a turnover of approximately HK$1,109 million (period ended 30 June 2020: HK$1,469 million) and a loss attributable to ordinary equity holders of the Company of about HK$8 million (period ended 30 June 2020: loss of HK$92 million), representing loss of about HK$0.002 per ordinary share of the Company ("Share") (period ended 30 June 2020: loss of HK$0.03 per Share).

Business Review

Foundation Piling

For the period under review, turnover of the Group's foundation piling segment was about HK$1,088 million (period ended 30 June 2020: HK$1,451 million) and the segment recorded a profit of approximately HK$30 million (period ended 30 June 2020: loss of HK$72 million).

The Group's major contracts on hand include various private commercial and industrial development projects at New Kowloon Inland Lot No. 6610 at Kai Tak Area 1E Site 1, New Kowloon Inland Lot No. 6591 at Kai Tak Area 4B Site 4, Inland Lot No. 9065 on Gage Street and Graham Street, Tai Po Town Lot No. 157, Sai Sha, Shap Sze Heung, rental housing project at Shek Pai Wan Road and Drainage Services Department Office Building at Cheung Sha Wan Sewage Pumping Station.

Prospects

It is generally expected that the overall economy will improve in the second half of 2021 as the vaccination rate goes up, and we believe that the overall operating environment will continue to improve.

Tender invitations for our foundation piling work have been increasing steadily, driven by both private and public sector projects. As a result, we have secured some meaningful projects during the first half of this year.

In light of the housings shortage in Hong Kong, the Government is expected to expedite various initiatives to increase land supply and residential supply. The Government also intends to speed up its railway development projects and to rehabilitate the city's aging buildings. These will create demand for infrastructure and foundation works over the medium term.

The Group remains in a net cash position. Our strong balance sheet will enable us to make significant new investments when opportunities arise.

Financial Review

Financial position, liquidity and financial resources

As at 30 June 2021, the Group's cash on hand was about HK$760 million (31 December 2020: HK$707 million) while

total assets and net assets were about HK$2,100 million (31 December 2020: HK$2,267 million) and HK$1,428 million

(31 December 2020: HK$1,433 million), respectively. Total liabilities were about HK$672 million (31 December 2020:

HK$834 million), out of which financial liabilities were about HK$371 million (31 December 2020: HK$470 million) and the remaining were mainly contract liabilities and current or deferred tax provision.

As at 30 June 2021, the Group had interest-bearing borrowings of about HK$90 million (31 December 2020: HK$62 million).

The Group's gearing ratio, calculated on the basis of net debt (including financial liabilities less cash on hand) divided by total equity of the Group, was Nil as at 30 June 2021 as the Group had a net cash position.

• INTERIM REPORT 2021

Tysan Holdings Limited

Management Discussion and Analysis

Financial Review (Cont'd)

Funding and treasury policy

The Group continues to maintain a prudent funding and treasury policy and sustain a sound good capital structure with healthy cash flows. Surplus funds are maintained in the form of deposits with leading banks. Borrowings are denominated in Hong Kong dollar and subject to floating interest rates. Currency exposure is being closely monitored and forward contracts will be considered as required.

Capital expenditure and capital commitments

During the six months ended 30 June 2021, the Group invested about HK$10 million on purchase of machinery and equipment. As at 30 June 2021, the Group had capital commitments in relation to purchase of machinery and equipment of about HK$22 million. Capital expenditure is principally financed by internal resources.

Pledge of assets

As at 30 June 2021, an office premise of the Group with a carrying amount of about HK$134 million was pledged to a bank to secure the instalment loan granted to the Group.

Contingent liabilities

Contingent liabilities in relation to corporate guarantees provided by the Group to banks for issue of performance bonds decreased from about HK$450 million as at 31 December 2020 to about HK$407 million as at 30 June 2021. Save for the above, the Group did not have any other material contingent liabilities.

Remuneration Guidelines and Employment

The Group, including its subsidiaries in Hong Kong, Macau and Mainland China, employed approximately 803 employees as at 30 June 2021. The Group's remuneration guidelines are primarily based on prevailing market salary levels and the performance of the respective business units and individuals concerned. Fringe benefits include provident fund, medical insurance and training. In addition, share options may also be granted in accordance with the terms of the Group's approved share option scheme.

Interim Dividend

The Board of Directors has resolved to declare an interim dividend of HK$0.01 (period ended 30 June 2020: Nil) per Share for the six months ended 30 June 2021. The interim dividend will be payable on Friday, 24 September 2021 to shareholders whose names appear on the Company's register of members on Tuesday, 7 September 2021.

Closure of Register of Members

The register of members of the Company will be closed from Monday, 6 September 2021 to Tuesday, 7 September 2021 (both dates inclusive), during which period no transfer of Shares will be effected. In order to qualify for entitlement of the interim dividend for the six months ended 30 June 2021, all transfers of Shares accompanied by the relevant share certificates and transfer forms must be lodged for registration with the Company's Branch Registrar in Hong Kong, Tricor Tengis Limited, Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong, not later than 4:30 p.m. on Friday, 3 September 2021.

INTERIM REPORT 2021

3

Tysan Holdings Limited

Corporate Governance

During the period under review, Tysan Holdings Limited (the "Company") has complied with the code provisions set out in the Corporate Governance Code and Corporate Governance Report contained in Appendix 14 to the Rules Governing the Listing of Securities ("Listing Rules") on The Stock Exchange of Hong Kong Limited save for the following deviation:

Code Provision A.4.1 stipulates that non-executive directors should be appointed for a specific term, subject to re-election.

• non-executivedirector of the Company ("Non-executive Director"), Mr. Justin Wai, and an independent non- executive director of the Company ("Independent Non-executive Director"), Mr. Lung Chee Ming, George, have been appointed without a specific term but are subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the bye-laws of the Company. As such, the board (the "Board") of directors of the Company (the "Directors") is of the view that the aforesaid Non-executive Director and Independent Non-executive Director did not have to be appointed for a specific term at the time of appointment.

Four Non-executive Directors, namely Mr. David Robert McClure, Mr. Yuen Pak Man, Ms. Gu Ye and Ms. Hou Xiangjia, and three Independent Non-executive Directors, namely Mr. Li Kit Chee, Ms. Chow Wai Lee and Ms. Jennifer Kwok are appointed for a specific term of three years. They are subject to renewal after the expiry of the then current term and the retirement by rotation and re-election at the annual general meeting of the Company in accordance with the bye- laws of the Company.

Audit Committee

As at the date of this report, the audit committee ("Audit Committee") of the Company and its subsidiaries (the "Group") comprises four members, namely Mr. Li Kit Chee, Mr. Lung Chee Ming, George, Ms. Chow Wai Lee and Ms. Jennifer Kwok who are Independent Non-executive Directors. The chairman of the Audit Committee is Mr. Li Kit Chee.

The primary duties of the Audit Committee are to review and supervise the financial reporting system, risk management and internal control systems of the Group, to review the Group's financial information, compliance and to provide advice and comments to the Board.

The unaudited condensed interim financial statements of the Group for the six months ended 30 June 2021 have been reviewed by the Audit Committee.

Model Code

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") set out in Appendix 10 to the Listing Rules as the code of conduct regarding directors' securities transactions. Having made specific enquiry, all the Directors have confirmed that they have fully complied with the required standard set out in the Model Code for the period under review.

• INTERIM REPORT 2021