2024 Interim Report

Contents

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 2024. During the period under review, the Group recorded a turnover of HK$1,009 million (period ended 30 June 2023: HK$1,426 million) and a profit attributable to ordinary equity holders of the Company of about HK$11 million (period ended 30 June 2023: loss of HK$41 million), representing an earning of HK0.32 cents per ordinary share of the Company ("Share") (period ended 30 June 2023: loss of HK1.23 cents per Share).

Business Review

Foundation Piling

For the period under review, turnover of the Group's foundation piling segment was about HK$1,009 million (period ended 30 June 2023: HK$1,426 million) and the segment recorded a profit of about HK$19 million (period ended 30 June 2023: loss of HK$22 million).

The Group's major contracts on hand include various commercial and residential development projects at Kowloon Inland Lot No. 11273, junction of Sai Yee Street and Argyle Street, Mong Kok, Lot No. 4354 in D.D. 124, Kiu Cheong Road, Kiu Tau Wai, rental housing projects at Fanling North Area 15 East Phase 2, Tung Chung Area 42, warehouse development at Kwai Chung Container Terminal 2 and light public housing at Tuen Mun Area 54 and at Sheung On Street/Sheung Ping Street, Chai Wan.

Prospects

Looking ahead, the foundation piling sector will remain highly competitive due to the prevailing economic climate. Nevertheless, the Group's tender flow remains healthy and we have implemented cost-trimming measures to stay competitive. Tender flow from public sector remains robust as more projects such as rental and affordable housing, site formation and infrastructure projects are being rolled out, in contrast with a relative slowdown in the private sector. Land in new development areas, including the Northern Metropolis, and railway property development projects will be introduced to meet the government's development objectives. These projects will span multiple phases and are expected to provide a steady stream of business for the construction sector as a whole. We will actively participate in tenders for these government initiatives to secure our market share in the foundation piling market.

As for the property market in Hong Kong, investors remain cautious due to the high interest rate environment, the worse-than-expected economic recovery and the oversupply in the private sector. However, opportunities may arise in light of expected interest rate cuts and the government's proactive measures in reviving the local economy. We will closely monitor the economic developments and adjust our business strategies from time to time.

The Group continues to be cautiously optimistic about our core foundation and piling business. Our strong balance sheet will enable the Group to take on large-scale tenders or to make significant new investments when opportunities arise.

• INTERIM REPORT 2024

Tysan Holdings Limited

Management Discussion and Analysis

Financial Review

Financial position, liquidity and financial resources

As at 30 June 2024, the Group's cash on hand was about HK$689 million (31 December 2023: HK$747 million) while

total assets and net assets were about HK$1,795 million (31 December 2023: HK$1,915 million) and HK$1,243 million

(31 December 2023: HK$1,283 million), respectively. Total liabilities were about HK$552 million (31 December 2023:

HK$632 million), out of which financial liabilities were about HK$363 million (31 December 2023: HK$420 million) and the remaining were mainly accruals, contract liabilities and current or deferred tax provision.

As at 30 June 2024, the Group had interest-bearing borrowings of about HK$117 million (31 December 2023: HK$129 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 2024 as the Group had a net cash position.

Funding and treasury policy

The Group continues to maintain a prudent funding and treasury policy and sustain a sound and 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 2024, the Group invested about HK$20 million on purchase of machinery and equipment. As at 30 June 2024, the Group had capital commitments in relation to purchase of machinery and equipment of about HK$4 million. Capital expenditure is principally financed by internal resources.

Pledge of assets

As at 30 June 2024, an office premise of the Group with a carrying amount of about HK$111 million and a bank deposit of about HK$5 million were pledged to banks to secure the instalment loans 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$332 million as at 31 December 2023 to about HK$324 million as at 30 June 2024. Save for the above, the Group did not have any other material contingent liabilities.

Tysan Holdings Limited

Management Discussion and Analysis

Remuneration Guidelines and Employment

The Group, including its subsidiaries in Hong Kong, Macau and Mainland China, employed approximately 752 employees as at 30 June 2024. 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 has resolved to declare an interim dividend of HK$0.01 (period ended 30 June 2023: Nil) per Share for the six months ended 30 June 2024. The interim dividend will be payable on Friday, 27 September 2024 to shareholders whose names appear on the Company's register of members on Friday, 6 September 2024.

Closure of Register of Members

The register of members of the Company will be closed from Thursday, 5 September 2024 to Friday, 6 September 2024 (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 2024, all transfers of Shares accompanied by the relevant share certificates and transfer forms must be lodged for registration with the Company's branch share registrar in Hong Kong, Tricor Tengis Limited, 17/F, Far East Finance Centre, 16 Harcourt Road, Hong Kong, not later than 4:30 p.m. on Wednesday, 4 September 2024.

• INTERIM REPORT 2024

Tysan Holdings Limited

Corporate Governance

During the period under review and up to the date of this report, Tysan Holdings Limited (the "Company") has complied with the code provisions set out in the Corporate Governance Code contained in Appendix C1 to the Rules Governing the Listing of Securities (the "Listing Rules") on The Stock Exchange of Hong Kong Limited save for the following deviation:

Code Provision C.1.6 stipulates that independent non-executive directors and other non-executive directors should attend general meetings to gain and develop a balanced understanding of the views of shareholders

Mr. Vikram Garg and Ms. Hou Xiangjia, both non-executive directors of the Company (the "Director(s)"), did not attend the annual general meeting (the "AGM") of the Company held on 30 May 2024 due to other business commitments. However, there were sufficient number of Directors, including executive Directors, non-executive Directors and independent non-executive Directors, presented at the AGM to enable the board of Directors (the "Board") to develop a balanced understanding of the views of the Company's shareholders.

Audit Committee

As at the date of this report, the audit committee of the Company (the "Audit Committee") comprises four members, namely Mr. Li Kit Chee, Mr. Lung Chee Ming, George, Ms. Jennifer Kwok and Ms. Yang Jing 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 Company and its subsidiaries (collectively, 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 2024 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 C3 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.

Tysan Holdings Limited

Other Information

Directors' and Chief Executive's Interests and Long Positions in Shares and Underlying Shares

As at 30 June 2024, the interests and long positions of the directors (the "Director(s)") of Tysan Holdings Limited (the "Company", together with its subsidiaries, the "Group") and chief executive of the Company ("Chief Executive") in the shares ("Shares") and underlying Shares of the Company or its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the "SFO")), as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO, or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the "Stock Exchange") pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") set out in Appendix C3 to the Rules Governing the Listing of Securities on the Stock Exchange, was as follows:

Long position in Shares

Save as disclosed above, as at 30 June 2024, none of the Directors or Chief Executive had registered any interest or short position in the Shares, underlying Shares or debentures of the Company or any of its associated corporations that was required to be recorded pursuant to section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

• INTERIM REPORT 2024

Tysan Holdings Limited

Other Information

Directors' and Chief Executive's Rights to Acquire Shares or Debentures

Share Option Scheme

The Company currently operates a share option scheme which was adopted on 3 December 2020 (the "Share Option Scheme") for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations.

The following table discloses the movements in the Share Options outstanding during the six months ended 30 June 2024:

Number of Share Options

Tysan Holdings Limited

Other Information

Directors' and Chief Executive's Rights to Acquire Shares or Debentures (Cont'd)

Share Option Scheme (Cont'd)

• INTERIM REPORT 2024

Tysan Holdings Limited

Other Information

Directors' and Chief Executive's Rights to Acquire Shares or Debentures (Cont'd)

Share Option Scheme (Cont'd)

Notes to the table of Share Options during the six months ended 30 June 2024:

1. Subject to the terms of the Share Option Scheme, each grantee is allowed to exercise up to 30% of the Share Options granted from 1 January 2022 up to and including 24 May 2025. Thereafter, each grantee is allowed to exercise a further 30% of the Share Options granted from 1 January 2023 up to and including 24 May 2025 and to exercise the remaining 40% of Share Options granted from 1 January 2024 up to and including 24 May 2025.
2. The exercise price of the Share Options set out in the table above is correct as at the dates stated in the table. The exercise price is subject to adjustment in the case of rights or bonus issues, or other similar changes in the Company's share capital.
3. At the special general meeting of the Company held on 3 December 2020 (the "SGM"), a resolution was approved by the shareholders of the Company that the total number of Shares which may be issued upon exercise of all Share Options to be granted under the Share Option Scheme and any other share option schemes of the Company must not, in aggregate, exceed 10% of the Shares in issue as at the date of the SGM. As at the date of the SGM, the maximum number of Shares which may be allotted and issued pursuant to the Share Option Scheme was 336,603,570 Shares, representing 10% of the total number of Shares in issue as at the date of the SGM (the "Scheme Mandate Limit").
   During the six months ended 30 June 2024, no Share Option was granted during the six months ended 30 June 2024 and 6,500,000 Share Options had lapsed.
   As at 1 January 2024 and 30 June 2024, the number of Share Options available for grant under the Scheme Mandate Limit was 169,003,570 Shares.
   The number of Shares that may be issued under the Share Option Scheme as at 1 January 2024 was 162,100,000 Shares (being the sum of 30%, 30% and 40% of the Share Options granted which were exercisable from 1 January 2022, 1 January 2023 and 1 January 2024 respectively, less the number of Share Options lapsed) divided by 3,366,035,709, being the weighted average number of Shares in issue, represented approximately 4.82% of the total number of Shares in issue as at 1 January 2024. The number of Shares that may be issued under the Share Option Scheme as at 30 June 2024 was 155,600,000 Shares (being the sum of 30%, 30% and 40% of the Share Options granted which were exercisable from 1 January 2022, 1 January 2023 and 1 January 2024 respectively, less the number of Share Options lapsed) divided by 3,366,035,709, being the weighted average number of Shares in issue, represented approximately 4.62% of the total number of Shares in issue as at 30 June 2024.
4. In April 2024, Mr. Fung Wen Yuan Brian resigned as an employee of the Group, his Share Options lapsed in April 2024 in accordance with the terms of the Share Option Scheme.

Save for the above, at no time during the period for the six months ended 30 June 2024 were rights to acquire benefits by means of the acquisition of Shares or debentures of the Company granted to any Director or their respective spouses or minor children, or the Chief Executive or were any such rights exercised by them, or was the Company or any of its subsidiaries a party to any arrangement to enable the Directors to acquire such rights in any other body corporate under the Share Option Scheme.