伟工控股(01793) - 2024 - 年度财报

Corporate Information This section provides an overview of Wecon Holdings Limited, including its registration, principal business activities, and the composition of its Board of Directors and committees Company Overview Wecon Holdings Limited, incorporated in the Cayman Islands, primarily operates as an investment holding company, with subsidiaries providing building construction and RMAA engineering services in Hong Kong, listed on the HKEX Main Board since February 2019 - The company was incorporated in the Cayman Islands on March 23, 2018, with its principal business being investment holding[820] - Its subsidiaries primarily engage in providing building construction and repair, maintenance, alteration, and addition (RMAA) engineering services[821] - The company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on February 27, 2019[20] Board and Committee Composition The company's Board of Directors comprises three executive and three independent non-executive directors, supported by Audit, Nomination, and Remuneration Committees to ensure effective corporate governance - Executive Directors include Mr. Tsang Ka Yip (Chairman), Mr. Tsang Tsz Him, and Mr. Tsang Tsz Kit[3] - Independent Non-Executive Directors include Dr. Lau Chi Keung, Mr. Chan Tim Yau, and Mr. Sze Kwok Wing[3] - The company has an Audit Committee (Chairman: Mr. Sze Kwok Wing), a Nomination Committee (Chairman: Dr. Lau Chi Keung), and a Remuneration Committee (Chairman: Mr. Chan Tim Yau)[3] Chairman's Statement This section presents the financial highlights and future outlook of the Group, emphasizing revenue growth, profit stability, and strategic investments Financial Highlights For the year ended March 31, 2024, the Group's revenue significantly increased by 33.5% to HK$1,160.4 million, while profit attributable to equity holders slightly rose by HK$0.1 million to HK$6.0 million 2024 Financial Highlights | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,160.4 | 869.0 | 291.4 | 33.5 | | Profit attributable to equity holders | 6.0 | 5.9 | 0.1 | 1.7 | Prospects The Group secured major contracts totaling approximately HK$843.9 million and plans to invest in Building Information Modeling (BIM) and related services to enhance competitiveness and diversify its client base, maintaining cautious optimism for Hong Kong's construction industry outlook - For the year ended March 31, 2024, the Group successfully secured three major contracts with a total value of approximately HK$843.9 million[10][13] - After March 31, 2024, an additional major contract of approximately HK$155.1 million was awarded[10][13] - The Group plans to invest in Building Information Modeling (BIM) services and building construction-related services to offer innovative technological solutions, enhance capabilities, and generate synergies[15][17] - Management remains cautiously optimistic about the prospects of the Hong Kong construction industry and will continue efforts to enhance reputation, ensure timely and high-quality project completion, and implement cost-effective measures to improve competitiveness[10][13] Management Discussion and Analysis This section provides a comprehensive review of the Group's business operations, financial performance, key risks, and human resource policies for the reporting period Business Review As a general contractor in Hong Kong, the Group primarily offers building construction and RMAA engineering services, with nine major projects in hand and five completed as of March 31, 2024 - The Group primarily provides building construction services (including residential, commercial, and industrial buildings) and RMAA engineering services (including repair, maintenance, improvement, renovation, alteration, and addition of existing facilities)[20][23] - As of March 31, 2024, the Group had nine major projects with awarded contract sums of HK$10 million or more in hand[21][24] - For the year ended March 31, 2024, the Group completed five major projects with awarded contract sums of HK$10 million or more[21][24] Principal Risks and Uncertainties The Group faces various operational risks, including public health event impacts, contract award uncertainties, customer concentration, subcontractor reliance, cash flow mismatches, raw material price volatility, and liquidity effects from performance bonds - Public health events may lead to lockdowns, travel restrictions, and work stoppages, affecting the Group's business and operations[22][25] - The Group's revenue relies on contracts obtained through non-recurring tender or quotation processes, with no guarantee of continued success, which could materially and adversely affect sustainability and financial performance[30] - The Group faces concentration risk due to significant reliance on its largest and major customers[30] - Fluctuations in subcontracting costs, poor subcontractor performance, or inability to source subcontractors could materially and adversely affect operations and profitability[30] - Mismatches between receiving progress payments from customers and making payments to suppliers and subcontractors may lead to insufficient cash flow[30] - Changes in raw material prices and availability could materially and adversely affect operating results[30] - Providing performance bonds may impact the Group's liquidity position[30] Segment Information The Group's reportable and operating segments are Building Construction Services and RMAA Engineering Services, with detailed information disclosed in Note 5 to the consolidated financial statements - The Group's reportable and operating segments are (i) building construction services and (ii) renovation and maintenance engineering services[28][30] - Details of segment information are disclosed in Note 5 to the consolidated financial statements[28][30] Financial Review The Group achieved a 33.5% revenue increase in FY2024, driven by progress in building construction and RMAA engineering services; however, gross profit margin slightly declined due to lower RMAA service margins and the absence of government subsidies, resulting in only a 1.7% net profit growth Revenue The Group's total revenue increased by 33.5% year-on-year to HK$1,160.4 million, with Building Construction Services growing by 29.5% and RMAA Engineering Services by 40.9%, primarily driven by progress in multiple projects Revenue Overview | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 1,160.4 | 869.0 | 291.4 | 33.5 | | Building Construction Services | 726.0 | 560.7 | 165.3 | 29.5 | | RMAA Engineering Services | 434.4 | 308.3 | 126.1 | 40.9 | - The increase in revenue from building construction services was primarily due to significant progress made on several major projects during the year[32][35] - The increase in revenue from RMAA engineering services was primarily attributable to significant progress made on several major projects during the year[33][36] Cost of Sales The Group's cost of sales increased by 34.4% year-on-year to HK$1,115.3 million, consistent with revenue growth, primarily comprising subcontracting costs, material costs, direct staff costs, and site overheads Cost of Sales | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of Sales | 1,115.3 | 830.0 | 285.3 | 34.4 | - The increase in cost of sales was primarily driven by and consistent with the corresponding increase in revenue[38][41] - Cost of sales primarily comprises subcontracting costs, material costs, direct staff costs, and site overheads[38][41] Gross Profit and Gross Profit Margin The Group's gross profit increased by 15.6% year-on-year to HK$45.1 million, but the overall gross profit margin decreased by 0.6 percentage points to 3.9%, mainly due to a decline in RMAA engineering services' gross profit margin offsetting an improvement in building construction services' margin Gross Profit and Gross Profit Margin Overview | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Total Gross Profit | 45.1 | 39.0 | 6.1 | 15.6 | | Total Gross Profit Margin | 3.9% | 4.5% | -0.6% | - | | Gross Profit from Building Construction Services | 26.2 | 18.3 | 7.9 | 43.2 | | Gross Profit Margin from Building Construction Services | 3.6% | 3.3% | 0.3% | - | | Gross Profit from RMAA Engineering Services | 18.9 | 20.7 | -1.8 | -8.7 | | Gross Profit Margin from RMAA Engineering Services | 4.4% | 6.7% | -2.3% | - | - The increase in gross profit margin for building construction services was primarily attributable to higher gross profit margins generated from several major projects that achieved significant progress[40][43] - The decrease in gross profit margin for RMAA engineering services was primarily attributable to lower gross profit margins generated from works orders performed under several major projects[45][48] Other Income and Gains The Group's other income and gains decreased by 45.5% year-on-year to HK$7.2 million, primarily due to the absence of non-recurring Employment Support Scheme subsidies from the HKSAR Government and a reduction in miscellaneous income Other Income and Gains | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income and Gains | 7.2 | 13.2 | -6.0 | -45.5 | - The decrease was primarily attributable to the absence of non-recurring government subsidies under the Employment Support Scheme established by the HKSAR Government and a decrease in miscellaneous income during the year[46][49] Administrative and Other Operating Expenses, Net The Group's administrative and other operating expenses, net, slightly decreased by 0.7% to HK$45.1 million, mainly due to a reduction in net impairment of contract assets and trade receivables Administrative and Other Operating Expenses, Net | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative and Other Operating Expenses, Net | 45.1 | 45.4 | -0.3 | -0.7 | - The decrease was primarily attributable to a reduction in the net impairment of contract assets and trade receivables for the year ended March 31, 2024[47][50] Finance Costs The Group's finance costs increased by 51.1% year-on-year to HK$272 thousand, primarily due to higher interest expenses on lease liabilities Finance Costs | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | Change (HK$ thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Finance Costs | 272 | 180 | 92 | 51.1 | - The increase was primarily attributable to higher interest expenses on lease liabilities[52][55] Income Tax The Group's income tax increased by 28.6% year-on-year to HK$0.9 million, with the effective tax rate rising from 11.0% to 12.8%, mainly due to the absence of non-taxable non-recurring government subsidies in the current year Income Tax Overview | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Income Tax | 0.9 | 0.7 | 0.2 | 28.6 | | Effective Tax Rate | 12.8% | 11.0% | 1.8% | - | - The increase in the effective tax rate was primarily due to the absence of non-taxable non-recurring government subsidies for the year ended March 31, 2024[53][56] Net Profit The Group's net profit slightly increased by 1.7% to HK$6.0 million, but the net profit margin decreased by 0.2 percentage points to 0.5%, primarily due to a decline in gross profit margin and the absence of government subsidies Net Profit Overview | Metric | 2024 (HK$ million) | 2023 (HK$ million) | Change (HK$ million) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 6.0 | 5.9 | 0.1 | 1.7 | | Net Profit Margin | 0.5% | 0.7% | -0.2% | - | - The decrease in net profit margin was primarily due to the decline in gross profit margin and the absence of government subsidies for the year ended March 31, 2024[54][57] Employees and Remuneration Policies As of March 31, 2024, the Group had 212 employees with total staff costs of approximately HK$96.6 million, determining remuneration based on performance, qualifications, responsibilities, and market conditions, while offering various employee benefits and training Employee Headcount and Costs | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Full-time Employees | 210 | 226 | | Part-time Employees | 2 | 3 | | Total Employees | 212 | 229 | | Total Staff Costs (excluding Directors' emoluments) | HK$96.6 million | HK$93.5 million | - The Group determines individual employee remuneration based on factors such as performance, qualifications, merits, responsibilities, and market conditions[59][63] - Employee benefits include provident fund contributions, medical insurance, annual leave, discretionary bonuses, and potential share options and share awards for eligible employees[59][63] Investments and Capital Commitments As of March 31, 2024, the Group held no significant investments apart from equity in subsidiaries, made no material acquisitions or disposals of subsidiaries and associates, and had no significant capital commitments or future major investment plans - For the year ended March 31, 2024, the Company held no significant investments other than equity interests in its subsidiaries[60][64] - For the year ended March 31, 2024, the Group made no material acquisitions or disposals of subsidiaries and associates[60][64] - As of March 31, 2024, the Group had no plans for any significant investments or capital assets, nor any significant capital commitments[61][62][65][66] Financial Position and Liquidity The Group primarily funds its liquidity through shareholder contributions, bank borrowings, and operating cash flow; as of March 31, 2024, it had a current ratio of 1.8 times, a gearing ratio of 3.3%, no outstanding bank borrowings, and appropriate bank facilities and asset pledges in place - The Group primarily funds its liquidity and capital requirements through shareholder contributions, bank borrowings, and net cash generated from operating activities[70][75] Liquidity and Capital Structure | Metric | 2024 (HK$ million) | 2023 (HK$ million) | | :--- | :--- | :--- | | Pledged Deposits | 111.7 | 98.4 | | Cash and Bank Balances | 111.7 | 98.4 | | Current Ratio | 1.8 times | 2.5 times | | Lease Liabilities | 9.3 | 6.7 | | Gearing Ratio | 3.3% | 2.4% | - As of March 31, 2024, the Group had no outstanding bank borrowings[77][82] - Bank facilities are secured by pledged deposits (approximately HK$34.2 million), life insurance policies (approximately HK$10.2 million), and corporate guarantees[78][82] - The Group has minimal exposure to foreign exchange risk and does not need to arrange foreign currency hedging[69][74] Corporate Governance Report This section details the company's commitment to high corporate governance standards, board structure, committee functions, and compliance with listing rules Practices and Compliance The company is committed to maintaining high corporate governance standards and has complied with all applicable code provisions in Appendix C1 of the Listing Rules, except for the non-separation of the Chairman and Chief Executive roles - The company is committed to achieving and maintaining the highest standards of corporate governance, emphasizing transparency, accountability, and independence[86][89] - For the year ended March 31, 2024, the company complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the non-separation of the roles of Chairman and Chief Executive[87][90] - Mr. Tsang Ka Yip serves concurrently as the Chairman of the Board and Chief Executive Officer, a structure the Board believes is most beneficial to the Group and its shareholders as a whole[88][91] Board of Directors The Board is responsible for setting the Group's overall strategy and overseeing management performance, comprising six directors, including three independent non-executive directors, in compliance with Listing Rules; it has adopted a diversity policy and will appoint at least one female board member by December 31, 2024 - The Board's primary responsibilities include formulating the Group's overall strategy, setting management objectives, and overseeing management performance[94][96] - For the year ended March 31, 2024, the Board comprised three executive directors and three independent non-executive directors, with independent non-executive directors constituting half of the Board, in compliance with Listing Rules[97][98][102] Board and Committee Meeting Attendance (FY2024) | Director's Name | Board Meetings | Audit Committee Meetings | Nomination Committee Meetings | Remuneration Committee Meetings | 2023 AGM | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Tsang Ka Yip | 5/5 | N/A | 1/1 | 1/1 | 1/1 | | Mr. Tsang Tsz Him | 5/5 | N/A | N/A | N/A | 1/1 | | Mr. Tsang Tsz Kit | 5/5 | N/A | N/A | N/A | 1/1 | | Dr. Lau Chi Keung | 5/5 | 4/4 | 1/1 | N/A | 1/1 | | Mr. Chan Tim Yau | 5/5 | 4/4 | N/A | 1/1 | 1/1 | | Mr. Sze Kwok Wing | 5/5 | 4/4 | 1/1 | 1/1 | 1/1 | - Independent non-executive directors meet with the Chairman at least once a year without other directors present to ensure independent perspectives[106][107][108] - The Board has adopted a Board Diversity Policy, considering factors such as gender, age, cultural and educational background, and professional experience[123][125][128] - The Board will appoint at least one female board member by December 31, 2024, to achieve its gender diversity objective[130][134] Board Committees The company has established three Board Committees: Audit, Nomination, and Remuneration, each with clear terms of reference to assist the Board in overseeing specific matters and ensuring compliance with Listing Rules; these committees regularly convene to review important issues such as financial matters, director appointments, and remuneration - The Board has established an Audit Committee, a Nomination Committee, and a Remuneration Committee to assist the Board in overseeing specific areas of the Company's affairs and in discharging its responsibilities[140][142] Audit Committee The Audit Committee is primarily responsible for maintaining relations with auditors, reviewing financial information, overseeing financial reporting and risk management systems, and held four meetings in FY2024 to review annual and interim results, risk management, internal control systems, and recommend re-appointment of external auditors - The Audit Committee is primarily responsible for maintaining a relationship with the auditors, reviewing the company's financial information, overseeing the financial reporting system, risk management and internal control systems, and monitoring continuing connected transactions[145][146] - The Audit Committee comprises three independent non-executive directors: Mr. Sze Kwok Wing (Chairman), Dr. Lau Chi Keung, and Mr. Chan Tim Yau[147] - In FY2024, four meetings were held to review the FY2023 annual results and report, the interim results and report for the six months ended September 30, 2023, and to discuss the re-appointment of external auditors and their remuneration[147] Nomination Committee The Nomination Committee is responsible for reviewing the Board's structure, identifying suitable director candidates, making recommendations on director appointments and succession planning, and assessing the independence of independent non-executive directors; in FY2024, it held one meeting to review Board composition, diversity, director appointments, and independence - The Nomination Committee's primary responsibilities include reviewing the structure, size, and composition of the Board at least annually, identifying individuals suitably qualified to become Board members, making recommendations on the appointment or re-appointment of directors and succession planning for directors, and assessing the independence of independent non-executive directors[149][152] - The Nomination Committee comprises Dr. Lau Chi Keung (Chairman), Mr. Sze Kwok Wing, and Mr. Tsang Ka Yip[150][153] - In FY2024, one meeting was held to review and consider the Board's composition and diversity, the appointment and re-appointment of directors, the annual independence of independent non-executive directors, and the succession plan for directors[151][153] - Criteria for selecting director candidates include character and integrity, professional qualifications, skills, knowledge and experience, diversity aspects, potential contributions, time commitment, and other business and succession planning-related considerations[155] Remuneration Committee The Remuneration Committee is responsible for recommending remuneration policies and structures for directors and senior management, and for determining, reviewing, and approving the remuneration packages of individual executive directors and senior management; in FY2024, it held one meeting to review and recommend remuneration proposals for executive directors and senior management - The Remuneration Committee is primarily responsible for making recommendations to the Board on the remuneration policy and structure for all directors and senior management of the Group, determining, recommending, considering, and approving the remuneration packages of individual executive directors and senior management, and reviewing and approving management's remuneration proposals[163][167] - The Remuneration Committee comprises Mr. Chan Tim Yau (Chairman), Mr. Sze Kwok Wing, and Mr. Tsang Ka Yip, with a majority being independent non-executive directors[165][168] - In FY2024, one meeting was held to review and make recommendations to the Board on the remuneration packages of individual executive directors and senior management members, as well as the remuneration of independent non-executive directors[166][168] - The director remuneration policy aims to provide competitive yet not excessive remuneration packages, is reviewed annually, and requires shareholder approval[171][172][174][175] Senior Management Remuneration Range (FY2024) | Remuneration Range (HK$) | Number of Individuals | | :--- | :--- | | 0 to 1,000,000 | 3 | | 1,000,001 to 1,500,000 | 2 | Independent Auditor's Remuneration In FY2024, the total remuneration paid to external auditor Ernst & Young for audit and non-audit services amounted to HK$1,338,000 Independent Auditor's Remuneration (FY2024) | Service Type | Amount (HK$ thousand) | | :--- | :--- | | Audit Services (Annual Audit) | 1,128 | | Non-Audit Services (Interim Review) | 200 | | Non-Audit Services (Others) | 10 | | Total | 1,338 | Directors' and Auditor's Responsibility for the Financial Statements All directors confirm their responsibility for preparing the Group's financial statements, external auditor Ernst & Young has made a statement regarding its reporting responsibilities, and there are no material uncertainties regarding the company's ability to continue as a going concern - All directors confirm their responsibility for preparing the Group's financial statements[181][183] - The statement by auditor Ernst & Young regarding its reporting responsibilities for the Group's financial statements is set out in the Independent Auditor's Report on pages 138 to 146 of this annual report[181][183] - There are no material uncertainties regarding any events or conditions that may cast significant doubt on the company's ability to continue as a going concern[182][183] Dividend Policy The company adopted a dividend policy on January 21, 2019, where the Board will consider the Group's financial position, capital and debt levels, future cash needs, and market conditions to determine dividend distributions, aiming to balance shareholder interests with prudent capital management - The company adopted a dividend policy on January 21, 2019, aiming to ensure a balance between shareholder interests and prudent capital management[185][186] - The Board will consider the Group's financial position, capital and debt levels, future cash requirements, business strategies, market conditions, and other appropriate factors when determining dividend amounts[186] - Final dividends are subject to shareholder approval at the Annual General Meeting, while interim and special dividends may be declared at the discretion of the Board[186] Company Secretary Mr. Tang Siu Fung has served as Company Secretary since April 11, 2021, responsible for supporting the Board and advising on corporate governance matters, and has complied with Listing Rules training requirements - Mr. Tang Siu Fung was appointed as Company Secretary on April 11, 2021, responsible for providing support to the Board and ensuring its compliance with Board policies and procedures, and also for advising on corporate governance matters[188][189] - Mr. Tang meets the qualification requirements for a company secretary under Rule 3.28 of the Listing Rules and complied with the training requirements under Rule 3.29 of the Listing Rules in FY2024[188][189] Communication with Shareholders and Shareholders' Rights The company has a shareholder communication policy to facilitate timely, transparent, and accurate communication through general meetings, its website, and inquiry channels; shareholders have the right to convene extraordinary general meetings, nominate directors, and submit inquiries to the Board - The company has adopted a Shareholder Communication Policy to ensure timely, transparent, and accurate communication between shareholders and the company[202][203] - General meetings are the primary channel for communication between shareholders and the Board, and shareholders are encouraged to attend in person or appoint a proxy[191][194][205] - Shareholders holding not less than one-tenth of the voting rights have the right to request the Board to convene an extraordinary general meeting[193][195] - Shareholders may submit inquiries to the Chairman of the Board and the Company Secretary in writing[198][200] Investor Relations The company communicates with shareholders and the investment community through various channels, including general meetings, its website, and electronic communications, to ensure timely, transparent, and accurate information, with regular website updates - The company has adopted a Shareholder Communication Policy to ensure timely, transparent, and accurate communication between shareholders and the company[202][203] - The company's website (www.wecon.com.hk) provides Group corporate information, corporate governance information, and the composition and functions of the Board and committees[209][211] - Company communications (including annual reports, interim reports, notices of general meetings, etc.) are uploaded to the Stock Exchange and the company's website and sent to shareholders electronically[210][211] Internal Control and Risk Management The Board regularly reviews the effectiveness of the Group's internal control and risk management systems; in FY2024, the Group engaged an external independent consultant to review internal control mechanisms and deemed the risk management and internal control systems effective and adequate, with strict regulations on handling and disseminating inside information - The Board is committed to regularly reviewing the Group's internal control and risk management systems to ensure their effectiveness and efficiency[218][223] - In FY2024, the Group engaged an external independent internal control consultant to review internal control mechanisms and perform internal audit functions[219][223] - The Audit Committee considers the Group's risk management and internal control systems to be effective and adequate[220][223] - The Group has strict prohibitions against unauthorized use of confidential or inside information[221][224] Biographical Details of Directors and Senior Management This section provides detailed biographical information for the Group's executive directors, independent non-executive directors, and senior management, highlighting their experience and roles Executive Directors Mr. Tsang Ka Yip serves as the Group's Chairman and CEO with over 45 years of construction industry experience; his son, Mr. Tsang Tsz Him, manages construction projects and daily operations, while Mr. Tsang Tsz Kit handles administration, IT, finance, and HR planning - Mr. Tsang Ka Yip (71 years old) is the Group's Chairman and Chief Executive Officer, with over 45 years of experience in civil engineering, building construction, and the construction industry[226][228] - Mr. Tsang Tsz Him (42 years old) is responsible for the Group's overall construction project management and daily operations[236][240] - Mr. Tsang Tsz Kit (37 years old) is responsible for the Group's overall administration, information systems, finance, and human resources planning[238][240] Independent Non-Executive Directors Dr. Lau Chi Keung, Mr. Chan Tim Yau, and Mr. Sze Kwok Wing serve as independent non-executive directors, bringing extensive experience in engineering, law, and business management, respectively, to provide independent advice to the Board - Dr. Lau Chi Keung (69 years old) has over 45 years of engineering experience and is a member of various engineering institutions and a Registered Professional Engineer[242][243][244][245][248][250] - Mr. Chan Tim Yau (65 years old), a practicing solicitor, has over 38 years of professional legal experience[251][252][254] - Mr. Sze Kwok Wing (67 years old) has over 43 years of experience in business and administrative management, having worked at Ford Motor Company, Citibank, Morgan Stanley, and others[256][257][259][260] Senior Management The Group's senior management includes Mr. Wu Wing Lun (Senior Project Manager), Mr. Ho Chi Ming (Project General Manager), Mr. Choi Ying Tung (Safety and Environmental Manager), Ms. Hui Pik Yu (Head of Human Resources and Administration), and Ms. Li Jingxia (Financial Controller), all possessing extensive experience in their respective professional fields and collectively responsible for the Group's daily operations and management - Mr. Wu Wing Lun (46 years old) is the Senior Project Manager of Wecon Limited, primarily responsible for the management and administration of various Group projects, with over 23 years of experience in civil engineering, building construction, and the construction industry[266][267][269] - Mr. Ho Chi Ming (62 years old) is the Project General Manager of Wecon Limited, primarily responsible for the management and administration of various Group projects, with over 39 years of experience in building construction and the construction industry[272][273][276] - Mr. Choi Ying Tung (49 years old) is the Safety and Environmental Manager of Wecon Limited, primarily responsible for the Group's safety and environmental management matters, with over 26 years of experience in civil engineering, building construction, and the construction industry[275][277][279][282] - Ms. Hui Pik Yu (51 years old) is the Head of Human Resources and Administration of Wecon Limited, primarily responsible for the Group's administrative management and human resources matters, with over 26 years of experience in business management, human resources, and company secretarial affairs[284][285][287] - Ms. Li Jingxia (35 years old) is the Financial Controller of Wecon Limited, primarily responsible for the Group's financial management and compliance assurance matters, with over 13 years of experience in accounting, auditing, and finance[290][291][293] Report of the Directors This section outlines the company's principal activities, business review, financial results, dividend recommendations, and key relationships with stakeholders Principal Activities and Business Review The company's principal business is investment holding, with the Group primarily providing building construction and RMAA engineering services in Hong Kong; the business review and principal risks are detailed in the Chairman's Statement and Management Discussion and Analysis - The Company's principal business is investment holding; the Group, as a long-established general contractor in Hong Kong, is primarily engaged in providing (i) building construction services and (ii) renovation and maintenance engineering services in Hong Kong[296][301] - The business review and principal risks are set out in the "Chairman's Statement" and "Management Discussion and Analysis" sections on pages 4 to 14 of this annual report[297][302] Results and Dividends The Group's profit and financial position for the year ended March 31, 2024, are presented in the consolidated financial statements; the Board recommends a final dividend of 1.2 HK cents per share, totaling HK$9.6 million, consistent with the previous year - The Group's profit for the year ended March 31, 2024, and its financial position as of that date are set out in the consolidated financial statements on pages 147 to 149 of this annual report[298][303] Proposed Final Dividend | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Final Dividend Per Share | 1.2 HK cents | 1.2 HK cents | | Total Amount | HK$9.6 million | HK$9.6 million | - The proposed final dividend is subject to approval by shareholders at the 2024 Annual General Meeting to be held on August 16, 2024[299][303] Major Customers and Suppliers In FY2024, the Group exhibited high reliance on its major customers and suppliers, with the top five customers accounting for 90.3% of total revenue and the largest customer for 35.8%; the top five subcontractors represented 35.1% of total subcontracting costs, and the top five suppliers accounted for 72.8% of total construction material purchases Major Customers, Subcontractors, and Suppliers Concentration (FY2024) | Category | 2024 (%) | 2023 (%) | | :--- | :--- | :--- | | Top 5 Customers' Contribution to Total Revenue | 90.3 | 74.1 | | Largest Customer's Contribution to Total Revenue | 35.8 | 31.0 | | Top 5 Subcontractors' Contribution to Total Subcontracting Costs | 35.1 | 24.0 | | Largest Subcontractor's Contribution to Total Subcontracting Costs | 10.6 | 6.0 | | Top 5 Suppliers' Contribution to Total Construction Material Purchases | 72.8 | 70.1 | | Largest Supplier's Contribution to Total Construction Material Purchases | 31.0 | 31.6 | - No director or their close associates or any shareholder holding more than 5% of the company's issued shares had any beneficial interest in the Group's top five customers, suppliers, or subcontractors[308][311] Relationship with Customers, Suppliers, Subcontractors and Employees The Group is committed to maintaining active relationships with customers by delivering high-quality services, upholding an approved list of subcontractors and suppliers to ensure quality, and valuing employees as assets by providing competitive remuneration, benefits, and training; in FY2024, the Group had no significant disputes with any parties - The Group maintains active relationships with its customers, striving to deliver high-quality services on time[309][312] - The Group maintains an approved list of subcontractors and suppliers based on experience, skills, workload, quotations, and quality assessments[310][313] - The Group regards its employees as valuable assets, providing competitive remuneration, benefits, and continuous professional training[314][319] - For the year ended March 31, 2024, there were no significant disputes or disagreements between the Group and its customers, subcontractors, suppliers, and employees[314][319] Compliance with Laws and Regulations The Group prioritizes compliance with regulatory requirements and, in FY2024, adhered to relevant laws and regulations in all material aspects, with no significant breaches or non-compliance incidents - The Group understands the importance of regulatory compliance and the risks of non-compliance with applicable laws and regulations[316][321] - For the year ended March 31, 2024, the Group complied in all material respects with relevant laws and regulations that have a significant impact on its business and operations, and there were no serious breaches or non-compliance with applicable laws and regulations[316][321] Charitable Contributions In FY2024, the Group's charitable contributions amounted to approximately HK$188,000, an increase from the previous year Charitable Contributions | Metric | 2024 (HK$) | 2023 (HK$) | | :--- | :--- | :--- | | Charitable Contributions | 188,000 | 134,000 | Annual General Meeting and Register Closure The 2024 Annual General Meeting is scheduled for August 16, 2024; share transfer registration will be suspended from August 13 to 16 to determine eligibility for attendance and voting, and from August 22 to 23 to determine entitlement to the final dividend - The 2024 Annual General Meeting will be held on Friday, August 16, 2024[325][328] - To determine the identity of shareholders entitled to attend and vote, the share transfer registration will be suspended from Tuesday, August 13, 2024, to Friday, August 16, 2024[326][329] - To determine shareholders' entitlement to the final dividend, the share transfer registration will be suspended from Thursday, August 22, 2024, to Friday, August 23, 2024[327][330] Share Capital and Reserves There was no change in the company's authorized and issued share capital in FY2024; as of March 31, 2024, the company's distributable reserves amounted to approximately HK$25.8 million - For the year ended March 31, 2024, there was no change in the Company's authorized and issued share capital[332][337] Overview of Share Capital | Metric | 2024 (HK$ thousand) | 2023 (HK$ thousand) | | :--- | :--- | :--- | | Authorized Share Capital | 50,000 | 50,000 | | Issued and Fully Paid Share Capital | 8,000 | 8,000 | - As of March 31, 2024, the Directors considered that the Company's reserves available for distribution to shareholders, in accordance with the Companies Act (as amended) of the Cayman Islands, amounted to approximately HK$25.8 million[334][339] Share Option Scheme and Share Award Plan The company has a Share Option Scheme and a Share Award Plan designed to incentivize and retain talent; no share options have been granted since the scheme's adoption in 2019, and the Share Award Plan trust holds 6,796,000 shares but has not yet granted any to eligible participants - The Share Option Scheme was adopted on January 21, 2019, to incentivize or reward eligible participants for their contributions to the Group and to recruit and retain outstanding employees[340][341] - Since the adoption date and up to the date of this annual report, no share options have been granted, exercised, expired, cancelled, or lapsed under the Share Option Scheme[340][341] - The Share Award Plan was adopted on July 31, 2020, to recognize and reward eligible participants for their contributions to the Group's growth and development, and to retain and attract talent[373][377][378] - As of March 31, 2024, the trustee under the Share Award Plan held 6,796,000 shares, but no shares have been granted to any eligible participants[385][388] Disclosure of Interests As of March 31, 2024, Mr. Tsang Ka Yip beneficially owned 75% of the company's shares through Triple Arch Limited, and his spouse, Ms. Lai Yuk Lin, was deemed to have the same interest; no other major shareholders held disclosable interests apart from the directors Directors' Long Position in the Company's Shares (March 31, 2024) | Director's Name | Capacity/Nature | Number of Shares Held (Long Position) | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Tsang Ka Yip | Interest in controlled corporation | 600,000,000 | 75% | Major Shareholders' Interests in the Company's Shares (March 31, 2024) | Name | Nature of Interest | Number of Shares Held (Long Position) | Approximate Percentage of Company's Interest | | :--- | :--- | :--- | :--- | | Triple Arch | Beneficial owner | 600,000,000 | 75% | | Ms. Lai Yuk Lin | Spouse's interest | 600,000,000 | 75% | - The controlling shareholder confirmed compliance with the non-competition undertaking, and independent non-executive directors, after review, found no breaches in FY2024[401][403] Directors' Interests in Competing Business and Contracts In FY2024, no director or their close associates held any interest in businesses competing with the Group, nor did any director have a material interest in any significant contracts of the Group - For the year ended March 31, 2024, no director or their close associates had any interest in any business that directly or indirectly competes or may compete with the Group's business[407][410] - As of March 31, 2024, or at any time during the year ended on that date, no director or their associated entities had a material interest in any significant contract entered into by the Company, its holding company, or any of its subsidiaries relating to the Group's business[412][417] Retirement Benefit Schemes The Group operates a Mandatory Provident Fund (MPF) scheme, with total contributions of approximately HK$3.3 million in FY2024, and no forfeited contributions available to reduce existing contribution levels - The Group operates a defined contribution Mandatory Provident Fund retirement benefit scheme (MPF Scheme), with contributions calculated as a percentage of employees' basic salaries[421][426] Retirement Benefit Scheme Contributions | Metric | 2024 (HK$ million) | 2023 (HK$ million) | | :--- | :--- | :--- | | Total Contributions | 3.3 | 3.4 | - For the year ended March 31, 2024, the Group had no forfeited contributions available to reduce existing contribution levels[422][426] Connected and Related Party Transactions In FY2024, the Group did not enter into any connected transactions or continuing connected transactions as defined by the Listing Rules; significant related party transactions are disclosed in Note 29 to the financial statements, but none constitute connected transactions under the Listing Rules - For the year ended March 31, 2024, the Group did not enter into any connected transactions or continuing connected transactions (as defined in Chapter 14A of the Listing Rules)[424][428] - Significant related party transactions are set out in Note 29 to the consolidated financial statements, but none of these related party transactions constitute connected transactions or continuing connected transactions under the Listing Rules[425][429] Equity-Linked Agreement and Public Float Apart from the Share Option Scheme and Share Award Plan, the company did not enter into any other equity-linked agreements in FY2024, nor did it purchase, sell, or redeem any listed securities; the company maintained a public float of at least 25% - Other than the Share Option Scheme and the Share Award Plan, the Company did not enter into any equity-linked agreements for the year ended March 31, 2024[432][438] - For the year ended March 31, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any shares[433][439] - The company maintained a public float of at least 25% of its issued shares as required by the Listing Rules during FY2024 and up to the date of this annual report[434][440] Permitted Indemnity Provision The company's articles of association stipulate that directors are entitled to indemnification, and appropriate insurance has been arranged for potential liabilities of directors and officers - The Company's articles of association stipulate that every director shall be indemnified out of the assets and profits of the Company against all actions, costs, charges, losses, damages, and expenses which they may incur or sustain in the execution of their duties, to the extent permitted by law[435][441] - For the year ended March 31, 2024, the Company had arranged appropriate insurance coverage for the liabilities of directors and officers arising from corporate activities[436][442] Events After Reporting Period and Auditor No significant disclosable events occurred after March 31, 2024, up to the date of this annual report; Ernst & Young will retire at the 2024 Annual General Meeting, and a resolution for their re-appointment will be proposed - No significant disclosable events occurred after March 31, 2024, and up to the date of this annual report[445][450] - Ernst & Young will retire as the Company's auditor at the 2024 Annual General Meeting, and a resolution concerning their re-appointment as the Company's auditor will be proposed at the 2024 Annual General Meeting[446][451] Environmental, Social and Governance Report This report details the Group's commitment to sustainable development, its ESG governance structure, stakeholder engagement, environmental performance, social aspects, and operational practices Board Statement and ESG Governance Structure The Board is committed to supporting the Group's sustainable development, overseeing the formulation and implementation of ESG strategies, and assessing related risks; an ESG working group handles daily execution and reports regularly to the Board, with clear short-term and long-term sustainability goals established - The Board is committed to actively supporting the Group's commitment to environmental and social responsibilities, overseeing the development and implementation of ESG strategies, and assessing and identifying ESG-related risks[454][455][457][458] - The Board has delegated day-to-day execution responsibilities to the ESG Working Group, which comprises senior management and core members from various departments, responsible for facilitating the integration of ESG strategies and policies[489][492] - The Group has established clear short-term and long-term sustainable development goals and guidelines, and continuously implements emission reduction measures in accordance with government regulations[455][457] About This Report This is the Group's fourth Environmental, Social and Governance Report, covering the period from April 1, 2023, to March 31, 2024, disclosing the Group's ESG policies, measures, and performance in building construction and RMAA engineering services in Hong Kong, with a reporting scope covering approximately 90% of total revenue - This report is the fourth Environmental, Social and Governance Report of Wecon Holdings Limited, covering the period from April 1, 2023, to March 31, 2024[461][462][466][467] - The report discloses the Group's ESG policies and initiatives in providing building construction services and RMAA engineering services in Hong Kong, with the reporting scope covering approximately 90% of the Group's total revenue for 2023/2024[463][464][468] - The report is prepared in accordance with the ESG Reporting Guide set out in Appendix C2 of the Listing Rules and adheres to the principles of materiality, quantitative disclosure, balance, and consistency[470][471][473][474] Stakeholder Engagement and Materiality Assessment The Group maintains continuous communication with stakeholders (including government, shareholders, suppliers, customers, communities, and employees) through various channels and identified 12 most relevant sustainability issues via a materiality assessment to guide ESG decision-making - The Group communicates with stakeholders through channels such as general meetings, annual reports, websites, emails, review meetings, customer communication meetings, community programs, donations, and employee communication meetings[497][498] - Key stakeholder expectations include compliance with laws and regulations, returns, ethical operations, health and safety, improving the community environment, and occupational health[497][498] - The Group identifies reporting disclosure issues through internal and external materiality assessments and identified 12 most relevant sustainability issues in 2024[499][501] Environmental Aspects The Group is committed to environmental protection, having implemented ISO 14001:2015 and ISO 50001:2018 certified environmental and energy management systems; it aims to reduce air emissions, energy consumption, water usage, and waste disposal by 3% by 2026/2027 and achieve carbon neutrality in Hong Kong by 2050 - The Group has implemented an Environmental Management System (ISO 14