WT集团(08422) - 2021 - 年度财报

Company Information This section provides core company information including basic registration details, board and committee members, principal bankers, auditors, and share registrars Company Overview and Key Personnel This section provides core company information including basic registration details, board and committee members, principal bankers, auditors, and share registrars, noting significant changes in board and committee members during the reporting period - The company's Board of Directors, Audit Committee, Nomination Committee, and Remuneration Committee experienced multiple member changes, including new appointments and resignations, in July and September 2021[4] - The company's Chairman is Mr. Kam Kin Bun, who also serves as Compliance Officer; its registered office is in the Cayman Islands, with Hong Kong headquarters in Tai Kok Tsui[4][5] Chairman's Statement and Management Discussion and Analysis This section reviews the Group's performance, strategy, liquidity, and human resources, highlighting a decline in revenue and expanded loss, alongside stable financial resources and a decision not to declare a dividend Business and Financial Review This fiscal year, the Group experienced significant declines in revenue and gross profit, with an expanded loss primarily due to fewer large construction projects, while gross profit margin improved due to optimized project mix, and net loss widened mainly from impairment losses on property, plant and equipment and right-of-use assets, and reversal of deferred tax assets Financial Performance Summary | Financial Indicator | FY2021 (Million HKD) | FY2020 (Million HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 33.8 | 61.2 | -44.8% | | Gross Profit | 2.1 | 2.4 | -12.5% | | Gross Profit Margin | 6.3% | 3.9% | +2.4pp | | Loss for the Year | 7.4 | 5.9 | +25.4% | - The decrease in revenue was primarily due to a reduction in the number of large contract construction projects undertaken in the current year compared to the previous year[8] - The expanded net loss was mainly attributable to (i) the recognition of impairment losses totaling approximately 0.8 million HKD on property, plant and equipment and right-of-use assets, and (ii) the reversal of deferred tax assets recognized in prior years[7][11][12] Outlook and Strategy The Group anticipates a continuously challenging and competitive business environment, exacerbated by COVID-19, yet management remains cautiously optimistic about long-term opportunities in the construction market, focusing on foundation, site formation, and superstructure works while seeking other investment opportunities to diversify revenue - Facing challenges, the Group will continue to execute business strategies including (i) expanding market share to secure more foundation and superstructure projects, and (ii) adhering to prudent financial management principles to ensure sustainable growth[13] - The Board will consider other investment opportunities to expand revenue streams and generate optimal returns for shareholders[14] Liquidity and Financial Resources The Group maintained a robust financial position this fiscal year, with significantly increased bank balances and cash, a high current ratio, and a slightly increased but still very low gearing ratio at period-end, which management deems sufficient to support business expansion Liquidity and Financial Resources Summary | Financial Indicator | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Bank Balances and Cash | Approx. 49.4 million HKD | Approx. 38.0 million HKD | | Current Ratio | Approx. 8.3 times | Approx. 8.8 times | | Gearing Ratio | Approx. 1.2% | Approx. 1.0% | - As of June 30, 2021, the Group pledged approximately 2.1 million HKD in deposits as collateral for performance guarantees[17] Employees and Remuneration Policy At fiscal year-end, the Group's employee count slightly increased, while total staff costs decreased; remuneration policy is based on position, qualifications, and performance, with a share option scheme for incentives, though no options were granted during the reporting period Employee and Staff Cost Summary | Indicator | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Total Employees | 21 persons | 18 persons | | Staff Costs (Annual) | Approx. 8.6 million HKD | Approx. 10.4 million HKD | Dividends and Dividend Policy The company has adopted a dividend policy where payout decisions consider the Group's financial performance, capital needs, and overall economic conditions, with the Board recommending no final dividend for the current year - The Board does not recommend a final dividend for the year ended June 30, 2021, consistent with the previous year[29] Biographical Details of Directors This section provides detailed biographical information for the company's executive and independent non-executive directors, highlighting their extensive professional experience and qualifications Executive Directors This section outlines the backgrounds of the executive directors, who possess decades of extensive experience in the construction and engineering industries, overseeing the Group's daily management, project bidding, and technical supervision - Chairman Mr. Kam Kin Bun has over 38 years of experience in the Hong Kong construction industry, primarily responsible for the Group's daily management and bidding[31] - Mr. Hung Cheung Fai, a co-founder of the Group and Technical Director, possesses over 45 years of experience in the construction industry and holds multiple professional engineer qualifications[32][33] - Ms. Wong Mei Chun was appointed Executive Director on July 28, 2021, bringing over 25 years of experience in the construction and electrical engineering industries[33] Independent Non-Executive Directors This section presents the biographies of the independent non-executive directors, all possessing extensive professional backgrounds and experience in accounting, auditing, or corporate finance, and holding positions in multiple listed companies - Independent Non-Executive Directors Ms. Chan Sin Wah, Mr. Leung Chi Hung, and Mr. Yu Tat Chi are all accounting professionals holding membership or fellowship with the Hong Kong Institute of Certified Public Accountants[34][35][36] - Several independent non-executive directors concurrently serve as independent non-executive directors in other listed companies on the Stock Exchange[36][37] Corporate Governance Report This report details the company's corporate governance practices, including board responsibilities, committee structures, and risk management, affirming compliance with the Code on Corporate Governance with one noted deviation Corporate Governance Practices The company is committed to maintaining high corporate governance standards, adhering to all applicable Code on Corporate Governance provisions during the reporting period, with the sole deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Kam Kin Bun, which the Board believes enhances management efficiency - During the reporting period, the company deviated from Code on Corporate Governance provision A.2.1, where the roles of Chairman and Chief Executive Officer were not separated, both held by Mr. Kam Kin Bun[39][45] - The Board believes that Mr. Kam's dual role, given his management of core subsidiaries since 2004, enhances management efficiency and business development, aligning with the Group's best interests[39][45] Board of Directors This section details the Board's responsibilities, composition, independence, appointment and re-election mechanisms, and diversity policy, highlighting its oversight of significant matters including strategy, financial control, and risk management, with independent non-executive directors comprising over one-third of the Board during the reporting period, in compliance with regulations - The Board is responsible for fulfilling corporate governance duties, including formulating and reviewing governance policies, monitoring director training, and ensuring legal compliance[41][42] - The company has adopted a Board Diversity Policy considering gender, age, cultural background, and professional experience in its composition, with two female directors on the Board during the reporting period[48] Board Composition by Age Group and Professional Experience | Director Name | Age Group | Professional Experience | | :--- | :--- | :--- | | Mr. Hung Cheung Fai | 60 and above | Business and Management, Construction | | Mr. Kam Kin Bun | 60 and above | Business and Management, Construction | | Ms. Wong Mei Chun | 60 and above | Business and Management, Construction | | Ms. Chan Sin Wah | 40–59 | Accounting and Finance | | Mr. Leung Chi Hung | 60 and above | Accounting and Finance | | Mr. Yu Tat Chi | 40–59 | Accounting and Finance | Board Committees The company has established three Board committees—Audit, Nomination, and Remuneration—each predominantly or chaired by independent non-executive directors to ensure independence and professionalism, with this section detailing their responsibilities, composition, and work during the reporting period Director Attendance at Meetings | Director/Committee | Board | Audit Committee | Nomination Committee | Remuneration Committee | Annual General Meeting | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Kam Kin Bun | 7/7 | N/A | N/A | N/A | 1/1 | | Mr. Hung Cheung Fai | 7/7 | N/A | N/A | N/A | 1/1 | | Mr. Leung Chi Hung | 7/7 | 5/5 | 1/1 | 1/1 | 1/1 | Audit Committee The Audit Committee, composed of independent non-executive directors and chaired by Mr. Leung Chi Hung who possesses accounting qualifications, is primarily responsible for overseeing financial statement integrity, reviewing external auditor independence and performance, and assessing the company's financial, risk management, and internal control systems - The Audit Committee's primary responsibilities include advising on external auditor appointment, monitoring financial statement integrity, and reviewing financial, risk management, and internal control systems[54] - During the reporting period, the Audit Committee held meetings to review the independence of the independent auditor, financial reporting, and the effectiveness of risk management and internal control systems[55] Nomination Committee The Nomination Committee reviews the Board's structure, size, and composition, identifies suitable director candidates, assesses the independence of independent non-executive directors, and proposes director appointments and re-appointments to the Board based on the company's nomination and diversity policies - The Nomination Committee's main responsibilities include reviewing the Board structure, identifying suitable director candidates, assessing the independence of independent non-executive directors, and making recommendations on director appointments[56] Remuneration Committee The Remuneration Committee is responsible for formulating the company's remuneration policy and advising the Board on the remuneration of executive directors and senior management, ensuring a formal, transparent, and independent remuneration determination process - The Remuneration Committee is responsible for formulating remuneration policies and reviewing the remuneration of executive directors, senior management, and independent non-executive directors before making recommendations to the Board[58][59] Risk Management and Internal Control The Group has established risk management and internal control systems, with the Board overseeing their effectiveness through at least annual reviews; given the relatively simple company structure, no internal audit department is currently in place, but internal control reviews have been conducted for financial, operational, and risk management functions, which the Board deems sufficiently effective - Risk management procedures involve three steps: risk identification, assessment, and mitigation, conducted or updated annually[73] - Due to the relatively simple company and operational structure, the Group has not established an internal audit department, but annual risk management and internal control reviews have been conducted, which the Board considers sufficiently effective[74] Directors' Report This report outlines the company's principal activities, performance, key risks, customer and supplier concentration, and disclosures of interests, along with compliance matters including public float and auditor changes Principal Activities and Performance The company is an investment holding company, with the Group's principal activities being the provision of specialized engineering (foundation, demolition, land surveying) and general building works in Hong Kong; this year's performance is detailed on page 38 of the financial report, and the Board does not recommend a final dividend - The Group's principal activities are the provision of specialized engineering (including foundation and site formation, demolition, and on-site land surveying) and general building works in Hong Kong[80] - The Directors do not recommend the payment of a final dividend for the year ended June 30, 2021[88] Key Risks and Uncertainties The Group's key risks include business reliance on securing non-recurring projects, potential cost overruns from inaccurate project cost estimations, dependence on subcontractors, client credit risk, and the overall trends and macroeconomic conditions of the Hong Kong construction industry - Revenue is dependent on the successful bidding of non-recurring projects, leading to uncertainty[86] - Inaccurate project cost estimations or delayed completion may lead to cost overruns[86] - Business performance relies on subcontractors and is affected by client credit risk and the overall trends in the Hong Kong construction industry[95] Major Customers and Suppliers This fiscal year, the Group experienced very high customer concentration, with the largest client accounting for nearly 60% of total revenue and the top five clients over 97%; supplier concentration was also high, with the top five suppliers representing nearly 70% of total purchases Customer and Supplier Concentration | Concentration Indicator | FY2021 | FY2020 | | :--- | :--- | :--- | | Largest Customer as % of Total Revenue | 59.7% | 39.8% | | Top Five Customers as % of Total Revenue | 97.4% | 76.7% | | Largest Supplier as % of Total Purchases | 40.9% | 15.7% | | Top Five Suppliers as % of Total Purchases | 68.6% | 52.9% | Disclosure of Interests This section discloses the interests of directors, chief executives, and substantial shareholders in the company's shares, noting that Executive Directors Mr. Kam Kin Bun and Mr. Hung Cheung Fai indirectly hold 57.66% of the company's shares through their controlling entity, Top Talent Ventures Limited, and also details other substantial shareholders' holdings Directors' and Chief Executives' Interests in Shares | Director Name | Capacity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Kam Kin Bun | Interest in a controlled corporation | 576,600,000 | 57.66% | | Mr. Hung Cheung Fai | Interest in a controlled corporation | 576,600,000 | 57.66% | Substantial Shareholders' Interests in Shares | Name of Substantial Shareholder | Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Top Talent | Beneficial owner | 576,600,000 | 57.66% | | China Silver Asset Management Limited | Investment manager | 140,140,000 | 14.01% | | CS Asia Opportunities Master Fund | Beneficial owner | 140,140,000 | 14.01% | Compliance Matters During the reporting period, the company's public float temporarily fell below the GEM Listing Rules' 25% requirement but was restored to approximately 25.03% on March 22, 2021, after the controlling shareholder sold 1.2% of shares; additionally, the company changed its auditor on July 9, 2020 - The company's public float once fell below the 25% requirement but was restored to approximately 25.03% on March 22, 2021, after controlling shareholder Top Talent sold 1.2% of its shares, meeting the Listing Rules' requirements[132] - PricewaterhouseCoopers resigned as the company's auditor on July 9, 2020, and Crowe (HK) CPA Limited was appointed as the new auditor on the same day[134] Independent Auditor's Report This report presents the independent auditor's opinion on the consolidated financial statements, affirming their fair presentation and compliance with accounting standards, and highlights key audit matters related to construction contract valuation and expected credit loss provisions Opinion Independent auditor Crowe (HK) CPA Limited believes the Group's consolidated financial statements fairly and accurately reflect its financial position, performance, and cash flows in accordance with Hong Kong Financial Reporting Standards, and are properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance, issuing an unmodified opinion - The auditor issued an unmodified opinion (i.e., a standard, unqualified opinion) on the consolidated financial statements[144] Key Audit Matters The auditor identified two key audit matters: the measurement of construction contract value, critical for revenue recognition and involving significant estimation; and the provision for expected credit losses on trade and retention receivables and contract assets, due to their material balances and the significant judgment required for assessment - Key Audit Matter One: Measurement of construction contract value; given its criticality to revenue and significant estimation, the auditor focused on this area, concluding that management's judgments and estimates were supported by evidence after evaluating controls, reviewing contracts, and assessing management's estimates[147] - Key Audit Matter Two: Provision for expected credit losses on receivables and contract assets; due to the material balances and significant judgment involved in assessing provisions, the auditor focused on this area, concluding that management's judgments and estimates were supported by evidence after understanding credit procedures, evaluating modeling methodologies, and forward-looking information[148] Consolidated Financial Statements This section presents the Group's consolidated financial statements, including the statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement presents the Group's operating results for the fiscal year, showing revenue of 33.83 million HKD, a 44.8% year-on-year decrease, and a loss for the year and total comprehensive loss of 7.40 million HKD, representing a 25.4% increase in loss year-on-year Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item (Thousand HKD) | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 33,826 | 61,215 | | Gross Profit | 2,124 | 2,398 | | Loss Before Income Tax | (6,472) | (6,909) | | Loss and Total Comprehensive Loss for the Year | (7,396) | (5,874) | | Basic Loss Per Share (HK cents) | (0.7) | (0.6) | Consolidated Statement of Financial Position This statement reflects the Group's assets, liabilities, and equity at fiscal year-end; as of June 30, 2021, total assets were 65.495 million HKD, total liabilities were 8.05 million HKD, and net assets were 57.445 million HKD, a decrease from the prior year Consolidated Statement of Financial Position | Item (Thousand HKD) | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 68 | 1,945 | | Current Assets | 65,427 | 71,065 | | Total Assets | 65,495 | 73,010 | | Liabilities and Equity | | | | Current Liabilities | 7,899 | 8,037 | | Non-current Liabilities | 151 | 132 | | Total Liabilities | 8,050 | 8,169 | | Net Assets | 57,445 | 64,841 | | Total Equity | 57,445 | 64,841 | Consolidated Statement of Changes in Equity This statement illustrates changes in each component of shareholders' equity during the fiscal year, with total equity decreasing from 64.841 million HKD at the beginning of the year to 57.445 million HKD at year-end, primarily due to the total comprehensive loss of 7.396 million HKD for the year Consolidated Statement of Changes in Equity | Item (Thousand HKD) | Share Capital | Share Premium | Other Reserves | Retained Earnings | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | As at July 1, 2020 | 10,000 | 36,855 | 10,100 | 7,886 | 64,841 | | Loss and Total Comprehensive Loss for the Year | – | – | – | (7,396) | (7,396) | | As at June 30, 2021 | 10,000 | 36,855 | 10,100 | 490 | 57,445 | Consolidated Statement of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities during the fiscal year, showing net cash inflow from operating activities of 12.08 million HKD, a net increase in cash and cash equivalents of 11.451 million HKD, and an ending balance of 49.447 million HKD Consolidated Statement of Cash Flows | Item (Thousand HKD) | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 12,080 | 8,939 | | Net Cash from/(used in) Investing Activities | 62 | (34) | | Cash Flows Used in Financing Activities | (691) | (635) | | Increase in Cash and Cash Equivalents | 11,451 | 8,270 | | Cash and Cash Equivalents at Beginning of Year | 37,996 | 29,726 | | Cash and Cash Equivalents at End of Year | 49,447 | 37,996 | Notes to the Consolidated Financial Statements This section provides detailed notes on the Group's accounting policies, financial and capital risk management, critical accounting estimates, major asset and liability items, and events occurring after the reporting period 2 Application of Amendments to Hong Kong Financial Reporting Standards This section outlines the basis of preparation and significant accounting policies for the consolidated financial statements, which are prepared under Hong Kong Financial Reporting Standards on a historical cost basis, with key policies including revenue recognition over time using the output method, impairment assessment of financial instruments under the expected credit loss model, and lease accounting under HKFRS 16 - The Group recognizes revenue from construction contracts over time using the output method, measured by the value of services transferred to the customer to date[247] - The Group applies a simplified approach to trade and retention receivables and contract assets, always recognizing expected credit losses (ECL) for the entire lifetime[211][213] - The Group has applied HKFRS 16, recognizing most leases as right-of-use assets and lease liabilities, while applying exemptions for short-term and low-value leases[191] 4 Financial and Capital Risk Management The Group's primary financial risks are credit and liquidity risks, with interest rate risk being relatively insignificant; credit risk is managed through client credit assessments and provisions under the expected credit loss model, while liquidity risk is managed via internal cash resources, and capital structure is monitored using a low debt-to-asset ratio - The Group's primary financial risks are credit risk and liquidity risk; interest rate risk is not significant due to the relatively small scale of fixed-rate liabilities and cash balances[260][261] - To manage credit risk, the Group assesses impairment for trade and contract receivables using the expected credit loss model, grouping them based on internal credit ratings[262] - The Group monitors capital using the debt-to-asset ratio, which was 1.0% as of June 30, 2021, indicating a robust capital structure[273][274] 5 Critical Accounting Estimates and Judgements Financial statement preparation involves two critical accounting estimates and judgments: the measurement of construction contract value, directly impacting revenue recognition amount and timing; and the provision for expected credit losses on trade and retention receivables and contract assets, requiring assumptions based on historical data and forward-looking information - Critical Estimate One: Measurement of construction contract value; management must recognize revenue by measuring completed works and estimating the value of uncertified works, involving significant judgment[277] - Critical Estimate Two: Provision for expected credit losses on receivables and contract assets; management must make judgments based on assumptions regarding default risk and expected loss rates[278] 16 Trade and Retention Receivables This section details the composition of various assets and liabilities; at fiscal year-end, the Group's property, plant and equipment and right-of-use assets had zero net book value due to impairment, while trade and contract receivables, though significantly reduced from last year, remained major components of current assets, and trade and retention payables were primary current liabilities - Due to impairment losses recognized, the net book value of both property, plant and equipment and right-of-use assets was zero as of June 30, 2021[303][305] Key Asset and Liability Balances | Item (Thousand HKD) | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Trade and Retention Receivables (Net) | 271 | 4,771 | | Contract Assets (Net) | 12,301 | 18,684 | | Trade and Retention Payables | 5,094 | 5,259 | - As of June 30, 2021, the Group had unutilized tax losses of approximately 11.255 million HKD, but no deferred tax assets were recognized due to the unpredictability of future profit streams[330] 32 Events After the Reporting Period Subsequent to the reporting period, the company's controlling shareholder, Top Talent Ventures Limited, sold all its shares in the company, approximately 57.66% of the total issued shares, on July 21, 2021, after which Top Talent Ventures no longer holds any company shares - On July 21, 2021, controlling shareholder Top Talent Ventures Limited sold all its 576,600,000 company shares (approximately 57.66%) in the open market[340] Financial Summary This section provides a concise overview of the Group's financial performance, assets, and liabilities over the past five fiscal years Five-Year Financial Summary This section provides a summary of the Group's performance, assets, and liabilities over the past five fiscal years, indicating significant fluctuations in revenue and profitability, with FY2021 revenue and net assets being among the lowest in the period Five-Year Performance Summary | Performance (Thousand HKD) | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 33,826 | 61,215 | 82,775 | 44,995 | 75,370 | | Loss/(Profit) for the Year | (7,396) | (5,874) | 6,436 | (9,563) | 9,467 | Five-Year Assets and Liabilities Summary | Assets and Liabilities (Thousand HKD) | 2021 | 2020 | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 65,495 | 73,010 | 82,630 | 78,895 | 56,232 | | Total Liabilities | 8,050 | 8,169 | 11,915 | 9,693 | 21,322 | | Net Assets | 57,445 | 64,841 | 70,715 | 69,202 | 34,910 |