CONTENTS

1

Financial and Operating Highlights

3

Management Discussion and Analysis

15

Unaudited Condensed Consolidated Statement of Financial Position

17

Unaudited Condensed Consolidated Comprehensive Income Statement

18

Unaudited Condensed Consolidated Statement of Changes in Equity

19

Unaudited Condensed Consolidated Statement of Cash Flows

20

Notes to the Unaudited Condensed Consolidated Financial Statements

35

Other information

FINANCIAL AND OPERATING HIGHLIGHTS

Financial Highlights

Six months ended 30 June

2020

2019

RMB'000

RMB'000

% change

Revenue

15,633,880

16,756,469

-6.7%

Gross profit

600,096

564,259

+6.4%

Total comprehensive income for the period

140,504

130,558

+7.6%

Revenue

Gross Profit

RMB'000

RMB'000

18,000,000

16,756,469

15,633,880

700,000

16,000,000

600,000

600,096

14,000,000

564,259

500,000

12,000,000

400,000

10,000,000

8,000,000

300,000

6,000,000

200,000

4,000,000

100,000

2,000,000

0

0

2019

2020

2019

2020

Total comprehensive income

RMB'000

160,000

140,000

140,504

130,558

120,000

100,000

80,000

60,000

40,000

20,000

020192020

1 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

FINANCIAL AND OPERATING HIGHLIGHTS

Operating Highlights

Six months ended 30 June

2020

2019

% change

Stainless steel

852,485

Sales volume (tonnes)

865,681

-1.5%

Processing volume (tonnes)

1,255,415

1,270,941

-1.2%

Processing multiple

1.47

1.47

Carbon steel

1,276,876

Sales volume (tonnes)

1,272,614

+0.3%

Processing volume (tonnes)

1,477,385

1,465,379

+0.8%

Processing multiple

1.16

1.15

Note  : Processing multiple = Processing volume/Sales volume

Sales volume of stainless steel

(tonnes)

900,000

865,681

852,485

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

20192020

Sales volume of carbon steel

(tonnes)

Processing volume of stainless steel

(tonnes)

1,400,000

1,270,941 1,255,415

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

20192020

Processing volume of carbon steel

(tonnes)

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

1,272,6141,276,876

20192020

1,500,000

1,465,379

1,477,385

1,200,000

900,000

600,000

300,000

0

20192020

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 2

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS REVIEW

Processing centres

We are a leading metals processing service provider providing comprehensive processing service to modern manufacturers in China with more than 20,000 active customers. Our processing services cover the whole manufacturing process including cutting, slitting, polishing, forming, welding, heat treating, machinery, painting and assembling. The Group has established ten processing centres strategically located in various regions in China, namely, Wuxi, Hangzhou, Tianjin, Wuhan, Taiyuan, Zibo, Jingjiang, Taian, Qianzhou and Jiaxing.

Business highlights

1. Da Ming contributed to "Made in Wuxi" by providing for Huoshenshan Hospital

In the evening of 31 January 2020, the whole of Huoshenshan Hospital, the first hospital in Wuhan, Hubei based on the Xiaotangshan model, was connected to power. Three days before that, four high-efficiency precipitators manufactured by Wuxi Hi-Tech Environmental Protection were loaded for delivery. The giants Jiangsu Daming Metal Products Co., Ltd. and Daming Metal Products Wuxi Co., Ltd., both being companies under Da Ming International, joined hands with Wuxi Hi-Tech Environmental Protection in this project. Da Ming provided the raw materials of carbon steel (Q235B) and stainless steel (304, 316L) and ancillary services for parts processing such as cutting and bending, while Hi-Tech Environmental Protection was responsible for the construction of the precipitators. It took Da Ming only two days from taking the order to inspection and delivery.

During the pandemic, Da Ming made use of its strengths as a large corporation and produced items used in the medical equipment of Wuhan Leishenshan Hospital, Huoshenshan Hospital and Fangcang Hospital. Its subsidiaries also actively participated in the production of parts used in CT equipment, disinfection equipment, water treatment equipment, ultrasonic cleaners, hand- washing devices, important chemical equipment for medical supplies, etc.

3 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

2. Valmet RAPP (EN standards) dual-phase steel pulping machines with parts from Daming Heavy Industry shipped overseas

Daming Heavy Industry held the "Valmet RAPP Dual-phase Steel Pulping Machine Shipment Ceremony" to announce the shipment of four large-scaledual-phase steel digesters overseas.

Valmet is a leading developer and supplier for the pulping, paper manufacturing and energy industries in the world and screens and reviews suppliers stringently. After a long period of observation and study, Daming Heavy Industry has successfully been nominated for the supply of parts on a number of projects for Valmet. The projects covered equipment such as heat exchangers, carbon steel tanks, stainless steel containers and dual-phase steel digesters, which won high acclaim from customers in countries such as Chile, Indonesia and Brazil.

  1. Jiangsu Daming kickstarted a high-end new energy vehicle parts project
    Jiangsu Daming held the kickstart ceremony for the "High-end New Energy Vehicle Parts Project".
    This batch of products was the structural parts of the body frame for high-end new energy vehicles, and the professional and highly efficient cutting and processing services were provided by Jiangsu Daming. The products covered nine specifications with a total of over one million pieces. The order required a large quantity of items of a high quality requirement to be delivered within a short time frame, which was a test of the company's ability to process parts. During the first half of 2020, more than 700,000 parts were completed.
  2. Daming Heavy Industry worked on a large project and started to ship prefabricated tank equipment to South America
    After the full resumption of work, in February, Daming Heavy Industry loaded and shipped the large-scale equipment ordered by a renowned European enterprise to South America. The dual-phase steel equipment shipped this time weighed approximately 300 tonnes. This not only represented Daming Heavy Industry's complete fulfillment of the client's order, but also indicated Daming Heavy Industry is increasingly mature in the export of prefabricated tank equipment.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 4

MANAGEMENT DISCUSSION AND ANALYSIS

5. Daming Heavy Industry shipped for the Hangzhou Oxygen U12 Project

Daming Heavy Industry held a shipment ceremony for a state key project - Hangzhou Oxygen U12 State Key Project. The successful shipment of the key components of four sets of supersized containers indicates that the manufacturing standard of Daming Heavy Industry has raised to a higher level.

  1. The EOEG plant tower Daming Heavy Industry manufactured for Lianyungang Petrochemical has been shipped
    The first batch of EOEG equipment Daming Heavy Industry manufactured for Lianyungang Petrochemical has been shipped. The project covered 38 sets of equipment with a total weight of nearly 2,400 tonnes, including 14 sets of stainless steel equipment, 20 sets of composite panel equipment, 2 sets of carbon steel equipment and 2 heat exchangers, with a maximum diameter of 6.6 meters and a maximum length of 55 meters.
  2. Daming Heavy Industry contributes to a major international project and products for Shanghai Electric's Photo-thermal Storage Tank Project in Dubai (second phase) has been shipped
    Da Ming serves high-end power stations under the "Belt and Road" initiative to build an ecosphere for large-scale projects. The first batch of prefabricated steel plates for light-heat storage tanks that Daming Heavy Industry manufactured for Shanghai Electric's 700MW photo- thermal and 250MW photovoltaic solar power plant project in Dubai (second phase) has been shipped.
  3. Daming Heavy Industry and Daming Precision joined hands to provide for the environment-friendly equipment RTO
    Two major manufacturing companies of the Da Ming Group, Daming Heavy Industry and Daming Precision, jointly provided parts for the environment-friendly equipment RTO (Regenerative Thermal Oxidizer) of a renowned foreign-owned enterprise using their respective strengths.

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Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

9. Daming Heavy Industry contributes to the Australian mining industry - a large-scale ore scrubber has been successfully exported

A large-scale ore scrubber jointly manufactured and processed by Production Division 1, Production Division 3 and the Equipment Manufacturing Division of Daming Heavy Industry was successfully exported to Mclanahan in Australia. The final owner is FMG, the third largest mining giant in Australia and the fourth largest in the world.

10. The world's largest welded tube sheet manufactured by Daming Heavy Industry has been successfully shipped

A tube sheet with the longest diameter in the world at present that was manufactured and processed by the Machine Processing Division of Daming Heavy Industry for a paper project of Valmet has been successfully shipped to Brazil.

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DA MING INTERNATIONAL HOLDINGS LIMITED 6

MANAGEMENT DISCUSSION AND ANALYSIS

  1. Daming Heavy Industry serves CNOOC's fertilizer project - heaters successfully shipped
    Air heaters manufactured by Daming Heavy Industry for a fertilizer project of CNOOC in Hainan have been successfully shipped. This also marks the inclusion of Daming Heavy Industry on CNOOC's supplier list in a real sense for the first time.
  2. Daming Heavy Industry manufactured stacked heat exchangers to serve a 600,000-tonne ABS and AS project
    In mid-June, the manufacturing of parts by Daming Heavy for the first phase works of the Zhangzhou ABS and AS project, with an annual production capacity of 450,000 tonnes, entered the final stage. It was the first time that Daming Heavy Industry had joined hands with a large- scale Taiwan enterprise in the PRC and won a contract for nearly 50 heat exchangers, including 12 stacked heat exchangers, made of stainless steel.

Operating results

The Group recorded a net profit of approximately RMB140.5 million for the six months ended 30 June 2020 representing an increase of approximately 7.6% as compared with the net profit of approximately RMB130.6 million for the six months ended 30 June 2019. The improvement in operating results was mainly due to the higher gross profit margin resulted from an improvement in operating efficiency.

The sales volume of our stainless steel processing business decreased from approximately 866,000 tonnes for the six months ended 30 June 2019 to approximately 852,000 tonnes for the six months ended 30 June 2020 representing a decrease of approximately 1.5%. The processing volume decreased slightly from approximately 1,271,000 tonnes for the six months ended 30 June 2019 to approximately 1,255,000 tonnes for the six months ended 30 June 2020 representing a decrease of approximately 1.2%.

The sales volume of our carbon steel processing business increased from approximately 1,273,000 tonnes for the six months ended 30 June 2019 to approximately 1,277,000 tonnes for the six months ended 30 June 2020 representing an increase of approximately 0.3% while the processing volume increased from approximately 1,465,000 tonnes for the six months ended 30 June 2019 to approximately 1,477,000 tonnes for the six months ended 30 June 2020 representing an increase of approximately 0.8%.

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Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

The sales volume and processing volume of our processing centres for the six months ended 30 June

2020 and the corresponding period in 2019 were as follows:

Stainless steel

Six months ended 30 June

2020

2019

tonnes

tonnes

% change

Sales volume

336,730

Wuxi

330,673

+1.8%

Hangzhou

125,464

132,293

-5.2%

Tianjin

113,274

116,823

-3.0%

Taiyuan

80,218

67,726

+18.4%

Wuhan

38,940

48,327

-19.4%

Jingjiang

75,369

110,151

-31.6%

Shandong

77,395

59,688

+29.7%

Jiaxing

5,095

-

n/a

Total

852,485

865,681

-1.5%

Processing volume

548,129

Wuxi

557,133

-1.6%

Hangzhou

152,146

172,579

-11.8%

Tianjin

121,650

128,577

-5.4%

Taiyuan

209,274

157,665

+32.7%

Wuhan

43,403

60,471

-28.2%

Jingjiang

104,587

140,502

-25.6%

Shandong

68,306

54,014

+26.5%

Jiaxing

7,920

-

n/a

Total

1,255,415

1,270,941

-1.2%

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DA MING INTERNATIONAL HOLDINGS LIMITED 8

MANAGEMENT DISCUSSION AND ANALYSIS

Carbon steel

Six months ended 30 June

2020

2019

tonnes

tonnes

% change

Sales volume

Wuxi

259,637

261,341

-0.7%

Hangzhou

93,111

93,059

-0.1%

Tianjin

138,728

119,479

+16.1%

Taiyuan

122,826

103,624

+18.5%

Wuhan

140,232

260,582

-46.2%

Jingjiang

280,362

296,597

-5.5%

Shandong

158,130

121,124

+30.6%

Jiaxing

83,850

16,808

+398.9%

1,276,876

1,272,614

+0.3%

Processing volume

Wuxi

205,611

188,017

+9.4%

Hangzhou

101,419

100,369

+1.0%

Tianjin

203,565

201,121

+1.2%

Taiyuan

179,524

191,430

-6.2%

Wuhan

175,096

297,226

-41.1%

Jingjiang

358,444

348,812

+2.8%

Shandong

179,958

122,541

+46.9%

Jiaxing

73,768

15,863

+365.0%

1,477,385

1,465,379

+0.8%

9 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL REVIEW AND ANALYSIS

During the six months ended 30 June 2020, we recorded a revenue of approximately RMB15,634 million, gross profit of approximately RMB600 million and profit attributable to equity holders of the Company of approximately RMB128 million. Total assets of the Group as at 30 June 2020 amounted to approximately RMB11,575 million while equity attributable to equity holders of the Company amounted to approximately RMB2,735 million.

Revenue

Our revenue for the six months ended 30 June 2020 amounted to approximately RMB15,634 million comprising approximately RMB10,479 million from our stainless steel processing business, approximately RMB4,345 million from our carbon steel processing business and approximately RMB810 million from our manufacturing business. As compared with the revenue for the six months ended 30 June 2019 of approximately RMB16,756 million, it represented a decrease of approximately 6.7%. Such decrease was mainly due to the decrease in the average market price of stainless steel and carbon steel raw materials.

The sales volume of our stainless steel processing business decreased slightly from 865,681 tonnes for the six months ended 30 June 2019 to 852,485 tonnes for the six months ended 30 June 2020 representing a decrease of approximately 1.5%. The sales volume of our carbon steel processing business increased from 1,272,614 tonnes for the six months ended 30 June 2019 to 1,276,876 tonnes for the six months ended 30 June 2020 representing an increase of approximately 0.3%.

The processing volume of our stainless steel processing business decreased slightly from 1,270,941 tonnes for the six months ended 30 June 2019 to 1,255,415 tonnes for the six months ended 30 June 2020 representing a decrease of approximately 1.2%. The processing volume of our carbon steel processing business increased from 1,465,379 tonnes for the six months ended 30 June 2019 to 1,477,385 tonnes for the six months ended 30 June 2020 representing an increase of approximately 0.8%.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 10

MANAGEMENT DISCUSSION AND ANALYSIS

Analysis of revenue by key industry segments

During the six months ended 30 June 2020 and the corresponding period in 2019, our revenue by key industry segments were shown below:

Revenue

Six months ended 30 June

2020

2019

Industry

RMB'000

%

RMB'000

%

Machineries

5,452,540

34.9

5,286,185

31.5

Distributors and Traders

3,514,564

22.5

5,041,475

30.1

Petrochemical

1,197,305

7.7

1,316,735

7.9

Home Hardware and Appliances

1,743,824

11.1

2,002,573

12.0

Automobile and Transport

959,353

6.1

909,226

5.4

Construction

499,393

3.2

475,090

2.8

Renewable Energy

630,134

4.0

559,221

3.3

Others

1,636,767

10.5

1,165,964

7.0

Total

15,633,880

100.0

16,756,469

100.0

RMB'000

10.5%

7.0%

(1,636,767)

34.9%

(1,165,964)

31.5%

(5,452,540)

3.3%

(5,286,185)

4.0%

(559,221)

2.8%

(630,134)

(475,090)

3.2%

2020

22.5%

5.4%

2019

30.1%

(499,393)

(909,226)

6.1%

(3,514,564)

12.0%

(5,041,475)

(959,353)

11.1%

(2,002,573)

(1,743,824)

7.7%

7.9%

(1,197,305)

(1,316,735)

Machineries

Automobile and Transport

Distributors and Traders

Construction

Petrochemical

Renewable Energy

Home Hardware and Appliances

Others

11 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

Analysis of revenue by geographical regions

During the six months ended 30 June 2020 and the corresponding period in 2019, our revenue by geographical regions were shown below:

Six months ended 30 June

2020

2019

Region

RMB'000

%

RMB'000

%

Eastern region, China

10,671,458

68.3

11,437,946

68.2

Northern region, China

2,381,154

15.2

2,266,107

13.5

Central region, China

1,133,913

7.2

1,704,094

10.2

Southwestern region, China

185,656

1.2

217,812

1.3

Northeastern region, China

291,320

1.9

285,019

1.7

Northwestern region, China

175,704

1.1

144,331

0.9

Southern region, China

407,549

2.6

339,626

2.0

Overseas

387,126

2.5

361,534

2.2

Total

15,633,880

100.0

16,756,469

100.0

RMB'000

2.5%

2.2%

(387,126)

(361,534)

2.6%

2.0%

(407,549)

(339,626)

1.1%

0.9%

(175,704)

(144,331)

1.9%

1.7%

(291,320)

1.2%

(285,019)

2020

1.3%

2019

(185,656)

68.2%

7.2%

(217,812)

(10,671,458)

10.2%

(11,437,946)

(1,133,913)

(1,704,094)

15.2%

13.5%

(2,381,154)

(2,266,107)

Eastern region, China

Northeastern region, China

Northern region, China

Northwestern region, China

Central region, China

Southern region, China

Southwestern region, China

Overseas

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 12

MANAGEMENT DISCUSSION AND ANALYSIS

Gross profit

Gross profit increased from approximately RMB564.3 million for the six months ended 30 June 2019 to approximately RMB600.1 million for the six months ended 30 June 2020 mainly due to the improvement in operating efficiency and contribution from our manufacturing business during the period.

Other income

Other income increased from approximately RMB12.9 million for the six months ended 30 June 2019 to approximately RMB14.3 million for the six months ended 30 June 2020 mainly due to the increase in government grants received.

Distribution costs

Distribution costs increased from approximately RMB167.5 million for the six months ended 30 June 2019 to approximately RMB168.9 million for the six months ended 30 June 2020. Such increase was mainly due to the increase in transportation costs.

Administrative expenses

Administrative expenses increased from approximately RMB125.2 million for the six months ended 30 June 2019 to approximately RMB151.9 million for the six months ended 30 June 2020. Such increase was mainly due to the increase in staff costs.

Finance costs

Finance costs increased from approximately RMB93.7 million for the six months ended 30 June 2019 to approximately RMB97.0 million for the six months ended 30 June 2020. Such increase was mainly due to the increase in interest expenses on bank acceptance notes and letters of credit.

Income tax expense

The income tax expense decreased from approximately RMB59.6 million for the six months ended 30 June 2019 to approximately RMB54.3 million for the six months ended 30 June 2020.

Profit for the period

The Group recorded a net profit of approximately RMB140.5 million for the six months ended 30 June 2020 as compared with a net profit of approximately RMB130.6 million for the six months ended 30 June 2019. The increase was mainly due to the increase in gross profit.

13 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

MANAGEMENT DISCUSSION AND ANALYSIS

Foreign exchange risk management

The Group mainly operates in the PRC with most of the transactions denominated and settled in RMB. However, the Group has certain trade receivables, restricted bank balances, cash and cash equivalents, trade payables, other payables and borrowings denominated in foreign currencies, mainly United States Dollar, EURO and Hong Kong Dollar, which are exposed to foreign currency translation risk.

Our management will closely monitor the exchange rate fluctuations to ensure sufficient precautionary measures against any adverse impacts.

LIQUIDITY, CAPITAL STRUCTURE AND FINANCIAL RESOURCES

As at 30 June 2020, the borrowings of the Group amounted to approximately RMB6,107 million. Notes payable amounted to approximately RMB279 million while the bank balances were approximately RMB1,908 million of which approximately RMB1,731 million were restricted bank deposits for issuing letter of credit and notes payable.

As at 30 June 2020, the Group recorded a net current liabilities of approximately RMB1,388 million.

The gearing ratios as at 30 June 2020 and 31 December 2019 were 65.86% and 62.62% respectively. The ratios are calculated as net debt divided by total capital. Net debt is calculated as total borrowings less cash and cash equivalents while total capital is calculated as total equity plus net debt.

CONTINGENT LIABILITIES

As at 30 June 2020, the Group did not have any material contingent liabilities.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 14

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

As at

As at

30 June

31 December

2020

2019

Note

RMB'000

RMB'000

ASSETS

Non-current assets

Property, plant and equipment

6

4,541,827

4,432,495

Right-of-use assets

512,465

519,362

Investment properties

4,022

4,214

Intangible assets

18,601

19,065

Deferred income tax assets

63,317

77,861

Trade receivables and contract assets

8

25,668

28,523

Other non-current assets

9,383

4,116

5,175,283

5,085,636

Current assets

Inventories

7

3,105,919

2,784,448

Trade receivables and contract assets

8

597,610

384,010

Prepayments, deposits and other receivables

9

788,632

814,805

Restricted bank deposits

1,731,246

1,039,691

Cash and cash equivalents

176,413

161,807

6,399,820

5,184,761

Total assets

11,575,103

10,270,397

EQUITY

Equity attributable to equity holders of the Company

Share capital

10

106,607

106,607

Reserves

2,628,344

2,500,710

2,734,951

2,607,317

Non-controlling interests

339,713

326,843

Total equity

3,074,664

2,934,160

15 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2020

As at

As at

30 June

31 December

2020

2019

Note

RMB'000

RMB'000

LIABILITIES

Non-current liabilities

Borrowings

11

498,135

248,410

Deferred government grants

139,642

133,130

Deferred income tax liabilities

41,330

40,569

Trade payables

12

9,152

9,074

Long-term payables

24,782

24,060

713,041

455,243

Current liabilities

Trade payables

12

1,181,501

966,980

Accruals and other current liabilities

351,248

383,534

Contract liabilities

580,476

607,539

Current income tax liabilities

62,177

49,261

Borrowings

11

5,608,608

4,829,012

Lease liabilities

3,388

3,618

Dividends payable

-

41,050

7,787,398

6,880,994

Total liabilities

8,500,439

7,336,237

Total equity and liabilities

11,575,103

10,270,397

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 16

UNAUDITED CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENT

For the six months ended 30 June 2020

Six months ended 30 June

2020

2019

Note

RMB'000

RMB'000

Revenue

13

15,633,880

16,756,469

Cost of sales

14

(15,033,784)

(16,192,210)

Gross profit

600,096

564,259

Other income

14,324

12,947

Other expenses

(1,828)

(723)

Distribution costs

14

(168,873)

(167,486)

Administrative expenses

14

(151,880)

(125,174)

Operating profit

291,839

283,823

Finance income

15

14,651

15,625

Finance costs

15

(111,656)

(109,317)

Finance costs - net

15

(97,005)

(93,692)

Profit before income tax

194,834

190,131

Income tax expense

16

(54,330)

(59,573)

Profit and total comprehensive income

for the period

140,504

130,558

Attributable to:

Equity holders of the Company

127,634

117,675

Non-controlling interests

12,870

12,883

140,504

130,558

Earnings per share for profit attributable

to equity holders of the Company during the period

(expressed in RMB per share)

- basic earnings per share

17

0.10

0.09

- diluted earnings per share

17

0.10

0.09

17 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the six months ended 30 June 2020

Attributable to equity holders

Non-

of the Company

controlling

Total

Share Capital

Reserves

interests

equity

RMB'000

RMB'000

RMB'000

RMB'000

Balance at 1 January 2020

106,607

2,500,710

326,843

2,934,160

Comprehensive income

Profit for the period

-

127,634

12,870

140,504

Total comprehensive income for the period

-

127,634

12,870

140,504

Transaction with owners

Employee share options scheme

- value of employee services

-

-

-

-

Share award scheme

- value of employee services

-

-

-

-

Total transaction with owners

-

-

-

-

Balance at 30 June 2020

106,607

2,628,344

339,713

3,074,664

Attributable to equity holders

Non-

of the Company

controlling

Total

Share Capital

Reserves

interests

equity

RMB'000

RMB'000

RMB'000

RMB'000

Balance at 1 January 2019

106,607

2,387,020

358,975

2,852,602

Comprehensive income

Profit for the period

-

117,675

12,883

130,558

Total comprehensive income for the period

-

117,675

12,883

130,558

Transaction with owners

Employee share options scheme

- value of employee services

-

486

-

486

Share award scheme

- value of employee services

-

5,275

-

5,275

Total transaction with owners

-

5,761

-

5,761

Balance at 30 June 2019

106,607

2,510,456

371,858

2,988,921

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 18

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the six months ended 30 June 2020

Six months ended 30 June

2020

2019

RMB'000

RMB'000

Cash flows from operating activities

Cash flows from operations

104,621

253,586

Interest received

14,651

15,625

Interest paid

(111,656)

(109,317)

Income tax paid

(56,719)

(89,730)

Net cash (used in)/from operating activities

(49,103)

70,164

Cash flows from investing activities

Purchase of property, plant and equipment

(235,052)

(196,724)

Other investing cash flow

2,045

21,160

Net cash used in investing activities

(233,007)

(175,564)

Cash flows from financing activities

Net change in borrowings

1,029,321

817,665

Net change in restricted bank deposits

(691,555)

(68,447)

Net change in bank acceptance notes

-

(573,028)

Dividend paid

(41,050)

-

Net cash from financing activities

296,716

176,190

Net change in cash and cash equivalents

14,606

70,790

Cash and cash equivalents at beginning of the period

161,807

140,004

Exchange loss on cash and cash equivalents

-

-

Cash and cash equivalents at end of the period

176,413

210,794

19 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

  1. GENERAL INFORMATION
    The Company was incorporated in the Cayman Islands on 14 February 2007 as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands. The Company's registered office is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
    The shares of the Company have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 1 December 2010.
  2. BASIS OF PREPARATION
    The unaudited condensed consolidated financial statements for the six months ended 30 June 2020 have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") and Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. These unaudited condensed consolidated financial statements have not been reviewed by external auditors but have been reviewed by the Company's audit committee.
    Going Concern
    As at 30 June 2020, the Group's current liabilities exceeded its current assets by approximately RMB1,387,578,000 (31 December 2019: RMB1,696,233,000). The Group meets its day-to-day working capital requirements mainly through its bank borrowings and facilities with banks in the PRC and Hong Kong that are refinanced and/or renewed every twelve months. In preparing this financial statements, the directors of the Company have considered the Group's available sources of funds as follows:
    • The net cash inflows from operating activities;
    • The available financing including bank borrowings in Mainland China and Hong Kong to be renewed during the next twelve months. The directors are confident that these bank financing could be renewed and/or extended for at least another twelve months upon renewal based on the Group's past experience and good credit standing; and
    • Other available sources of financing from banks and other financial institutions given the Group's credit history and that most of the Group's property, plant and equipment are free from pledge or restriction and would be available to secure further financing when necessary.

Having considered the above, the directors of the Company believe that the Group has adequate resources to continue operation for the foreseeable future of not less than twelve months from period end date of these financial statements. The directors, therefore, are of the opinion that it is appropriate to adopt the going concern basis in preparing the consolidated financial statements.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 20

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

3. SIGNIFICANT ACCOUNTING POLICIES

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2019, as described in those annual financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total earnings.

  1. New and amended standards adopted by the Group
    The Group has applied the following standards and amendments for the first time for their annual financial period commencing 1 January 2020.

Effective for

annual periods

beginning

on or after

HKAS 1 and HKAS 8 (Amendments)

Definition of Material

1 January 2020

HKFRS 3 (Amendments)

Definition of a Business

1 January 2020

Revised Conceptual Framework

Revised Conceptual

Framework for Financial

Reporting

1 January 2020

HKRS 9, HKAS 39 and

Interest Rate Benchmark

HKFRS 7 (Amendments)

Reform

1 January 2020

HKFRS 16 (Amendments)

Covid-19-related Rent

Concessions

1 June 2020

The newly adopted standards did not have material impact on the group's accounting policies and did not require retrospective adjustments.

21 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

  1. The following new standard has been issued but are not effective for the financial year beginning on 1 January 2020 and have not been early adopted.

Effective for

annual periods

beginning

on or after

HKAS 1 (Amendments)

Classification of Liabilities as

1 January 2022

Current or Non-current

HKAS 16 (Amendments)

Property, Plant and Equipment:

1 January 2022

Proceeds before intended use

HKAS 37 (Amendments)

Onerous Contracts - Cost of

1 January 2022

Fulfilling a Contract

HKFRS 3 (Amendments)

Reference to the Conceptual

1 January 2022

Framework

HKFRS 17

Insurance contracts

1 January 2023

HKFRS 10 and

Sale or contribution of assets

To be determined

HKAS 28 (Amendments)

between an investor and its

associate or joint venture

Annual Improvements to

1 January 2022

HKFRS Standards 2018-2020

The Group is assessing the full impact of the new standards, new interpretations and amendments to standards and interpretations.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 22

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

  1. ESTIMATES
    The preparation of unaudited condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
    In preparing these unaudited condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2019.

  2. FINANCIAL RISK MANAGEMENT
    1. Financial risk factors
      The Group's activities expose it to a variety of financial risks: market risk (including currency risk and fair value interest rate risk), credit risk, and liquidity risk.
      The unaudited condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 December 2019.
      There have been no changes in the risk management department since year end or in any risk management policies.
    2. Fair value estimation
      There are no financial assets/liabilities carried at fair value determined by valuation method. The carrying value of cash and cash equivalents, restricted bank deposits, trade and other receivables and financial liabilities including trade and other payables and borrowings are assumed to approximate their fair values.

23 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

6. PROPERTY, PLANT AND EQUIPMENT

Office

Buildings

equipment

Construction

and plant

Machinery

Vehicles

and others

in progress

Total

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

At 1 January 2019

Cost

1,169,140

3,267,110

38,312

61,862

674,149

5,210,573

Accumulated depreciation

(158,651)

(782,869)

(25,260)

(39,293)

-

(1,006,073)

Net book amount

1,010,489

2,484,241

13,052

22,569

674,149

4,204,500

Year ended 31 December 2019

Opening net book amount

1,010,489

2,484,241

13,052

22,569

674,149

4,204,500

Additions

1,413

11,791

5,319

5,936

433,451

457,910

Transfer

86,257

361,350

1,090

1,997

(450,694)

-

Transfer to intangible assets

-

-

-

-

(1,774)

(1,774)

Disposals

-

(97)

(473)

(395)

-

(965)

Depreciation

(36,000)

(178,277)

(4,452)

(8,447)

-

(227,176)

Closing net book amount

1,062,159

2,679,008

14,536

21,660

655,132

4,432,495

At 31 December 2019

Cost

1,256,810

3,639,459

42,346

68,062

655,132

5,661,809

Accumulated depreciation

(194,651)

(960,451)

(27,810)

(46,402)

-

(1,229,314)

Net book amount

1,062,159

2,679,008

14,536

21,660

655,132

4,432,495

Six months ended 30 June 2020

Opening net book amount

1,062,159

2,679,008

14,536

21,660

655,132

4,432,495

Additions

1,177

56,542

565

2,101

174,508

234,893

Transfer

-

52,583

-

-

(52,583)

-

Disposals

-

-

(130)

(48)

-

(178)

Depreciation

(17,990)

(103,389)

(1,538)

(2,466)

-

(125,383)

Closing net book amount

1,045,346

2,684,744

13,433

21,247

777,057

4,541,827

At 30 June 2020

Cost

1,257,987

3,748,584

42,781

70,115

777,057

5,896,524

Accumulated depreciation

(212,641)

(1,063,840)

(29,348)

(48,868)

-

(1,354,697)

Net book amount

1,045,346

2,684,744

13,433

21,247

777,057

4,541,827

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 24

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

7. INVENTORIES

As at

As at

30 June

31 December

2020

2019

RMB'000

RMB'000

Raw materials

2,367,159

1,971,978

Finished goods

738,760

812,470

3,105,919

2,784,448

For the six months ended 30 June 2020, the Group has recorded a gain of approximately RMB14,882,000 for the reversal of provision of inventories to their net realisable value. A gain of approximately RMB41,367,000 was recorded for the six months ended 30 June 2019. These amounts have been included in the cost of sales in the unaudited condensed consolidated statement of comprehensive income.

8. TRADE RECEIVABLES AND CONTRACT ASSETS

As at 30 June

As at 31 December

2020

2019

Non-

Non-

Current

Current

Total

Current

Current

Total

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

RMB'000

Contract assets

47,005

25,811

72,816

67,145

28,666

95,811

Accounts receivable

493,591

-

493,591

294,897

-

294,897

Notes receivable

- bank acceptance notes

60,548

-

60,548

27,255

-

27,255

- commercial acceptance notes

5,427

-

5,427

3,682

-

3,682

606,571

25,811

632,382

392,979

28,666

421,645

Less: provision for impairment

(8,961)

(143)

(9,104)

(8,969)

(143)

(9,112)

597,610

25,668

623,278

384,010

28,523

412,533

25 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

9. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

As at

As at

30 June

31 December

2020

2019

RMB'000

RMB'000

Prepayment for purchase of raw materials

474,560

490,343

Discounted interest for notes receivable

42,632

35,361

Value added tax recoverable

221,626

258,257

Export tax refundable

4,418

9,615

Deposits and other receivables

40,957

18,490

Loan to Daming Logistics

4,439

2,739

788,632

814,805

10. SHARE CAPITAL

Number

of shares

'000

HKD'000

RMB'000

Authorised share capital

As at 31 December 2019 and 30 June 2020

(ordinary shares of HKD0.10 each)

1,500,000

150,000

128,886

Issued and fully paid up

As at 31 December 2019 and 30 June 2020

(ordinary shares of HKD0.10 each)

1,245,190

124,519

106,607

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 26

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

11. BORROWINGS

As at

As at

30 June

31 December

2020

2019

RMB'000

RMB'000

Non-current

414,000

Bank borrowings

206,000

Borrowing under finance lease arrangement

84,135

42,410

498,135

248,410

Current

5,551,941

Bank borrowings

4,732,841

Borrowing under finance lease arrangement

16,667

66,171

Other loans

40,000

30,000

5,608,608

4,829,012

Total borrowings

6,106,743

5,077,422

Representing :

Bank borrowings

- unsecured

3,379,862

3,366,931

- secured

2,546,079

1,531,910

- guaranteed

40,000

40,000

Finance lease arrangement

100,802

108,581

Other loans

40,000

30,000

6,106,743

5,077,422

27 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

12. TRADE PAYABLES

As at

As at

30 June

31 December

2020

2019

RMB'000

RMB'000

Accounts payable

911,947

597,214

Notes payable

278,706

378,840

1,190,653

976,054

Less: non-current portion of accounts payables

(9,152)

(9,074)

1,181,501

966,980

The ageing analysis of the trade payable was as follows:

As at

As at

30 June

31 December

2020

2019

RMB'000

RMB'000

Within 6 months

1,186,339

974,265

6 months to 1 year

3,824

1,377

1 year to 2 years

437

388

More than 2 years

53

24

1,190,653

976,054

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 28

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

13. REVENUE

The result of its sales from external customers in different countries and regions was as follows:

Six months ended 30 June

20202019

RMB'000 RMB'000

- Mainland China

15,246,754

16,394,935

- Hong Kong and other overseas countries and regions (i)

387,126

361,534

Total sales

15,633,880

16,756,469

  1. Other overseas countries and regions mainly represented Australia, United States of America, South Korea, Japan, Europe, South America and Southeast Asia.

Revenue of the Group consists of the following revenues for the six months ended 30 June 2020 and 2019. All revenues are derived from external customers.

Six months ended 30 June

20202019

RMB'000 RMB'000

Processing and sales of stainless steel and carbon steel products

14,824,138

16,297,995

Manufacturing of stainless steel and carbon steel products

809,742

458,474

15,633,880

16,756,469

29 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

The segment results for the six months ended 30 June 2020:

Processing

Manufacturing

Elimination

Total

RMB'000

RMB'000

RMB'000

RMB'000

Segment revenue

15,139,822

809,742

(315,684)

15,633,880

Segment results

226,907

67,988

(15,552)

279,343

- including depreciation and

  amortisation

91,199

34,521

-

125,720

Other income and expenses

12,496

Finance costs - net

(97,005)

Profit before income tax

194,834

Income tax expense

(54,330)

Profit for the period

140,504

The segment results for the six months ended 30 June 2019:

Processing

Manufacturing

Elimination

Total

RMB'000

RMB'000

RMB'000

RMB'000

Segment revenue

16,482,335

458,474

(184,340)

16,756,469

Segment results

278,125

4,533

(11,059)

271,599

- including depreciation and

  amortisation

83,842

32,182

-

116,024

Other income and expenses

12,224

Finance costs - net

(93,692)

Profit before income tax

190,131

Income tax expense

(59,573)

Profit for the period

130,558

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 30

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

14. EXPENSES BY NATURE

Expenses included in cost of sales, distribution costs and administrative expenses were analysed as follows:

Six months ended

30 June 2020

30 June 2019

RMB'000

RMB'000

Changes in inventories of finished goods

23,674

(155,527)

Raw materials consumed

14,475,623

15,915,906

Stamp duty, property tax and other surcharges

22,029

22,416

Transportation costs

172,887

148,843

Employee benefit expenses, including directors' emoluments

350,306

312,970

Depreciation and amortisation

125,720

116,024

Operating lease rental for buildings

2,743

3,619

Utilities charges

30,797

33,458

Reversal of write-down of inventories

(14,882)

(41,367)

Entertainment and travelling expenses

17,793

24,171

Professional service expenses

4,949

4,921

Others

142,898

99,436

15,354,537

16,484,870

15. FINANCE COSTS - NET

Six months ended

30 June 2020

30 June 2019

RMB'000

RMB'000

Interest expenses on bank borrowings

60,106

73,674

Interest expenses on bank acceptance notes

50,221

39,217

Exchange loss/(gain), net

1,329

(3,574)

Total finance costs

111,656

109,317

Interest income

(14,651)

(15,625)

97,005

93,692

31 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

16. INCOME TAX EXPENSE

Six months ended

30 June 2020

30 June 2019

RMB'000

RMB'000

Current income tax expense

- Mainland China corporate income tax

52,608

57,968

Deferred income tax expense

1,722

1,605

54,330

59,573

The Company was incorporated in the Cayman Islands as an exempted company with limited liability under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of Cayman Islands and, accordingly, is exempted from payment of Cayman Islands income tax.

The subsidiary incorporated in British Virgin Islands under the International Business Companies Acts of the British Virgin Islands is exempted from payment of British Virgin Islands income tax.

Hong Kong profits tax has not been provided as there is no estimated assessable profit arising in or derived from Hong Kong during the financial periods.

The PRC corporate income tax is calculated based on the statutory profit of subsidiaries incorporated in the PRC in accordance with the PRC tax laws and regulations, after adjustments on certain income and expense items, which are not assessable or deductible for income tax purposes.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 32

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

17. EARNINGS PER SHARE

  1. Basic
    Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of ordinary shares in issue during the period.

Six months ended

30 June 2020

30 June 2019

Profit attributable to equity holders of the company

(RMB'000)

127,634

117,675

Weighted average number of ordinary shares in issue

(thousands)

1,245,190

1,245,190

Basic earnings per share (RMB)

0.10

0.09

  1. Diluted
    Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares of the company are share options. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.

Six months ended

30 June 2020

30 June 2019

Profit attributable to equity holders of the

company (RMB'000)

127,634

117,675

Weighted average number of ordinary shares

in issue (thousands)

1,245,190

1,245,190

Adjustments for share option plan (thousands)

-

132

Weighted average number of ordinary shares for

diluted earnings per share (thousands)

1,245,190

1,245,322

Diluted earnings per share (RMB)

0.10

0.09

33 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the six months ended 30 June 2020

  1. INTERIM DIVIDENDS
    The directors do not recommend the payment of an interim dividend in respect of the six months ended 30 June 2020 (2019: HK$0.06 per share).
  2. COMMITMENTS
    Capital commitments

As at

As at

30 June

31 December

2020

2019

RMB'000

RMB'000

Contracted but not provided for:

Acquisition of property, plant and equipment

372,073

278,484

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 34

OTHER INFORMATION

CORPORATE GOVERNANCE

The Company is committed to ensuring high standards of corporate governance in enhancing shareholders' value and safeguarding interests of shareholders and other stakeholders.

The Company has complied with the Corporate Governance Code and Corporate Governance Report (the "CG Code") set out in Appendix 14 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") during the six months ended 30 June 2020. The Company adopted the CG Code as its own code of corporate governance.

MODEL CODE

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules (the "Model Code") as its code of conduct regarding securities transactions by the directors. Having made specific enquiry with all the directors of the Company (the "Directors"), all Directors confirmed that they have complied with the required standard set out in the Model Code during the six months ended 30 June 2020.

SHARE CAPITAL

Details of the movements in the share capital of the Company are set out in Note 10 to the unaudited condensed consolidated financial statements.

INTERIM DIVIDENDS

The Directors do not recommend the payment of an interim dividend in respect of the six months ended 30 June 2020 (2019: HK$0.06 per share).

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

There was no purchase, sale or redemption of the Company's listed shares by the Company or any of its subsidiaries during the six months ended 30 June 2020.

AUDIT COMMITTEE

The Audit Committee of the Company has discussed with the management and reviewed the unaudited condensed consolidated financial statements of the Group for the six months ended 30 June 2020 and considered that the Company has complied with all applicable accounting standards and requirements.

BOARD CHANGES

On 27 March 2020, Mr. Lu Ping resigned as an executive director of the Company and Mr. Lu Jian was appointed as a non-executive director of the company.

35 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

OTHER INFORMATION

SHARE OPTION SCHEME

The Company adopted a share option scheme on 9 November 2010. Principal terms of the share option scheme were set out in our 2019 Annual Report.

Particulars of share options outstanding under the share option scheme at the beginning and at the end of the financial period for the six months ended 30 June 2020 and share options granted, exercised, cancelled or lapsed under the share option scheme during such period are as follows:

Number of share options

As at

Granted

Exercised

Cancelled/

As at

Name or category

Exercise

1 January

during

during

lapsed during

30 June

of participant

Date of grant

price

2020

the period

the period

the period

2020

Exercise period

(HK$)

Directors

Mr. Zhang Feng

21 December 2010

2.452

300,000(1)

-

-

-

300,000

21 December 2013 to

20 December 2020

23 December 2014

2.364

100,000(2)

-

-

-

100,000

23 December 2017 to

22 December 2024

Dr. Fukui Tsutomu

23 December 2014

2.364

500,000(2)

-

-

-

500,000

23 December 2017 to

22 December 2024

Mr. Wang Jian

23 December 2014

2.364

400,000(2)

-

-

-

400,000

23 December 2017 to

22 December 2024

Other employees in

21 December 2010

2.452

4,420,000(1)

-

-

(50,000)

4,370,000

21 December 2013 to

aggregate

20 December 2020

23 December 2014

2.364

13,500,000(2)

-

-

(350,000)

13,150,000

23 December 2017 to

22 December 2024

Total

19,220,000

-

-

(400,000)

18,820,000

(1)

(2)

30% of share options are exercisable from the third anniversary date of the date of grant; 60% of share options are exercisable from the fourth anniversary date of the date of grant; and all share options are exercisable from the fifth anniversary date of the date of grant.

40% of share options are exercisable from the third anniversary date of the date of grant; 70% of share options are exercisable from the fourth anniversary date of the date of grant; and all share options are exercisable from the fifth anniversary date of the date of grant.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 36

OTHER INFORMATION

SHARE AWARD SCHEME

The Company adopted a share award scheme on 25 August 2011. Principal terms of the share award scheme were set out in our 2019 Annual Report.

During the period ended 30 June 2020, an aggregate of 1,620,000 shares of the Company's existing ordinary shares have been purchased for the share award scheme, no awarded shares were granted and vested to directors and selected employees. As at 30 June 2020, the independent trustee holds 21,508,000 shares of the Company for the share award scheme.

EMPLOYMENT POLICY

The Group employed a total of 5,732 staffs as at 30 June 2020 (2019: 4,997).

The remuneration of the Directors and employees was based on their performance, skills, knowledge, experiences and market trend. The remuneration committee reviews the remuneration policies and packages of the Group on a regular basis. In addition to basic salaries, employees may be offered with discretionary bonus on individual performance. The Group has also adopted share option scheme and share award scheme for its employees, providing incentives and rewards to eligible participants with reference to their contribution.

DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ANY ASSOCIATED CORPORATION

As at 30 June 2020, the interests and short positions of each director and chief executive in the shares, underlying shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the Securities and Futures Ordinance ("SFO")), as recorded in the register required to be kept by the Company under section 352 of Part XV 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, were as follows:

37 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

OTHER INFORMATION

  1. Long and short position in the shares and underlying shares of the Company

Number of

shares/underlying

% of issued

Name of Director

Nature of interests

shares held

share capital

Mr. Zhou Keming

Personal, family and

793,551,000(3)

63.73%

corporate

Mr. Jiang Changhong

Personal

384,000

0.03%

(also Chief Executive Officer)

Ms. Xu Xia

Personal, family and

793,551,000(3)

63.73%

corporate

Mr. Zou Xiaoping

Personal and family

5,060,000(4)

0.41%

Dr. Fukui Tsutomu

Personal and family

1,864,000(5)

0.15%

Mr. Zhang Feng

Personal

2,086,000(6)

0.17%

Mr. Wang Jian

Personal and family

1,644,000(7)

0.13%

Mr. Lu Ping

Personal

34,000

0.00%

(resigned on 27 March 2020)

    1. 793,435,000 shares are held by Ally Good Group Limited, which is owned as to 77.2% by Mr. Zhou Keming and 22.8% by Ms. Xu Xia. 60,000 shares are held by Mr. Zhou Keming and 56,000 shares are held by Ms. Xu Xia personally.
    2. 60,000 shares are held by Mr. Zou Xiaoping and 5,000,000 shares are held by Mr. Zou Xiaoping's spouse, Ms. Li Jun.
    3. The interest comprises 498,000 shares held by Dr. Fukui Tsutomu, 866,000 shares held by Dr. Fukui Tsutomu's spouse, Ms. Mizuho Fukui and 500,000 underlying shares in respect of the share options granted to Dr. Fukui pursuant to the share option scheme as disclosed under section headed share option scheme.
    4. The interest comprises 1,686,000 shares, 400,000 underlying shares in respect of the share options granted pursuant to the share option scheme as disclosed under section headed share option scheme.
    5. The interest comprises 396,000 shares held by Mr. Wang Jian, 848,000 shares held by Mr. Wang Jian's spouse, Ms. Zhang Minxian and 400,000 underlying shares in respect of the share options granted pursuant to the share option scheme as disclosed under section headed share option scheme.
  2. Long position in the shares in associated corporation(s)
    • of issued share capital

Name of associated

Nature of

Number of

of associated

Name of Director

corporation (8)

interests

shares held

corporation

Mr. Zhou Keming

Ally Good Group Limited

Personal(9)

1,000

100%

Ms. Xu Xia

Ally Good Group Limited

Personal(9)

1,000

100%

  1. As at 30 June 2020, Ally Good Group Limited is the holder of 63.72% of the issued share capital of the Company and is an associated corporation under SFO.
  2. 772 shares are held by Mr. Zhou Keming and 228 shares are held by Ms. Xu Xia. Ms. Xu Xia is the spouse of Mr. Zhou Keming.

Interim Report 2020

DA MING INTERNATIONAL HOLDINGS LIMITED 38

OTHER INFORMATION

Save as disclosed above, as at 30 June 2020, none of the directors or chief executive and their associates, had interests or short positions in any shares, underlying shares or debentures of the Company and its associated corporations which were recorded in the register required to be kept under section 352 of the SFO or notified to the Company and the Stock Exchange pursuant to the Model Code.

At no time during the reporting period was the Company, its subsidiaries, its associated companies, its fellow subsidiaries or its parent company a party to any arrangement to enable the directors and chief executives of the Company (including their spouse and children under 18 years of age) to hold any interest or short positions in the shares or underlying shares in, or debenture of the Company or its associated corporation.

SUBSTANTIAL SHAREHOLDERS' INTERESTS AND/OR SHORT POSITIONS IN THE SHARES AND UNDERLYING SHARES OF THE COMPANY

As at 30 June 2020, the interests or short positions of every person, other than a director or chief executive of the Company, in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO, are set out below:

Aggregate long position in the shares and underlying shares of the Company

Approximate

percentage of the

Number of ordinary

Company's issued

Name of Shareholder

shares held

share capital

Long position

Ally Good Group Limited

793,435,000(10)

63.72%

China Baowu Steel Group Corporation Limited

103,750,000

8.33%

Tisco Stainless Steel (H.K.) Limited

103,750,000

8.33%

  1. As Ally Good Group Limited is owned as to 77.2% by Mr. Zhou Keming and 22.8% by Ms. Xu Xia, they have interest in these shares as disclosed under the previous section.

Save as disclosed above, no other parties were recorded in the register of the Company required to be kept under section 336 of the SFO as having interests or short positions in the shares or underlying shares of the Company as at 30 June 2020.

39 DA MING INTERNATIONAL HOLDINGS LIMITED

Interim Report 2020

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Da Ming International Holdings Ltd. published this content on 11 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 September 2020 08:54:04 UTC