DIT GROUP LIMITED Stock Code : 726
2020
DIT Group Limited
(Incorporated in Bermuda with limited liability)
DIT Group Limited 2020 Interim Report
Contents
Corporate Information | 2 |
Corporate Profile | 3 |
Chairman's Statement | 5 |
Management Discussion and Analysis | 8 |
Corporate Governance | 29 |
General Information | 30 |
Condensed Consolidated Financial Statements | |
• Condensed Consolidated Statement of Profit or Loss and | 36 |
Other Comprehensive Income | |
• Condensed Consolidated Statement of Financial Position | 38 |
• Condensed Consolidated Statement of Changes in Equity | 40 |
• Condensed Consolidated Statement of Cash Flows | 41 |
• Notes to the Condensed Consolidated Financial Statements | 42 |
DIT Group Limited 2020 Interim Report
CORPORATE INFORMATION
Board of Directors
Executive Directors
Mr. LIU Weixing (Chairman)
Mr. GUO Weiqiang (Chief Executive Officer)
Ms. WANG Jing
Non-executive Director
Ms. WU Wallis (alias LI Hua)
Mr. WANG Jun
Independent Non-executive Directors
Mr. JIANG Hongqing
Mr. LEE Chi Ming
Mr. MA Lishan
Board Committees
Audit Committee
Mr. LEE Chi Ming (Chairman)
Mr. JIANG Hongqing
Mr. MA Lishan
Nomination Committee
Mr. LIU Weixing (Chairman)
Mr. JIANG Hongqing
Mr. LEE Chi Ming
Remuneration Committee
Mr. JIANG Hongqing (Chairman)
Mr. LIU Weixing
Mr. LEE Chi Ming
Company Secretary
Mr. TSANG Ho Pong
Authorised Representatives
Mr. GUO Weiqiang
Mr. TSANG Ho Pong
Registered Office
Victoria Place, 5th Floor, 31 Victoria Street Hamilton HM 10, Bermuda
Principal Place of Business in the PRC
10 Zhongshi Road, Changsha City Hunan Province, the PRC
Head Office and Principal Place of Business in Hong Kong
Room 7707-7708,
77th Floor, International Commerce Centre
1 Austin Road West
Kowloon, Hong Kong
Independent Auditor
PricewaterhouseCoopers
Certified Public Accountants
Registered Public Interest Entity Auditor
Principal Banker
The Hongkong and Shanghai Banking
-
Corporation Limited The Bank of China Limited
China Construction Bank (Asia) Corporation - Limited
Principal Share Registrar and Transfer Office
MUFG Fund Services (Bermuda) Limited
The Belvedere Building
69 Pitts Bay Road
Pembroke, HM08
Bermuda
Hong Kong Share Registrar and Transfer Office
Computershare Hong Kong Investor Services
Limited
Shops 1712-1716
17th Floor, Hopewell Centre
183 Queen's Road East
Wanchai, Hong Kong
Stock Code
The Stock Exchange of Hong Kong Limited: 00726
Website
http://dit.aconnect.com.hk
Shareholders' Information
Share listing
The Company's shares are listed on the Main Board of the Stock Exchange of Hong Kong Limited
Ordinary Share (as at 30 June 2020)
Shares outstanding: | 11,209,602,920 shares |
Nominal value: | HK$0.10 per share |
2
DIT Group Limited 2020 Interim Report
CORPORATE PROFILE
DIT Group Limited (hereinafter referred to as "the Company", together with its subsidiaries, collectively, "the Group") (stock code: 726HK) is listed on the main board of the Stock Exchange of Hong Kong Limited.
The Group positions itself as a leading service provider of comprehensive and integrated solutions to intelligent buildings as well as an innovative high-tech enterprise engaging in the ecological chain construction of intelligent buildings and we are the first listed company in the prefabricated construction industry. The Group is mainly engaged in the business of modernization of construction industry and prefabricated construction business encompassing a wide coverage ranging from the research and development as well as operation of prefabricated construction technology, the expansion and operation of intelligent prefabricated construction plants to the manufacture of precast components for prefabricated construction.
The key mission of the Group lies in the provision of both green buildings and the comprehensive solutions to urban households whereas the Group is dedicated to the strategic business layout in the geographical locations nationwide with seizure of the advantages of industrialization of the construction industry in China during the golden era of ten years to achieve such industrialization, informationalization and technologicalization of the construction industry with the leverage of technology collaborations among various parties so as to elicit the unprecedented huge transformation of the traditional construction industry in China with such a shift from the mode of "building conventions" to that of "precast components + on-the site prefabrication".
The core values of the Group of "the establishment of our business with sophistication and delicacy in our products based on the justified conscientiousness and consciousness of the farreaching expansion of our business with our mutual respect for any contribution and input for a shared experience in growth of our business prosperity" together with our unwavering motto "to create a promising life with intelligence" facilitates the upgrade and transformation with modernization of the construction industry. With our commitment to the creation of the largest modernized operating platform of the construction industry in China, we strive to give shape to the new construction industry which is environmentally friendly, highly efficient and at top quality by the process of informationalization with the seamless combination between technology and building. The Group, with its business location layout which is strategized to the smart digitalized plants across various provinces and municipalities directly administered by the central government in China, is the enterprise equipped with the greatest number of smart production lines. With the integration of the world's first business mode of EMPC as exclusively innovated by its parent company DIT Group, the Company's technology and its products receive a great variety of approvals from the communities and the clients while the Company currently provides its service for projects under construction with site area of 11.00 million square metres in China.
3
DIT Group Limited 2020 Interim Report
CORPORATE PROFILE (Continued)
With the consistent adherence persevered by the Group to its development strategy of "Top Priority for Leading Edge of Technology", the Group is equipped with the five most advanced core technology systems specific to the industry of prefabrication construction in the world with the Group's possession of a plenitude of core technologies ranging from BIM in the context of intelligent building construction, the Internet of Things, Big Data to artificial intelligence. The number of the Company's patents has been continuously securing top-ranked in the prefabricated construction industry. The Company's scientific research institutes include the one and the only one research centre at provincial level for the engineering projects specific to the industry as well as the scientific research platforms such as the demonstration enterprise models of intelligent manufacturing and the production bases for the national-level prefabricated construction industry.
The Group is determined to assist in the realization of the living experiences of safer, more comfortable and smarter for the people in general by virtue of continuing technological innovation with an aim to culminate in an ever more open ecological system for intelligent buildings.
4
DIT Group Limited 2020 Interim Report
CHAIRMAN'S STATEMENT
Dear Shareholders,
On behalf of the Board of Directors of the Company, I am pleased to report the unaudited consolidated interim results and business review of the Group for the six months ended 30 June 2020.
With the global economy development in turmoil due to the COVID-19 pandemic and in the face of increased risks and challenges at home and abroad in the first half of 2020, China took the lead in containing the COVID-19, resuming work and production in all sectors, and seeing steady recovery. China's GDP grew by 3.2 percent year on year for the second quarter and reached RMB45,661.4 billion in the first half of 2020. The market expectation was generally good, and the overall social development was stable.
For the real estate industry, China continues to stick to the principle that "houses are for living in, not speculation", and real estate developers embrace upgrade of competitiveness more strongly than ever amid intensified market competition. On the other hand, the central government of China introduces more incentive policies for prefabricated construction industry. More specifically, the MOHURD and provinces issued 133 related policies on technical standards, work programmes, quality control, and industrial demonstration during the first half of 2020. The first half of 2020 sees fast growth of prefabricated construction industry. Owing to the accurate judgments of the Company on the industry environment and competition situation, as well as the full effect of the synergy with Central China Group in terms of brands and markets, the Group achieved revenue of HK$402.40 million, a year-on-year increase of 39.6% and recorded a further improvement in profitability in the first half of 2020.
The Company actively responded to the country's call for resumption of work and production, and almost all plants resumed production before 10 February 2020 by making the advantages of the smart prefabricated construction plants. The Company took concrete action to respond to the country's policy of "stabilising employment and ensuring living standards" while protecting the health of its employees. The plant in Jiaozuo was reported in the CCTV News for fast epidemic control and production resumption to guarantee the progress of two provincial-level key projects in Henan, namely "Guanghuiyuan" and "Chenhuiyuan" - talent apartments under the management of Henan Provincial Government.
As to industrial presence, in the first half of 2020, the Company won the bid for the right to use the plot ((2020) No. 8) with an area of 140.2 mu in Dengfeng City, Henan Province. This land will be used to construct Dengfeng Green Construction Industrial Park to expand the Company's production volume of prefabricated construction components across Henan. As of 30 June 2020, the Group has established three green construction industrial parks in Jiaozuo, Zhoukou and Dengfeng of Henan Province, and will continue its efforts to build prefabricated construction industrial parks in the province. In the first half of 2020, the Company keeps pushing forward its industrial park business across China through franchising and asset-light approaches. In this respect, it has put in place one franchised factory and four asset-light plants.
5
DIT Group Limited 2020 Interim Report
CHAIRMAN'S STATEMENT (Continued)
As for smart manufacturing, the Company continuously promoted the production of innovative devices from the third-generation smart prefabricated construction plants. The device company under the Company installed an environmental-friendly automatic cleaning device for prefabricated construction moulds, the first of its kind in China. By cleaning a single set of moulds within the 10-minute cycle time of an assembly line, this device can save labour, increase mould installation and removal efficiency, make moulds cleaner, prolong the service life of moulds and reduce the cost of using moulds, and improve the production quality of prefabricated construction components. In addition, the device company won Hunan Science and Technology Progress Award for its technological achievement of the "production line of prestressed concrete composite slabs". As a new-generation production line of prestressed concrete composite slabs and complete set of automatic equipment with independent intellectual property rights, this line can greatly save labour and increase efficiency in comparison with traditional production modes.
In terms of cost control and efficiency improvement, the Company further improved its cost control system in the first half of 2020 to reduce the costs of producing prefabricated construction components and equipment in strict accordance with the annual key task requirement of "reducing costs in a scientific manner". As a result, the costs of prefabricated construction components decreased by 7% year on year. For prefabricated construction devices, costs were saved mainly on production lines of binary cycle wallboards. The investment cost in prefabricated construction plants has also been further reduced. Furthermore, China Association for Engineering Construction Standardization (CECS) have approved Technical Specifications for Laminated Prestressed Composite Slab and Technical Specifications for Edge Composite Slab, two standards mainly proposed by parent company DIT Group and included them in its 2020 standard formulation programme. The approval for the two proposed CECS standards marks a significant transition towards the application in actual engineering of two key research projects of structure systems of DIT Group - "long-span prestressed two-way composite slab system" and "RIFF system". The two newly developed systems have obvious cost advantages. This is a good solution to the industry problem of the stubbornly high comprehensive construction cost of prefabricated buildings.
As to market expansion, in the first half of 2020, the parent company DIT Group stood out among 43 high-quality suppliers for the joint purchasing platform of China Urban Realty Association (CURA) for green realty and new processes. This joint purchasing is the first attempt of CURA to seek for new processes, new techniques and new products, with a preference for innovation and environmental protection. This success will offer the Company extensive market opportunities for the sales of its prefabricated construction components and promotion of its asset-light business.
The first half of 2020 was a special period full of uncertainties and challenges, bringing both crises and opportunities. On behalf of the Board, I would like to take this opportunity to express my sincere gratitude to the staff of the Company for their hard work and dedication during the first half of 2020. I would also like to express our gratitude to all shareholders, investors and other business partners for their continuing support and trust to the Group.
6
DIT Group Limited 2020 Interim Report
CHAIRMAN'S STATEMENT (Continued)
Though we are halfway in 2020, the prefabricated construction market has shown great potential. As for the industry trend, the 13th Five-Year Plan of Prefabricated Building Action Program issued by the MOHURD explicitly stipulates that the area of prefabricated buildings shall account for 25% and 30% of that of new buildings by 2023 and 2025, respectively. Recently, policies have been introduced across China to support the development of prefabricated buildings. More economically developed regions have even stricter requirements in this respect. For example, Jiangsu Province has put forward the goal of increasing the penetration rate of prefabricated buildings to 50% by 2025. The proportion of prefabricated buildings is expected to keep increasing rapidly in the coming years, and China's prefabricated construction component market is expected to maintain fast growth.
In the future, the Company will continue to explore technologies by implementing its strategy of "intelligent construction of home" and expand its business to create synergy with its parent company DIT Group across the industrial chain of prefabricated construction and with business units of Central China Group. The Company will also expand its business presence by expediting the building of prefabricated construction plants through direct operations, franchising, and asset- light approaches in markets, especially Yangtze River Delta, Pearl River Delta, Beijing-Tianjin- Hebei, and Henan markets, so as to quickly increase its market share across China. The Company will also equip itself with innovative technologies to develop digital business platforms and improve its equipment and technologies of its third-generation prefabricated construction plants. It will keep lowering costs for prefabricated construction while improving the quality of its buildings. The Company works to find a faster and better way of developing prefabricated buildings to create richer lifestyles for consumers and make consumers' yearning for a better life come true via intelligent technologies.
Heading forward, we believe that the urbanization process in China will be continuously advancing, and prefabricated construction industry in China will seize this historical opportunity of environmental-friendly development and transformation and upgrading of the building industry to develop smoothly. The Company will devote unremitting efforts in fulfilling our vision of "creating a promising life with intelligence"!
Liu Weixing
Chairman
11 September 2020
7
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS
Business Review
1. Macro situation
- Industrial pattern
-
Industrial scale
Maintaining a good growth momentum in recent years, prefabricated construction plays a significant role in pushing forward the transformation and upgrading of the building industry and promoting high-quality environmental- friendly construction in urban and rural areas. According to the statistics in 2019 Prefabricated Construction Development Overview issued by the Ministry of Housing and Urban-Rural Development (MOHURD) on 29 April 2020, the gross floor area of China's newly built prefabricated constructions in 2019 reached 420 million square metres, an increase of 45% from 2018, accounting for about 13.4% of the gross floor area of the country's all newly built constructions. 2019 saw an increase of 45% from 2018 in the gross floor area of China's newly built prefabricated constructions with annual growth rate averaging 55% for the recent four years. - Development by region
Top regions take a lead while other regions tend to develop in scale. The policy categorises three city clusters, namely, Beijing-Tianjin-Hebei Region, Yangtze River Delta and Pearl River Delta as top regions, other cities with more than 3 million permanent residents as key regions, and the remaining cities as encouraged regions. In 2019, newly built prefabricated constructions in top regions accounted for 47.1% of the total in China, and the sum of newly built prefabricated constructions in key regions and encouraged regions accounted for 52.9% of the total in China. The prefabricated constructions in eastern developed regions continued to take a lead across the country, and some cities in other provinces gradually showed a tendency of scale development. In 2019, the floor area of newly built prefabricated constructions in Shanghai, Beijing, Hunan, and Zhejiang, was 34.44 million, 14.13 million, 18.56 million, and 78.95 million square metres, accounting for 86.4%, 26.9%, 26%, and 25.1% of newly built constructions, respectively. The proportions of prefabricated constructions in newly built constructions in Jiangsu, Tianjin and Jiangxi all exceeded 20%. According to the statistics for the most recent three years, the floor area of newly built prefabricated constructions in top regions was 75.11 million, 135.38 million and 196.78 million square metres, accounting for 47.2%, 46.8% and 47.1% of that of the whole country, respectively. With strong policy support and solid industrial foundation for prefabricated construction development, these regions provide a good policy and market development environment.
-
Industrial scale
8
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
1. Macro situation (continued)
- Industrial pattern (continued)
-
Development by structure type
In terms of structure type, prefabricated construction is still dominated by prefabricated concrete construction, and prefabricated concrete residential constructions still by shear wall construction. In 2019, the floor area of newly built prefabricated constructions with concrete structure was 270 million square metres, accounting for 65.4% of newly built prefabricated constructions; that with steel structure was 130 million square metres, accounting for 30.4% of newly built prefabricated constructions. The floor area with wooden structure was 2.42 million square metres, and that with other hybrid structures was 15.12 million square metres. - Development by building type
Recent years have seen the increasing use of prefabricated construction for commodity housing. Among the prefabricated constructions newly built in 2019, there were 170 million square metres of commodity houses, 60 million square metres of indemnificatory apartments, and 90 million square metres of public buildings, accounting for 40.7%, 14% and 21% of the total newly built prefabricated constructions, respectively. Prefabricated constructions have been developed greatly in all categorised regions with policy support and guidance, especially the requirement to include prefabricated construction in regulatory detailed plans and land grant conditions.
-
Development by structure type
- Up-to-datepolicies in China
Following the issuance of the Guiding Opinions of the General Office of the State Council on Vigorously Developing Prefabricated Constructions, 31 provinces, autonomous regions and municipalities directly under the Central Government introduced policies to promote the development of prefabricated construction. During 2016-2019, 33, 157, 235 and 261 policy documents with respect to prefabricated construction in 31 provinces, autonomous regions and municipalities directly under the Central Government were introduced, respectively, with improved supplementary policies and detailed implementation rules. In particular, economic incentive policies and technical standards provide institutional guarantee and technological support for promotion of the prefabricated construction development. The first half of 2020 sees the accelerated application and fast growth of prefabricated construction thanks to the introduction of more incentive policies and standard systems. The MOHURD and provinces issued 133 related policies on technical standards, work schemes, quality control, and industrial demonstration during the first half of 2020. In terms of region, central and western provinces accounted for nearly 60%, promoting prefabricated construction as the eastern counterparts had done before, while the eastern provinces deepened policy guidance in terms of administrative details, such as technological standards and subsidy methods.
9
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
1. Macro situation (continued)
- Up-to-datepolicies in China (continued) Major policies are as follows:
Beijing:
Interim Administrative Procedures of Municipal Incentive Funds for Prefabricated Constructions, Green Buildings and Green Ecological Demonstration Zones Projects: financial incentives will be given to prefabricated construction projects, the incentive fund will be up to RMB8 million for a single green building project and RMB180 for each square metre of prefabricated construction, and a long-term evaluation mechanism will be introduced as a part of the incentive policy for green ecological demonstration zones.
Hainan:
This revision adds the demonstration project of ultra-low energy buildings as a new project type entitled to subsidy and offers a subsidy of RMB300 for each square metre of a building with a floor area of over 2,000 square metres.
Shanghai:
Special Supportive Measures of Shanghai for Building Energy Savings and Green Building Demonstration Projects (H.Z.J.G.F.L (2020) No.2)
This revision adjusts subsidy methods for prefabricated construction projects against the evaluation grade. The subsidy for a Grade AA project is RMB60/m2, and for Grade
- is RMB 100/m2. The requirement for the building size is lowered to over 10,000 square metres.
MOHURD:
Notice on Organising Application for Science and Technology Plan Projects 2020: prefabricated construction is prioritised among applications for science and technology plan projects 2020 of MOHURD.
Zhejiang Department of Housing and Urban-Rural Development:
2020 Zhejiang Building Industrialization Outline: the floor area of newly built prefabricated constructions in 2020 should account for over 30% of the whole newly built constructions, and are expected to be 25 million m2.
10
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
1. Macro situation (continued)
- Up-to-datepolicies in China (continued)
Hebei Department of Housing and Urban-Rural Development:
2020 Outline of Hebei for Building Energy Savings, Technology and Prefabricated Constructions: the prefabricated constructions shall account for over 20% of the whole urban newly built constructions in floor area.
Jiangsu Department of Housing and Urban-Rural Development:
2020 Outline of Jiangsu for Housing and Urban-Rural Development: efforts should be made to ensure the floor area of prefabricated constructions reaches 30% of the provincial newly built constructions by the end of 2020.
Sichuan Department of Housing and Urban-Rural Development:
2020 Outline of Sichuan for Promotion of Prefabricated Constructions Development: the newly built prefabricated constructions in Sichuan should reach 46 million m2, including 30 million m2 in Chengdu.
Chongqing Commission of Housing and Urban-Rural Development:
2020 Outline for Construction Science and Technology and External Cooperation: efforts should be made to ensure the floor area of prefabricated constructions accounts for over 15% of the newly built constructions in Chongqing, and over 30% in the central downtown.
Henan Department of Housing and Urban-Rural Development:
2020 Work Plan of Henan Department of Housing and Urban-Rural Development for Air Pollution Control Efforts: newly built prefabricated constructions shall account for 20% by the end of 2020.
Shandong:
2020 Annual Plan of Shandong for Housing and Urban-Rural Development: prefabricated constructions shall account for 25% and 15% of newly built constructions in cities with districts and counties (county-level cities), respectively.
11
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
1. Macro situation (continued)
- Up-to-datepolicies in China (continued) Anhui:
Opinions on Promoting Development of Prefabricated Construction Industry: by the end of 2020, about 10 provincial-level prefabricated construction industry bases will be established, and the floor area of prefabricated constructions will account for 15% of the newly built constructions.
Hubei:
Opinions on 2020 Works for Building Energy Savings and Green Building Development: 14 million m2 of green buildings will be developed, and urban green buildings will account for over 40% of the newly built constructions. - Impact of epidemic
Prefabricated construction, as a mode of modular construction, represents a systematic thinking of standardization, the practice of prefabricating components at factories and transporting those sub-assemblies to the location of construction sites for assembly to form the complete building. A hospital was constructed and put into use within only ten days in response to the COVID-19 epidemic. The fast completion of Huoshenshan Hospital and Leishenshan Hospital fully reveals and makes market players fully aware of the advantages of prefabricated construction: high efficiency, standardization, and greatly shortened construction period. Social and policy supports are also provided to prefabricated construction. The prefabrication-driven reform of construction mode has been an irresistible development trend. The prefabricated construction will probably see an opportunity of rapid growth after the epidemic, and will become a significant signpost on the road to future development of China's building industry.
The Group has taken preventive measures in strict accordance with national prevention and control requirements to prepare for the resumption of production since the outbreak of COVID-19 in late January, and no employee has been infected. After the whole country returned to work, the Group seized the golden period for production resumption by securing more market orders and increasing production capacity exhaustively in various ways, such as the improvement of shift, production, and delivery schedules and intensification of production outsourcing. As a result, some plants reached full monthly production capacity, and the volume of production increased by 70% year on year. The capacity utilization rate increased to 39% from 26% for the whole year of 2019.
12
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
2. Business review
- Operations and highlights for the first half of 2020
-
70% increment in prefabricated construction owing to fast production resumption amid epidemic prevention
All prefabricated construction plants of the Group across China prepared early for epidemic prevention and avoided crowds in workplaces by making good use of the industrialization and intellectualization of prefabricated construction amid the challenges posed by the COVID-19. As a result, several plants resumed production on as early as 10 February, including the plant in Jiaozuo which was reported in CCTV News for guaranteeing supplies for construction of a key engineering in Henan.
As of 30 June 2020, the cumulative production of all prefabricated construction plants of the Group across China for the first half of 2020 exceeded 124,500 m3, a year-on-year growth of 70% from 73,400 m3 in 2019. This is a remarkable achievement in face of the severe situation of the epidemic. - Government award for technological progress
The Group won the Science and Technology Progress Award for its independently developed "production line of prestressed concrete composite slabs" at Hunan Technological Innovation Award Conference held on 10 June in Changsha.
The equipment technology and production technology for the production line of prestressed concrete composite slabs have been monopolized by foreign companies. As a technology-driven enterprise, the Group ultimately succeeds after three years of research and development. The new generation of the production line of prestressed concrete composite slabs, and complete set of automatic equipment have made breakthroughs in the innovation of traditional production technology, and independently developed key devices, saving labours substantially and increasing efficiency in comparison with traditional production modes.
-
70% increment in prefabricated construction owing to fast production resumption amid epidemic prevention
13
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
2. Business review (continued)
- Operations and highlights for the first half of 2020 (continued)
-
Continuous efforts to reduce costs and improve efficiency keep improving our product competitiveness
During the first half of 2020, the Group installed an environmental-friendly automatic cleaning device for prefabricated construction mould, the first of its kind in China, which represents its idea of technology-led development and technological innovation exploration of a prefabricated construction plant. This device realizes the seamless connection between mould setting and mould removal, and enhances the full automation level of prefabricated construction component production lines. By completing the cleaning of a single set of mould within the 10-minute cycle time of an assembly line, it can save substantial labour cost, increase production efficiency for the process of mould installation and removal, reduce mould damage from knocking during manual cleaning, prolong mould service life and reduce cost to use mould, enhance mould cleanliness to over 95%, and improve the production quality of prefabricated construction components.
During the first half of 2020, the Group continuously improved the Cost Management Department, make "science-based cost reduction" a key task in its annual goal plan, and further improved the cost management system. Priority was given to the gradual reduction of costs of construction and installation in EPC projects and production costs of prefabricated construction components and devices. Prefabricated construction costs decreased year-on- year by 7%, and some plants has even brought their costs below RMB1,700/ m3. For prefabricated construction devices, costs were saved mainly on production lines of binary cycle wallboards owing to optimization of the control system, process design and procurement of bench formworks of wallboard lines, channel optimization and price negotiation. The investment cost of prefabricated construction plant devices has been further reduced. - Continuous acceleration for industrial presence across China
On 19 June, the Henan headquarters won the Dengfeng Municipal Government's bid for the use right of the plot (No. (2020) 8), further strengthening its industrial presence there. With an area of 140.2 mu, this plot will be used to construct Zhengzhou Green Construction Industrial Park. This success marks the expansion of the Group's presence across China and new development of the prefabricated construction industry in Henan Province.
-
Continuous efforts to reduce costs and improve efficiency keep improving our product competitiveness
14
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
- Business review (continued)
- Operations and highlights for the first half of 2020 (continued)
-
Continuous acceleration for industrial presence across China (continued)
As of the issuance of this interim report, the Group has constructed four green construction industrial parks in Henan, specifically, in Jiaozuo, Zhengzhou, Zhoukou and Luoyang. It will continue efforts to construct green construction industrial parks in Henan and other provinces in a variety of ways, such as direct investment, franchising, and management output. - Strengthening training of industrial workers
The Group trained in-service industrial workers to upgrade their skills and asked senior workers help new ones in various ways during the first half of 2020. It will intensify efforts to train industrial workers to guarantee supply of steady professional labours that are needed to enhance the production capacity of plants across China.
-
Continuous acceleration for industrial presence across China (continued)
- Future prospects
-
Industrial development
According to the Guiding Opinions on Vigorously Developing Prefabricated Constructions issued by the State Council in 2020, the proportion of prefabricated constructions in the total newly built constructions in three city clusters, namely, Beijing-Tianjin-Hebei Region, Yangtze River Delta and Pearl River Delta as top regions will reach 20%; and that in other cities with more than 3 million permanent residents as key regions will reach 15%, and that in the remaining cities as encouraged regions will reach 10%.As guided by the policy, the penetration rate of the prefabricated construction industry will reach over 30% by 2025. Based on an estimated floor area of approximately 2.1 billion m2 for China's annual urban newly built constructions, the floor area of the newly built prefabricated constructions will then reach over 0.63 billion m2, ensuring a compound annual growth rate of over 17% for the coming five years. Thus, it can be expected that the coming several years will see an accelerated development, an expanded market size, and an unleashed potential in this industry.
The Group should seize and make full use of the window period of this policy to invest in key markets, such as Henan, Yangtze River Delta, and Greater Bay Area, and quickly improve the nationwide industrial layout through direct investment, franchising and asset-light operation.
-
Industrial development
15
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
3. Future prospects (continued)
- Industrial development (continued)
The cost of prefabricated construction is higher than the traditional cast-in-place construction at present, but there is a significant potential for cost reduction. In recent years, the Central Government and local governments suggest the use of EPC model for prefabricated construction projects to integrate resources in building design, component production and construction, thereby cutting costs incurred in the intermediary links of the chain ultimately. In comparison with the traditional cast-in- place construction, the prefabricated construction puts more emphasis on the integration of preliminary design, production and construction. The resource integration throughout the industrial chain of prefabricated construction will become a trend in this industry with the policy support. - Development strategy
Deepening business layout: Three evaluation indicators, namely, economic development, policy enforcement and market conditions, will be utilized for the overall arrangement in Henan, Yangtze River Delta, Pearl River Delta, and Guangdong-HongKong-Macao Greater Bay Area, and in priority regions, such as other capitals, major cities and central cities.
Layout of new business: For the second half of 2020, subsidiaries will be registered under the Group to expand its business scope by adding businesses of construction, decoration and gardening. The Group will establish an integrated industrial chain model ("turn-key" engineering), ranging from R&D, devices, prefabricated construction components, and general contracting to decoration and gardening. Its business delivery capability and scope will be improved rapidly. With positioning as a "leading provider of overall smart building solutions" and eye-catching feature of "technology-based manufacturing", the Group will use the business model of EMPC and EM to deliver "smart building for beautiful life". It will develop its competitiveness across the full industrial chain and strive to create a powerful industrial competitive edge by the concerted efforts from stakeholders across the industrial chain to reduce comprehensively and rapidly the cost of contract performance. Within the coming 3-5 years, the smart building products relying on the two structural systems, namely long-span prestressed two-way composite slab system and RIFF system, will become the most competitive products of the Group, greatly reducing production costs of prefabricated construction components, but their quality will be improved on par with the leading player in this industry; decoration and gardening businesses will depend on EMPC to evolve outside of Henan and in cooperation with others than Central China Real Estate, and transition from Central China Real Estate to external customers in terms of contract performance, with increasing market share.
16
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
3. Future prospects (continued)
- Development strategy (continued)
Efficiency improvement and cost reduction: Online solicitation, field research, and other methods will be used to fast solve R&D problems, fast apply R&D achievements in actual engineering, in order to reduce cost and improve construction quality. Design phase: More efforts will be made on the research of standardized house types and a standard component library to control the design of the content of rebars and concrete, thereby eliminating rebar interference and avoid excessive floor slab thickness. Manufacturing phase: More efforts will be put on research to control the wastage of main prefabricated construction materials (concrete, rebars, prestressed reinforcing bars and truss reinforcing bars), improve product quality of bi-circulating assembly lines, and reduce prefabricated construction moulds and logistics expenses. Assembly phase: More efforts will be made for research on mortar leakage from splicing seams at the ends of composite slabs, efficient dismounting and installation of elevator shaft moulds, and improvement of efficiency and precision of installation of supports for aluminium moulds. Digital technology: This is used to enhance the consistency and accuracy of BOM, improve the efficiency of plant processing and quantities calculation. The concerted efforts from stakeholders across the industrial chain will further reduce the production costs of prefabricated construction components, putting the Group on a par with or even beyond industrial leaders in the market.
Improvement of product quality and services: Product quality is the foundation for the development of the Group. All staff should follow the product and service philosophy of "no excuse for the provision of defective products or second-rate services to customers" and the principle of "seeking for efficient management and profitable efficiency". Industrial workers should be regularly trained. We should stick to customer satisfaction surveys, reporting of problems and continuous improvement. We should also keep improving existing product testing procedures and mechanisms to further upgrade the product quality and service capability of the Group.
17
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
3. Future prospects (continued)
- Outlook for synergy with Central China Group
The Group will make synergistic efforts with all business units of Central China Group to innovate business model, create synergistic effects and get benefits from synergy.
In cooperation with Central China Real Estate Limited ("CCRE"), the Group will manage well the "industry + real estate" model, secure the procurement of the 290 mu commercial-residential land for Zhoukou project Phase II; manage well the integration model of "mine + mixing plant + plant land + construction land + EPC municipal works", such as in Ruyang Green Construction Industrial Park, to reduce the investment cost of science and technology parks and improve the model of industrial chain layout; promote use of real estate for research and development, determine 5 demonstration projects on long-span prestressed two-way composite slab system, RIFF system and prefabricated model house, and support application of CECS standard and specifications; push forward incorporation of prefabricated construction components, decoration, gardening and other new businesses into the real estate purchasing and supply pool, intensify land procurement, and fast drive the development of business segments of the Group; jointly establish quality control measures and constraint mechanism, and ensure effective implementation of contract.
In cooperation with Henan Zhongyuan Central China City Development Company Limited ("CCRE Zhongyuan"), the Group will try cooperation in other provinces than Henan, and strive to successfully win first project contracts in Qijiang; proactively explore cooperation modes with CCRE Zhongyuan, promote businesses of prefabricated construction components, decoration, gardening, etc. in asset-light projects, and fast drive the development of business segments of the Group.
The Group will centre the strategy of "intelligent construction of home" to complementarily develop with Central China New Life Limited ("Central China New Life"), Soontech and other market players, establish synergistic mechanism with clear division of functions and future result outputs; focus on synergistic cooperation on digital platform this year, develop high-quality patent products of the Group, and create a new win-win model among the Group, Central China New Life and CCRE.
18
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
As of 30 June 2020, the Group has signed contracts with the third parties for prefabricated components with a total contract amount of approximately RMB1,190.93 million and a total volume of 414,505 cubic metres.
Sales revenue of prefabricated construction units | ||
- by region | Six months ended 30 June | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Changsha | 72,458 | 18,334 |
Nanjing | 70,890 | 72,059 |
Jiaozuo | 68,361 | 1,592 |
Hefei | 45,052 | 36,232 |
Kunshan | 27,320 | 41,543 |
Foshan | 26,320 | 19,142 |
Huizhou | 19,123 | 19,518 |
Xiangtan | 18,470 | 611 |
Hengyang | 3,519 | 15,095 |
Jiaozhou | 272 | 2,073 |
Total | 351,785 | 226,199 |
Sales revenue of prefabricated construction units | Six months ended 30 June | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Sales revenue from third parties | 282,110 | 182,236 |
Sales revenue from related parties | 69,675 | 43,963 |
Total | 351,785 | 226,199 |
19
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
Technology trademarks and patents obtained by the Group during the first half of 2020
Patents: For the six months ended 30 June 2020, 8 applications for patents have been made, and 33 patents were granted. As at 30 June 2020, there were approximately 978 applications for patents in aggregate, and 666 patents were granted.
Plants in operations | |||||
Annual | |||||
estimated | Area of | ||||
Regions | capacity | Area | plants | ||
(approximate | |||||
'000 | (approximate | (approximate | |||
cubic metre) | mu) | square metre) | |||
Changsha Plant | 60 | 352 | 33,433 | ||
Nanjing Plant | 120 | 151 | 35,981 | ||
Hengyang Plant | 70 | 150 | 24,905 | ||
Huizhou Plant | 70 | 61 | 22,284 | ||
Kunshan Plant | 60 | 50 | 18,061 | ||
Hefei Plant | 80 | 154 | 22,398 | ||
Foshan Plant | 60 | 123 | 36,550 | ||
Jiaozuo Plant | 60 | 81 | 19,383 | ||
Xiangtan Plant | 60 | 100 | 19,310 | ||
Total | 640 | 1,222 | 232,305 | ||
Plants under construction | |||||
Proportion of | Annual | ||||
attributable | Volume of | Area of | estimated | ||
Regions | equity interest | investment | Area of land | plants | capacity |
(approximate | (approximate | ||||
RMB100 | (approximate | (approximate | '000 | ||
million) | mu) | square metre) | cubic metre) | ||
Huaian Techno Park (淮安科技園) | 100% | 1.2 | 120 | 19,356 | 80 |
Qingdao Jiaozhou Technology Park | |||||
(青島胶州科技園) | 51% | 0.7 | 92 | 19,339 | 80 |
Yuxi Technology Park (玉溪科技園) | 100% | 1.4 | 128 | 18,191 | 80 |
Zhoukou Technology Park | |||||
(周口科技園) | 100% | 1.3 | 135 | 20,639 | 80 |
Total | 4.6 | 475 | 77,525 | 320 | |
20
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Business Review (continued)
Incorporation of new subsidiaries for the six months ended 30 June 2020
Proportion of | ||||
Place of | ordinary | |||
incorporation | Particulars of | shares | ||
and operation and | authorised | held by the | ||
Name | kind of legal entity | Principal activities | share capital | Group (%) |
Zhoukou Nengda New Material Limited* | China, limited | Construction | RMB30,000,000 | 55% |
周口能達新材有限公司 | liability company | industrialisation | ||
Zhengzhou DIT Limited* | China, limited | Construction | RMB300,000,000 | 100% |
鄭州築友智造科技有限公司 | liability company | industrialisation | ||
Zhoukou DIT Limited* | China, limited | Construction | RMB70,000,000 | 100% |
周口築友智造科技有限公司 | liability company | industrialisation | ||
* For identification purpose only |
Government subsidies in the first half of the year
As prefabricated construction industry has received strong support from central government of People's Republic of China (the "PRC"), local governments are initiating relevant ancillary policies, offering honorary awards and fund subsidies. As a national high-tech enterprise, the technology innovation capability of the Group is widely recognized by the government authorities. The Group has been granted honorary awards such as Changsha Engineering Research Center and National Intellectual Property Advantageous Enterprises. We have also made great contributions on environmental energy-saving engineering, promotion of industry upgrade and transformation, and intelligent manufacturing, while encouraging local employment and industry development. In this regard, local governments are offering direct cash incentives.
Six months ended 30 June
20202019
HK$'000 HK$'000
(unaudited) (unaudited)
Government subsidies | 4,215 | 9,390 |
The Group has satisfied and complied with relevant requirements and regulations in the PRC necessary for the receipt of the above government subsidies.
21
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Financial Review
Review of results
The Group was principally engaged in the manufacture and sale of prefabricated building units and equipment, and granting licenses in the PRC.
Revenue
The revenue of the Group increased by approximately HK$114.2 million from approximately HK$288.2 million for the six months ended 30 June 2019 to approximately HK$402.4 million for the six months ended 30 June 2020. The increase in revenue were mainly attributable to the increase in revenue from sales of prefabricated construction units and consulting services as a result of the increasing number of customers for the six months ended 30 June 2020. As a result, the Group recorded sales revenue for the six months ended 30 June 2020 of prefabricated construction units of approximately HK$351.8 million (2019: approximately HK$226.2 million), revenue from granting licenses of approximately HK$16.1 million (2019: approximately HK$16.4 million), revenue from sales of prefabricated construction equipments of approximately HK$28.5 million (2019: approximately HK$38.4 million), rental income from investment properties of approximately HK$5.6 million (2019: approximately HK$7.1 million) and revenue from consulting services of approximately HK$0.3 million (2019: approximately HK$0.08 million).
Cost of sales
The Group recorded cost of sales of approximately HK$290.1 million (2019: approximately HK$227.5 million) for the six months ended 30 June 2020. The increase was primarily attributable to the increase in sales of prefabricated construction units.
Other income
The other income of the Group decreased by approximately HK$4.3 million from approximately HK$5.3 million for the six months ended 30 June 2019 to approximately HK$1.0 million for the six months ended 30 June 2020. Other income mainly came from interest income generated from bank deposits.
Other losses - net
For the six months ended 30 June 2020, other losses-net amounting to approximately HK$0.5 million mainly comprised of (i) net exchange losses amounting to approximately HK$0.2 million; and (ii) non-business expenditures of approximately HK$0.3 million.
22
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Financial Review (continued)
Selling and distribution expenses
For the six months ended 30 June 2020, the selling and distribution expenses increased by approximately HK$8.4 million to approximately HK$30.9 million for the six months ended 30 June 2020 from approximately HK$22.5 million for the six months ended 30 June 2019, such expenses are directly related to the sale of prefabricated construction units.
Administrative expenses
For the six months ended 30 June 2020, the administrative expenses increased by approximately 23.7% from approximately HK$44.4 million for the six months ended 30 June 2019 to approximately HK$54.9 million for the six months ended 30 June 2020. Such increase was mainly because staff's basic salaries increased by approximately HK$2.1 million and staff's year-end bonuses increased by approximately HK$7.9 million. The remaining increase was due to the rise of other general administrative expenses such as professional fees, entertainment, travelling expenses, and office expenses.
Finance costs
For the six months ended 30 June 2020, the finance costs increased by approximately HK$2.8 million from approximately HK$11.9 million for the six months ended 30 June 2019 to approximately HK$14.7 million for the six month ended 30 June 2020 which was mainly attributable to (i) the interest expenses of approximately HK$14.9 million for the bank borrowing;
- the interest expenses of approximately HK$0.4 million for the lease liabilities; and (iii) capitalisation interest of HK$0.6 million in plant under development for prefabricated construction business for the period.
Profit for the period
As a result of the foregoing, our profit increased by approximately HK$23.7 million to approximately HK$10.6 million for the six months ended 30 June 2020 as compared to a loss of approximately HK$13.1 million for the corresponding period of 2019.
23
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Financial Review (continued)
Liquidity and financial resources
For the six months ended 30 June 2020, the Group's net cash generated from operating activities was approximately HK$14.1 million (six months ended 30 June 2019: net cash used in operating activities was approximately HK$14.2 million) and the Group's cash and cash equivalents were approximately HK$74.5 million as at 30 June 2020 (31 December 2019: approximately HK$82.4 million).
As at 30 June 2020, the Group had current assets of approximately HK$1,169.2 million (31 December 2019: approximately HK$1,022.0 million) and current liabilities of approximately HK$1,162.5 million (31 December 2019: approximately HK$907.2 million). The current ratio (which is calculated by dividing total current assets by total current liabilities) was approximately 1.0 as at 30 June 2020 (31 December 2019: 1.1).
As at 30 June 2020, the Group hold borrowings amounted to approximately HK$589.7 million (31 December 2019: approximately HK$474.7 million) and the gearing ratio was 17.7% (31 December 2019: 12.1%).
Other than the matters above, there has been no material change from the information published in the report and accounts for the year ended 31 December 2019.
Capital structure
As at 30 June 2020, the total number of issued shares of the Company (the "Share(s)") was 11,209,602,920 Shares with a par value of HK$0.1 each. Based on the closing price of HK$0.215 per Share as at 30 June 2020, the Company's market value as at 30 June 2020 was approximately HK$2,410,064,628.
24
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Financial Review (continued)
Structure of Borrowings and Deposits
The Group continued to adopt a prudent principle on financial management and centralise our funding and financial management. Therefore, we maintained a high proportion of cash with a reasonable level of borrowing. As at 30 June 2020, the repayment schedule of the Group's loans and lease liabilities was as follows:
As at | As at | ||
Repayment Schedule | 30 June 2020 | 31 December 2019 | |
HK'000 | HK$'000 | ||
(unaudited) | (audited) | ||
Borrowings | |||
Within one year | 145,755 | 351,649 | |
More than one year, but not exceeding two years | 333,756 | 78,702 | |
More than two year, but not exceeding five years | 110,224 | 44,375 | |
589,735 | 474,726 | ||
Lease Liabilities | |||
Within one year | 9,609 | 10,968 | |
More than one year, but not exceeding two years | 2,348 | 2,770 | |
More than two year, but not exceeding five years | 9,417 | 237 | |
21,374 | 13,975 | ||
Total debt | 611,109 | 488,701 | |
Interest payable | 94 | 58 | |
Less: restricted cash for borrowings | (109,000) | (114,000) | |
Less: cash and cash equivalents | (74,520) | (82,415) | |
Net debt | 427,683 | 292,344 | |
Total equity | 2,417,258 | 2,419,043 | |
Gearing ratio | 17.7% | 12.1% | |
25
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Financial Review (continued)
Exposures to exchange rates
Presently, most of the Group's business transactions, assets and liabilities are denominated in Hong Kong dollars and Renminbi. The board of directors of the Company (the "Board") is of the view that the Group's exposure to currency risk is minimal and hence the Group does not have any currency hedging policy and has not entered into any hedging or other instruments to reduce currency risk. However, the management will closely monitor the Group's exposure to the fluctuation of exchange rates and take appropriate measures as necessary to minimise any adverse impact that may be caused by such fluctuation.
Employees And Remuneration Policy
1. Analysis of employees as at 30 June 2020
As at 30 June 2020, the Group had 690 employees (31 December 2019: 630) employees
excluding directors of the Company (the "Directors") 686 (31 December 2019: 627) of them
worked in the PRC and 4 (31 December 2019: 3) of them worked in Hong Kong, with a turnover rate of approximately 20.7%. The numbers of employees by age, education level and function are set out as below:
Age: | |
20-30 | 204 |
31-40 | 318 |
41-50 | 138 |
51-60 | 30 |
61 or above | 0 |
Total | 690 |
26
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Employees And Remuneration Policy (continued)
1. Analysis of employees as at 30 June 2020 (continued)
Education level:
Master degree or above | 30 |
Bachelor degree | 221 |
Associate degree | 111 |
Middle school or below | 328 |
Total | 690 |
Function: | |
Finance and accounting (finance and costing) | 33 |
Engineering | 104 |
Management | 50 |
Design | 45 |
Investment (investment, preliminary work) | 4 |
Sales, marketing and customer service | 6 |
Administration | 9 |
Others | 439 |
Total | 690 |
2. Remuneration policy
Employees are basically remunerated based on the nature of their job and their performance as well as the prevailing market trend. Other employee benefits include mandatory provident fund, medical benefits and year end discretionary bonus. Following a people- oriented approach, we implement a systematic recruitment, training and incentive platform, providing internal fuel for the growth of the Group. In doing so, we create a desirable workplace for our employees to develop and flourish.
27
DIT Group Limited 2020 Interim Report
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
Charges on Group Assets
As at 30 June 2020, the Group had no significant assets pledged to banks to secure general banking facilities and bank loan granted to the Group, except for the one as disclosed in the Note 25 to the consolidated financial statements.
Capital Commitments and Contingent Liabilities
As at 30 June 2020, the Group had outstanding capital commitments in the aggregate amount of approximately HK$154.0 million (31 December 2019: HK$107.2 million) and no material contingent liabilities (31 December 2019: Nil).
Issue of Equity Securities for Cash by the Group
During the six months ended 30 June 2020, the Group has not issued for cash any equity securities (including securities convertible into equity securities).
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors of the Company that makes strategic decisions.
The Group is managed centrally and the Directors are of the view that the whole Group is one single reporting segment and hence no segment information is presented.
Significant Investment, Acquisition and Disposal of Subsidiaries
The Group has no significant investment, acquisition or disposal of subsidiaries, associates and joint ventures during the six-months ended 30 June 2020.
Future Plans for Material Investments and Capital Assets
The Group did not have other plans for material investments or capital assets as at 30 June 2020.
Material Events After The Reporting Period
As at the date of this interim report, there were no significant events after the Reporting Period.
28
DIT Group Limited 2020 Interim Report
CORPORATE GOVERNANCE
Corporate Governance Practices
The Company is committed to maintaining high standard corporate governance practices as the Board considers that good and effective corporate governance is essential for enhancing accountability and transparency of a company to the investing public and other stakeholders.
For the six months ended 30 June 2020, the Company has complied with the code provisions set out in the Corporate Governance Code (the "Code") contained in Appendix 14 to the Rules Governing the Listing of Securities (the "Listing Rules") on the Stock Exchange, except for the code provision A.6.7 of the Code which requires Directors to attend the annual general meetings and special general meeting of the Company and code provision E.1.2 which require the chairman of the Board should attend the annual general meeting. Due to their respective engagements and impact on COVID-19, Mr. Wu Po Sum (the former executive Director who resigned on 21 August 2020), Ms. Wu Wallis, Mr. Wang Jun and Mr. Jiang Hongqing were unable to attend the annual general meeting of the Company held on 5 June 2020. Due to their respective engagements and impact on COVID-19, Mr. Wu Po Sum, Mr. Guo Weiqiang, Ms. Wu Wallis, Mr. Wang Jun and Mr. Jiang Hongqing were unable to attend special general meeting of the Company held on 17 July 2020.
Code for Securities Transactions
The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") contained in Appendix 10 to the Listing Rules as its code of conduct regarding Directors' securities transactions. In response to the specific enquiry made by the Company, all the Directors confirmed that they fully complied with the required standard as set out in the Model Code throughout the six months ended 30 June 2020.
The Company has also adopted a code for dealing in the Company's securities by relevant employees, who are likely to be in possession of inside information in relation to the securities of the Company, on no less exacting terms than the Model Code.
29
DIT Group Limited 2020 Interim Report
GENERAL INFORMATION
Interim Dividend
The Directors do not recommend the payment of an interim dividend for the six months ended 30 June 2020 (six months ended 30 June 2019: Nil).
Directors' Interests and Short Positions in Shares, Underlying Shares and Debentures
As at 30 June 2020, none of the Directors and chief executives of the Company had or was deemed to have interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) ("SFO")) which (i) have been notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO); or (ii) have been entered in the register maintained by the Company pursuant to Section 352 of the SFO; or (iii) otherwise have been notified to the Company and the Stock Exchange pursuant to the Model Code to the Listing Rules.
30
DIT Group Limited 2020 Interim Report
GENERAL INFORMATION (Continued)
Substantial Shareholders' Interest and Short Positions in Shares and Underlying Shares
As at 30 June 2020, as far as known to the Directors or chief executive of the Company, the following persons (other than the Directors or chief executive of the Company) had the interests or short positions in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO:
Long positions in the Shares and underlying Shares of the Company as at 30 June 2020
Percentage of | |||
Number of | the Issued | ||
Name of Shareholders | Capacity | Shares held | Share Capital |
(note 1) | |||
Jiayao Global Investments Limited | Beneficial owner | 5,880,440,000 | 52.46% |
("Jiayao") | |||
Jiamin (Holding) Investment Limited | Beneficial owner | 320,000,000 | 2.85% |
Jianuo (Holding) Investment Limited | Beneficial owner | 310,000,000 | 2.77% |
Jiaxin (Holding) Investment Limited | Beneficial owner | 274,000,000 | 2.44% |
Jiaheng (Holding) Investment Limited | Beneficial owner | 269,000,000 | 2.40% |
Jiacheng (Holding) Investment Limited | Beneficial owner | 65,000,000 | 0.58% |
Jialing (International) Investment Limited | Interest of controlled | 1,238,000,000 | 11.04% |
corporation | |||
Jiayao | Interest of controlled | 1,238,000,000 | 11.04% |
corporation | |||
Jiaye Summit Global Investment Limited | Interest of controlled | 7,118,440,000 | 63.50% |
corporation | |||
Drawin Intelligent Manufacture | Interest of controlled | 7,118,440,000 | 63.50% |
Technology Industry Group Limited | corporation | ||
Tianjin Drawin Technology Limited | Interest of controlled | 7,118,440,000 | 63.50% |
("TCMDT") | corporation | ||
Henan Hongdao Business Information | Interest of controlled | 7,118,440,000 | 63.50% |
Consultancy Company Limited | corporation | ||
Construction Development (HK) | Interest of controlled | 7,118,440,000 | 63.50% |
Company Limited | corporation |
31
DIT Group Limited 2020 Interim Report
GENERAL INFORMATION (Continued)
Substantial Shareholders' Interest and Short Positions in Shares and Underlying Shares (continued)
Long positions in the Shares and underlying Shares of the Company as at 30 June 2020
(continued)
Percentage of | |||
Number of | the Issued | ||
Name of Shareholders | Capacity | Shares held | Share Capital |
(note 1) | |||
Construction Housing Group Company | Interest of controlled | 7,118,440,000 | 63.50% |
Limited | corporation | ||
Jianye Holdings Limited | Interest of controlled | 7,118,440,000 | 63.50% |
corporation | (Note 2) | ||
Joy Bright Investments Limited | Beneficial owner | 3,329,700 | 0.03% |
(Note 2) | |||
Mr. Wu Po Sum | Interest of controlled | 7,121,769,700 | 63.53% |
corporation | (Note 2) | ||
Zhu Yuehai | Beneficial owner | 978,940,000 | 8.73% |
Notes:
- It was based on 11,209,602,920 Shares as at 30 June 2020.
- Mr. Wu Po Sum holds 100% of the issued share capital of Joy Bright Investments Limited and Jianye Holdings Limited.
Save as disclosed above, and as at 30 June 2020, the Directors were not aware of any persons (other than the Directors and chief executive of the Company) who had any interests or short positions in the Shares or underlying Shares which would fall to be disclosed under Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.
Further, reference is made to the voluntary announcement made by the Company dated 13 July 2020 (the "Voluntary Announcement"), in respect of, inter alia, the Company was informed by Joy Bright Investments Limited ("Joy Bright", a company directly wholly and beneficially owned by Mr. Wu Po Sum ("Mr. Wu", a controlling shareholder (as defined in the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")) of the Company)) that Joy Bright and Mr. Zhu Yuehai ("Mr. Zhu", a shareholder of the Company immediately before the Share Transfer (as defined hereinbelow)) entered into a share purchase agreement on 13 July 2020 (after trading hours), pursuant to which Joy Bright agreed to purchase and Mr. Zhu agreed to dispose of 978,940,000 shares of the Company (the "Sale Share(s)") at a total cash consideration of HK$303,471,400, equivalent to HK$0.31 per Sale Share (the "Share Transfer").
32
DIT Group Limited 2020 Interim Report
GENERAL INFORMATION (Continued)
Substantial Shareholders' Interest and Short Positions in Shares and Underlying Shares (continued)
Long positions in the Shares and underlying Shares of the Company as at the date of the Voluntary Announcement
As a result of the Share Transfer, as at the date of the Voluntary Announcement, as far as known to the Directors or chief executive of the Company, the following persons (other than the Directors or chief executive of the Company) had the interests or short positions in the Shares and the underlying Shares of the Company which would fall to be disclosed in the Company under provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under section 336 of the SFO:
Percentage of | |||
Number of | the Issued | ||
Name of Shareholders | Capacity | Shares held | Share Capital |
(note 1) | |||
Jiayao Global Investments Limited | Beneficial owner | 5,880,440,000 | 52.46% |
("Jiayao") | |||
Jiamin (Holding) Investment Limited | Beneficial owner | 320,000,000 | 2.85% |
Jianuo (Holding) Investment Limited | Beneficial owner | 310,000,000 | 2.77% |
Jiaxin (Holding) Investment Limited | Beneficial owner | 274,000,000 | 2.44% |
Jiaheng (Holding) Investment Limited | Beneficial owner | 269,000,000 | 2.40% |
Jiacheng (Holding) Investment Limited | Beneficial owner | 65,000,000 | 0.58% |
Jialing (International) Investment Limited | Interest of controlled | 1,238,000,000 | 11.04% |
corporation | |||
Jiayao | Interest of controlled | 1,238,000,000 | 11.04% |
corporation | |||
Jiaye Summit Global Investment Limited | Interest of controlled | 7,118,440,000 | 63.50% |
corporation | |||
Drawin Intelligent Manufacture | Interest of controlled | 7,118,440,000 | 63.50% |
Technology Industry Group Limited | corporation | ||
Tianjin Drawin Technology Limited | Interest of controlled | 7,118,440,000 | 63.50% |
("TCMDT") | corporation |
33
DIT Group Limited 2020 Interim Report
GENERAL INFORMATION (Continued)
Substantial Shareholders' Interest and Short Positions in Shares and Underlying Shares (continued)
Long positions in the Shares and underlying Shares of the Company as at the date of the Voluntary Announcement (continued)
Percentage of | |||
Number of | the Issued | ||
Name of Shareholders | Capacity | Shares held | Share Capital |
(note 1) | |||
Henan Hongdao Business Information | Interest of controlled | 7,118,440,000 | 63.50% |
Consultancy Company Limited | corporation | ||
Construction Development (HK) | Interest of controlled | 7,118,440,000 | 63.50% |
Company Limited | corporation | ||
Construction Housing Group Company | Interest of controlled | 7,118,440,000 | 63.50% |
Limited | corporation | ||
Jianye Holdings Limited | Interest of controlled | 7,118,440,000 | 63.50% |
corporation | (Note 2) | ||
Joy Bright Investments Limited | Beneficial owner | 982,269,700 | 8.77% |
(Note 2) | |||
Mr. Wu Po Sum | Interest of controlled | 8,100,709,700 | 72.27% |
corporation | (Note 2) |
Notes:
- It was based on 11,209,602,920 Shares as of the date of the Voluntary Announcement.
- Mr. Wu Po Sum holds 100% of the issued share capital of Joy Bright Investments Limited and Jianye Holdings Limited.
Purchase, Sale or Redemption of Securities
During the six months ended 30 June 2020, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the listed securities of the Company.
34
DIT Group Limited 2020 Interim Report
GENERAL INFORMATION (Continued)
Share Options
The share option scheme adopted by the Company on 7 November 2003 (the "Old Scheme") was terminated pursuant to an ordinary resolution passed by the shareholders of the Company on 7 August 2013. A new share option scheme (the "New Scheme") in place of the Old Scheme was adopted pursuant to such resolution with effect from 7 August 2013 which has a term of 10 years.
No share options have been granted, exercised, cancelled or lapsed under the New Scheme since its adoption on 7 August 2013. As at 30 June 2020 and up to the date of this report, there were no outstanding share options that have been granted and remained outstanding and exercisable under both the Old Scheme and the New Scheme.
The share option scheme adopted by the Company on 7 August 2013 (the "New Scheme") was terminated pursuant to an ordinary resolution passed by the shareholders of the Company on 17 July 2020. A new share option scheme (the "Scheme 2020") in place of the New Scheme was adopted pursuant to such resolution with effect from 17 July 2020 which has a term of 10 years.
Review of Interim Results
The audit committee of the Company has reviewed the interim results and the unaudited condensed consolidated financial statements of the Group for the six months ended 30 June 2020.
Choice of Languages or Means of Receiving Corporate Communications
This interim report is now available in printed form in English and in Chinese, and on the website of the Company and on the website of the Stock Exchange.
If (i) shareholders, who have received or chosen to receive or are deemed to have consented to receive the Company's corporate communications by electronic means, wish to receive printed copies or vice versa; or (ii) shareholders for any reason have difficulty in receiving or gaining access to the Company's corporate communications, they may obtain printed copies free of charge by sending a request to the Company c/o the Share Registrar, Computershare Hong Kong Investor Services Limited, by post to Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong or by email at ditgroup.ecom@computershare.com.hk.
For shareholders who wish to change their choice of languages or means of receiving the Company's future corporate communications free of charge, they may at any time notify the Company by giving reasonable notice (of not less than 7 days) to the Company c/o the Share Registrar by post or by email.
35
DIT Group Limited 2020 Interim Report
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the six months ended 30 June 2020
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
Notes | (unaudited) | (unaudited) | ||
Revenue | 4 | 402,375 | 288,178 | |
Cost of sales | 7 | (290,112) | (227,536) | |
Gross profit | 112,263 | 60,642 | ||
Gains on disposal of subsidiaries | - | 3,286 | ||
Government subsidies | 4,215 | 9,390 | ||
Other income | 5 | 1,002 | 5,287 | |
Other losses - net | 6 | (526) | (4,166) | |
Selling and distribution expenses | 7 | (30,878) | (22,504) | |
Administrative expenses | 7 | (54,883) | (44,365) | |
Share of gains/(losses) of associates | 4,087 | (4,052) | ||
Net impairment losses on financial assets | (3,075) | (1,011) | ||
Operating profit | 32,205 | 2,507 | ||
Finance costs | 8 | (14,682) | (11,902) | |
Profit/(loss) before income tax | 17,523 | (9,395) | ||
Income tax expenses | 9 | (6,941) | (3,712) | |
Profit/(loss) for the period | 10,582 | (13,107) | ||
Profit/(loss) for the period, attributable to | ||||
- Owners of the Company | 8,486 | (11,339) | ||
- Non-controlling interests | 2,096 | (1,768) | ||
10,582 | (13,107) | |||
Earnings/(loss) per share attributable to owners | ||||
of the Company | ||||
(expressed in HK$ cents per share) | ||||
- Basic and diluted | 11 | 0.08 | (0.10) | |
36
DIT Group Limited 2020 Interim Report
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (Continued)
For the six months ended 30 June 2020
Six months ended 30 June | |||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
Notes | (unaudited) | (unaudited) | |
Profit/(loss) for the period | 10,582 | (13,107) | |
Other comprehensive loss,which may be | |||
reclassified subsequently to profit or loss | |||
- Currency translation differences | (49,805) | (7,822) | |
Other comprehensive loss for the period, | |||
net of tax | (49,805) | (7,822) | |
Total comprehensive loss for the period | (39,223) | (20,929) | |
Total comprehensive loss for the period, | |||
attributable to | |||
- Owners of the Company | (39,073) | (19,404) | |
- Non-controlling interests | (150) | (1,525) | |
(39,223) | (20,929) | ||
37
DIT Group Limited 2020 Interim Report
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
30 June | 31 December | ||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
Notes | (unaudited) | (audited) | |
ASSETS | |||
Non-current assets | |||
Property, plant and equipment | 12 | 1,487,243 | 1,416,328 |
Right-of-use assets | 13 | 809,375 | 726,587 |
Investment properties | 14 | 16,750 | 17,080 |
Intangible assets | 4,498 | 3,619 | |
Deferred income tax assets | 23 | 38,767 | 44,973 |
Investments in associates | 15 | 193,207 | 192,883 |
Financial assets at fair value through profit or loss | 18 | 42,639 | 43,480 |
2,592,479 | 2,444,950 | ||
Current assets | |||
Inventories | 17 | 97,065 | 89,672 |
Trade and other receivables and prepayments | 16 | 819,829 | 725,589 |
Cash and cash equivalents | 19 | 74,520 | 82,415 |
Restricted cash | 20 | 177,815 | 124,371 |
1,169,229 | 1,022,047 | ||
Total assets | 3,761,708 | 3,466,997 | |
EQUITY | |||
Equity attributable to owners of the Company | |||
Share capital (nominal value) | 21 | 1,120,960 | 1,120,960 |
Reserves | 669,119 | 710,485 | |
1,790,079 | 1,831,445 | ||
Non-controlling interests | 22 | 627,179 | 587,598 |
Total equity | 2,417,258 | 2,419,043 | |
38
DIT Group Limited 2020 Interim Report
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (Continued)
As at 30 June 2020 | |||
30 June | 31 December | ||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
Notes | (unaudited) | (audited) | |
LIABILITIES | |||
Non-current liabilities | |||
Amount due to a related party | 27 | 46,463 | - |
Deferred income | 1,522 | 1,708 | |
Deferred income tax liabilities | 23 | 11,939 | 12,916 |
Lease liabilities | 11,765 | 3,007 | |
Borrowings | 25 | 110,224 | 123,077 |
181,913 | 140,708 | ||
Current liabilities | |||
Trade and other payables | 24 | 618,567 | 458,112 |
Contract liabilities | 27,607 | 55,341 | |
Current income tax liabilities | 27,243 | 31,176 | |
Lease liabilities | 9,609 | 10,968 | |
Borrowings | 25 | 479,511 | 351,649 |
1,162,537 | 907,246 | ||
Total liabilities | 1,344,450 | 1,047,954 | |
Total equity and liabilities | 3,761,708 | 3,466,997 | |
39
DIT Group Limited 2020 Interim Report
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
Attributable to owners of the Company | ||||||||||
Contributed | Non- | |||||||||
Share | Share | Exchange | surplus | Other | Accumulated | controlling | Total | |||
capital | premium | reserve | reserve | reserve | losses | Total | interests | equity | ||
Notes | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | HK$'000 | |
Balance at 1 January 2019 | 1,120,960 | 863,347 | (26,262) | 131,166 | 29,439 | (347,744) | 1,770,906 | 607,623 | 2,378,529 | |
Loss for the period | - | - | - | - | - | (11,339) | (11,339) | (1,768) | (13,107) | |
Other comprehensive income: | ||||||||||
Currency translation differences | - | - | (8,065) | - | - | - | (8,065) | 243 | (7,822) | |
Total comprehensive income | ||||||||||
for the period | - | - | (8,065) | - | - | (11,339) | (19,404) | (1,525) | (20,929) | |
Transactions with owners | ||||||||||
Disposal of a subsidiary | - | - | - | - | - | - | - | (34,658) | (34,658) | |
Disposal of ownership interests in | ||||||||||
subsidiaries without loss of control | - | - | - | - | - | - | - | 13,616 | 13,616 | |
Transactions with NCI | ||||||||||
Capital injection by non-controlling | ||||||||||
shareholders | - | - | - | - | - | - | - | 21,138 | 21,138 | |
Total transactions with owners | - | - | - | - | - | - | - | 96 | 96 | |
Balance at 30 June 2019 (unaudited) | 1,120,960 | 863,347 | (34,327) | 131,166 | 29,439 | (359,083) | 1,751,502 | 606,194 | 2,357,696 | |
Balance at 1 January 2020 | 1,120,960 | 863,669 | (76,794) | 131,166 | 29,439 | (236,995) | 1,831,445 | 587,598 | 2,419,043 | |
Profit for the period | - | - | - | - | - | 8,486 | 8,486 | 2,096 | 10,582 | |
Other comprehensive income: | ||||||||||
Currency translation difference | - | - | (47,559) | - | - | - | (47,559) | (2,246) | (49,805) | |
Total comprehensive (losses)/income | ||||||||||
for the period | - | - | (47,559) | - | - | 8,486 | (39,073) | (150) | (39,223) | |
Transactions with owners in their | ||||||||||
capacity as owners: | ||||||||||
Transactions with non-controlling | ||||||||||
interests | - | - | - | - | (2,293) | - | (2,293) | 39,731 | 37,438 | |
Total transactions with owners | - | - | - | - | (2,293) | - | (2,293) | 39,731 | 37,438 | |
Balance at 30 June 2020 (unaudited) | 1,120,960 | 863,669 | (124,353) | 131,166 | 27,146 | (228,509) | 1,790,079 | 627,179 | 2,417,258 | |
40
DIT Group Limited 2020 Interim Report
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2020 | ||||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
Notes | (unaudited) | (unaudited) | ||
Operating activities | ||||
Cash generated from/(used in) operations | 20,567 | (6,430) | ||
Income tax paid | (6,470) | (7,732) | ||
Net cash generated from/(used in) operating | ||||
activities | 14,097 | (14,162) | ||
Investing activities | ||||
Purchase of properties, plants and equipments | (144,992) | (102,813) | ||
Purchase of right-of-use assets | (90,200) | (8,519) | ||
Purchase of intangible assets | (1,115) | (19,647) | ||
Purchase of financial assets at fair value through | ||||
profit or loss | - | (3,297) | ||
Proceeds from disposal of equipments | 2,478 | 16,097 | ||
Proceeds from disposal of a subsidiary | - | 47,711 | ||
Interest received | 931 | 2,263 | ||
Net cash used in investing activities | (232,898) | (68,205) | ||
Financing activities | ||||
Proceeds from borrowings | 200,636 | 77,494 | ||
Amounts due to a related party | 77,438 | - | ||
Repayments of borrowings | (75,434) | (78,593) | ||
Interest paid | (15,104) | (13,501) | ||
Decrease in restricted cash | 5,000 | - | ||
Payment of lease liability | (6,515) | (7,606) | ||
Proceeds from partial disposal of equity interests | ||||
in subsidiaries without loss of control | - | 13,616 | ||
Capital contributions by non-controlling interests | 39,731 | 21,138 | ||
Net cash generated from financing activities | 225,752 | 12,548 | ||
Net increase/(decrease) in cash and | ||||
cash equivalents | 6,951 | (69,819) | ||
Cash and cash equivalents at beginning of the period | 82,415 | 110,802 | ||
Net exchange losses on cash and cash equivalents | (14,846) | (3,308) | ||
Cash and cash equivalents at end of the period | 19 | 74,520 | 37,675 | |
41
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2020
-
BASIS OF PREPARATION
The condensed consolidated interim financial statements of the Company for the six months ended 30 June 2020 have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and investment properties, which are carried at fair value, and in accordance with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting", issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").
The condensed consolidated interim financial statements should be read in conjunction with the consolidated financial statements of the Company for the year ended 31 December 2019, which have been prepared in accordance with Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA. - SIGNIFICANT ACCOUNTING POLICIES
The accounting policies applied in the preparation of the unaudited condensed consolidated financial statements are consistent with those of the annual consolidated financial statements of the Company for the year ended 31 December 2019, as described in those annual financial statements, except for estimation of income tax for the interim periods using the tax rate that would be applicable to expected total annual earnings, and the adoption of the new and amended standards of HKFRSs effective for the financial year ending 31 December 2020, which did not have any significant impact on the Group's financial statements and did not require retrospective adjustments.
There are no standards, amendments and interpretations to existing standards that are not effective and would be expected to result in any significant impact on the Group's financial positions and results of operations. - SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors of the Company that makes strategic decisions.
The Group is managed centrally and the Directors are of the view that the whole Group is one single business segment and hence no segment information is presented. - REVENUE
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Revenue from sales of prefabricated construction units | 351,785 | 226,199 |
Revenue from sales of prefabricated construction equipments | 28,532 | 38,407 |
Revenue from granting licenses | 16,081 | 16,367 |
Rental income | 5,648 | 7,129 |
Revenue from consulting services | 329 | 76 |
402,375 | 288,178 | |
42
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
5. OTHER INCOME
Six months ended 30 June
20202019
HK$'000 HK$'000
(unaudited) (unaudited)
Interest income on bank deposits | 931 | 3,881 | ||
Others | 71 | 1,406 | ||
1,002 | 5,287 | |||
6. | OTHER LOSSES - NET | |||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
(unaudited) | (unaudited) | |||
Gains on disposal of equipments | 36 | - | ||
Net gains on financial assets at fair value through profit or loss | - | 821 | ||
Net exchange (losses)/gains | (193) | 257 | ||
Others | (369) | (5,244) | ||
(526) | (4,166) | |||
7. EXPENSES BY NATURE
Expenses included in cost of sales, selling and distribution expenses and administrative expenses are analysed as follows:
Six months ended 30 June | ||
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (unaudited) | |
Raw materials and consumables used | 177,288 | 108,789 |
Changes in inventories of finished goods, goods in transit and | ||
work in progress | (169) | 487 |
Employee benefits expenses | 78,687 | 52,846 |
Labour outsourcing | 28,896 | 23,185 |
Depreciation | 35,782 | 39,730 |
Amortisation of right-of-use assets | 10,480 | 17,541 |
Transportation | 18,178 | 10,866 |
Legal and professional fees | 8,147 | 6,917 |
Land use tax and value-added tax surcharges | 7,646 | 6,573 |
Entertainment and travelling expenses | 1,604 | 3,571 |
Repairs and maintenance | 1,052 | 881 |
Office expenses | 338 | 345 |
Provision for inventories impairment | 10 | 1,094 |
Others | 7,934 | 21,580 |
Total of cost of sales, selling and distribution expenses and | ||
administrative expenses | 375,873 | 294,405 |
43
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
8. | FINANCE COSTS | ||||
Six months ended 30 June | |||||
2020 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(unaudited) | (unaudited) | ||||
Interest expenses on borrowings | 14,935 | 13,997 | |||
Finance charges on lease liabilities | 380 | 1,126 | |||
Less: Interest capitalised (Note 12) | (633) | (3,221) | |||
14,682 | 11,902 | ||||
9. INCOME TAX EXPENSES
Hong Kong profits tax has not been provided for as the Group has no estimated assessable profits in Hong Kong for the six months ended 30 June 2020 (six months ended 30 June 2019: Nil). Taxation on PRC profits is recognised based on management's estimate of the weighted average annual income tax rate expected for the full financial year.
Six months ended 30 June | |||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
(unaudited) | (unaudited) | ||
Current income tax - PRC corporate income tax | 2,294 | 4,530 | |
Deferred income tax (Note 23) | 4,647 | (818) | |
Total income tax expenses for the period | 6,941 | 3,712 | |
- DIVIDEND
The Board of Directors did not recommend any payment of dividend in respect of the six months ended 30 June 2020 (six months ended 30 June 2019: Nil). - EARNINGS/(LOSS) PER SHARE
-
Basic
Basic earnings per share for the period is calculated by dividing the consolidated profit of the Group attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period.
-
Basic
Six months ended 30 June
20202019
(unaudited) (unaudited)
Consolidated profit/(loss) attributable to owners of the Company | |||
(HK$'000) | 8,486 | (11,339) | |
Weighted average number of ordinary shares in issue ('000) | 11,209,603 | 11,209,603 | |
Basic earnings/(loss) per share (HK cents) | 0.08 | (0.10) | |
- Diluted
No diluted earnings/(loss) per share has been presented as the Group has no dilutive potential ordinary shares during the period.
44
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
12. | PROPERTY, PLANT AND EQUIPMENT | |||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
Balance as at 31 December | 1,416,328 | 1,483,219 | ||
Change in accounting policies - adoption of HKFRS16 in 2019 | - | (4,904) | ||
Balance as at 1 January | 1,416,328 | 1,478,315 | ||
Additions | 136,303 | 73,884 | ||
Disposals | (2,514) | (48,755) | ||
Depreciation charge | (35,782) | (39,730) | ||
Currency translation differences | (27,092) | (4,842) | ||
Balance as at 30 June (unaudited) | 1,487,243 | 1,458,872 | ||
As at 30 June 2020, property, plant and equipments with net book value of HK$357.9 million (31 December 2019: net book value of HK$371.8 million) were pledged as collateral for the Group's borrowings HK$185.6 million (Note 25). Among the collateral, property ownership certificate of the Group's building with a net book value HK$264.2 million (31 December 2019: HK$245.6 million) is under China Minsheng Drawin Co., Ltd.. These buildings were pledged as collateral for two bank borrowings of HK$150.5 million which was secured by China Minsheng Drawin Co., Ltd..
For the six months ended 30 June 2020, depreciation of property, plant and equipment of approximately HK$35.8 million (six months ended 30 June 2019: HK$39.7 million) has been charged to cost of sales and administrative expenses in the condensed consolidated statement of profit or loss and other comprehensive income (Note 7).
Interest expenses of HK$0.6 million were capitalised in plants under development for prefabricated construction business for the six months ended 30 June 2020 (six months ended 30 June 2019: HK$3.2 million) (Note 8).
13. | RIGHT-OF-USE ASSETS | |||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
Balance as at 1 January | 726,587 | 773,659 | ||
Additions | 109,932 | 33,481 | ||
Disposals | - | (33,065) | ||
Amortisation | (12,282) | (17,541) | ||
Currency translation differences | (14,862) | (2,630) | ||
Balance as at 30 June (unaudited) | 809,375 | 753,904 | ||
As at 30 June 2020, right-of-use assets with net book value of HK$456.4 million (31 December 2019: HK$510.6 million) were pledged as collateral for the Group's borrowings HK$222.2 million (Note 25).
Among the collateral, state-owned land use certificates of the Group's lands with net book value HK$293.9 million (31 December 2019: HK$356.3 million) are under China Minsheng Drawin Co., Ltd.. These lands were pledged as collateral for two bank borrowings of HK$21.9 million which was guaranteed/secured by China Minsheng Drawin Co., Ltd..
45
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
14. | INVESTMENT PROPERTIES | |||
Six months ended 30 June | ||||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
Balance as at 1 January | 17,080 | 17,348 | ||
Currency translation differences | (330) | (69) | ||
Balance as at 30 June (unaudited) | 16,750 | 17,279 | ||
Investment properties held by the Group are all commercial properties located in Shandong, the PRC.
15. INVESTMENT IN ASSOCIATES
As at | As at | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Share of net assets | 193,207 | 192,883 |
Less: Provision for impairment | - | - |
193,207 | 192,883 | |
As at 30 June 2020, the Group had indirect interests in the following associates:
Place of | |||||
incorporation | Proportion of | Issued | |||
Name | and operation | ownership interest | share capital | Principal activities | |
Held by the | Indirectly | ||||
Company | held | ||||
Zhejiang China Minsheng | China | - | 47% | HK$200,000,000 | Construction |
Drawin Technology | industrialisation | ||||
Company Limited (a) | |||||
YMCI China Minsheng | China | - | 30% | RMB100,000,000 | Construction |
Kunming Technology | industrialisation | ||||
Construction (b) | |||||
- The Group disposed 2% and 51% of its equity interest in Zhejiang China Minsheng Drawin Technology Company Limited ("Zhejiang China Minsheng") in June 2017 and December 2017 respectively. Zhejiang China Minsheng become an associate of the Group after the transaction completed. This associate has then been accounted for using the equity method and was remeasured to its fair value at the initial recognition, with the change in the carrying amount recognised in gains on disposal of subsidiaries.
- On 31 October 2017, the Group and two third-parties entered into an agreement to set up YMCI China Minsheng Kunming Technology Construction Limited ("YMCI China Minsheng"). The Group holds 30% equity interest in YMCI China Minsheng. As at 30 June 2020, the Group and the third-parties have injected paid-in capital of RMB30.0 million and RMB70.0 million respectively.
The financial year end dates of the above associates are coterminous with that of the Group.
There are no contingent liabilities relating to the Group's interests in the associates.
46
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
16. | TRADE AND OTHER RECEIVABLES AND PREPAYMENTS | |||
As at | As at | |||
30 June | 31 December | |||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
(unaudited) | (audited) | |||
Trade receivables - third parties | 416,485 | 353,618 | ||
Trade receivables - related parties (Note 27(c)) | 235,777 | 162,480 | ||
Value-added tax recoverable | 64,591 | 61,314 | ||
Prepayments | 23,375 | 24,526 | ||
Receivables relating to disposal of subsidiaries | 17,180 | 72,760 | ||
Amounts due from related parties (Note 27(c)) | 15,227 | 13,251 | ||
Land auction deposits | 14,077 | 11,173 | ||
Deposits | 10,697 | 7,297 | ||
Government grant receivable | 7,006 | 8,261 | ||
Notes receivable | 4,987 | 2,693 | ||
Others | 19,276 | 14,130 | ||
828,678 | 731,503 | |||
Less: Provision for impairment of trade receivables and other receivables | (8,849) | (5,914) | ||
819,829 | 725,589 | |||
The ageing analysis of trade receivables as at 30 June 2020 and 31 December 2019 based on the invoice issue date were as follows:
As at | As at | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Less than 1 year | 301,321 | 355,566 |
1 to 2 years | 347,940 | 149,455 |
More than 2 years | 3,001 | 11,077 |
652,262 | 516,098 | |
The maximum exposure to credit risk as at 30 June 2020 and 31 December 2019 is the carrying value of each class of receivables mentioned above.
As at 30 June 2020 and 31 December 2019, the fair values of trade and other receivables approximate their carrying amounts.
47
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
16. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS (continued)
The carrying amounts of the Group's trade and other receivables and prepayments are denominated in the following currencies:
As at | As at | ||||
30 June | 31 December | ||||
2020 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(unaudited) | (audited) | ||||
HK dollar | 2,827 | 3,890 | |||
Renminbi | 817,002 | 721,699 | |||
819,829 | 725,589 | ||||
17. | INVENTORIES | ||||
As at | As at | ||||
30 June | 31 December | ||||
2020 | 2019 | ||||
HK$'000 | HK$'000 | ||||
(unaudited) | (audited) | ||||
Raw materials | 47,433 | 40,204 | |||
Finished goods | 44,920 | 47,245 | |||
Goods in transit | 3,537 | 1,412 | |||
Work in progress | 1,185 | 816 | |||
Low value articles | 68 | 79 | |||
Inventory provision | (78) | (84) | |||
97,065 | 89,672 | ||||
Inventories recognised as cost of sales during the six months ended 30 June 2020 amounted to HK$177.1 million (six months ended 30 June 2019: HK$109.3 million).
18. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Financial assets at fair value through profit or loss include the following:
As at | As at | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Unlisted equity instruments (note (a)) | 42,639 | 43,480 |
note: |
- Equity instruments are related to investments in seven unlisted companies in Mainland China which are measured at fair value.
48
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
19. CASH AND CASH EQUIVALENTS
As at | As at | ||
30 June | 31 December | ||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
(unaudited) | (audited) | ||
Cash at bank and on hand | |||
- Denominated in RMB | 46,989 | 77,116 | |
- Denominated in HKD | 27,531 | 5,299 | |
74,520 | 82,415 | ||
20. | RESTRICTED CASH | ||
As at | As at | ||
30 June | 31 December | ||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
(unaudited) | (audited) | ||
Restricted cash | |||
- Deposit for bank borrowing (note (a)) | 109,000 | 114,000 | |
- Deposit for bank notes | 68,815 | 10,371 | |
177,815 | 124,371 | ||
note: |
- As at 30 June 2020, certificate of deposit of HK$109.0 million (31 December 2019: HK$114.0 million)
was pledged as collateral of the Group's borrowing HK$92.5 million (31 December 2019: HK$99.9 million).
21. SHARE CAPITAL Authorised shares
Number of | ||
authorised | ||
shares | ||
As at 1 January 2019, 31 December 2019 and 30 June 2020 | 25,000,000,000 | |
Issued shares | ||
Number of | Ordinary shares | |
issued shares | (nominal value) | |
(at HK$0.1 each) | HK$'000 | |
As at 1 January 2019, 31 December 2019 and 30 June 2020 | 11,209,602,920 | 1,120,960 |
All the shares issued rank pari passu in all respects. |
49
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
22. NON-CONTROLLING INTERESTS
The non-controlling interests of the Group are as follows:
As at | As at | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Changsha DIT Limited | 546,019 | 544,186 |
Jiaozhou China Minsheng DIT Limited | 59,653 | 37,519 |
Nantong China Minsheng DIT Limited | 15,297 | - |
Nanjing China Minsheng DIT Limited | 6,210 | 5,893 |
627,179 | 587,598 | |
23. DEFERRED INCOME TAX
The gross movement in deferred income tax assets and liabilities for the six months ended 30 June 2020 and six months ended 30 June 2019, without taking into consideration the offsetting of balances within the same tax jurisdiction, are as follows:
Deferred income tax assets
Six months ended 30 June | |||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
Opening balance at 1 January | 44,973 | 37,442 | |
(Debit)/credit to profit or loss (Note 9) | (5,381) | 499 | |
Currency translation differences | (825) | (478) | |
Closing balance at 30 June (unaudited) | 38,767 | 37,463 | |
Deferred income tax liabilities | |||
Six months ended 30 June | |||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
Opening balance at 1 January | 12,916 | 8,010 | |
Debit to profit or loss (Note 9) | (734) | (319) | |
Currency translation differences | (243) | (75) | |
Closing balance at 30 June (unaudited) | 11,939 | 7,616 | |
50
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
24. | TRADE AND OTHER PAYABLES | ||
As at | As at | ||
30 June | 31 December | ||
2020 | 2019 | ||
HK$'000 | HK$'000 | ||
(unaudited) | (audited) | ||
Trade payables - third parties | 240,988 | 216,833 | |
Trade payables - related parties (Note 27(c)) | 3,995 | 6,162 | |
Amounts due to related parties (Note 27(c)) | 117,511 | 48,482 | |
Notes payable | 86,529 | 24,911 | |
Accrued payable for property, plant and equipment construction | |||
- third parties | 38,474 | 40,965 | |
Accrued payable for property, plant and equipment construction | |||
- related parties | 37,561 | 46,194 | |
Accrued tax payable | 45,475 | 28,257 | |
Accrued payroll | 9,889 | 8,702 | |
Deposits | 2,983 | 9,397 | |
Interest payable | 94 | 58 | |
Others | 35,068 | 28,151 | |
618,567 | 458,112 | ||
The ageing analysis of trade payables as at 30 June 2020 and 31 December 2019 based on the invoice issue date were as follows:
As at | As at | |
30 June | 31 December | |
2020 | 2019 | |
HK$'000 | HK$'000 | |
(unaudited) | (audited) | |
Less than 1 year | 238,936 | 170,503 |
1 to 2 years | 6,047 | 52,492 |
244,983 | 222,995 | |
As at 30 June 2020 and 31 December 2019, the fair values of trade and other payables approximate their carrying amounts.
The carrying amounts of the Group's trade and other payables are primarily denominated in Renminbi.
51
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
25. | BORROWINGS | |||
As at | As at | |||
30 June | 31 December | |||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
(unaudited) | (audited) | |||
Non-current, secured | ||||
- Bank borrowings | 415,516 | 359,463 | ||
- Other financial institution borrowings | 8,758 | 12,280 | ||
Non-current, unsecured | ||||
- Bank borrowings | 19,706 | 20,094 | ||
443,980 | 391,837 | |||
Less: Current portion of non-current borrowings | (333,756) | (268,760) | ||
Non-current, total | 110,224 | 123,077 | ||
Current, secured | ||||
- Bank borrowings | 76,031 | 82,889 | ||
- Other financial institution borrowing | 69,724 | - | ||
145,755 | 82,889 | |||
Current portion of non-current borrowings | 333,756 | 268,760 | ||
Current, total | 479,511 | 351,649 | ||
notes: |
- These borrowings of the Group are secured by property, plant and equipment (Note 12), right-of-use assets (Note 13) and restricted cash deposit (Note 20) of the Group and/or guaranteed by subsidiaries of the Company or related parties (Note 27(c)).
- The borrowings are all denominated in RMB and their fair values approximate their carrying amounts.
- As at 30 June 2020, the Group's current borrowings included borrowing with principal amount of HK$35.5 million (31 December 2019: HK$52.7 million) which the Group has breached certain terms and conditions, as set out in the respective borrowing agreement among which HK$8.2 million were originally matured beyond 30 June 2021.
52
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
26. CAPITAL COMMITMENTS
As at 30 June 2020 and 31 December 2019, capital expenditure contracted for but not yet incurred is as follows:
As at | As at | |||
30 June | 31 December | |||
2020 | 2019 | |||
HK$'000 | HK$'000 | |||
(unaudited) | (audited) | |||
Property, plant and equipment | 153,959 | 107,221 | ||
27. | RELATED-PARTY TRANSACTIONS | |||
(a) | Name and relationship with related parties | |||
Name | Relationship | |||
Drawin Intelligent Manufacture Technology Industry | Controlled by the same ultimate controlling | |||
Group Limited | shareholder | |||
China Minsheng Drawin Construction Technology | Controlled by the same ultimate controlling | |||
Group Company Limited | shareholder | |||
China Minsheng Drawin Culture Co., Ltd. | Controlled by the same ultimate controlling | |||
shareholder | ||||
China Minsheng Drawin New Material Company | Controlled by the same ultimate controlling | |||
Limited | shareholder | |||
Jiayao Global Investments Limited ("Jiayao") | Controlled by the same ultimate controlling | |||
shareholder | ||||
China Minsheng Drawin Architectural Design Limited | Controlled by the same ultimate controlling | |||
shareholder | ||||
China Minsheng Drawin Co., Ltd. | Controlled by the same ultimate controlling | |||
shareholder | ||||
Hunan China Minsheng Drawin Green Construction | Controlled by the same ultimate controlling | |||
Investment Limited | shareholder | |||
SRE Group Limited | Controlled by the same ultimate controlling | |||
shareholder | ||||
YMCI China Minsheng Kunming Technology Group | An associate company of the Group | |||
Co., Ltd. | ||||
Zhejiang China Minsheng Drawin Technology | An associate company of the Group | |||
Company Limited |
53
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
27. RELATED-PARTY TRANSACTIONS (continued)
- Transactions with related parties
During the six months ended 30 June 2020 and 2019, the Group has the following related party transactions:
Six months ended 30 June | ||
2020 | 2019 | |
HK$000 | HK$000 | |
(unaudited) | (unaudited) | |
Payment on behalf of related parties by the Group | ||
China Minsheng Drawin Construction Technology Group | ||
Company Limited | 1,289 | 44 |
China Minsheng Drawin Co., Ltd. | 1,090 | 1,995 |
China Minsheng Drawin Architectural Design Limited | 94 | - |
China Minsheng Drawin New Material Company Limited | 49 | 16 |
Drawin Intelligent Manufacture Technology Industry Group Limited | 41 | - |
2,563 | 2,055 | |
Payment on behalf of the Group by a related party | ||
China Minsheng Drawin Construction Technology Group | ||
Company Limited | 214 | 478 |
Supply of prefabricated construction components and | ||
products by the Group | ||
China Minsheng Drawin Construction Technology Group | ||
Company Limited | 67,757 | 38,236 |
Zhejiang China Minsheng Drawin Technology Company Limited | 21,141 | 5,700 |
China Minsheng Drawin Architectural Design Limited | 4,657 | - |
YMCI China Minsheng Kunming Technology Group Co., Ltd. | 1,626 | - |
China Minsheng Drawin Co., Ltd. | 31 | 27 |
95,212 | 43,963 | |
Provision of engineering, procurement and construction | ||
general contracting services by a related party | ||
China Minsheng Drawin Construction Technology Group | ||
Company Limited | 47,460 | 41,515 |
Leasing of properties to related parties | ||
China Minsheng Drawin Construction Technology Group | ||
Company Limited | 1,863 | 1,098 |
China Minsheng Drawin Architectural Design Limited | 1,270 | 1,341 |
China Minsheng Drawin New Material Company Limited | 1,079 | 1,135 |
Drawin Intelligent Manufacture Technology Industry Group Limited | 694 | 395 |
China Minsheng Drawin Culture Co., Ltd. | 87 | 201 |
SRE Group Limited | - | 2,610 |
4,993 | 6,780 | |
Provision of design services by a related party | ||
China Minsheng Drawin Architectural Design Limited | 136 | 315 |
54
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
27. | RELATED-PARTY TRANSACTIONS (continued) | |||
(c) | Related-party balances | |||
As at | As at | |||
30 June | 31 December | |||
2020 | 2019 | |||
HK$000 | HK$000 | |||
(unaudited) | (audited) | |||
Amount due from related parties | ||||
China Minsheng Drawin Construction Technology Group Company | ||||
Limited | 198,356 | 140,654 | ||
Zhejiang China Minsheng Drawin Technology Company Limited | 14,509 | 4,648 | ||
China Minsheng Drawin Architectural Design Limited | 13,804 | 7,874 | ||
China Minsheng Drawin New Material Company Limited | 7,763 | 6,704 | ||
YMCI China Minsheng Kunming Technology Group Co., Ltd. | 6,260 | 7,360 | ||
China Minsheng Drawin Co., Ltd. | 5,044 | 4,020 | ||
Drawin Intelligent Manufacture Technology Industry Group Limited | 3,278 | 2,548 | ||
Hunan China Minsheng Drawin Green Construction Investment | ||||
Limited | 1,016 | 1,036 | ||
China Minsheng Drawin Culture Co., Ltd. | 974 | 886 | ||
SRE Group Limited | - | 1 | ||
251,004 | 175,731 | |||
Amount due to related parties | ||||
Drawin Intelligent Manufacture Technology Industry Group Limited | 82,598 | 44,877 | ||
Jiayao Global Investments Limited - Current (note(a)) | 30,975 | - | ||
- Non-current (note(a)) | 46,463 | - | ||
China Minsheng Drawin Construction Technology Group Company | ||||
Limited | 41,326 | 50,001 | ||
China Minsheng Drawin Architectural Design Limited | 2,428 | 2,725 | ||
Zhejiang China Minsheng Drawin Technology Company Limited | 1,027 | 2,507 | ||
China Minsheng Drawin Co., Ltd. | 699 | 715 | ||
China Minsheng Drawin New Material Company Limited | 13 | 13 | ||
205,529 | 100,838 | |||
note: |
- As at 30 June 2020, the amount due to Jiayao Global Investments Limited of US$10.0 million (equivalent to HK$77.4 million) is unsecured and bears no interest, of which HK$31.0 million will be matured within one year and HK$46.5 million will be matured till May 2022.
Save as disclosed in note(a), all other amounts due from or due to related parties are unsecured, bear no interest and are repayable on demand or within one year.
55
DIT Group Limited 2020 Interim Report
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the six months ended 30 June 2020
27. | RELATED-PARTY TRANSACTIONS (continued) | |||
(c) | Related-party balances (continued) | |||
As at | As at | |||
30 June | 31 December | |||
2020 | 2019 | |||
HK$000 | HK$000 | |||
(unaudited) | (audited) | |||
Guarantee/security for bank borrowings provided by | ||||
related parties | ||||
China Minsheng Drawin Co., Ltd. | 172,425 | 193,686 | ||
Drawin Intelligent Manufacture Technology Industry Group Limited | 89,429 | 20,094 | ||
261,854 | 213,780 | |||
- Key management compensation
Key management includes directors (executive and non-executive, chief financial officer, vice presidents and assistant presidents. The compensation paid or payable to key management for employee services is shown below:
Six months ended 30 June
20202019
HK$000 HK$000
(unaudited) (unaudited)
Salaries and other short-term employee benefits | 1,627 | 1,494 |
56
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original document
- Permalink
Disclaimer
China Minsheng Drawin Technology Group Ltd. published this content on 11 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 September 2020 23:24:01 UTC
