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CHINA STARCH HOLDINGS LIMITED
中 國 澱 粉 控 股 有 限 公 司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 3838)
DISCLOSEABLE TRANSACTION:
CONSTRUCTION CONTRACTS
The Board is pleased to announce that on 12 April 2019, (i) Golden Corn, an indirect wholly-owned subsidiary of the Company, and (ii) Golden Corn Biotech, an indirect non- wholly-owned subsidiary of the Company, entered into construction contracts amounting to approximately RMB102 million with Huaye, pursuant to which Huaye is to provide certain construction services to Golden Corn and Golden Corn Biotech.
Pursuant to Rule 14.22 of the Listing Rules, the transactions contemplated under these construction contracts have to be aggregated. As one of the applicable percentage ratios (after aggregation) is more than 5% but less than 25%, the transactions contemplated under these construction contracts constitute discloseable transaction for the Company and are subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.
INTRODUCTION
Each of (i) Golden Corn, an indirect wholly-owned subsidiary of the Company, and (ii) Golden Corn Biotech, an indirect non-wholly-owned subsidiary of the Company, conducted open tenders for the certain construction services. On 12 April 2019, each of Golden Corn and Golden Corn Biotech issued a letter of acceptance to Huaye, confirming that Huaye has become the successful bidder.
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The Board is pleased to announce that on 12 April 2019, (i) Golden Corn and (ii) Golden Corn Biotech entered into construction contracts amounting to approximately RMB102 million with Huaye, pursuant to which Huaye is to provide certain construction services to Golden Corn and Golden Corn Biotech on the principal terms as set out below.
CONSTRUCTION CONTRACT I:
The principal terms of the Construction Contract I are set out below:
Date of the construction | 12 April 2019 |
contract: | |
Parties: | Golden Corn, and |
Huaye, as the contractor. | |
Scope of construction | The construction of factory and ancillary facilities at the |
services: | production site located at the Shouguang production complex. |
The scope of services is related to the construction of the sewage | |
plant (phase two) project which includes but not limited to the | |
construction of the BYIC anaerobic reactor foundation, A/O pool, | |
various sedimentation tanks and collection tanks. | |
The construction work is expected to be completed by the end of | |
2019. | |
Contract sum: | The contract sum payable by Golden Corn for the construction |
service is approximately RMB6,000,000, which includes the cost | |
of the construction of the sewage plant and other scope of works | |
as stated in the construction contract, subject to the adjustments | |
in connection to the changes in the design and/or the construction | |
work, the specified contract rebate rate stated in the construction | |
contract and other factors as agreed by both parties. | |
The contract sum was determined based on the terms of the open | |
tender and after the arm's length negotiations among the parties | |
thereto with reference to the expected scope and complexity of | |
the construction works to be carried out, the material costs and | |
labour costs estimated to be incurred, and the prevailing market | |
prices for carrying out construction works of comparable scale and | |
complexity. | |
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Payment terms:Monthly progress payment
Huaye will, on or before 20th day of each month, according to the actual work progress of the construction of the sewage plant, issue a monthly payment request to Golden Corn with the monthly progress payment entitled to them stated therein. The monthly progress payment, after deduction of the contract rebate and the cost of material provided by Golden Corn ("monthly progress payment"), shall be payable by Golden Corn in the following manner:
(i)70% of the monthly progress payment shall be payable by Golden Corn on or before the 20th day of the following month;
(ii)the remaining 30% of the monthly progress payment shall be held up and settled in the manner as more particularly stated in the subsection headed "Final Payment" below.
Final payment
Upon the completion of the construction of the sewage plant and other scope of works as stated in the construction contract, the remaining 30% of all monthly progress payments ("balance of the progress payment") shall be payable by Golden Corn in the following manner:
(i)The first 20% of the balance of the progress payment shall be payable after the completion of the audit of final accounts; and
(ii)the remaining 10% of the balance of the progress payment shall be held up as retention monies, of which half of the retention monies is to be released to Huaye after one year of the normal operation of the sewage plant; and the remaining half of the retention monies is to be released after two years upon the satisfaction of the quality report on the construction of the sewage plant, provided that there is no issues as to the quality of the construction of the sewage plant.
The payment of the consideration will be funded by internal resources of the Group.
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Supply of construction
materials:
Period of warranty:
Huaye shall procure the purchase of materials for the construction of the sewage plant, except for the steel, concrete, bricks and other materials stated in the construction contract, which shall be supplied by Golden Corn.
The agreed material costs incurred by Golden Corn for the procurement of the construction material shall be deducted from the contract sum in accordance with the terms and conditions set out in the construction contract.
Two years (commencing from the completion, examination and acceptance of the construction work).
CONSTRUCTION CONTRACT II:
The principal terms of the Construction Contract II are set out below:
Date of the construction | 12 April 2019 |
contract: | |
Parties: | Golden Corn Biotech, and |
Huaye, as the contractor. | |
Scope of construction | The construction of factory and ancillary facilities at the |
services: | production site located at the Shouguang production complex. |
The scope of construction services includes but not limited to the | |
civil engineering works in connection with the construction of raw | |
material workshop, packaging workshops, refinery workshop and | |
finished goods warehouses. | |
The construction work is expected to be completed by the end of | |
2019. | |
Contract sum: | The contract sum payable by Golden Corn Biotech is |
RMB96,000,000, which includes the cost of the civil engineering | |
works in connection with the construction of various workshops | |
and warehouses as stated in the construction contract, subject to | |
the adjustments in connection to the changes in the design and/ | |
or the construction work, the specified contract rebate rate stated | |
in the construction contract and other factors as agreed by both | |
parties. | |
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The contract sum was determined based on the terms of the open tender and after the arm's length negotiations among the parties thereto with reference to the expected scope and complexity of the construction works to be carried out, the material costs and labour costs estimated to be incurred, and the prevailing market prices for carrying out construction works of comparable scale and complexity.
Payment terms:Monthly progress payment
Huaye will, on or before 20th day of each month, according to the actual work progress of the civil engineering works in connection with the construction of the various workshops and warehouses, issue a monthly payment request to Golden Corn Biotech with the monthly progress payment entitled to them stated therein. The monthly progress payment, after deduction of the contract rebate and the cost of material provided by Golden Corn Biotech ("monthly progress payment"), shall be payable by Golden Corn Biotech in the following manner:
(i)70% of the monthly progress payment shall be payable by Golden Corn Biotech on or before the 20th day of the following month;
(ii)the remaining 30% of the monthly progress payment shall be held up and settled in the manner as more particularly stated in the subsection headed "Final Payment" below.
Final payment
Upon the completion of the construction of the civil engineering works in connection with the construction of the various workshops and warehouses as stated in the construction contract, the remaining 30% of all monthly progress payments ("balance of the progress payment") shall be payable by Golden Corn Biotech in the following manner:
(iii)The first 20% of the balance of the progress payment shall be payable after the completion of the audit of final accounts; and
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