DREAM INTERNATIONAL LIMITED Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
International
Limited
DREAM INTERNATIONAL LIMITED(Incorporated in Hong Kong with limited liability)
(Stock Code: 1126)
CONTINUING CONNECTED TRANSACTIONS RENEWAL OF TENANCY AGREEMENT
Reference is made to the announcement of the Company dated 1 August 2014 regarding the Current TA
entered into by Dream INKO and C & H relating to the rental of Premises in Korea from C & H.
On 31 July 2015, Dream INKO, as the tenant, entered into the New TA with C & H, as the landlord, for renewal of the Current TA for a term of one year commencing on 1 August 2015 and ending on 31 July
2016.
Mr. Kyoo Yoon Choi, being the Chairman, Chief Executive Officer and the controlling shareholder of the Company, together with his wife, Mrs. Woul Hee Cha, hold approximately 61.95% of the issued share capital of C & H. According to the Listing Rules, C & H is an associate of Mr. Kyoo Yoon Choi and thus a connected person of the Company.
The transactions contemplated under the New TA shall constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Since the aggregate charges payable by the Company under the New TA for the relevant years represent less than 5% for the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rules) in respect of the Company, the transactions are subject to the reporting and announcement requirements but exempted from Independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.
Reference is made to the announcement of the Company dated 1 August 2014 regarding the Current TA (the "Announcement"). Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as those used in the Announcement.
On 1 August 2014, Dream INKO and C & H entered into the Current TA relating to the rental of Premises in
Korea by Dream INKO from C & H.
On 31 July 2015, Dream INKO, as the tenant entered into the New TA, with C & H, as the landlord, for renewal of the Current TA for a term of one year commencing on 1 August 2015 and ending on 31 July 2016.
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Mr. Kyoo Yoon Choi, being the Chairman, Chief Executive Officer and the controlling shareholder of the Company, together with his wife, Mrs. Woul Hee Cha, hold approximately 61.95% of the issued share capital of C & H. According to the Listing Rules, C & H is an associate of Mr. Kyoo Yoon Choi and thus a connected person of the Company.
The transactions contemplated under the New TA shall constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Accordingly, the Company makes this announcement in accordance with Chapter 14A of the Listing Rules.
31 July 2015
Parties
(1) C & H, as the landlord
(2) Dream INKO, as the tenant
C & H is an associate of Mr. Kyoo Yoon Choi and thus a connected person of the Company under the Listing
Rules. The principal business activities of the C & H Group are sale of toy and tarpaulin products.
Dream INKO was the previous plush toys business arm of C & H. It became the wholly-owned subsidiary of the Group since 18 July 2003. Since then, it has been continuing to specialize in design, development and trading of the plush toys business of the Group.
Floors 9th and 10th, and part of the 1st and 3rd basements of C & H Building, 154-8, Samsung-Dong, Gangnam-Gu, Seoul, Korea used as business office of Dream INKO (total gross floor area of 1,917 square meters).
TermFrom 1 August 2015 to 31 July 2016 (both dates inclusive)
Rental and administrative expensesTotally Korean Won 37,221,940 (approximately equivalent to HK$260,548) per month for the period from 1 August 2015 to 31 July 2016 including rental payment of Korean Won 20,674,620 (approximately equivalent to HK$144,719) per month, which shall be payable in cash to the landlord on or before the last day of each month and administrative expense of Korean Won 16,547,320 (approximately equivalent to HK$115,829) per month which shall be payable in cash to the landlord fifteen days before the start of each month.
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The amounts of rental and administrative expenses have been determined at the rates comparable to other independent tenants in the same building. Rental payment will be paid out of the Group's internal resources.
Caps of Charges
The aggregate charges payable by the Group under the Current TA and the New TA from 1 January 2015 to
31 July 2016 are as follows:-
1 January 2015 to 31 December 2015 Korean Won 443,286,620 (approximately equivalent to
HK$3,102,944)
1 January 2016 to 31 July 2016 Korean Won 260,553,580 (approximately equivalent to
HK$1,823,839)
The above aggregate charges are derived from the fixed amount of the total rental and administrative expenses under the Current TA and the New TA, where applicable, for the lease period proportionally. The Directors (including the independent non-executive Directors) have determined the above caps on the basis of the relevant charges (namely rental and administrative expenses) as set out in the Current TA and the New TA.
Dream INKO, which was the previous plush toys business arm of C & H, has been occupying the Premises owned by C & H before and after its acquisition by the Group on 18 July 2003. In order to avoid unnecessary moving cost and business interruption, the Board considered it most favourable for Dream INKO to retain the existing Premises and to renew the Current TA. The administrative expenses represent utilities, building management fee and other office administrative services provided by C & H and they are determined by total rental area. The caps for rental and administrative expenses payable under the Current TA and the New TA will be Korean Won 443,286,620 (approximately equivalent to HK$3,102,944) and Korean Won 260,553,580 (approximately equivalent to HK$1,823,839) for the years 2015 and 2016 respectively. The terms of the New TA are on terms substantially the same as those of the Current TA, and are comparable to the terms offered to other independent tenants in the same building. The New TA will be subject to renewal upon its expiry and the Company will ensure compliance with the Listing Rules requirements upon renewal of the New TA.
The Directors (including the independent non-executive Directors) consider that the New TA is made on normal commercial terms and on terms no less favourable to the Group than those available from independent third parties, the terms are fair and reasonable and in the ordinary and usual course of business of the Group, and are in the interests of the Group and the Shareholders as a whole.
Except for Mr. Kyoo Yoon Choi, none of the Directors have any material interest in the transactions. Mr. Kyoo Yoon Choi has abstained from voting on the Board resolution(s) approving the renewal of the New TA.
Mr. Kyoo Yoon Choi, being the Chairman, Chief Executive Officer and the controlling shareholder of the Company, together with his wife, Mrs. Woul Hee Cha, hold approximately 61.95% of the issued share capital of C & H. According to the Listing Rules, C & H is an associate of Mr. Kyoo Yoon Choi and thus a connected person of the Company.
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The transactions contemplated under the New TA shall constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Since the aggregate charges payable by the Company under the New TA for the relevant years represent less than 5% for the applicable percentage ratios (as defined under Rule 14.07 of the Listing Rule) in respect of the Company, the entering into the New TA is subject to reporting and announcement requirements, but is exempt from the Independent Shareholders' approval requirement under Rule 14A.34 of the Listing Rules.
INFORMATION ON THE GROUPThe principal business of the Group is the design, development, manufacture and sale of plush stuffed toys, ride-on toys and plastic figures.
DEFINITIONS
In this announcement, the following expressions have the meanings set out below unless the context requires otherwise.
"associate(s)", "connected person(s)" and "controlling shareholder"
have the meanings ascribed to them in the Listing Rules
"Board" the board of Directors
"C & H Group" C & H and its subsidiaries
"C & H" C & H Co., Ltd., a limited liability company incorporated in Korea, of which approximately 61.95% of the issued share capital were held by Mr. Kyoo Yoon Choi and his wife
"Company" Dream International Limited, a company incorporated in Hong Kong with limited liability whose Shares are listed on the Main Board of the Stock Exchange
"Current TA" the current office lease agreement dated 1 August 2014 entered into by
C & H and Dream INKO in respect of the Premises for the period of
1 August 2014 to 31 July 2015 "Directors" the directors of the Company
"Dream INKO" Dream INKO Co., Ltd., a limited liability company incorporated in Korea, which is a wholly-owned subsidiary of the Company
"Group" the Company and its subsidiaries
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"HK$" Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong" the Hong Kong Special Administrative Region of the People's Republic of
China
"Independent Shareholders" Shareholders other than Mr. Kyoo Yoon Choi and its associates
"Korea" the Republic of Korea
"Korean Won" Korean Won, the lawful currency of Korea
"Listing Rules" the Rules Governing the Listing of Securities on the Stock Exchange
"New TA" the new office lease agreement dated 31 July 2015 entered into by C & H
and Dream INKO in respect of the Premises for the period of 1 August
2015 to 31 July 2016
"Premises" the subject premises of the Current TA and the New TA of Floors 9th and
10th, and part of the 1st and 3rd basements of C & H Building, 154-8, Samsung-Dong, Gangnam-Gu, Seoul, Korea
"Shareholder(s)" holder(s) of the Share(s)
"Shares" ordinary shares in the capital of the Company "Stock Exchange" The Stock Exchange of Hong Kong Limited "%" per cent
By order of the Board
Executive Director
Hong Kong, 31 July 2015
As at the date of this announcement, the Directors are:
Executive Directors
Mr. Kyoo Yoon Choi (Chairman)
Mr. Young M. Lee
Mr. James Chuan Yung Wang
Mr. Hyun Ho Kim
Independent Non-executive Directors
Professor Cheong Heon Yi Professor Byong Hun Ahn Mr. Tae Woong Kang
The rate of HK$1 = Korean Won 142.86 is adopted for illustration purpose in this announcement.
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