09:38 DICKSON CONCEPT<00113> - Announcement (4) RELATIONSHIP BETWEEN THE PARTIES As each of Dickson Investment, Precision Watch, Top Creation, S.T. Dupont Marketing and Tommy Hilfiger Marketing is an associate of Mr. Dickson Poon, a Director and substantial shareholder of the Company as disclosed in the "General" section below, each of these parties is deemed to be a connected person for the purpose of the Listing Rules. Agreements Nos. 1 to 5 therefore constitute continuing connected transactions of the Company under Rule 14A.14 of the Listing Rules. INDEPENDENT SHAREHOLDERS' APPROVAL NOT REQUIRED Given that the total of the annual rental and licence fees payable/receivable by the Group under Agreements Nos. 1 to 5 represents less than 2.5 per cent. of the applicable percentage ratios of the Company, Agreements Nos. 1 to 5 are subject to reporting, announcement and annual review requirements under Rules 14A.45 to 14A.47 and Rules 14A.37 to 14A.40 of the Listing Rules respectively and no Independent Shareholders' approval is required. GENERAL The Company is an investment holding company and the Group is principally engaged in the sale of luxury goods with over 380 retail outlets throughout Asia. In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: "Artland Group" Artland Watch Company Limited, a company incorporated in Hong Kong with limited liability and wholly-owned by Mr. Dickson Poon and together with its subsidiary companies "associate(s)" has the meaning as ascribed under the Listing Rules "Board" the board of Directors "Company" Dickson Concepts (International) Limited, a company incorporated in Bermuda with limited liability, the shares of which are listed on the Stock Exchange "DTG Group" Dickson Trading (S) Pte Ltd, a company incorporated in Singapore with limited liability and wholly-owned by Mr. Dickson Poon and together with its group companies "Dickson Investment" Dickson Investment (Singapore) Pte. Ltd., a company incorporated in Singapore with limited liability, the principal activities of which are the leasing out of its leasehold shopping units and investment holding. Dickson Investment is a member of the DTG Group and is wholly-owned by Mr. Dickson Poon "Dickson Stores" Dickson Stores Pte Ltd, a company incorporated in Singapore with limited liability, the principal activities of which are the retailing of consumer goods. Dickson Stores is wholly-owned by the Company "Director(s)" the director(s) of the Company "Group" the Company and its subsidiary companies "Hong Kong Seibu Enterprise" Hong Kong Seibu Enterprise Company Limited, a company incorporated in Hong Kong with limited liability, the principal activity of which is the operation of and investing in department stores in Hong Kong. Hong Kong Seibu Enterprise is wholly-owned by the Company "Independent Shareholders" shareholders of the Company, other than Mr. Dickson Poon and his associates "Langham Place Seibu Store" a department store at Langham Place, 8 Argyle Street, Kowloon, Hong Kong otherwise in the reasonable opinion of the Placing Agent makes it inexpedient or inadvisable or inappropriate for the Company or the Placing Agent to proceed with the CN Placing then and in any such case, the Placing Agent may terminate the CN Placing Agreement without liability to the Company by giving notice in writing to the Company, provided that such notice is received prior to 10:00 a.m. on the date of completion date of the CN Placing Agreement. Completion Completion of the CN Placing Agreement shall take place on the third business day following the date on which the conditions thereto are fulfilled (which shall take place on or before 31 March 2005) or in such other date as the Company and the Placing Agent shall agree. The Convertible Notes The terms of the Convertible Notes have been negotiated on arm's length basis and the principal terms of which are summarized below: Principal amount An aggregate of HK$60,000,000. Interest The Convertible Notes will bear interest at a rate of 3% per annum on the principal amount of the Convertible Notes outstanding, payable semi-annually. Maturity 3 years from the date of issue of the Convertible Notes. Denomination HK$50,000 each Conversion price The conversion price, subject to the adjustment, is HK$0.30 per New Share from the date of issue of the Convertible Notes to the date immediately before the first anniversary of date of issue of the Convertible Notes, HK$0.35 per New Share from the first anniversary of the date of issue of the Convertible Notes to the date immediately before the second anniversary of the date of issue of the Convertible Notes, and HK$0.40 per New Share from the second anniversary of the date of issue of the Convertible Notes to the Maturity Date. The conversion prices of the Convertible Notes are subject to adjustment provisions which as standard terms for convertible securities of similar type. The adjustment events will arise as a result of certain change in the share capital of the Company including consolidation or sub-division of Shares, capitalisation of profits or reserves, capital distributions in cash or specie or subsequent issue of securities in the Company. Assuming that the Consolidation becomes effective, the initial conversion price of HK$0.30 per New Share represents (i) a premium of about 3.45 over the closing price of HK$0.29 per New Share as quoted on the Stock Exchange on 31 January 2005, being the last trading day before this announcement; (ii) a premium of about 8.70% over the average of the closing price per New Share of HK$0.276 as quoted on the Stock Exchange for the last five trading days up to and including 31 January 2005, being the last trading day before this announcement; and (iii) a premium of about 5.26 to the average of the closing price per New Share of HK$0.285 as quoted on the Stock Exchange for the last ten trading days up to and including 31 January 2005, being the last trading day before this announcement. Conversion Each holder may convert the whole or part of the principal amount of the relevant Convertible Notes (in multiple of HK$50,000 at any one time of conversion) into New Shares unless the principal amount of the outstanding Convertible Notes are less than HK$50,000 in which case the whole (but not part only) of such outstanding principal amount of the Convertible Notes shall be converted. Assuming there is an immediately exercise in full of the conversion rights attaching to the Convertible Notes in the aggregate of HK$60 million at the conversion price of HK$0.30 per New Share by all holders of the Convertible Notes, the Company will issue an aggregate of 200,000,000 New Shares, representing (i) about 13.2 of the existing issued share capital of the Company of 1,517,484,600 New Shares; (ii) about 11.6 of the issued share capital of the Company of 1,717,484,600 New Shares as enlarged by the CN Placing and (iii) about 10.4 of the issued share capital of the Company of 1,917,484,600 New Shares as enlarged by the New Shares Placing and issue of 200,000,000 New Shares upon full conversion of the Convertible Notes at the conversion price of HK$0.30 each. Ranking The Conversion Shares will rank pari passu in all respects with all New Shares in issue at the date of the Conversion notice. Redemption by the Company The Company shall, at any time before the Maturity Date, have the option to redeem the Convertible Notes in whole or in part. The amount payable for any redemption shall be the aggregate of (i) the relevant amount of the principal amount of the Convertible Notes so redeemed; and (ii) interest accrued in respect of the relevant amount