Dreamland Ltd-A(TDIC) - 2025 Q4 - Annual Report

FORM 20-F Cover Page Registrant Information Dreamland Limited filed its Annual Report on Form 20-F for the fiscal year ended March 31, 2025, incorporated in the Cayman Islands with Class A Ordinary Shares listed on Nasdaq under TDIC - Dreamland Limited filed its Annual Report on Form 20-F for the fiscal year ended March 31, 2025[2] - The company is incorporated in the Cayman Islands and its Class A Ordinary Shares are registered on The Nasdaq Stock Market LLC under the symbol TDIC[2] Outstanding Shares and Filer Status | Metric | Value | | :--- | :--- | | Outstanding Class A Ordinary Shares (as of March 31, 2025) | 28,660,000 | | Filer Status | Non-accelerated filer, Emerging Growth Company | | Accounting Standards | International Financial Reporting Standards (IFRS) | TABLE OF CONTENTS The table of contents provides an overview of the report's structure and sections FORWARD-LOOKING STATEMENTS Disclaimer on Forward-Looking Statements This Annual Report contains forward-looking statements, which are projections about future events or results subject to various risks and uncertainties - Forward-looking statements are projections about future events or results, subject to many risks and uncertainties, and actual results may differ materially[11][12] - Investors should carefully review risk factors described in Item 3 and other SEC filings, as the company undertakes no obligation to publicly revise or update these statements[13] FINANCIAL STATEMENTS AND CURRENCY PRESENTATION Basis of Presentation The consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and published in Hong Kong Dollars - Consolidated financial statements are prepared in accordance with IFRS as issued by the IASB[15] - Financial statements are published in Hong Kong Dollars[15] - Amounts, percentages, and other figures may be subject to rounding adjustments[16] REFERENCES Definitions and Subsidiaries This section defines key terms and outlines the corporate structure, identifying Trendic International Limited as the indirect wholly-owned operating subsidiary - The terms 'we,' 'our,' 'us,' and the 'Company' refer to Dreamland Limited and its direct and indirect subsidiaries[18] - Trendic International Limited (Hong Kong) is the indirect wholly-owned operating subsidiary, while Goal Success Global Limited (British Virgin Islands) is a direct wholly-owned subsidiary[18] - The Initial Public Offering (IPO) closed on July 23, 2025, involving the sale of 2,000,000 Class A Ordinary Shares at US$4.00 per share, totaling US$5,360,000 in gross proceeds[19] PART I Item 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS This item is marked as 'Not Applicable' in the report, indicating no specific information is provided under this section Item 2. OFFER STATISTICS AND EXPECTED TIMETABLE This item is marked as 'Not Applicable' in the report, indicating no specific information is provided under this section Item 3. KEY INFORMATION This section outlines key information, including reasons for the offer, capitalization, indebtedness, and comprehensive risk factors C. Reasons for the Offer and Use of Proceeds This sub-item is marked as 'Not applicable,' indicating no information regarding the reasons for the offer or use of proceeds D. Risk Factors The company faces significant risks, including business model transition, customer concentration, operational dependencies, and regulatory uncertainties - The company is transitioning into a new business model, shifting from a pure service provider to an event organizer and investor, which makes future financial results difficult to evaluate[24][27] - The company faces significant customer concentration risk, with its largest customer accounting for 20.4% of net revenue in FY2025, down from 66.5% in FY2024[29][32][253] - The business is highly dependent on its management team, particularly CEO Ms. Seto, and the ability to retain them and attract qualified personnel is critical for success[33][35] - The company relies heavily on third-party vendors for event facilitation, temporary workers, and merchandise production, posing risks of service disruption, quality issues, and cost increases[55][56][58] - The company identified 12 material weaknesses in its internal control over financial reporting, including management override of controls, reliance on manual accounting records, inadequate control over related party transactions, and improper revenue recognition[78][79][80][81][82][83] - Operating in Hong Kong exposes the company to political, economic, regulatory, and social uncertainties, as well as potential PRC government oversight that could impact operations and share value[89][90][91][92][93][94][95][96] - The market price of Class A Ordinary Shares may be volatile due to various factors, including fluctuations in operating results, analyst coverage, and overall market trends, potentially leading to significant losses for investors[129][130][131] A. Reserved This sub-item is marked as 'Reserved,' indicating no information is provided under this section B. Capitalization and Indebtedness This sub-item is marked as 'Reserved,' indicating no information is provided under this section Item 4. INFORMATION ON THE COMPANY This section details the company's corporate history, structure, business overview, strategies, operations, and competitive landscape CORPORATE HISTORY AND STRUCTURE Dreamland Limited was incorporated in the Cayman Islands on July 5, 2024, as a holding company, with Trendic International Limited becoming its indirect wholly-owned operating subsidiary - Dreamland Limited was incorporated in the Cayman Islands on July 5, 2024, as an exempted company with limited liability[172][173] - Through a group reorganization on March 6, 2025, Trendic International Limited (Hong Kong) became an indirect wholly-owned subsidiary[177][185] - The company has a dual-class share structure: Class A Ordinary Shares (one vote per share) and Class B Ordinary Shares (twelve votes per share)[180][439][470][471] - Ms. Seto, the CEO, beneficially owns 70.81% of Class A Ordinary Shares and 100% of Class B Ordinary Shares, representing an aggregate voting power of 79.13%[146][179][442] BUSINESS OVERVIEW Dreamland Limited is a Hong Kong-based event management service provider specializing in themed touring walk-through experience events involving IP licenses, also offering design and merchandising services - The company specializes in organizing, planning, promoting, and managing themed touring walk-through experience events for IP owners, alongside design and merchandising services[187][188] - Post-COVID-19, the business model evolved to include direct investment deals for experience events and pure investment deals, with a long-term goal to obtain IP licenses directly[191][218][221] - Key competitive strengths include an established reputation, ability to manage the entire event lifecycle, experienced management team (led by Ms. Seto), strong network of service providers, creative offerings, and ownership of an event venue[193][194][195][196][197][198][199] Our Business Strategies The company plans to expand its market share by moving up the value chain to an event organizer, directly investing in events, and obtaining multi-territorial IP licenses - Strategic goals include moving up the value chain to become an event organizer by obtaining multi-territorial IP licenses directly from IP owners[201][246] - Plans involve building a proprietary ticketing platform to facilitate direct marketing, collect comprehensive attendee engagement data, and inform future IP acquisition and event planning[201][247] - The company aims to expand its project, finance, administration, sales, marketing, and IT departments, and upgrade its ERP system[201] Our Services The company offers comprehensive event management, design, and merchandising services, covering the entire event lifecycle from planning to post-event evaluation - Services span the entire event lifecycle, from initial research and conceptualization to post-event follow-up and evaluation[201][207] - Key service areas include event planning, venue selection, ticketing, marketing, sponsorship, schematic design, merchandise design and production, food and beverage arrangements, and logistical coordination[201][207] Our Business Model The core business revolves around experience events, with a shift towards acting as an investor/co-investor in direct investment deals, alongside design and merchandising services - The company's core business is organizing, planning, promoting, and managing experience events, typically involving IP licenses[204][206] - A growing trend involves the company engaging in direct investment deals for experience events, acting as an effective investor or co-investor, absorbing production costs, and taking all revenue[218][220][225] - The company also provides design services for merchandise (apparel, stationery, figurines) and merchandising services, selling finished goods at cost-plus pricing[222][223] Event management for brands The company directly assists brand owners with event organization, planning, promotion, and management, compensated by an agreed service fee - The company provides event management services directly to brand owners, including organization, planning, promotion, and management[228] - Compensation is typically an agreed service fee, paid in two non-refundable installments[228] - For events with product sales (e.g., pop-up stores), the company can manage sales and report back to brand owners[228] Our Operations The company's operations for experience events are structured into four phases: Planning, Pre-event preparation, Managing the experience event, and Post-event - Operations are divided into four phases: Planning, Pre-event preparation, Managing the experience event, and Post-event[229] - The Planning phase involves research, brainstorming, venue selection, and preparing detailed plans (ticketing, marketing, sponsorship, schematic design, merchandising, F&B, operation) for IP owner approval[230][231][232][233] - Pre-event preparation includes liaising with parties, commissioning merchandise, logistics, obtaining permits, executing marketing, commencing ticket sales, and training crew[239] - Event management involves media days, official opening ceremonies, supervising crew, and daily sales reconciliation[242][243] - Post-event activities include evaluating the event, preparing reports for IP owners, and collecting monies due from third parties[244] Our Growth Strategies The company's growth strategies focus on moving up the value chain to become an event organizer by directly investing in experience events and acquiring multi-territorial IP licenses - The primary growth strategy is to transition from an event planner to an event organizer by directly investing in experience events and obtaining multi-territorial IP licenses[246] - The company plans to build its own ticketing platform to facilitate direct marketing, capture full engagement data on event attendees, and use this data to inform future IP acquisitions and event planning, thereby reducing investment risks[247] - Upfront capital investment for acquiring multi-territorial IP licenses is planned to be financed by proceeds from the public offering[246] Pricing Model Pricing for services, tickets, merchandise, and F&B is determined by estimated costs, complexity, market demand, labor trends, competitor pricing, and expected margins - Pricing for event management services, tickets, interactive opportunities, merchandise, and F&B considers estimated execution time costs, event complexity, unreimbursed third-party costs, market demand, labor trends, competitor prices, and expected margins[248] - Design fees are based on similar factors, including the extent of design utilization by customers[249] - Finished merchandise is typically sold to customers at cost-plus pricing, factoring in raw material quality, technical complexity, production costs, and expected margins[251] Customers Customers shifted from event organizers to event sponsors and individual attendees with the company's move to direct investment deals, operating on a project-by-project basis - Before April 2024, customers were mainly event organizers and other Hong Kong-based enterprises[252] - Since April 2024, with direct investment deals, customers are primarily event sponsors and individual event attendees[253] - The company operates on a project-by-project basis without long-term contracts[252] Customer Revenue Concentration | Fiscal Year Ended March 31 | Largest Customer (% of Net Revenue) | Top Three Customers (% of Net Revenue) | | :------------------------- | :---------------------------------- | :------------------------------------ | | 2023 | 66.4% | 89.6% | | 2024 | 66.5% | 88.8% | | 2025 | 20.4% | 51.0% | Sales and Marketing Sales and marketing efforts primarily rely on maintaining strong customer relationships, customer referrals, and word-of-mouth, with CEO Ms. Seto playing a crucial role - Sales and marketing rely on customer referrals and word-of-mouth[255] - Ms. Seto, CEO, is responsible for building and maintaining customer relationships and identifying business opportunities[255] Suppliers The company's suppliers include local facilitators, HR companies, venue operators, PR firms, and merchandise manufacturers, with no long-term contracts and significant cost concentration among a few vendors - Suppliers include local facilitators, HR companies, venue operators, PR firms, and merchandise manufacturers[256] - No long-term contracts are in place with suppliers; purchases are on a case-by-case basis[56][256] Supplier Concentration (Cost of Goods Sold) | Fiscal Year Ended March 31 | Cost of Goods Sold (% of Total Cost of Revenue) | Top Five Suppliers (% of Total Cost of Goods Sold) | Largest Supplier (% of Total Cost of Goods Sold) | | :------------------------- | :---------------------------------------------- | :------------------------------------------------- | :----------------------------------------------- | | 2023 | 28.3% | 85.0% | 43.3% | | 2024 | 44.6% | 78.9% | 20.7% | | 2025 | 26.5% | 75.0% | 50.6% | Employees As of March 31, 2025, the company employed 12 full-time staff across various functions, all local and not covered by collective bargaining agreements Employee Count by Function (as of March 31, 2025) | Function | Total | | :------------------------ | :---- | | Management | 1 | | Project | 5 | | Design and merchandising | 5 | | Finance and administration| 1 | | Total | 12 | - All employees are local and not covered by collective bargaining agreements[258] - The company hires temporary workers through human resources companies for event management as required[259] Intellectual Property The company operates under the 'Trendic' brand and relies heavily on IP licenses for events, committed to protecting IP owners' rights, with no known material infringement claims - The company operates under the brand name 'Trendic' and has registered its domain name, but does not hold any registered trademarks[260] - The business is substantially dependent on IP licenses for events, and the company is committed to protecting IP owners' rights through compliance and contractual agreements[261] - No material IP infringement proceedings or claims are currently known to be threatened or pending against the company[262] Real Property The company does not own any real property, operating from three leased premises in Hong Kong, including a head office, an event venue, and a café - The company does not own any real property[263] Leased Premises in Hong Kong | Location | Usage | Lease Period | Monthly Rent | Approximate Gross Floor Area | | :---------------------------------------- | :---------------- | :---------------------------- | :----------------------------------------- | :--------------------------- | | Room 1705, 17 Floor, PeakCastle | Head office | July 19, 2024 to July 18, 2026| HK$41,100 | 1,790 square feet | | Shop 1, 4 Floor, iSQUARE | Event venue | June 5, 2024 to September 16, 2025 | HK$1 base rent plus turnover rent | 9,593 square feet | | Shop 4, 3 Floor, iSQUARE | Café for event venue | June 11, 2024 to September 16, 2025 | HK$10,000 base rent plus turnover rent | 1,917 square feet | Insurance The company maintains various insurance policies for content, business interruption, and public liability, but does not carry 'key person' or product liability insurance - The company maintains various insurance policies including content and stock, business interruption, money, employees' compensation, and public liability[264] - For direct investment deals, the company is responsible for taking out all insurance policies covering the events[264] - The company does not carry 'key person' or product liability insurance[264] Competition The Hong Kong events industry is highly fragmented and competitive, with the company specializing in niche experience events, facing competition from local event management companies - The events industry in Hong Kong is highly fragmented, intensely competitive, and characterized by constant change and innovation[265] - The company specializes in the niche sector of experience events, competing with local event management companies experienced in IP-licensed public events and potentially global entrants[266] - Principal competitive factors include breadth and depth of services, pricing, user experience, financial viability, industry expertise, reputation, track record, and relationships with industry players[267] Litigation and Other Legal Proceedings As of the report date, the company is not involved in any material claims, litigation, or arbitration that could adversely affect its business - The company is not currently party to any material claims, litigation, or arbitration[268] - No material legal proceedings are known to be pending or threatened against the company[268] Item 4A. UNRESOLVED STAFF COMMENTS This item is marked as 'Not Applicable' in the report, indicating no unresolved staff comments Item 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS This section provides a detailed discussion and analysis of the company's financial condition and results of operations for the fiscal years ended March 31, 2023, 2024, and 2025 Overview Dreamland Limited, a Hong Kong-based event management service provider, experienced significant revenue growth post-COVID-19, driven by a shift to event organizer and investment roles - The company is an event management service provider specializing in themed touring walk-through experience events for IP owners, also offering design and merchandising services[274][275] - The business model shifted in FY2025 to include roles as an event organizer and investor[277] Net Revenue and Net Profit/(Loss) Overview | Fiscal Year Ended March 31 | Net Revenue (HKD) | YoY Growth (%) | Net Profit/(Loss) (HKD) | | :------------------------- | :---------------- | :------------- | :---------------------- | | 2023 | 3,615,137 | - | (482,783) | | 2024 | 20,440,683 | 465% | 7,088,874 | | 2025 | 45,804,377 | 124.1% | 6,425,533 | Description and Analysis of Principal Components of Our Results of Operations for the year ended March 31, 2024 and 2025 For FY2025, total revenue significantly increased by 124.1% to HK$45.8 million, primarily due to the company acting as an event organizer/co-organizer, boosting income from ticket sales, sponsorship, and video production Consolidated Results of Operations (FY2024 vs FY2025) | Metric | FY2024 (HKD) | FY2025 (HKD) | Change (HKD) | Change (%) | | :-------------------------------------- | :------------- | :------------- | :------------- | :--------- | | Total Revenues, net | 20,440,683 | 45,804,377 | 25,363,694 | 124.1% | | Cost of revenue | (11,360,489) | (33,565,785) | (22,205,296) | 195.5% | | Selling, general and administrative expenses | (666,286) | (7,319,454) | (6,653,168) | 998.6% | | Research and development | - | (760,000) | (760,000) | N/A | | Amortization | - | (2,560,667) | (2,560,667) | N/A | | Impairment of rights of use assets | - | (111,136) | (111,136) | N/A | | Depreciation | (294,083) | (449,514) | (155,431) | 52.8% | | Profit from operations | 8,119,825 | 773,472 | (7,346,353) | (90.5%) | | Total other income/(expenses), net | (42,604) | 6,752,061 | 6,794,665 | (15948.4%) | | Profit before income taxes | 8,077,221 | 7,525,533 | (551,688) | (6.8%) | | Income tax expense | (988,347) | (1,100,000) | (111,653) | 11.3% | | NET PROFIT | 7,088,874 | 6,425,533 | (663,341) | (9.4%) | - Revenue increase was mainly due to the company acting as event organizer/co-organizer, enhancing income from ticket sales, sponsorship, and video production[285] - General and administrative expenses increased significantly due to IPO listing fees (HK$3.5 million), increased staff costs, and business expansion[287][651] - Other income increased substantially due to gains on disposal of intangible assets (HK$6.15 million) and investments in event projects (HK$0.81 million)[292][648] Liquidity and Capital Resources The company's liquidity is primarily met through cash from operations, supplemented by bank loans and IPO proceeds, with significant cash used in operating and investing activities in FY2025 - Liquidity is primarily sourced from operations, bank loans, and IPO proceeds[295] Cash Flow Summary (FY2024 vs FY2025) | Cash Flow Activity | FY2024 (HKD) | FY2025 (HKD) | | :---------------------------------- | :----------- | :----------- | | Net cash provided by/(used in) operating activities | 8,281,946 | (15,992,733) | | Net cash used in investing activities | (110,860) | (14,765,561) | | Net cash provided by/(used in) financing activities | (4,682,217) | 44,076,930 | | Net change in cash and cash equivalent | 3,488,869 | 13,318,636 | | Cash and bank balances, end of period | 3,817,083 | 17,135,719 | - Net cash used in operating activities in FY2025 was primarily due to increases in accounts and other receivables, deposits and prepayments, and contract assets[298] - Net cash used in investing activities in FY2025 was mainly due to the acquisition of intangible assets (HK$9.27 million) and cash paid for event project investments (HK$8.49 million)[300] - Net cash provided by financing activities in FY2025 was significantly boosted by proceeds from an investment partner (HK$30.1 million) and bank overdrafts (HK$15.14 million)[303] - As of March 31, 2025, the company has outstanding commitments for investments in event projects totaling HK$12,798,092[306] Key Factors Affecting our Results of Operations The company's operating results are influenced by economic conditions in Hong Kong and Asian markets, customer demand, dependence on key customers and vendors, and staff cost management - Economic conditions in Hong Kong and Asian markets significantly affect revenue due to consumer spending habits on events and IP products[308] - Dependence on key customers and limited vendors for event facilitators and IP products pose risks to revenue and costs[308] - The performance of co-organizers/joint operation parties and the ability to manage staff costs are critical factors impacting financial results[308] Off-Balance Sheet Transactions As of March 31, 2025, the company has not entered into any material off-balance sheet transactions or arrangements, financial guarantees, or derivative contracts - As of March 31, 2025, the company has not entered into any material off-balance sheet transactions or arrangements[309] - No financial guarantees, derivative contracts indexed to own shares, or retained/contingent interests in assets transferred to unconsolidated entities exist[310] Critical Accounting Policies and Estimates The company's financial statements are prepared under IFRS, requiring significant management estimates for revenue recognition, doubtful accounts, and income tax provisions - Financial statements are prepared in accordance with IFRS, requiring significant estimates and judgments for revenue recognition, doubtful accounts, and income tax[311][357] - Interests in joint operations are recognized based on the profit-sharing ratio for assets, liabilities, revenues, and expenses[311][312] - Investment on event projects are recorded at cost less impairment, similar to equity accounting, for projects where the Group does not involve event operations but has a return based on profit/loss percentage[314][315] - Revenue recognition follows a five-step model under IFRS 15, distinguishing between event management services (recognized over time), sales of goods/tickets (at a point in time), sponsorship (over event period), and design services (over time)[315][316][317][318][319][320][322][323][324][325][326] Quantitative and Qualitative Disclosures about Market Risk The company is exposed to credit risk from cash equivalents and accounts receivable, with minimal interest rate risk, but significant economic and political risks in Hong Kong - Credit risk arises from cash equivalents and accounts receivable; management monitors creditworthiness and maintains allowances for doubtful accounts[328][329][330] - The company has no significant interest-bearing assets, making its income and operating cash flows substantially independent of market interest rate changes[332] - Operations in Hong Kong expose the company to economic and political risks in the region[333] - Liquidity risk is managed by ensuring sufficient cash and, if necessary, obtaining short-term funding from financial institutions and related parties[334] Description and Analysis of Principal Components of Our Results of Operations for the years ended March 31, 2023 and 2024 For FY2024, total net revenue surged by 465% to HK$20.4 million, primarily due to the revival of in-person events post-COVID-19, leading to a significant turnaround from a net loss in FY2023 Consolidated Results of Operations (FY2023 vs FY2024) | Metric | FY2023 (HKD) | FY2024 (HKD) | Change (HKD) | Change (%) | | :-------------------------------------- | :------------- | :------------- | :------------- | :--------- | | Total Revenues, net | 3,615,137 | 20,440,683 | 16,825,546 | 465.4% | | Cost of revenue | (3,262,588) | (11,360,489) | (8,097,901) | 248.2% | | General and administrative expenses | (490,636) | (666,286) | (175,650) | 35.8% | | Depreciation | (206,006) | (294,083) | (88,077) | 42.7% | | Profit/(Loss) from operations | (344,093) | 8,119,825 | 8,463,918 | (2459.8%) | | Total other income/(expenses), net | (138,690) | (42,604) | 96,086 | (69.3%) | | Profit/(Loss) before income taxes | (482,783) | 8,077,221 | 8,560,004 | (1773.1%) | | Income tax expense | - | (988,347) | (988,347) | N/A | | NET PROFIT/(LOSS) | (482,783) | 7,088,874 | 7,571,657 | (1568.4%) | - The significant revenue increase in FY2024 was primarily due to the end of COVID-19 pandemic lockdown policies, leading to a revival of in-person events and increased event management and goods sales[337] - The company transitioned from a net loss of HK$0.48 million in FY2023 to a net profit of HK$7.09 million in FY2024[344] - Other income/(expenses) decreased in net expense due to government grants related to anti-epidemic funding and technology voucher programs[342] Liquidity and Capital Resources (2023-2024) For FY2024, net cash generated from operating activities was HK$8.3 million, a significant improvement from a net cash outflow in FY2023, driven by increased net profit and contract liabilities - Net cash generated from operating activities was HK$8.3 million in FY2024, a turnaround from HK$0.24 million used in FY2023[348][349] - Net cash used in investing activities was HK$0.11 million in FY2024, primarily for equipment purchases[350] - Net cash used in financing activities was HK$4.7 million in FY2024, mainly due to a net increase in amounts due from a shareholder and repayment of bank borrowings and lease liabilities[352] - The company had no capital commitments as of March 31, 2023 and 2024[354] Key Factors Affecting our Results of Operations (2023-2024) The company's financial performance is influenced by economic conditions in Hong Kong and Asian markets, dependence on key customers and vendors, and staff cost management - Economic conditions in Hong Kong and Asian markets impact revenue by affecting customer willingness to engage in events and purchase IP products[358] - Dependence on key customers and limited vendors for IP products and event facilitators pose risks to revenue and costs[358] - The ability to manage staff costs is a key factor affecting operating results[358] Off-Balance Sheet Transactions (2023-2024) As of March 31, 2024, the company had not entered into any material off-balance sheet transactions or arrangements, financial guarantees, or derivative contracts - As of March 31, 2024, the company had no material off-balance sheet transactions or arrangements[355] - No financial guarantees, derivative contracts, or retained/contingent interests in assets transferred to unconsolidated entities were reported[356] Critical Accounting Policies and Estimates (2023-2024) The financial statements are prepared under IFRS, requiring management estimates for revenue recognition, doubtful accounts, and income tax, with revenue recognized over time for services and at a point in time for goods - Financial statements are prepared in accordance with IFRS, involving significant estimates and judgments[357] - Revenue recognition follows a five-step model under IFRS 15, with event management services and design services recognized over time, and sales of goods at a point in time[359][360][361][362][363][364][366][367] Quantitative and Qualitative Disclosures about Market Risk (2023-2024) The company faces credit risk from cash equivalents and accounts receivable, low interest rate risk, and exposure to Hong Kong's economic and political conditions, with liquidity managed through cash and short-term funding - Credit risk is managed through ongoing monitoring of creditworthiness and allowances for doubtful accounts[369][370][371] - The company's income and operating cash flows are largely independent of market interest rates due to no significant interest-bearing assets[373] - Economic and political conditions in Hong Kong influence the company's business, financial condition, and results of operations[374] - Liquidity risk is controlled by maintaining sufficient cash and, if necessary, obtaining short-term funding from financial institutions and related parties[375] Item 6. DIRECTORS, SENIOR MANAGEMENT AND KEY EMPLOYEES This section details the company's directors, executive officers, and key employees, outlining their backgrounds, board committee structure, corporate governance, and compensation arrangements Directors and Executive Officers The management team includes Ms. Seto Wai Yue (CEO), Ms. Tse Sze Man (Director/Head of Design & Merchandising), Mr. Leung Tak Shun (CFO), and Mr. Luk Kai Chung (General Manager), all with extensive industry experience - Ms. Seto Wai Yue is the founder, CEO, and Director, responsible for overall business development and strategic planning, with over eight years of experience in the events industry[33][377] - Ms. Tse Sze Man is a Director and Head of Design & Merchandising, with over 15 years of experience in the design and merchandising industry[33][381][383] - Mr. Leung Tak Shun serves as Chief Financial Officer, bringing over 15 years of experience in auditing and accounting consulting services[33][397][398] - Mr. Luk Kai Chung is the General Manager, overseeing day-to-day operations and ensuring smooth and efficient functioning[33][394] Independent Directors The independent directors are Ms. Cheung Tan (Audit Committee Chair), Ms. Lui Yi Sin, Edith (Compensation Committee Chair), and Ms. Lee Wing Yin (Nomination Committee Chair), each bringing specialized expertise - Ms. Cheung Tan is an Independent Director and Chairman of the Audit Committee, designated as an 'audit committee financial expert' by the SEC[384][403] - Ms. Lui Yi Sin, Edith is an Independent Director and Chairman of the Compensation Committee[388][404] - Ms. Lee Wing Yin is an Independent Director and Chairman of the Nomination Committee[391][405] Key Employees Key employees include Mr. Luk Kai Chung, General Manager, and Mr. Leung Tak Shun, Chief Financial Officer, both possessing extensive experience in their respective fields - Mr. Luk Kai Chung, General Manager, oversees day-to-day operations and has experience in business development and administrative roles[394][395] - Mr. Leung Tak Shun, Chief Financial Officer, is responsible for financial functions, tax, corporate secretarial matters, financial reporting, and budget preparation, with over 15 years in auditing and accounting[397][399] Family Relationships There are no family relationships among any of the company's directors, executive officers, independent directors, and key employees - There are no family relationships among the company's directors, executive officers, independent directors, and key employees[400] Board Diversity The company aims for Board diversity by considering factors such as gender, skills, age, professional experience, and cultural background, with appointments based on merit and contribution - The company considers various factors for Board diversity, including gender, skills, age, professional experience, knowledge, cultural and educational background, ethnicity, and length of service[401] - Appointments are based on merit and the candidate's ability to contribute positively to the Board's collaborative culture and align with the company's growth strategy[401] Board Diversity Matrix (as of report date) | Category | Female | Male | Non-Binary | Did Not Disclose Gender | | :------------------------ | :----- | :--- | :--------- | :---------------------- | | Directors | 5 | - | - | - | | Demographic Background| | | | | | Asian | 5 | - | - | - | Committees of the Board of Directors The Board has established an Audit Committee, a Compensation Committee, and a Nomination Committee, each composed of independent directors, overseeing financial reporting, executive compensation, and board membership - The Board of Directors has established an Audit Committee, a Compensation Committee, and a Nomination Committee[402] - All members of these committees are independent directors, as defined by SEC and Nasdaq rules[403][404][405] - The Audit Committee is responsible for appointing auditors, reviewing financial statements, and overseeing internal controls. The Compensation Committee evaluates and recommends executive and director compensation. The Nomination Committee develops criteria for board membership and evaluates candidates[403][404][405] Controlled Company The company is a 'controlled company' under Nasdaq rules due to Ms. Seto's 79.13% voting power, allowing exemptions from certain corporate governance requirements, though not currently utilized - The company is a 'controlled company' as Ms. Seto holds 79.13% of the total voting power[406][442] - Controlled companies are exempt from certain Nasdaq corporate governance requirements, including having a majority independent board and independent compensation/nominating committees[407][410] - The company currently does not intend to rely on these exemptions but may do so in the future[408] Foreign Private Issuer Status As a foreign private issuer, the company follows Cayman Islands corporate governance practices, which differ from Nasdaq standards, allowing exemptions from certain requirements while maintaining an independent audit committee - As a foreign private issuer, the company follows Cayman Islands corporate governance practices, which differ from Nasdaq standards[411] - Exemptions include not requiring a majority independent board, non-management director meetings, independent compensation/nominating committees, and shareholder approval for certain equity compensation plans or dilutive issuances[415] - The audit committee complies with Rule 10A-3 of the Exchange Act, ensuring a fully independent audit committee[415] Corporate governance The company intends to adopt a formal policy on board diversity, considering various factors, and prioritizes selecting members who enhance shareholder interests and foster a collaborative environment - The company intends to adopt a formal policy on board diversity, considering factors such as race, gender, national origin, professional achievements, and industry knowledge[412] - The nominating and corporate governance committee and the Board prioritize selecting members who advance shareholder interests and foster a collaborative environment aligned with the growth strategy[412] Code of Conduct and Code of Ethics The company intends to adopt a written code of business conduct and ethics applicable to all directors, officers, and employees, with amendments and waivers disclosed as required - The company intends to adopt a written code of business conduct and ethics for directors, officers, and employees[413] - Amendments and waivers to the code will be disclosed on the company's website as required by applicable regulations[413] Compensation of Directors and Key Employees Compensation for directors and key employees includes fixed salaries, discretionary performance-based cash bonuses, and potential equity awards, with aggregate compensation increasing significantly in FY2025 Aggregate Compensation of Directors and Key Employees | Position | Fiscal Year Ended March 31 | Aggregate Salary (HK$) | Aggregate Compensation Paid Bonus (HK$) | Aggregate Other Compensation (HK$) | Total Aggregate Compensation (HK$) | | :----------------- | :------------------------- | :--------------------- | :-------------------------------------- | :--------------------------------- | :--------------------------------- | | All directors | 2025 | 1,662,000 | 94,000 | 275,373 | 2,031,373 | | | 2024 | 430,500 | 36,430 | 0 | 466,930 | | | 2023 | 271,847 | 8,380 | 0 | 280,227 | | All key employees | 2025 | 388,000 | 50,000 | 0 | 438,000 | | | 2024 | 252,000 | 4,000 | 0 | 256,000 | | | 2023 | 240,000 | 12,007 | 0 | 252,007 | - Bonuses are discretionary, based on contributions and company profitability[414] - Trendic entered into a savings insurance plan for Ms. Seto on August 30, 2024, with an initial payment of US$35,212 and four additional annual payments of US$40,000, for a notional/guaranteed maturity amount of US$200,000[417] Independent Directors' Agreements Each independent director has a one-year renewable agreement with a monthly fee of HK$10,000 and eligibility to participate in the company's share option scheme - Independent directors have one-year agreements, subject to re-election, with a monthly fee of HK$10,000[418][419] - Independent directors are entitled to participate in the 2025 Equity Incentive Plan, with the number and terms of options determined by the board[420] Employment Agreements The company has indefinite employment agreements with its directors and key managers, specifying annual or monthly base salaries and including non-competition or non-disclosure clauses - Ms. Seto's employment agreement with Trendic provides an annual base salary of HK$1,200,000 and includes a 12-month non-competition clause post-employment[423] - Mr. Leung Tak Shun's employment agreement with Trendic provides an annual base salary of HK$600,000 and includes a 12-month non-competition clause post-employment[424] - Ms. Tse and Mr. Luk Kai Chung have employment agreements with Trendic, specifying monthly base salaries (HK$35,000 and HK$20,000, respectively) and including non-disclosure clauses[425][426] 2025 Equity Incentive Plan The 2025 Dreamland Limited Equity Incentive Plan was adopted on June 5, 2025, to attract, retain, and incentivize personnel, allowing for awards of options, restricted shares, and restricted share units - The 2025 Equity Incentive Plan was adopted on June 5, 2025, to motivate, attract, and retain personnel[427] - The plan permits awards of options, restricted shares, and restricted share units[429] - The maximum aggregate number of Class A Ordinary Shares that may be issued under the plan is 6,000,000, representing 20% of the total issued and outstanding Class A Ordinary Shares on a fully-diluted basis[427] - The plan is administered by the Board or the Compensation Committee, which determines participants, award types, numbers, and terms[430] - No awards have been granted under the 2025 Equity Incentive Plan as of the date of this Annual Report[427] Indemnification Agreements The company entered into indemnification agreements with its directors and executive officers, effective June 30, 2025, to protect them against certain liabilities and expenses incurred in their roles - Indemnification agreements were entered into with directors and executive officers, effective June 30, 2025[437] - These agreements indemnify directors and executive officers against certain liabilities and expenses[437] - Indemnification for liabilities under the Securities Act is considered against public policy by the SEC and is therefore unenforceable[438] Item 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS This section details the beneficial ownership of the company's shares and outlines transactions with related parties, including Ms. Seto's controlling stake and various financial dealings Major Shareholders Ms. Seto, the CEO and Director, is the controlling shareholder, beneficially owning 70.81% of Class A Ordinary Shares and 100% of Class B Ordinary Shares, resulting in 79.13% of the total voting power - Ms. Seto is the controlling shareholder, holding 70.81% of Class A Ordinary Shares and 100% of Class B Ordinary Shares[146][442] - Her aggregate voting power is 79.13%, giving her substantial influence over corporate transactions and director elections[146][442] - As of the date of this Annual Report, the company has six shareholders of record, none located in the United States[440] Related Party Transactions Related party transactions involve Ms. Seto and entities where she or her brother have significant interests, including an interest-free loan facility and various revenue and cost of revenue transactions - Related parties include Ms. Seto Wai Yue (Shareholder and Director) and entities where she or her brother hold significant interests (Exit (HK) Limited, Earthling Catering Limited, Exit Catering Limited, Exit Operations Limited, I Dao Cao Limited)[445] - Ms. Seto entered into an interest-free revolving loan facility agreement with TIL for up to HK$12,000,000 for IPO costs, with a loan amount of approximately HK$1.78 million from Ms. Seto as of March 31, 2025[445] Related Party Revenue (HKD) | Related Party | FY2023 | FY2024 | FY2025 | | :------------------------ | :---------- | :-------- | :-------- | | Exit (HK) Limited | 2,398,888 | 20,000 | - | | Exit Catering Limited | - | 317,586 | - | | Exit Operations Limited | - | - | 451,759 | | Earthling Catering Limited| 78,340 | - | - | | Total Related Party Revenue | 2,477,228 | 337,586 | 451,759 | - In FY2024, Trendic declared and paid a dividend of HK$5.5 million (approximately US$706,000) to its shareholders, which was offset against an amount due from a shareholder[451][668][692] Item 8. FINANCIAL INFORMATION This item refers to the company's Consolidated Financial Statements, which are presented in full under Item 18 of this Annual Report - The Consolidated Financial Statements are presented under Item 18 of this Annual Report[452] Item 9. THE OFFER AND LISTING This section provides details regarding the company's Class A Ordinary Shares, which commenced trading on the Nasdaq Global Market on July 23, 2025, under the symbol 'TDIC' - Class A Ordinary Shares commenced trading on the Nasdaq Global Market on July 23, 2025, under the symbol 'TDIC'[452] - Transhare Corporation is the transfer agent and registrar for the Class A Ordinary Shares[453] Item 10. ADDITIONAL INFORMATION This section covers enforceability of civil liabilities, share capital structure, memorandum and articles of association, dividend policy, and material tax considerations Enforceability of Civil Liabilities Enforcing U.S. judgments against the company or its officers/directors may be difficult due to its Cayman Islands incorporation and Hong Kong operations, as neither jurisdiction has reciprocal enforcement arrangements with the U.S - Enforcing U.S. judgments against the company or its officers/directors may be difficult due to its Cayman Islands incorporation and Hong Kong operations[455][459] - Cayman Islands courts may recognize foreign judgments under specific conditions (e.g., proper jurisdiction, no fraud, not contrary to public policy), but not those penal or punitive in nature[457] - Hong Kong has no reciprocal enforcement arrangement with the U.S., requiring fresh common law proceedings to enforce U.S. judgments, subject to certain conditions and defenses[458][460][461] Share Capital The company's authorized share capital is US$100,000, divided into 9.5 billion Class A and 500 million Class B Ordinary Shares, each with a par value of US$0.00001 - The authorized share capital is US$100,000, divided into 9,500,000,000 Class A Ordinary Shares and 500,000,000 Class B Ordinary Shares, each with a par value of US$0.00001[172][178] Issued and Outstanding Shares (as of March 31, 2025) | Share Class | Number of Shares | | :------------------ | :--------------- | | Class A Ordinary Shares | 28,660,000 | | Class B Ordinary Shares | 1,000,000 | - A recapitalization on March 31, 2025, subdivided shares, reclassified authorized capital, and allotted 1,000,000 Class B Ordinary Shares to Ms. Seto[178][179][678][679] Our Memorandum and Articles of Association The company's memorandum and articles of association grant it unrestricted objects, with Class A shares having one vote and Class B shares having twelve votes, convertible to Class A - The company's objects are unrestricted, allowing it to exercise all functions of a natural person[469] - Class A Ordinary Shares are registered, with each share entitling the holder to one vote[470] - Class B Ordinary Shares entitle holders to twelve votes and are convertible into one Class A Ordinary Share at the holder's option[471] - Dividends can be declared by ordinary resolution from profits or reserves, provided the company remains solvent and has lawfully available funds[472] Dividend Policy The company does not intend to pay dividends in the foreseeable future, planning to retain earnings for business growth, though a HK$5.5 million dividend was paid in FY2024 - The company does not intend to pay cash dividends in the foreseeable future, planning to retain all available funds and future earnings for business development and growth[141][480] - In FY2024, Trendic declared and paid a dividend of HK$5.5 million (approximately US$706,000) to its shareholders, which was offset against an amount due from a shareholder. No dividends were declared for FY2023 or FY2025[451][480][668][692] - Future dividend decisions will depend on consolidated operating and financial results, cash flow, capital requirements, business strategies, and regulatory restrictions[481] - As a holding company, it relies on dividends from its subsidiary, Trendic, which currently faces no restrictions on dividend payments[483][484] Material Tax Considerations This section outlines tax considerations for the Cayman Islands, Hong Kong, and U.S. federal income tax, highlighting no taxes in Cayman, profits tax in Hong Kong, and potential PFIC implications for U.S. Holders - The Cayman Islands currently levies no taxes on individuals or corporations based on profits, income, gains, or appreciation, and no withholding tax on dividends or capital[486][487] - Hong Kong levies profits tax on trading gains from securities (8.25% for first HK$2 million, 16.5% thereafter) but no withholding tax on stock sales or dividends paid outside Hong Kong[490][491] - For U.S. Holders, cash distributions are generally treated as dividends and taxed as ordinary income; gains/losses on share disposition are typically capital gains/losses[497][501] - The company does not expect to be a Passive Foreign Investment Company (PFIC) for the current or foreseeable future, but warns of potential adverse U.S. federal income tax consequences and reporting requirements if classified as such[142][143][144][503][504][505][511] Documents on Display Documents referred to in this Annual Report on Form 20-F are available for public inspection at the SEC's Public Reference Room and on the SEC's website - Documents referred to in this Annual Report are available at the SEC's Public Reference Room and on the SEC's website (http://www.sec.gov)[514](index=514&type=chunk) - Information filed with the SEC can be incorporated by reference into this Annual Report[515] Item 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK This section details the company's exposure to various market risks, including credit risk, interest rate risk, economic and political risk, and currency risk Credit Risk The company is exposed to credit risk from cash equivalents and accounts receivable, with cash held in high-credit-quality institutions and receivables continuously monitored - Credit risk stems from cash equivalents and accounts receivable, with cash held in high-credit-quality Hong Kong institutions[516] - Amounts exceeding HKD500,000 in bank balances are subject to credit risk if a bank fails[516] - Accounts receivable are monitored, and allowances for doubtful accounts are based on estimated realizable value and customer-specific risk[517][518] Accounts and Other Receivables (HKD) | Metric | March 31, 2024 | March 31, 2025 | | :-------------------------------------- | :------------- | :------------- | | Accounts and other receivables | 826,687 | 17,082,085 | | Customers with >=10% of total receivables | 2 | 3 | Interest Rate Risk The company's income and operating cash flows are largely unaffected by changes in market interest rates because it does not hold significant interest-bearing assets - The company has no significant interest-bearing assets[521] - Income and operating cash flows are substantially independent of changes in market interest rates[521] Economic and Political Risk The company's primary operations are in Hong Kong, making its business, financial condition, and results of operations susceptible to changes in the region's political, economic, and legal environments - Major operations are conducted in Hong Kong[522] - The company's business, financial condition, and results of operations are influenced by Hong Kong's political, economic, and legal environments[522] Liquidity Risk Liquidity risk, the inability to meet financial obligations, is managed by ensuring sufficient cash under normal and stressed conditions and by obtaining short-term funding when necessary - Liquidity risk is the risk of not being able to meet financial obligations when due[523] - The company's policy is to maintain sufficient cash under normal and stressed conditions[523] - Liquidity risk is controlled through financial position analysis, monitoring procedures, and obtaining short-term funding from financial institutions and related parties if needed[523] Currency Risk The company is exposed to foreign currency risk from overseas procurement and international transactions denominated in various currencies, which could adversely affect financial results - The company is exposed to foreign currency risk from overseas procurement and transactions with international partners (e.g., in Malaysia and Thailand)[524] - Reporting currency is Hong Kong Dollar, while transactions occur in foreign currencies like Renminbi, Malaysian Ringgits, and Thai Baht[524] - The company does not use forward contract