09:35 GOLDEN HARVEST<01132> - Announcement & Resumption (8) 2. Li Ka-shing is deemed to be interested in 178,054,000 Shares by virtue of his 100% beneficial holding in Mayspin Management Limited which in turn owns the entire interest in each of Garex Resources Limited, which holds 150,414,000 Shares, Podar Investment Limited, which holds 25,000,000 Shares, and Oscar Resources Limited, which holds 2,640,000 Shares. 3. EMI Group Plc has 100% control of Virgin Music Group Limited, which has 100% control of EMI Group Worldwide Limited, which in turn has a 50% shareholding in Typhoon Music (PRC) Limited. Cheng Tung Hon, Norman has 100% control of Typhoon Records Limited, which has a 50% shareholding in Typhoon Music (PRC) Limited. Each of EMI Group Plc, Virgin Music Group Limited, EMI Group Worldwide Limited, Cheng Tung Hon, Norman and Typhoon Records Limited is deemed to be interested in the 155,000,000 Shares held by Typhoon Music (PRC) Limited. Feng Yuen Cheung, Lily, the spouse of Cheng Tung Hon, Norman, is deemed to be interested in the same shares in which Cheng Tung Hon, Norman is interested. REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS The principal activities of the Group consist of worldwide film and video distribution, film exhibition in Hong Kong, Malaysia, Singapore and the PRC, film production and the operation of a film processing business in Hong Kong. The expenses of the Rights Issue are estimated to be approximately HK$3.0 million, which will be borne by the Company. The net proceeds of the Rights Issue after expenses are expected to be not less than approximately HK$62.0 million. The Company intends to use the net proceeds from the Rights Issue for the purposes of financing in part the Acquisition, provided that if the Company does not proceed with the Acquisition for any reason, the Company intends to use the net proceeds for investment purposes if suitable opportunities arise, and for general working capital purposes. The Directors consider that the Rights Issue provides an opportunity for the Group to strengthen its capital base and to provide part of the financing required to fund the Acquisition. It was stated in the announcement dated 21 October 2004 that Golden Sky has agreed to acquire a 40% interest in the capital interest in Warner Village Taiwan and certain shareholders loans at a pro-rated consideration of US$15.2 million (approximately HK$118.26 million), provided that such pro-rated consideration may increase should the other two purchasers decide not to fulfil its/their obligations under the Acquisition Agreement at completion and Golden Sky decides to step-in and purchase additional capital interest in Warner Village Taiwan at completion. It also provides an opportunity to the shareholders to participate in the growth of the Company. In addition, the Rights Issue will also allow the Qualifying Shareholders to maintain their respective pro rata shareholdings in the Company. Accordingly, the Directors consider that it is in the interest of the Company and its Shareholders as a whole to raise capital through the Rights Issue. However, a Qualifying Shareholder who does not take up the Rights Shares to which he is entitled should note that their shareholding in the Company will be diluted. CAPITAL RAISING ACTIVITIES OF THE COMPANY DURING THE 12 MONTHS ENDED 30 November 2004 The following table summaries the capital raising activities of the Group for the 12 months immediately before the date of this announcement: Date of announcement Date of agreement Nature of transaction Amount of net proceeds raised Intended use of net proceeds