09:13     CHINA STAR ENT<00326> - Announcement (4)                            

    Note:                                                                     
                                                                              
    1.   The entire issued share capital of Porterstone is                    
    beneficially owned by Ms. Chen. Accordingly, Mr. Heung,                   
    the husband of Ms. Chen, is deemed to be interested in the                
    Shares held by Porterstone.                                               
                                                                              
    2.   The issued share capital of Dorest is beneficially                   
    owned as to 60% by Ms. Chen through Porterstone and as to                 
    40% by Mr. Heung.                                                         
                                                                              
    USE OF PROCEEDS                                                           
    The gross proceeds from the Subscription will be about                    
    HK$38.30 million. The net proceeds from the Subscription                  
    of about HK$37.30 million will be used for general working                
    capital of the Group and/or any future possible                           
    acquisition which is yet to be identified. As at the date                 
    of this announcement, the Company has no concrete plans                   
    or targets for the future possible acquisition.                           
                                                                              
    The net proceeds raised per Subscription Share upon                       
    completion of Subscription will be approximately HK$0.49                  
    per Share.                                                                
                                                                              
    REASONS FOR THE TOP-UP PLACING AND SUBSCRIPTION                           
    The Directors consider that the Top-Up Placing and the                    
    Subscription represent an opportunity to raise capital for                
    the Company under the current positive market condition                   
    while broadening the shareholder base and the capital base                
    of the Company.                                                           
                                                                              
    FUND RAISING IN THE 12 MONTHS IMMEDIATELY PRECEDING THE                   
    DATE OF THE TOP-UP PLACING AGREEMENT AND THE SUBSCRIPTION                 
    AGREEMENT                                                                 
                                                                              
    Date of announcement                                                      
                                                                              
    Event                                                                     
                                                                              
    Net proceeds (approximately)                                              
                                                                              
    Intended use of net proceeds                                              
                                                                              
    Actual use of net proceeds as at the date of this                         
    announcement                                                              
                                                                              
    15 December 2004                                                          
                                                                              
    Issue of 60,765,000 new Shares                                            
                                                                              
    HK$35.6 million                                                           
                                                                              
    HK$20 million will be used for two movies'production which                
    have been scheduled to be produced in 2005, planned                       
    screenplay and principal production personal have been                    
    arrange and approximately HK$15.6 million will be used as                 
    the general working capital                                               
                                                                              
    Approximately HK$3.7 million has been used for movies'                    
    production and approximately HK$15.6 million has been used                
    for general working capital and the remaining balance of                  
    approximately HK$16.3 million are intended to be used for                 
    movies' production                                                        
                                                                              
    15 December 2004                                                          
                                                                              
    Issue of 60,765,000 new Shares                                            
                                                                              
    HK$35.6 million                                                           
                                                                              
    HK$20 million will be used for two movies' production which               
    have  been scheduled to be produced in 2005, planned                      
    screenplay and principal production personal have been                    
    arrange and approximately HK$15.6 million will be used as                 
    the general working capital                                               
                                                                              
    The total net proceeds of HK$35.6 million has not yet been                
    utilized at all up to the date of this announcement and                   
    such proceeds will be utilized in accordance with the                     
    intended use of proceeds as set out in the content of                     
    Company's announcement dated 15 December 2004                             
                                                                              
    GENERAL                                                                   
    The principal activities of the Company are engaged in film               
    production, distribution of film and television drama                     
    series, and provision of post-production services.