08:36     ESUN HOLDINGS<00571> - Results Announcement (2)                     

                                                                              
    Fundamental uncertainty relating to the going concern basis               
                                                                              
    In forming their opinion, the auditors have considered the adequacy of the
    disclosures made in the financial statements concerning the basis of      
    presentation of the financial statements prepared by the Directors of the 
    Company.  The financial statements have been prepared on a going concern  
    basis, the validity of which depends on the continuous financial support  
    from the Group's financial creditors and the successful implementation of 
    other measures.  The financial statements do not include any adjustments  
    that may be necessary if the Company fails to obtain continuous support   
    from its financial creditors or to successfully implement the other       
    measures.  The auditors consider that appropriate disclosures have been   
    made and their opinion is not qualified in this respect.                  
                                                                              
    Qualified opinion arising from scope limitation                           
                                                                              
    Except for any adjustments that might have been found to be necessary had 
    the auditors been able to obtain sufficient evidence relating to the      
    carrying value of the film rights as set out above, in their opinion the  
    financial statements give a true and fair view of the state of affairs of 
    the Company and of the Group as at 31st December, 2004 and of the profit  
    and cash flows of the Group for the year then ended and have been prepared
    in accordance with the disclosure requirements of the Hong Kong Companies 
    Ordinance.                                                                
                                                                              
    In respect alone of the limitations on their work relating to the film    
    rights above, the auditors have not obtained all the information and      
    explanations that they considered necessary for the purpose of their      
    audit.                                                                    
                                                                              
                                                                              
    3.      BASIS OF PRESENTATION                                             
                                                                              
    As at 31st December, 2004, the Group recorded consolidated net current    
    liabilities of HK$207 million (2003: HK$172 million), consolidated        
    accumulated losses of HK$2,284 million (2003: HK$2,336 million) and       
    consolidated net assets of HK$1,831 million (2003: HK$1,779 million).     
                                                                              
    Included in the net current liabilities of HK$207 million were bank loans 
    of HK$21 million, loans from directors of HK$10 million and other loans of
    HK$150 million (collectively, the "Financial Creditors"), all of which are
    due for repayment within the next 12 months from the balance sheet date.  
                                                                              
    In order to improve the Group's working capital position, profitability   
    and operations, the Group has adopted and continue to implement the       
    following measures:                                                       
                                                                              
    (a)     the Group continues to seek ongoing support from its Financial    
    Creditors, and to explore opportunities for different sources of financing
    to strengthen the Group's working capital position; and                   
                                                                              
    (b)     the Group continues to implement measures to tighten cost controls
    over various general and administrative expenses and to attain positive   
    and profitable cash flow operations.                                      
                                                                              
    The Directors of the Company believe that the Group will be successful in 
    obtaining ongoing support from its Financial Creditors and in exploring   
    opportunities for different sources of financing and that it will be      
    successful in improving cash flow through tightening of cost controls and 
    attaining positive and profitable cash flow operations.  On this basis,   
    the Directors of the Company consider that the Group will have sufficient 
    working capital to finance its operations in the foreseeable future.      
    Accordingly, the Directors of the Company are satisfied that it is        
    appropriate to prepare the financial statements on a going concern basis. 
                                                                              
    If the going concern basis was not appropriate, adjustments would have to 
    be made to restate the values of the assets to their recoverable amounts, 
    to provide for any further liabilities which might arise and to reclassify
    non-current assets and liabilities as current assets and liabilities,     
    respectively.  The effects of these potential adjustments have not been   
    reflected in the financial statements.                                    
                                                                              
    4.      ANALYSIS OF TURNOVER AND PROFIT/(LOSS) FROM CONTINUING OPERATIONS 
    AND A DISCONTINUED OPERATION                                              
                                                                              
                                            2004            2003              
                                            HK$'000         HK$'000           
                                                                              
    TURNOVER                                                                  
    Continuing operations                   152,781         94,334            
    Discontinued operation (note a)         -               3,470             
                                            ------------    -----------       
                                            152,781         97,804            
                                            ========        ========