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EMPEROR ENTERTAINMENT GROUP LIMITED

(Incorporated in Bermuda with limited liability)
(Stock Code: 8078)
CONTINUING CONNECTED TRANSACTION

The Directors wish to announce that EMP, a wholly-owned subsidiary of the Company, had
entered into the Run Papa Run Agreement and the fees received by EMP from JCE under
the transactions thereof are expected to exceed the reporting and announcement threshold
under Rules 20.45 to 20.47 of the GEM Listing Rules, but exempted from the independent
shareholders’ approval requirement. The Company makes this announcement in compliance
with the GEM Listing Rules.
The Run Papa Run Agreement dated 15 October 2007 was made between EMP and JCE,
pursuant to which EMP was appointed by JCE as the sole and exclusive distribution agent
and to provide marketing and public relation services in relation to the motion picture “Run
Papa Run” for an initial term commencing from the date of agreement up to 31 March 2010
and subject to (a) renewal at the option of EMP for a period of three years from 1 April
2010 and (b) automatic renewal for three years upon expiry of such renewed term or any
subsequent term unless the Run Papa Run Agreement is terminated by either party in
writing three months in advance prior to the expiry of such term.
JCE is ultimately owned as to (a) approximately 50% by the AY Trust, of which Dr. Albert
Yeung is the founder, and (b) approximately 50% by Independent Third Parties. Since the
AY Trust is also interested in 78.09% of the issued share capital of the Company, the Run
Papa Run Agreement constitutes a continuing connected transaction for the Company under
the GEM Listing Rules.
The Directors wish to announce that EMP, a wholly-owned subsidiary of the Company, entered
into the Run Papa Run Agreement with JCE and the fees received by EMP from JCE under the
transactions thereof are expected to exceed the reporting and announcement threshold under
the GEM Listing Rules.
JCE is ultimately owned as to (a) approximately 50% by the AY Trust, of which Dr. Albert
Yeung is the founder; and (b) approximately 50% by Independent Third Parties. Since the AY
Trust is also interested in 78.09% of the issued share capital of the Company, the marketing
and distribution services provided by EMP to JCE under the Run Papa Run Agreement
constitutes a continuing connected transaction for the Company under the GEM Listing Rules.
R19.58(1)
for identification purpose only

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CONTINUING CONNECTED TRANSACTION — The Run Papa Run Agreement
The Run Papa Run Agreement was entered into between EMP and JCE on 15 October 2007
pursuant to which EMP was appointed by JCE as the sole and exclusive distribution agent of a
motion picture “Run Papa Run” produced by JCE, for an initial period from 15 October 2007
to 31 March 2010, subject to (a) renewal at the option of EMP for a period of three years
commencing on 1st April 2010 and (b) automatic renewal for three years upon expiry of such
renewed term or any subsequent term unless the Run Papa Run Agreement is terminated by
either party in writing three months in advance prior to the expiry of such term. The Directors
consider that it is fair and reasonable for EMP to have an option to renew the Run Papa Run
Agreement after initial term, as the distribution needs to cover future television and video
release which can be lasted for many years after the movie came up in theaters.
Under the Run Papa Run Agreement, EMP agreed to provide JCE marketing and public
relation services to promote the motion picture “Run Papa Run” in Hong Kong. The film is
produced by JCE and plan to release in Hong Kong theaters in April 2008. The fees payable to
EMP by JCE for the marketing and public relation services is comprised of (i) a fixed fee of
one-time charge HK$50,000 for the project payable upon presentation of invoice by EMP
within 30 days from the date of the agreement, plus (ii) a flexible fee ranging from 5% to 10%
of the gross/net media publication charges or cash received from sponsors, depending the
nature of income from sponsors and promotional expenses, which is payable upon such fee is
ascertained by EMP based on the charges and sponsors amount.
Under the Run Papa Run Agreement, JCE also granted to EMP and EMP accepted the sole and
exclusive right to distribute the licensed rights of “Run Papa Run” worldwide in all language
versions dubbed and subtitled at the agency fee rates ranging from 2% to 12% of the gross
income from theatrical release or from other forms of media. The agency fee rate of 2% to
12% to be charged by EMP depends on the type of medium, territories or whether EMP is
required to rebate sub-sales agent for the distribution. EMP is entitled to deduct and retain for
itself the agency fee and relevant expenses from the gross income derived from Run Papa
Run. The gross income (after deduction of the agency fees and expenses) is required to be
paid by EMP to JCE within 15 days after the gross income is ascertained at every calendar
quarter. The Directors consider that the agency fee rates under the Run Papa Run Agreement
are on normal commercial terms after comparing with other film distribution agreements
made by EMP with Independent Third Parties.
Run Papa Run will be released in Hong Kong and in Asia in April 2008. The Directors expect
that the fees (including the marketing fees and the agency fees) to be received by EMP under
the Run Papa Run Agreement for the years ending 31 March 2008, 31 March 2009 and 31
March 2010 would be approximately HK$20,000, HK$1,072,000 and HK$500,000 respectively.
The above estimation has taken into consideration (i) the marketing and promotional scale, the
targeted audience and type of promotional channels for “Run Papa Run”; (ii) the historical
box office from theatrical release of films of comparable production scale; (iii) the anticipated
broadcast of Run Papa Run in other media (i.e. pay and free television and home video); (iv)
the countries (including Asia, Europe and America) in which Run Papa Run will be distributed
and (v) the rates of agency fee for each medium and in each territory.

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ANNUAL CAP FOR THE FILMS

According to Rule 20.25 of the GEM Listing Rules, the Stock Exchange will aggregate a
series of connected transactions and treat them as if they were one transaction. In light of this
rule, the Directors consider it is proper to aggregate the fee to be received by the Company
under the Run Papa Run Agreement together with the agency fee and marketing fee to be
received under all the motion pictures produced by JCE, including “The Myth” (details of
which are stated in the announcement of the Company dated 31 July 2007), “Rob-B-Hood”
(details of which are stated in the announcement of the Company dated 28 November 2006)
and “New Police Story” (details of which are stated in the announcement of the Company
dated 10 November 2004).
The Company, as stated in the announcement dated 31 July 2007, has obtained an annual cap
HK$5,100,000 for “The Myth”, “Rob-B-Hood” and “New Police Story” for the year ending
31 March 2008.
In accordance with Rule 20.35 of the GEM Listing Rules, it is necessary for the Company to
obtain a cap for the fees receivable by EMP from JCE in relation to the Films for the year
ending 31 March 2009 and 31 March 2010. For the year ending 31 March 2008, it is expected
that the fees payable to EMP by JCE under the Films (including the HK$20,000 fees payable
under “Run Papa Run” as stated in the section above and taking into consideration of the box
office and the release dates of the Films and the continuing broadcast of the Films in pay and
free television and home video) for the year ending 31 March 2008 will not exceed the annual
cap of HK$5.1 million which was already obtained in the announcement of the Company
dated 31 July 2007 and therefore the HK$5.1 million annual cap shall be set for the year
ending 31 March 2008.
As for the year ending 31 March 2009, it is expected that the income to be received by EMP
for the Films will be approximately HK$1.4 million (of which HK$1.1 million will be from
“Run Papa Run”), the annual cap will be set as HK$1.4 million for the fees receivable by
EMP from JCE for the Films.
As for the year ending 31 March 2010 it is expected that the aggregate fee to be received by
EMP in relation to the Films will be less than HK$1,000,000.
The above estimation of annual caps has taken into consideration of the aggregate agency fee
and marketing fee to be received by EMP from JCE in relation to the distribution of the Films
for the ending 31 March 2008, 31 March 2009 and 31 March 2010.
As the percentage ratios set out in Rule 19.04(9) of the GEM Listing Rules (other than the
profits ratio) calculated with reference to the aggregate fee to be received by EMP in relation
to the Films for the year ending 31 March 2008 and 31 March 2009 under the Films is more
than 2.5% less than 25% but less than HK$10,000,000, the transaction under the agreements
made between EMP and JCE for the Films for the year ending 31 March 2008, 31 March 2009
and 31 March 2010 constituted continuing connected transaction which is only subject to the
reporting and announcement requirements set out in Rules 20.45 to 20.47 of the GEM Listing
Rules and is exempted from independent shareholders’ approval requirements.

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At the time of entering into the Run Papa Run Agreement, it is expected that no income will
be accrued until March 2008, when the marketing of the film is expected to commence.
Practically, at the time of entering into the Run Papa Run Agreement, there is no sufficient
information for calculate the annual caps. The Directors have made this announcement as
soon as practicable once the annual cap for the Run Papa Run is duly ascertained. The annual
cap is based on the expected income to be received under the Run Papa Run Agreement which
is calculated based on a formula which require information of the film to be provided by JCE
(such as the production scale, the casts, the territories in which the film will be released).
Such information on “Run Papa Run” is only made available by JCE upon entering into the
Run Papa Run Agreement and the Directors require time to formulate the expected income.
REASONS FOR ENTERING INTO THE RUN PAPA RUN AGREEMENT

The Company is an investment holding company with its subsidiaries principally engaged in
the entertainment business specializing in music production and distribution, film and television
programme production and distribution, artiste management and event production. JCE is
engaged in the business of film and television programme production and investment. The
Directors are of the view that the provision of the distribution and marketing services by EMP
to JCE under the Run Papa Run Agreement are in the ordinary and usual course of business of
EMP as EMP is engaged in the business of film distribution.
Utilizing EMP’s well-established distribution and sales agency capability and resources, the
Run Papa Run Agreement is able to provide stable income for the Group. Furthermore, the
Directors consider that it is a good opportunity for the Group to have granted the sole
distribution of films which are starred by international well-known casts.
Accordingly, the Directors (including the independent non-executive Directors) consider that
the terms of the Run Papa Run Agreement are fair and reasonable and it is in the best interest
of the Company and its shareholders as a whole for EMP to enter into the Run Papa Run
Agreement. The terms of the Run Papa Run Agreement were negotiated on arm’s length basis
between the parties.
TERMS USED IN THIS ANNOUNCEMENT

“AY Trust” The Albert Yeung Discretionary Trust of which Dr. Albert
Yeung is a founder
“Company” Emperor Entertainment Group Limited, a company
incorporated in Bermuda with limited liability, the securities
of which are listed on GEM
“Director(s)” director(s) of the Company
“Dr. Albert Yeung” Dr. Yeung Sau Shing, Albert, a deemed substantial shareholder
of the Company and the spouse of Ms. Luk Siu Man Semon,
who is a Director
“EMP” Emperor Motion Picture (HK) Limited, a company
incorporated in Hong Kong and a wholly-owned subsidiary
of the Company

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“Films” all such existing films produced by JCE, including “Run Papa
Run”, “The Myth”, “Rob-B-Hood” and “New Police Story”
“GEM” the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules” the rules governing the listing of securities on GEM
“Group” the Company and its subsidiaries
“Hong Kong” the Hong Kong Special Administrative Region of the People’s
Republic of China
“Independent Third Parties” independent third parties who are not connected persons of
the Company as defined in the GEM Listing Rules and are
independent of the Company and the connected persons of
the Company
“JCE” JCE Movies Limited, a company incorporated in Hong Kong
and is ultimately and beneficially owned as to (a)
approximately 50% by the AY Trust, of which Dr. Albert
Yeung is the founder; and (b) approximately 50% by
Independent Third Parties
“Run Papa Run Agreement” the agreement dated 15 October 2007 made between EMP
and JCE pursuant to which EMP was appointed by JCE as
the sole and exclusive distribution agent and to provide
marketing service to JCE in relation to the motion picture
“Run Papa Run”
“Stock Exchange” Luk Siu Man Semon (Chairperson);
Mr. Ng Sui Wan alias Ng Yu, Mr. Wong Chi Fai and Ms Fan Man Seung, Vanessa (executive
Directors); Mr. Wong Ching Yue, Mr. Chu Kar Wing and Mr. Wong Tak Ming Gary (independent
non-executive Directors).
This announcement, for which the directors of the Company collectively and individually
accept full responsibility, includes particulars given in compliance with the GEM Listing
Rules for the purpose of giving information with regard to the Company. The directors of the
Company, having made all reasonable enquiries, confirm that, to the best of their knowledge
and belief (i) the information contained in this announcement is accurate and complete in all
material respects and not misleading; (ii) there are no other matters the omission of which
would make any statement in this announcement misleading; and (iii) all opinion expressed in
this announcement have been arrived at after due and careful consideration and are founded
on bases and assumptions that are fair and reasonable.
This announcement will remain on the GEM website at www.hkgem.com on the “Latest Company
Announcements” page for seven days from the day of its posting.