11:02     K. WAH INT'L<00173>K. WAH CONS<00027>-Joint Ann & Resumed-8         

    C.   Information on Galaxy                                                
                                                                              
    Overview                                                                  
                                                                              
    Galaxy was incorporated in Macau with limited liability on 30th           
    November, 2001 under registration number 15066. It holds one of           
    only three gaming concessions awarded by the Macau government to          
    operate casinos in Macau and currently operates its first city club       
    casino, the Galaxy Casino at Waldo Hotel, which is a casino with          
    an emphasis on the Macau VIP gaming market. The VIP market at             
    present accounts for the majority of gaming turnover in Macau.            
    Galaxy is also constructing Galaxy StarWorld and plans to develop         
    three further casino projects in Macau --- Galaxy Cotai Mega Resort,      
    and its second and third city club casinos, namely the Galaxy             
    Casino at Cotai City Club and Galaxy Casino at Rio Hotel.                 
                                                                              
    Apart from gaming facilities, Galaxy will integrate non-gaming            
    amenities and services such as food and beverage, leisure,                
    entertainment and shopping outlets into its hotel and resort              
    properties thus making them attractive destinations for tourists          
    of all kinds --- gaming and non-gaming --- to Macau.                      
                                                                              
    Shareholders of Galaxy                                                    
                                                                              
    At the date of the Acquisition Agreement, the Galaxy B Shares were        
    held by the Family Companies as to 73.58%, Hugo Legend 2.0%,              
    Minority Vendors: 22.32% and Wealth Access 2.1%. As mentioned             
    above, Hugo Legend subsequently sold its entire holding of Galaxy         
    B Shares to Future Leader and they form part of the Galaxy B Shares       
    to be acquired by KWCM.                                                   
                                                                              
    Immediately after Completion, the Galaxy B Shares will be held by         
    KWCM (through Canton Treasure) and Wealth Access as to 97.9% and          
    2.1% respectively.                                                        
                                                                              
    Wealth Access is beneficially owned by Mr. Yeung Chi Hang and Mr.         
    Cheng Kwee. Wealth Access, Mr. Yeung Chi Hang and Mr. Cheng Kwee          
    are each Independent Third Parties of KWIH, KWCM (and, so far as          
    KWCM and KWIH know, independent of Galaxy and of connected persons        
    of Galaxy) and their connected persons. Information on the Family         
    Companies and the Minority Vendors is set out in the sections below       
    headed ``M. Information on the Vendors'' and ``N. Family                  
    Companies'', respectively.                                                
                                                                              
    Overview of Macau's gaming market                                         
                                                                              
    Macau is the only legalised gaming destination in China. In 1962,         
    the Portuguese Government of Macau awarded an exclusive casino            
    gaming licence to Sociedade de Turismo e Diversoes de Macao               
    (``STDM''), a Macau company controlled by Dr. Stanley Ho.                 
                                                                              
    In December 2001, the Macau government decided to bring an end to         
    STDM's monopoly of the gaming industry and to liberalise laws and         
    regulations applicable to gaming activities. In 2002, gaming              
    concessions were granted to three concessionaires after tendering.        
    The three operators are (i) SJM whose concession is valid until           
    March 2020, (ii) Wynn Resorts (Macau), S.A. whose concession is           
    valid until June 2022, and (iii) Galaxy whose concession is valid         
    until June 2022. Pursuant to the terms of the Concession as               
    supplemented on 19th December, 2002 between Galaxy and the Macau          
    government, Galaxy granted a sub-concession in December 2002 to           
    Venetian Macau, S.A.                                                      
                                                                              
    In 2004, Macau was the world's second largest gaming market, behind       
    the Las Vegas Strip. In 2004, Macau recorded US$5.0 billion               
    (approximately HK$39 billion) in total gaming revenue (from games         
    of fortune), an increase of 44% from 2003, as illustrated below           
    According to the Macau DICJ, approximately 72% of the total gaming        
    revenue (from games of fortune) were generated from VIP baccarat          
    table games in 2004.