11:04 K. WAH INT'L<00173>K. WAH CONS<00027>-Joint Ann & Resumed-11 Galaxy StarWorld Galaxy is constructing, and will own and operate under its own brand, the Galaxy StarWorld, which is a 95,000 square metre gross floor area, 33-storey hotel and casino resort in Macau's central business and tourism district. Scheduled to open in mid 2006, Galaxy StarWorld is designed to house approximately 560 modules comprising standard hotel rooms and suites (including a presidential suite), plus food and beverage outlets, entertainment outlets and shops. Along the theme of `one-stop at Galaxy', hotel and casino guests can enjoy dining, leisure, shopping or entertainment facilities all within the same complex. The casino is configured to include an approximately 26,000 square metres gaming facility with 200 table games and 300 slot machines. The casino is designed to consist of two levels of gaming halls and five floors housing 15 VIP gaming rooms. The two main gaming halls are designed to cater to mass-market players with 140 table games supplemented by slot machines. The 15 dedicated VIP rooms are designed to house 60 baccarat tables. Galaxy currently owns a land concession for 2,911 square metres for Galaxy StarWorld. Galaxy has commenced negotiations for a grant by the Macau government to use a garden lot of an additional area of 3,948 square metres in front of the existing lot for a portion of Galaxy StarWorld. Galaxy will still enjoy title to and possession of the original (2,911 square metres) lot even if its application for the grant of the garden lot is not successful. The Galaxy StarWorld's existing land concession, which expires in 2028 but is renewable, grants Galaxy exclusive use of the land, for hotel and commercial use. Apart from the premium for the existing land concession in the sum of MOP200,000,000.00 (approximately HK$194,174,757) which has been fully paid by Galaxy, Galaxy is also required to pay a small rent in the sum of MOP87,480 (approximately HK$84,932) per year during the term of the land concession. The rent may be revised every five years by the Macau government in accordance with Macau laws. Galaxy is in the process of seeking to modify the land grant for Galaxy StarWorld to include this garden lot and to transfer to Galaxy the lease from Investimento Hoteleiros Majesty (Internacional) Lda., a wholly-owned subsidiary of Galaxy. Although negotiations with the Macau government have commenced, they have not yet concluded and Galaxy has not yet secured rights to the entire proposed 6,859 square metres site for Galaxy StarWorld through the new land concession agreement. Construction of Galaxy StarWorld is currently on schedule and within budget. Galaxy Cotai Mega Resort Galaxy will build, own and operate Galaxy Cotai Mega Resort, which will become Galaxy's flagship resort casino in Macau. The Galaxy Cotai Mega Resort will cater for both the VIP and mass player markets. In Cotai, an area of over 442,000 square metres of land has been earmarked by the Macau government for the Galaxy Cotai Mega Resort project and Galaxy is in the process of negotiating the lease of the land concession for the site. Galaxy has submitted to the Macau government a development plan for a gross floor area of approximately 1,000,000 square metres in Cotai. Galaxy Cotai Mega Resort will be designed to eventually offer approximately 6,300 hotel rooms and suites in several hotels with four themed casinos providing an additional 41,000 square metres of gaming facilities. The KWCM Board expects Galaxy Cotai Mega Resort to be completed in several phases. Phase I, which is designed to include two deluxe hotels and one themed casino, is scheduled to open in 2008. The deluxe hotels are expected to contain approximately 2,000 rooms. The themed casino, which is planned to have approximately 28,800 square metres of gaming facilities, will be the Phase 1 main casino in Galaxy Cotai Mega Resort. The facilities include approximately 300 non-VIP table games, approximately 48 VIP table games in 12 dedicated VIP rooms and approximately 1,000 slot machines. The remaining phases of Galaxy Cotai Mega Resort will be completed at future dates yet to be determined and which will depend upon market conditions and demand. Nevertheless, the plan is to complete all site formation work and as much foundation work as possible at an early stage.