11:09 K. WAH INT'L<00173>K. WAH CONS<00027>-Joint Ann & Resumed-24 --- there are too few KWCM Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the KWCM Shares or the KWIH Shares. I. Possible meeting of holders of the KWIH Bonds Pursuant to the terms of the KWIH Bonds, it shall be an event of default if KWIH owns, directly or indirectly, less than 30% of the issued share capital of KWCM. Assuming that there is no change in the issued share capital of KWCM from the date of this announcement to Completion save for the issue of the Consideration KWCM Shares, KWIH will be interested in approximately 27.2% of the total enlarged issued share capital of KWCM immediately after Completion. The KWIH Directors propose either to convene a meeting of holders of the KWIH Bonds for the purpose of passing a resolution or to obtain written consent from sufficient holders (or through such other means including, but not limited to, early redemption) prior to Completion so as to ensure that no event of default will be triggered under the KWIH Bonds. J. Law After Completion, KWCM will in its capacity as the controlling shareholder of Galaxy seek to ensure that Galaxy operates casinos only in compliance with all applicable laws and does not breach the Gambling Ordinance of Hong Kong or any other relevant laws and in compliance with the requirements of the guidelines issued by the Stock Exchange in relation to ``Gambling Activities Undertaken by Listing Applicants and/or Listed Issuers'' dated 11th March, 2003. If it fails to do so, the Stock Exchange may, depending on the circumstances of the case, seek to direct KWCM to take remedial actions, and/or suspend dealings in, or cancel the listing of, the KWCM Shares under Rule 6.01 of the Listing Rules. K. Gain on disposal by KWIH Immediately upon Completion and assuming that there will be no change in the issued share capital of KWCM from the date of this announcement and up to Completion (save for the issue of the Consideration KWCM Shares), KWIH's interest in KWCM will be diluted from approximately 65.74% to approximately 27.18%. This will constitute a deemed disposal by KWIH of its interest in KWCM under the Listing Rules. Upon Completion, KWIH's share of KWCM's consolidated net assets following issue of the Consideration KWCM Shares at HK$8 each, is estimated to increase to approximately HK$4,391,793,000. KWIH's gain on the deemed disposal of its equity interest in KWCM is estimated to amount to approximately HK$3,446,000,000. On Completion, KWCM will no longer be a subsidiary of KWIH and will become an associated company of the KWIH Group and its results and assets and liabilities will be recognised by the equity method of accounting in the consolidated financial statements of KWIH. The estimated gain on such deemed disposal by KWIH is calculated on the basis of the Purchase Price and the price of Consideration KWCM Shares at HK$8 each. The actual amount to be recognized in KWIH's consolidated profit and loss account will be adjusted based on the actual market price of the KWCM Shares on the date of Completion. L. Principal Shareholders of Galaxy Galaxy is today principally owned by the Family Companies and the Minority Vendors. The Family Companies acquired their respective interests in Galaxy at an aggregate cost of MOP630,367,000 (approximately HK$612,006,796) under and pursuant to a shareholders internal reorganisation, which took place in Macau on 3rd February, 2005. At the same time, Hugo Legend acquired its 1.8% voting interest in Galaxy and Brightwealth acquired its 15.59% voting interest in Galaxy. Brightwealth was not previously a shareholder of Galaxy. The Family Companies acquired their interest in Galaxy principally through subscription of new shares issued on increase of capital by Galaxy, and as to a small part, through purchase of existing shares in Galaxy from Galaxy Resort S.A. Prior thereto, Galaxy Resort S.A. was the major controlling shareholder of Galaxy (holding 90% of the 200,000,000 Galaxy Shares then in issue). Dr. Lui ultimately beneficially owns 54.29% of Galaxy Resort S.A. Mr. Pedro Ho, the owner of Future Leader and the resident managing director of Galaxy, owns all the Galaxy A Shares. He is a native resident of Macau and a businessman. Mr. Pedro Ho has extensive relationships in business and the Macau gaming market and with the Macau government. The Galaxy A Shares carry negligible economic rights and can be transferred only with the consent of the Macau government.