11:09     K. WAH INT'L<00173>K. WAH CONS<00027>-Joint Ann & Resumed-23        

    The segment for construction materials will no longer be presented        
    in the segment information in KWIH's consolidated financial               
    statements, as upon Completion KWCM will cease to be a subsidiary         
    of KWIH and will become an associated company. Hence KWIH will            
    account for its shareholding in KWCM by equity accounting so that         
    KWIH will recognise the appropriate share of KWCM's profit under          
    ``associated company'' in its consolidated profit and loss account        
    and account for the investment in KWCM under ``associated                 
    company'' in its consolidated balance sheet.                              
                                                                              
    The executive directors of KWCM consider that the Acquisition is          
    on normal commercial terms and that such terms are fair and               
    reasonable and in the interests of KWCM and its shareholders as           
    a whole. The views and recommendations of the KWCM Independent            
    Board Committee in respect of the transactions contemplated by the        
    Acquisition Agreement will be set out in the circular to be issued        
    to the KWIH Shareholders and the KWCM Shareholders.                       
                                                                              
    The executive directors of KWIH consider that the Acquisition is          
    on normal commercial terms and that such terms are fair and               
    reasonable and in the interests of KWIH and its shareholders as           
    a whole. The views and recommendations of the KWIH Independent            
    Board Committee in respect of the transactions contemplated by the        
    Acquisition Agreement will be set out in the circular to be issued        
    to the KWIH Shareholders and the KWCM Shareholders.                       
                                                                              
    G.   No general offer implication                                         
                                                                              
    Neither the Family Companies nor parties acting in concert with           
    any of them had in the six months ended on the Last Dealing Date          
    purchased or sold any KWCM Shares. None of them holds any KWCM            
    Shares or has any other interest in the KWCM Shares on the date           
    of this announcement, other than as disclosed herein.                     
                                                                              
    The Trusts together are the single largest and the controlling            
    shareholder of KWIH. KWCM is a subsidiary of KWIH. Through the            
    direct shareholding of City Lion in KWCM and the indirect                 
    shareholding through KWIH immediately after Completion, the               
    Trusts will continue to have de facto and Takeovers Code control          
    of KWCM. The Executive has confirmed that the proposed Acquisition        
    and issue of the Consideration KWCM Shares will not result in any         
    general offer obligation under the Takeovers Code.                        
                                                                              
    H.   Relevant requirements of the Listing Rules                           
                                                                              
    The profits attributable to the Galaxy Equity Interest exceed 100%        
    of the profits of KWCM for the financial year ended 31st December,        
    2004. The nominal value of the Consideration KWCM Shares exceeds          
    100% of KWCM's existing issued share capital.                             
                                                                              
    The Purchase Price exceeds 100% of the market capitalisation of           
    KWCM. Each of the Family Companies is a connected person of KWCM.         
    Consequently, pursuant to the Listing Rules, the Acquisition              
    constitutes a very substantial acquisition and a connected                
    transaction for KWCM and is subject to the approval of the KWCM           
    Independent Shareholders.                                                 
                                                                              
    The Purchase Price exceeds 100% of the market capitalisation of           
    KWIH. Upon Completion, KWCM will cease to be a subsidiary of KWIH.        
    The issue of the Consideration KWCM Shares will give rise to a            
    deemed disposal. The revenue attributable to KWCM for the                 
    financial year ended 31st December, 2004 exceeds 75% of the revenue       
    of KWIH for the financial year ended 31st December, 2004. The value       
    of the Consideration KWCM Shares exceeds 75% of the market                
    capitalisation of KWIH. The Family Companies are connected persons        
    of KWIH.                                                                  
                                                                              
    Consequently, for the purposes of the Listing Rules, the                  
    Acquisition and issue of the Consideration KWCM Shares at                 
    Completion will constitute a very substantial acquisition, a              
    deemed very substantial disposal and a connected transaction for          
    KWIH and is subject to the approval of the KWIH Independent               
    Shareholders.                                                             
                                                                              
    It is the intention of the Family Companies to maintain the listing       
    of KWCM on the Stock Exchange after Completion. Appropriate steps         
    will be taken to ensure that not less than 25% of the KWCM Shares         
    will be held by the public immediately after Completion. These            
    steps may include the issue of new KWCM Shares and/or placing down        
    by KWIH and/or the Family Companies of some or all of their interest      
    in KWCM to Independent Third Parties.                                     
                                                                              
    The Stock Exchange has stated that it will closely monitor the            
    trading in the KWCM Shares and in the KWIH Shares on the Stock            
    Exchange. If the Stock Exchange believes that:                            
                                                                              
    ---   a false market exists or may exist in the KWCM Shares or the        
    KWIH Shares; or