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THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION This Circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for shares or other securities. If you are in doubt as to any aspect of this Circular or as to the actions to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in K. Wah Construction Materials Limited or K. Wah International Holdings Limited (as the case may be), you should at once hand this Circular and the relevant accompanying proxy form to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this Circular, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Circular. K. WAH INTERNATIONAL K. WAH CONSTRUCTION HOLDINGS LIMITED MATERIALS LIMITED * (incorporated in Bermuda with limited liability) (incorporated in Hong Kong with limited liability) (Stock Code: 173) (Stock Code: 27) POSSIBLE ACQUISITION OF 88.1% OF THE VOTING SHARES CARRYING 97.9% OF THE ECONOMIC INTEREST IN GALAXY CASINO, S.A. CONNECTED TRANSACTION AND VERY SUBSTANTIAL ACQUISITION FOR K. WAH CONSTRUCTION MATERIALS LIMITED AND CONNECTED TRANSACTION, DEEMED VERY SUBSTANTIAL DISPOSAL AND VERY SUBSTANTIAL ACQUISITION FOR K. WAH INTERNATIONAL HOLDINGS LIMITED Financial adviser to K. Wah Construction Materials Limited Independent financial adviser to the independent board committee and independent shareholders of K. Wah Construction Materials Limited Commerzbank AG Hong Kong Branch Independent financial adviser to the independent board committee and independent shareholders of K. Wah International Holdings Limited A letter from the KWCM Independent Board Committee is set out on pages 91 to 92 of this Circular and a letter from Commerzbank AG, the independent financial adviser to the KWCM Independent Board Committee and the KWCM Independent Shareholders, is set out on pages 93 to 140 of this Circular. A notice convening the KWCM EGM to be held at Island Shangri-La Hong Kong, Level 39, Atrium Room, Two Pacific Place, Supreme Court Road, Central, Hong Kong on Tuesday, 19 July 2005 at 2: 00 p.m. is set out on pages 570 to 571 of this Circular. Whether or not KWCM Shareholders are able to attend the KWCM EGM, KWCM Shareholders are requested to complete and return the enclosed BLUE form of proxy in accordance with the instructions printed thereon to the registered office of KWCM at 29th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the KWCM EGM. Completion and return of the BLUE form of proxy will not preclude KWCM Shareholders from attending and voting in person at the KWCM EGM or any adjournment thereof should KWCM Shareholders so wish. A letter from the KWIH Independent Board Committee is set out on pages 141 and 142 of this Circular and a letter from Anglo Chinese Corporate Finance, Limited, the independent financial adviser to the KWIH Independent Board Committee and the KWIH Independent Shareholders, is set out on pages 143 to 161 of this Circular. A notice convening the KWIH SGM to be held at Island Shangri-La Hong Kong, Level 39, Atrium Room, Two Pacific Place, Supreme Court Road, Central, Hong Kong on Tuesday, 19 July 2005 at 3: 00 p.m. is set out on pages 572 and 573 of this Circular. Whether or not KWIH Shareholders are able to attend the KWIH SGM, KWIH Shareholders are requested to complete and return the enclosed WHITE form of proxy in accordance with the instructions printed thereon to the principal place of business in Hong Kong of KWIH at 29th Floor, K. Wah Centre, 191 Java Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for holding the KWIH SGM. Completion and return of the WHITE form of proxy will not preclude KWIH Shareholders from attending and voting in person at the KWIH SGM or any adjournment thereof should KWIH Shareholders so wish. * For identification only 30 June 2005 EXPECTED TIMETABLE 2005 Latest time for return of BLUE form of proxy inrespectoftheKWCMEGM..........................2:00p.m.on17July Latest time for return of WHITE form of proxy inrespectoftheKWIHSGM..........................3:00p.m.on17July KWCMEGM.....................................2:00p.m.on19July KWIHSGM......................................3:00p.m.on19July DateofcompletionoftheAcquisition................................22July —i— CONTENTS Page Definitions .......................................................................... 1 Forward-looking Statements ......................................................... 9 The Macau Gaming Industry ......................................................... 10 Letter from the KWCM Directors ..................................................... 29 Letter from the KWIH Directors ...................................................... 49 Description of the Galaxy Group .................................................... 57 Letter from the KWCM Independent Board Committee ................................ 91 Letter from Commerzbank ........................................................... 93 Letter from the KWIH Independent Board Committee ................................. 141 Letter from Anglo Chinese .......................................................... 143 Appendices I. Risk Factors ............................................................... 162 II. Valuation of Galaxy Group .................................................. 182 III. Financial Information about KWCM ........................................... 195 IV. Financial Information about KWIH ............................................ 240 V. Financial Information about Galaxy ........................................... 300 VI. Unaudited Pro Forma Financial Information on the Enlarged KWCM Group ...... 345 VII. Unaudited Pro Forma Financial Information on the Remaining KWIH Group ..... 356 VIII. Property Valuation — The Remaining KWIH Group ............................ 367 IX Property Valuation — The KWCM Group ..................................... 458 X. Property Valuation — The Galaxy Group ..................................... 506 XI. General Information about KWIH ............................................. 520 XII. General Information about KWCM ............................................ 533 —ii— CONTENTS Page XIII. General Information about Galaxy ............................................ 546 XIV. Other General Information ................................................... 563 XV. Terms of the FRNs ......................................................... 568 Notice of the KWCM EGM ........................................................... 570 Notice of the KWIH SGM ............................................................ 572 — iii — DEFINITIONS In this Circular, unless the context otherwise requires, the following terms have the meanings set opposite them below. ‘‘Acquisition’’ the acquisition by KWCM of the Galaxy Equity Interest pursuant to the Acquisition Agreement; ‘‘Acquisition Agreement’’ the Acquisition Agreement dated 14 March 2005 among the Family Companies, Hugo Legend, the Minority Vendors, Canton Treasure and KWCM, in relation to, inter alia, the Acquisition, as amended by the Supplemental Agreements; ‘‘American Appraisal’’ American Appraisal China Limited, the independent valuer of the Galaxy Group; ‘‘Anglo Chinese’’ Anglo Chinese Corporate Finance, Limited, a corporation deemed licensed to carry out types 1, 4, 6 and 9 regulated activities under the SFO; ‘‘associates’’ the meaning ascribed to it in the Listing Rules; ‘‘Brightwealth’’ Brightwealth Investments Limited, a company incorporated in the British Virgin Islands on 23 November 2004 and a subsidiary of Guoco Group Limited, the latter of which is listed on the Stock Exchange; ‘‘Brightwealth Options’’ the put and call options between Brightwealth, Kentlake and Top Notch referred to in the section headed ‘‘Brightwealth Options’’ in the ‘‘Letter from the KWCM Directors’’ in this Circular; ‘‘Brightwealth Option two deeds each dated 3 February 2005 between Brightwealth and Deeds’’ each of the Option Holders in respect of the Brightwealth Options; ‘‘business day’’ a day (other than a Saturday) on which banks are open for business in Hong Kong; ‘‘CAGR’’ compound annual growth rate; ‘‘Call Option’’ the option granted by Brightwealth under the relevant Brightwealth Option Deeds to the Option Holders to require Brightwealth to sell its Galaxy Shares; ‘‘Canton Treasure’’ Canton Treasure Group Ltd., a company incorporated in the British Virgin Islands on 13 October 2004 and wholly-owned by KWCM; ‘‘City Lion’’ City Lion Profits Corp., a company incorporated in the British Virgin Islands on 13 October 2004 and wholly-owned by the Principal Trust; —1— DEFINITIONS ‘‘Commerzbank’’ Commerzbank AG, acting through its Hong Kong branch, an authorized financial institution registered with the Hong Kong Monetary Authority licensed to carry out types 1, 4, 6 regulated activities (as set out in Schedule 5 of the SFO);

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