Joy Spreader Group Inc. — Capital/Financing Update 2007

Jan 24, 2007

This announcement appears for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities.

The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, 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 announcement.

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(incorporated in Bermuda with limited liability)

(Stock Code: 8279)

RESUMPTION OF TRADING

and

DISCLOSEABLE TRANSACTIONS Establishment of a joint venture company, Asia Gaming Technologies Limited, with Ladbroke Group and grant of an Option to Ladbroke Group to subscribe for new Shares in MegaInfo Holdings Limited

The Board is pleased to announce that on 19 January 2007, Ladbroke Group, MIH (being an indirect wholly-owned subsidiary of the Company), the JV Company, Ladbrokes Holdco and the Company have entered into the JV Agreement to establish the JV Company. The JV Company will be principally engaged in (i) the management and development of the Products, (ii) the sale and distribution of the Products to Qualified Customer(s), (iii) the provision of maintenance, after-sales, training and consultancy services relating to the Products, and (iv) the management, development, sale and distribution of such other additional Products and the provision of such other additional services as the parties to the JV Agreement may agree from time to time in writing. Upon completion of the JV Agreement, the JV Company will be owned as to 51% by MIH and as to 49% by Ladbroke Group. The total capital contribution from MIH and Ladbroke Group will be HK$5,100,000 and HK$4,900,000 respectively. After completion of the JV Agreement, any future earnings, assets and liabilities of the JV Company (and any of its subsidiaries from time to time) will be consolidated in the accounts of the Group.

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Pursuant to the JV Agreement, on the date of completion of the JV Agreement, Ladbroke Group will subscribe at a nominal consideration of HK$1 for an option of the Company which, if exercised during the exercise period commencing from the date of completion of the JV Agreement and ending on the first anniversary of such date, will entitle Ladbroke Group to subscribe for up to an aggregate of 157,990,000 new shares in the Company (representing approximately 5.26% of the issued share capital of the Company as at the date of this announcement and approximately 5.00% of the enlarged issued share capital of the Company if the Option is exercised in full by Ladbroke Group) at an exercise price of HK$2.0033 per Share (subject to adjustment). The maximum total consideration payable by Ladbroke Group to the Company upon exercise in full of the Option shall amount to HK$316,501,367. Assuming the Company had to issue the Option Shares on 19 January 2007 (being the date of the JV Agreement), based on the closing price per Share of HK$1.78 as quoted on the Stock Exchange on 19 January 2007, the total value of the Option Shares would be HK$281,222,200.

The formation of the JV Company and the grant of the Option by the Company to Ladbroke Group under the JV Agreement constitute discloseable transactions for the Company under the GEM Listing Rules. A circular of the Company containing, among other things, details of the formation of the JV Company and the grant of the Option pursuant to the JV Agreement will be despatched to the Shareholders as soon as practicable.

At the request of the Company, trading in the Shares on the Stock Exchange was suspended from 9:30 a.m. on 22 January 2007 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 24 January 2007.

JV AGREEMENT

Set out below are the principal terms and conditions of the JV Agreement:

Date: 19 January 2007 Parties: (i) Ladbroke Group, an indirect wholly-owned subsidiary of Ladbrokes Holdco; (ii) MIH, an indirect wholly-owned subsidiary of the Company; (iii) the JV Company; (iv) Ladbrokes Holdco; and (v) the Company.

Upon Completion, the JV Company will be owned as to 51% by MIH and 49% by Ladbroke Group. Each of the Company and Ladbrokes Holdco entered into the JV Agreement as guarantor to guarantee the respective obligations of MIH and Ladbroke Group under the JV Agreement.

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To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, as at the date of this announcement, Ladbroke Group and its controlling shareholder, Ladbrokes Holdco (the issued shares of which are listed on the London Stock Exchange), are third parties independent of and not connected with the Company and the directors, chief executive, management shareholders or substantial shareholders of the Company or its subsidiaries, or any of their respective associates (as defined under the GEM Listing Rules).

The Business:

The JV Company (or any of its subsidiaries from time to time) will be principally engaged in (i) the management and development of the Products, (ii) the sale and distribution of the Products to Qualified Customer(s), (iii) the provision of maintenance, after-sales, training and consultancy services relating to the Products, and (iv) the management, development, sale and distribution of such other additional Products and the provision of such other additional services as the parties to the JV Agreement may agree from time to time in writing.

• (Note: The JV Group will provide the Products and services to only Qualified Customer(s) as the JV Group does not possess the necessary licence or permits to sell and distribute the Products to end consumers in the PRC. The Qualified Customer(s) will be the only licensed or authorised entities which may sell and distribute the Products to end consumers in the PRC. As at the date of this announcement, fixed odds betting products are a new kind of betting products not yet approved or accessible to the general public in the PRC, and no entity is licensed or authorised to sell fixed odds betting products in the PRC at this moment. The JV Company is a venture between MIH and Ladbroke Group set up to explore the opportunity to introduce certain fixed odds betting products of Ladbroke Group and its group companies to the sports lottery market of the PRC.)

Capital structure and financing:

	Total capital
	contribution	% equity
	in cash to the	interest in the
	JV Company	JV Company
	(HK$)
MIH	5,100,000	51%
Ladbroke Group	4,900,000	49%
Total	10,000,000	100%

The total share capital of the JV Company will be HK$10,000,000 upon Completion. After Completion, any future earnings, assets and liabilities of the JV Company (and any of its subsidiaries from time to time) will be consolidated in the accounts of the Group. Save for the above contributions, neither Ladbroke Group nor MIH undertakes to provide any loan or share capital to the JV Company (or to any other member of the JV Group) nor to give any guarantee, security or indemnity in respect of any of the liabilities or obligations of the JV Company (or any other member of the JV Group).

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In the event that the JV Group’s financial resources are at any stage insufficient to satisfy its working capital or business development requirements, the JV Group may procure such means of financing as approved by the board of directors of the JV Company and by both Ladbroke Group and MIH (or their respective representatives at a general meeting of the JV Company).

The above capital contribution of MIH to the JV Company corresponds with its pro rata entitlement to the equity interests in the JV Company and will be funded from the proceeds from the placing of new Shares as announced by the Company on 17 October 2006 and 8 November 2006.

Intellectual properties:

Upon Completion, Ladbroke Group agrees to grant, and procure the IP Owner(s) to grant, a licence to use the Licensed IPR at a nominal consideration of £1 to the JV Company (and any member of the JV Group) for the performance of the Business on the terms set out in the JV Agreement. Once a Contract is entered into in respect of a Product and becomes unconditional and effective, the licence in respect of the Licensed IPR of the relevant Product shall be exclusive to the JV Company (or any member of the JV Group) in the PRC but the Licensed IPR relating to any system(s) required for the distribution and sale of such Product shall be non-exclusive.

If the JV Company (or any member of the JV Group) shall at any time make any development or modification based on the Licensed IPR, Ladbroke Group shall own any and all Intellectual Property Rights in such developments or modifications.

Ladbroke Group and the IP Owners shall at all times indemnify and hold harmless the JV Company (or any member of the JV Group), MIH and the Company (each an “ Indemnified Party ”) on demand from and against damages, costs, expenses, liabilities, awards, judgments and penalties suffered or incurred by an Indemnified Party in connection with any action, suit, proceeding, claim, demand, investigation or inquiry (each a “ Relevant Claim ”), or any settlement thereof which arises out of or is based upon the use by the JV Company (or any member of the JV Group) of the Licensed IPR, provided that if the Relevant Claim relates to any Intellectual Property Right(s) which is(are) licensed to Ladbroke Group and/or the IP Owners under any software licence agreement(s) with any third party(ies), the liability of Ladbroke Group and the IP Owners shall then be limited to the amount capable of being recovered by Ladbroke Group and/or any of the IP Owners from its licensor(s) in relation to such Relevant Claim.

The JV Company (or any member of the JV Group) shall not use the Licensed IPR for any purpose which could have a material adverse effect on Ladbroke Group’s businesses or which could harm or otherwise bring the Licensed IPR into disrepute.

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Ladbroke Group acknowledges and agrees that it and the IP Owners shall provide the JV Company (or any member of the JV Group) with Intellectual Property Right(s) attached to the Licensed IPR. Where any part of the Licensed IPR so provided is not owned by Ladbroke Group and/or the IP Owners, and where reasonably requested to do so by MIH and/or the JV Company, Ladbroke Group shall explain the status of such third party Intellectual Property Right(s) to the JV Company and/ or MIH in sufficient detail and shall also provide supporting documentation to evidence the status of such right(s).

• Technical staff: Ladbroke Group and MIH (or the Company, as the case may be) shall second full time and/or part time technical staff to the JV Company (or any member of the JV Group).

• Additional staff may be employed by the JV Company (or any member of the JV Group) or seconded by either of the Parties where agreed between the Parties.

• Board representation: The maximum number of directors of the JV Company shall be 5. Ladbroke Group and MIH shall be entitled to appoint and at any time remove or substitute up to 2 directors and 3 directors of the JV Company respectively.

• Dividend policy: Unless otherwise agreed in writing or unless the amount of dividend declared by any member of the JV Group would prevent such member from retaining sufficient working capital to enable it to carry on business in a prudent and business-like manner, the Parties shall procure that the JV Company distributes to Ladbroke Group and MIH in the ratio of 49% and 51% respectively by way of dividend in respect of each of its financial years all its net profits available for distribution in accordance with the applicable laws. Any such distribution shall be made within seven days after the date of the auditor’s report on the relevant accounts.

• Profit sharing: The net profit of the JV Company will be shared by Ladbroke Group and MIH in the ratio of 49% and 51% respectively.

• Transfer of shares Unless the shares in the JV Company are transferred to a wholly-owned in the JV Company: subsidiary of the transferor shareholder of the JV Company or to a wholly-owned subsidiary of the ultimate holding company of such transferor shareholder, no shareholder of the JV Company shall transfer any shares in the JV Company during a period of three years from the date of the JV Agreement. After the end of such initial three-year period, if a shareholder of the JV Company (the “ Seller ”) wishes to sell any of its shares in the JV Company to third party(ies), it shall promptly give the other shareholder (the “ Continuing Shareholder ”) a written notice offering to sell such shares to the Continuing Shareholder on the same terms as apply to the purchase of such shares by the aforesaid third party(ies), and such offer shall be open for acceptance by the Continuing Shareholder within 21 days of receipt of such offer. If the Continuing

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Shareholder does not accept the offer within the aforesaid 21-days period, the Seller shall sell such shares to the aforesaid third party(ies) at not less than the proposed selling price of such shares first offered by the Seller to the Continuing Shareholder.

Any purchase or sale by MIH of the shares in the JV Company shall be subject to the compliance with the GEM Listing Rules and any necessary approval of the Shareholders.

Non-competition Each of Ladbroke Group and Ladbrokes Holdco agrees, and undertakes undertaking: to MIH and the JV Company, that, with effect from the Contract Date in relation to each Product which has been unconditionally Contracted by a Qualified Customer in the PRC, each of Ladbroke Group and Ladbrokes Holdco shall not directly or indirectly, whether on its own account or jointly with others or whether as principal, agent or otherwise, manage, develop, distribute or sell such Product in the PRC other than through the JV Company (and any member of the JV Group) pursuant to the terms of the JV Agreement. However, the aforesaid non-competition undertaking shall cease to apply to such Product from the date on which such Product ceases for any reason to be the subject of a valid and subsisting Contract. In addition, the aforesaid non-competition undertaking shall not prevent Ladbroke Group from distributing or selling any such Product in the PRC at any time prior to the Contract Date in respect of such Product otherwise than through the JV Company (or any member of the JV Group) (whether alone or jointly with others or whether as principal, agent or otherwise) pursuant to any agreement, arrangement or understanding entered into by Ladbroke Group at any time prior to the Contract Date for such Product.

Liability of Ladbroke Save as disclosed above, the maximum aggregate liability of Ladbroke Group, Ladbrokes Group, Ladbrokes Holdco and any IP Owners in respect of any provision Holdco and any in the JV Agreement shall be the higher of HK$70,000,000 or the IP Owners: valuation of 100% of the JV Company’s equity share capital at the date that the liability is incurred pursuant to the JV Agreement. The valuation shall be determined by an internationally recognised firm of accountants who shall determine the fair value of the JV Company in accordance with the terms of the JV Agreement.

• Subscription of the Option:

On the date of Completion, Ladbroke Group shall subscribe at a nominal consideration of HK$1 for the Option which, if exercised during the Exercise Period, will entitle Ladbroke Group to subscribe for up to a maximum of 157,990,000 Option Shares at an exercise price of HK$2.0033 per Option Share (subject to adjustments for any of the Adjustment Events). The maximum total consideration payable by Ladbroke Group to the Company upon exercise in full of the Option shall amount to HK$316,501,367. Assuming the Company had to issue the Option Shares on 19 January 2007 (being the date of the JV Agreement), based on the closing price per Share of HK$1.78 as quoted on the Stock Exchange on 19 January 2007, the total value of the Option Shares would be HK$281,222,200.

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The Option shall not be transferable and shall not entitle its holder to vote at any Shareholders’ meetings of the Company but can be exercised in whole or in part at any time during the Exercise Period.

Further announcement(s) will be made by the Company if:

• the Option is exercised in part or in full by Ladbroke Group during the Exercise Period and to update the Shareholders on the intended use of the resultant proceeds received by the Company based on the then financial position and business development or investment plans of the Group;

• any portion of the Option is lapsed after the expiry of the Exercise Period; or

• any adjustments need to be made to the aggregate number of Option Shares, and/or the exercise price per Option Share, issuable under any outstanding portion of the Option as a result of the occurrence of any Adjustment Event of the Company.

The aforesaid maximum number of 157,990,000 Option Shares issuable under the Option represents approximately 5.26% of the issued share capital of the Company as at the date of this announcement and approximately 5.00% of the issued share capital of the Company as enlarged by the issue of such Option Shares in the event that the Option is exercised in full by Ladbroke Group. The Option Shares will rank pari passu in all respects with all other Shares then in issue.

The Option Shares shall be issued under the general mandate granted to the Directors at the annual general meeting of the Company held on 23 October 2006, which allows the Directors to deal with up to 557,470,000 new Shares. Such general mandate has not been utilised as of the date of this announcement. Application will be made by the Company to the Stock Exchange for the listing of, and permission to deal in, the Option Shares issuable upon exercise in whole or in part of the Option by Ladbroke Group. However, no listing of the Option itself will be sought on the Stock Exchange or any other stock exchange.

The aforesaid exercise price of HK$2.0033 per Option Share is determined with reference to the recent closing prices of the Shares as quoted on the Stock Exchange and represents:

• (i) a premium of approximately 12.54% over the closing price of HK$1.78 per Share as quoted on the Stock Exchange on 19 January 2007, being the last trading day of the Shares on the Stock Exchange before the release of this announcement; and

• (ii) a premium of 15% over the average closing price of HK$1.742 per Share as quoted on the Stock Exchange for the five consecutive trading days leading up to and including 19 January 2007.

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Lock-up period for Option Shares:

Termination:

Ladbroke Group has undertaken to the Company that during the period of three years from the date of allotment of any portion of the Option Shares to it, it will not sell, transfer, grant options over or otherwise dispose of such portion of Option Shares.

Either MIH or Ladbroke Group (as the case may be) may within thirty days of any termination event (the “ Termination Event ”) occurring or within thirty days after MIH or Ladbroke Group (as the case may be) has become aware of the occurrence of such event, provide the other Party with a written notice of its desire to terminate the JV Agreement (the “ Termination Notice ”). If the Termination Event cannot be remedied within 30 days after the receipt of the Termination Notice by the other Party (or such longer period as the Parties may mutually agree), the Parties shall concur to place the JV Company (and all members of the JV Group) into liquidation.

The Termination Events shall cover situations including, among other things, the following:

• the liquidation or insolvency, or appointment of a liquidator or receiver, of the other Party or its ultimate holding company;

• the cessation or change in the nature or scope of the principal line(s) of business of the other Party or its ultimate holding company;

• any material breach of its obligations by the other Party under the JV Agreement;

• failure of the other Party to pay its proportionate share of any further finance or subscribe for additional shares in the JV Company or assume liabilities as required pursuant to the JV Agreement;

• a change in control of the other Party;

• the occurrence of any restriction or condition imposed by any relevant regulatory authority in the PRC which would have a material and adverse financial impact on the Business or where the Business or any Contract is declared illegal or unlawful by the regulatory authorities in the PRC or where there are any changes in the law of the PRC that would impact adversely on the Business or on a Contract so as to render the performance of the Contract unlawful, undesirable or subject to additional conditions;

• the JV Company (or any member of the JV Group) not having obtained a Contract to distribute the Products to any Qualified Customer within 18 months following the date of Completion;

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• the Parties not having agreed or confirmed (as the case may be) in writing within 90 days following the date of Completion on the new articles of association of the JV Company, the budget and business plan of the JV Group or, if required or applicable, the acceptance of a legal opinion to be provided by a legal counsel in the PRC advising on the course of action to be taken and followed by the JV Company (and any member of the JV Group) and the Parties to ensure that the operations of the Business will comply at all times with all relevant PRC laws and regulations;

• failure of the JV Company (or any member of the JV Group) to obtain all necessary regulatory approvals, consents or permits required to be obtained prior to entry into the Contract;

• failure of the JV Company (or any member of the JV Group) or the Qualified Customer to obtain any outstanding regulatory approval, consent or permit in relation to a Contract within 180 days after the Contract Date; or

• cessation of either Party to own any shares in the JV Company.

In addition, in the event that a deadlock arises because Ladbroke Group and MIH fail to agree on any corporate matter specified in the JV Agreement or any other matter requiring their decision or agreement and that such deadlock cannot be resolved in the manner and within the time limit as specified under the JV Agreement, the Parties shall be deemed to have elected to place the JV Group into liquidation and shall concur in taking all steps required promptly to procure that the JV Group ceases trading, winds up its affairs and enters into liquidation.

Conditions precedent: Completion of the JV Agreement is conditional upon the following conditions:

• (i) if required under the GEM Listing Rules, the passing by the Shareholders of resolution(s) approving the JV Agreement and the transactions contemplated thereby;

• (ii) the Company obtaining the approval from the GEM Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Option Shares;

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• (iii) a PRC legal counsel, the identity of which shall be agreed in writing by MIH and Ladbroke Group as soon as reasonably practicable after the date of the JV Agreement, advising that the proposed arrangements relating to the operation of the Business are in compliance with all relevant laws and regulations in the PRC; and if any approvals, consent or permits from any regulatory or governmental authorities in the PRC are required to be obtained by the JV Company (or any other member of the JV Group) for the operation of the Business, such approvals, consents or permits have been duly obtained and are in force; and

• (iv) no indication that any necessary approvals and consents from regulatory authorities in the PRC to the execution of the JV Agreement and the performance of the transactions thereby contemplated not having been obtained as at the time that the conditions described in (i), (ii) and (iii) above are satisfied,

in each case to the satisfaction of MIH and Ladbroke Group.

Long-stop date:

Completion:

The above conditions precedent of the JV Agreement shall have been fulfilled and/or waived by all the Parties on or before the 60th calendar day after the date of the JV Agreement (or such other date as may be agreed between the Parties in writing).

Completion shall take place on the third Business Day after the fulfillment and/or waiver of all conditions precedent of the JV Agreement.

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CHANGES OF SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below are the changes of the shareholding structure of the Company in the event that the Option is exercised in full by Ladbroke Group following Completion:

Shareholders MAXPROFIT GLOBAL INC_(Note 1) Mr. SUN Ho(Note 2) Mr. KOT Wai Ming(Note 2) Mr. WANG Ronghua(Note 2) Mr. HUA Fengmao(Note 2) Mr. KWOK Wing Leung Andy(Note 2)_ Ladbroke Group Public Shareholders Total	As at the date of this announcement Approximate percentage of total issued share capital of No. of Shares the Company 2,006,250,000 66.84% 26,750,000 0.89% 26,750,000 0.89% 2,675,000 0.09% 2,675,000 0.09% 2,675,000 0.09% – – 934,020,000 31.11% 3,001,795,000 100.00%	Immediately upon Completion(Note 3) Approximate percentage of total issued share capital of No. of Shares the Company 2,006,250,000 63.49% 26,750,000 0.84% 26,750,000 0.84% 2,675,000 0.09% 2,675,000 0.09% 2,675,000 0.09% 157,990,000 5.00% 934,020,000 29.56% 3,159,785,000 100.00%	Immediately upon Completion(Note 3) Approximate percentage of total issued share capital of No. of Shares the Company 2,006,250,000 63.49% 26,750,000 0.84% 26,750,000 0.84% 2,675,000 0.09% 2,675,000 0.09% 2,675,000 0.09% 157,990,000 5.00% 934,020,000 29.56% 3,159,785,000 100.00%
			100.00%

Notes:

1. MAXPROFIT GLOBAL INC is beneficially and wholly-owned by Mr. Sun Ho, an executive Director and Chairman of the Company.

2. Each of the two executive Directors, Mr. Sun Ho and Mr. Kot Wai Ming, holds 26,750,000 Shares and each of the three independent non-executive Directors, Mr. Kwok Wing Leung Andy, Mr. Wang Ronghua and Mr. Hua Fengmao, holds 2,675,000 Shares following their exercise in full of the respective options granted to them on 14 August 2006 by the Company pursuant to the share option scheme of the Company adopted on 18 November 2004.

3. This shareholding structure of the Company is based on the assumptions that: (a) the Option will be exercised in full immediately upon Completion; (b) no Shares will be issued (except for the Option Shares) or repurchased by the Company after the date of this announcement; and (c) the respective shareholdings of MAXPROFIT GLOBAL INC, Mr. Sun Ho, Mr. Kot Wai Ming, Mr. Kwok Wing Leung Andy, Mr. Wang Ronghua and Mr. Hua Fengmao in the Company will remain unchanged after the date of this announcement.

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INFORMATION ON LADBROKE GROUP AND ITS GROUP COMPANIES

(as extracted from the website of Ladbrokes plc at www.ladbrokesplc.com)

Ladbroke Group is an indirect wholly-owned subsidiary of Ladbrokes plc. Ladbrokes plc is the world’s leading fixed odds betting company. Formerly Hilton Group plc, the company was renamed Ladbrokes plc following the completion of the sale of the Hilton International Hotel division to Hilton Hotel Corporation on 23 February 2006.

Now a pure betting and gaming company, Ladbrokes plc comprises (i) Ladbrokes, the biggest retail bookmaker in the United Kingdom and Ireland, (ii) Ladbrokes Remote Betting and Gaming, which includes Ladbrokes.com, a world-leading provider of interactive betting and gaming services, and one of Europe’s leading telephone betting operations, (iii) Vernons, the leading football pools operator, and (iv) Ladbrokes Casinos which opened its first casino at the Hilton London Paddington in July 2006.

INFORMATION ON THE GROUP

The Company is an investment holding company incorporated in Bermuda and its issued Shares are listed on GEM. The Group is principally engaged in the research, development and sale of software products and systems as well as the provision of information technology solutions (including project implementation, system integration and after-sales maintenance services) to customers in the Macao Special Administrative Region of the PRC and the PRC. The Group offers an array of enterprise solutions including MegaImage (document imaging application), MegaMax (surveillance solution), MegaDMS (document management system) and MegaERP (enterprise resource planning application).

REASONS FOR ENTERING INTO THE JV AGREEMENT

The terms of the JV Agreement have been agreed based on arm’s length negotiations between the Parties involved. The JV Company will be principally engaged in the Business. The Directors are of the view that the establishment of the JV Company provides an excellent opportunity for the Group to expand its range of products and services to the fixed odds betting products and system(s) and related services. In addition, leveraging on the strength and technical expertise of Ladbroke Group (and its group companies) in the fixed odds betting business, the Directors believe that the Group will benefit from the future business opportunities brought about by the JV Company. The Directors therefore consider that the terms of the JV Agreement are fair and reasonable and in the interests of the Shareholders as a whole.

IMPLICATIONS UNDER THE LAWS OF HONG KONG AND THE GEM LISTING RULES

Reference is made to the guidelines issued by the Stock Exchange in relation to “Gambling Activities Undertaken by Listing Applicants and/or Listed Issuers” dated 11 March 2003 (the “ Guidelines ”). Under the Guidelines, if the Group is directly or indirectly engaged in gambling activities, the Group should ensure that the operation of such gambling activities should comply with the applicable laws in the area where such activities operate and/or not contravene the Gambling Ordinance (Chapter 148 of the Laws of Hong Kong) (the “ Gambling Ordinance ”). Should such operation (i) fail to comply with the applicable laws in the areas where such activities operate and/or (ii) contravene the Gambling Ordinance, the Company or its business may be considered unsuitable for listing under Rule 11.06 of the GEM Listing Rules and the Stock Exchange may direct the Company

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to take remedial action, and/or may suspend dealings in, or may cancel the listing of, the Shares on the Stock Exchange. The Company will use its best endeavours to procure that the operation of the JV Company must (i) comply with the applicable laws in the areas where such activities operate; and/or (ii) not contravene the Gambling Ordinance. In addition, the Company will exercise its right to terminate the JV Agreement if the operation of the JV Company becomes unlawful or illegal in the PRC pursuant to the terms of the JV Agreement. Please refer to the section headed “JV Agreement – Termination” above for further details.

The formation of the JV Company and the grant of the Option by the Company to Ladbroke Group under the JV Agreement constitute discloseable transactions for the Company under the GEM Listing Rules. A circular of the Company containing, among other things, details of the formation of the JV Company and the grant of the Option pursuant to the JV Agreement will be despatched to the Shareholders as soon as practicable.

SUSPENSION AND RESUMPTION OF TRADING

At the request of the Company, trading in the Shares on the Stock Exchange was suspended from 9:30 a.m. on 22 January 2007 pending the release of this announcement. Application has been made by the Company to the Stock Exchange for the resumption of trading in the Shares on the Stock Exchange with effect from 9:30 a.m. on 24 January 2007.

DEFINITIONS

In this announcement, unless the context requires otherwise, the following expressions have the following meanings:

“Adjustment Event(s)”	means capitalisation issue, rights issue, open offer, reduction of
	capital, consolidation or subdivision of the Shares of the Company
“Board”	the board of Directors
“Business”	the business of the JV Group as set out in the sub-section headed
	“The Business” in this announcement
“Business Day”	a day, except a Saturday or Sunday, on which banks in Hong
	Kong are generally open for business
“Company”	MegaInfo Holdings Limited, a company incorporated in Bermuda
	with limited liability and the issued Shares of which are listed on
	GEM
“Completion”	completion of the JV Agreement, which shall take place on the
	third Business Day after all conditions precedent of the JV
	Agreement have been fulfilled and/or waived

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“Contract”

any contract entered into between the JV Company (or any member of the JV Group) and any Qualified Customer for development of the Product(s) by the JV Company (or any member of the JV Group) for, as well as sale and distribution of the Product(s) by the JV Company (or any member of the JV Group) to, such Qualified Customer in any of the provinces, municipalities, special administrative regions and autonomous regions of the PRC on terms satisfactory to the JV Company (or any member of the JV Group) and pursuant to which:

• the JV Company (or any member of the JV Group) will earn revenue satisfactory to each of MIH and Ladbroke Group from the provision of Products and/or related services to such Qualified Customer;

• the Qualified Customer is obligated to promote the distribution and sale of the Products in the PRC; and

• all applicable laws are complied with and all necessary licences, permissions and authorisations and consents have been obtained by the Qualified Customer and, as applicable, by the JV Company (or any member of the JV Group), MIH and/or Ladbroke Group

• and “ Contracted ” shall be construed accordingly

“Contract Date”

the date on which any Contract becomes unconditional and effective in all respects (save for obtaining any approvals, consents and permits from regulatory authorities in the PRC which cannot be obtained prior to execution of the Contract)

“Directors”

directors of the Company

• “Exercise Period”

• the period commencing from the date of Completion and ending on the first anniversary of such date

• “GEM” the Growth Enterprise Market of the Stock Exchange

• “GEM Listing Committee” the listing sub-committee of the Stock Exchange with responsibility for GEM

• “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

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“Intellectual Property Rights”	patents, copyrights, rights in designs, trade marks, rights in trade
	or business names or internet domain names, topography and
	database rights, moral rights, rights in confidential information
	(whether registered or unregistered, and including applications for
	any such rights) and any intellectual property rights having the
	same or similar effect anywhere in the world
“IP Owner(s)”	the owner(s) of the Licensed IPR which are the group companies
	of Ladbroke Group as at the date of this announcement
“JV Agreement”	the joint venture shareholders’ agreement dated 19 January 2007
	entered into between Ladbroke Group, MIH, the JV Company,
	Ladbrokes Holdco and the Company to establish the JV Company
“JV Company”	Asia Gaming Technologies Limited (亞博科技有限公司), a
	company incorporated in Hong Kong with limited liability which
	will be owned as to 51% by MIH and 49% by Ladbroke Group
	upon Completion
“JV Group”	the JV Company and its subsidiaries from time to time
“Ladbrokes Holdco”	Ladbrokes plc, the issued shares of which are listed on the London
	Stock Exchange
“Licensed IPR”	the intellectual property rights relating to the Products
“MIH”	Maxprofit Investment Holdings Limited, a company incorporated
	in British Virgin Islands and an indirect wholly-owned subsidiary
	of the Company
“Option”	the unlisted option of the Company to be granted to Ladbroke
	Group upon Completion at a nominal consideration of HK$1 which
	will entitle Ladbroke Group to subscribe for the whole of or part
	of the Option Shares at an exercise price of HK$2.0033 per Share
	(subject to adjustment)
“Option Shares”	an aggregate of up to 157,990,000 new Shares to be issued by the
	Company to Ladbroke Group upon exercise in whole or in part of
	the Option by Ladbroke Group
“Parties”	the parties to the JV Agreement
“PRC”	the People’s Republic of China which, for the purpose of this
	announcement, excludes Hong Kong, the Macao Special
	Administrative Region of the PRC and Taiwan

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“Products”

• specific fixed odds betting products (which are games for proposed adoption in the PRC sports lottery market) that Ladbroke Group and MIH have agreed shall be developed, distributed and sold by the JV Company (or any member of the JV Group) to Qualified Customers in the PRC (and the system(s) required for the distribution and sale of such products), and any other products and/or any other system(s) which Ladbroke Group and MIH specifically agree in writing from time to time

• “Qualified Customer” means any customer of the JV Group which is licensed or authorised by the relevant regulatory authority in the PRC to operate a business which sells and distributes the Products in the PRC and to undertake all acts and things contemplated by any Contract to which that customer is a party

• “Share(s)”

• ordinary share(s) of HK$0.002 each in the share capital of the Company

• “Shareholder(s)” holder(s) of the Share(s)

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “£” British Pounds Sterling, the lawful currency of the United Kingdom

• “%” per cent.

By order of the Board Sun Ho Chairman

Hong Kong, 23 January 2007

As at the date of this announcement, the Board comprises two executive Directors, namely Mr. Sun Ho and Mr. Kot Wai Ming, and three independent non-executive Directors, namely Mr. Wang Ronghua, Mr. Hua Fengmao and Mr. Kwok Wing Leung Andy.

This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief: (1) the information contained in this announcement is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this announcement misleading; and (3) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable.

This announcement will remain at www.hkgem.com on the “Latest Company Announcements” page of the GEM website for at least 7 days from the date of its posting.

* For identification purpose only

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