Contents :

1. INTRODUCTION

The Board of Directors of TDEX is pleased to announce that its 100% owned subsidiary, TDEX Global Limited (TDex Global ) has on 29 October 2007 entered into a Shareholders Agreement (SA) with:-

· Tian Xian Cheng, a citizen of The People Republic of China. (hereinafter called Tian); and
· Qingyuan City Xin Hai Yuan Digital Technology Co., Ltd., a company incorporated and registered in The People Republic of China. (hereinafter called XHY)

for the subscription of 5 million ordinary shares of RMB 1 each (Subscription Shares), representing 33% equity interest in HITONE by Tdex Global for a total cash consideration of RMB10million (or approximately RM4.5million based on the exchange rate of RMB1.00:RM0.45 as at 26 October 2007) (the Subscription).

2. INFORMATION ON HITONE

HITONE is a company incorporated in China with a registered and paid-up share capital of RMB10million comprising 10million ordinary shares of RMB1.00 each as at 29 October 2007. HITONE is a developer of Massive Multiplayer Online Role-Playing Game (MMORPG) in China. HITONE focuses on creating multimedia, online, comical, professional game products and services focuses on creating healthy online community.

HITONE has not generated any revenue since its incorporation and therefore the financial results of the HITONE would have no material impact to TDEX up to the SA date. As at 30 September 2007, the net assets value of HITONE was RMB 17.7 million based on the interim account provided by HITONE.

3. BACKGROUND INFORMATION ON THE SUBSCRIPTION

As announced by the Company on 10 April 2007, TDEX had on the same date entered into an Agreement with HITONE for the joint engagement of the publication of an online game Childhood (CH) in China (the Collaboration Agreement).

Salient terms of the Collaboration Agreement are as set out below:-

i. Both parties are forming a joint operation to carry out all of the publishing activities of CH in China as follows:-

Ш TDEX undertakes to provide corporate management know how in strategy planning, marketing planning, and infrastructure provision in the publication of CH; and

Ш HITONE undertakes to provide know-how in CHs maintenance, support, and customer service;

ii. The collaboration shall be carried out from the date of the Collaboration Agreement for 12 months; and

iii. Both TDEX and Hitone shall engage in a Profit Sharing Scheme as follows:

Ш During the tenure of the Collaboration Agreement, 20% of the net profit generated from CH shall be set aside for HITONEs continuous maintenance and support of CH;

Ш The balance of the 80% net profit, HITONE and TDEX will share on the ratio of 49% and 51% respectively; and

Ш Net profit allocation shall be performed on monthly basis. Profit payout shall be mutually determined by both the said parties.

Pursuant to the terms of the SA, the above Profit Sharing Scheme as provided in the Collaboration Agreement shall be terminated and cease to have any effect upon the completion of the Subscription

4. SALIENT TERMS OF THE SA

4.1 Purpose Of The SA

The SA is for the purpose of:-

· giving effect to the Subscription; and

· regulating the relationship among the shareholders of HITONE (including TDEX Global) in respect of the conduct of HITONEs business relating to establishing, operating and developing and publishing of online games in China.

4.2 Subscription Consideration

Subscription Consideration shall be payable in the following manner:-

(a) TDEX Global has prior to the execution of the SA channelled to HITONE under the Collaboration Agreement a total sum of RMB 4,685,958.86; and
(b) the balance of RMB5,314,041.14 payable within three (3) months from the date of the SA upon the allotment of the Subscription Shares thereof.

4.3 Capital Structure

After the Subscription by TDEX Global, the registered and paid-up share capital of HITONE will be RMB15million comprising 15 million ordinary shares of RMB1.00 each:

The shareholding structure after the subscription by TDEX Global shall be in the proportions as set out below:



Shareholders of HITONE	Number of ordinary shares	Shareholding (%)
TIAN	4,500,000	30
TDEX Global	5,000,000	33
XHY	5,500,000	37
Total	15,000,000	100

4.4 Board Of Directors

The composition of the Board of Directors of HITONE shall consist of at least three (3) Directors as may be nominated and appointed one each by TIAN, XHY and TDEX Global.

4.5 Termination

The SA shall forthwith terminate with respect to a shareholder (in this Clause referred to as the "Defaulter") upon written notice (the Termination Notice) to it by the other shareholder (s), upon the occurrence of any of the following events:

(a) The Defaulter has a resolution passed for its winding up (other than for the purposes of and followed by a recon-struction or amalgamation) or if a petition is presented or a proceeding is commenced or an order is made for the winding-up, insolvency, administration, reorganisation, reconstruction or simi-lar order for the benefit of creditors, dissolution or bankruptcy of the Defaulter;

(b) The Defaulter has a provisional liquidator, receiver, manager, administrator, trustee or similar officer appointed in respect of all or any part of its business or assets;

(c) The Defaulter stops or suspends payments to its creditors generally or is unable or admits its liability to pay its debts as they fall due or seeks to enter into any composition or other arrangement with its creditors or is declared or becomes bankrupt or insolvent; or if a creditor takes possession of all or any part of the business or assets of the Defaulter or any execution or other legal process is enforced against the Defaulter and is not discharged within fourteen (14) days;

(d) If the Defaulter is in breach of any of its obligations under the SA and such breach, (if capable of remedy), has not been remedied at the expiry of fourteen (14) days after receipt of a written notice giving particulars of the breach and requiring the Defaulter to remedy the breach;

and upon the issuance of the Termination Notice, the Defaulter shall be deemed to have offered to transfer its shares in HITONE to the other shareholder(s) and the provisions of transfer procedures in the SA shall mutatis mutandis apply.

The termination of the SA however caused and the ceasing by any shareholder to hold any shares shall be without prejudice to any obligations or rights of any of the shareholders under the SA which have accrued prior to such termination and shall not affect any provision of the SA which is expressly or by implication provided to come into effect on or to continue in effect after such termination.

4.6 Disposal Of Shares

Unless all the shareholders otherwise agree, a shareholder shall not dispose of shares in HITONE except in accordance with the provisions of the SA.

A shareholder that gives or is deemed to have given a transfer notice to dispose of its shares, appoints HITONE acting through the board of directors of HITONE as the shareholders agent to sell all the shares to the other shareholders at a sale price to be determined in the following manner:-

i. unanimously agreed by the directors of HITONE; or

ii. based on the valuation by a person or an independent valuer appointed by the board of directors of HITONE, the appointment of which must be agreed by all directors of HITONE.

5. BASIS OF VALUATION AND FUNDING

The subscription consideration of RMB10 million will be paid in cash and the price was arrived at after taking into consideration the earnings potential of HITONEs online games engine. The Subscription will be funded by internally generated funds of TDex Group.

6. LIABILITIES TO BE ASSUMED AND ADDITIONAL FINANCIAL COMMITMENT REQUIRED

There are no other liabilities to be assumed by TDEX pursuant to the Subscription. The Board does not foresee any material additional financial commitment required as HITONE is envisaged to be self-funding after the Subscription.

7. RATIONALE FOR THE SUBSCRIPTION, FUTURE PROSPECTS AND SPECIFIC INVESTMENT RISK

Rationale for the Subscription
HITONE is a developer of MMORPG in China. TDEX provides TechnoDex platform® to develop and deploy online game portal which could support over 1 million users. The Subscription would provide TDEX the opportunity to support all new online games developed by HITONE in the future by providing the e-Business solutions using TechnoDex platform®. The subscription would also strengthen and widen TDEXs distribution network and broaden its customer base and to expand its market abroad. We believe this venture will provide the Group with a steady and recurring revenue stream going forward.

Future Prospects

According to industry estimates, Chinas online gaming industry was worth about USD1.04 billion in 2006, and is expected to grow to reach USD3.9 billion by 2010. This rapid growth is driven by the increasing number of Internet users in China, the adequate infrastructure, and the lower cost of playing online games compared to that of console games. Furthermore, China-made online games held 65% of the domestic market in 2006; overtaking the previous dominance of American and Japanese games.

According to the China Internet Network Information Centre, as at June 2007, there were 162 million Internet users in China, up from 137 million users in December 2006; user being defined as Chinese residents aged 6 and above who used the Internet within half a year. The bulk of users were in the 18  24 year old age bracket. Most users had at least a high school education. 122 million users connected to the Internet via broad band connection, up from 104 million in December 2006.

With such an ever growing bulk of young and reasonably educated users with increasing disposable income, its market potential is staggering.

Specific investment risk

Political, economic and regulatory consideration
The financial and business prospects of HITONE and the industry in which it operates may depend to some degree on political, economic and regulatory factors. Any adverse developments of such factors may materially and adversely affect the prospects of HITONE. The political and regulatory uncertainties include, amongst others, the risks of war, riots, and changes in political leadership, expropriation, nationalism, re-negotiation or nullification of existing contracts. As such, there is no guarantee that there will not be any changes in government policies or regulations that may be unfavorable to HITONE.

Dependence on key personnel
HITONE is highly dependent on its key personnel. The loss of any of its key personnel could be detrimental to the operations as well as the financial performance of HITONE. HITONE will continuously provide better working environment and staff welfare and inculcate loyalty amongst the key staff including all its employees.

Financial and foreign currency risks
The Subscription may expose TDEX to the fluctuation of foreign exchange rates as the Subscription price is denominated in RMB. The Group may seek to mitigate the risk through effective hedging and effective fund management with its Subsidiary in Suzhou.

Business risks
HITONE is subject to inherent risks in; inter alia, the online game industry. These include but are not limited to key personnel shortages, intensity of competition, demand for its products, increases in the costs of equipment, changes in government legislation, changes in general economic, business conditions, entry of new competitors and introduction of new technology products. There can be no assurance that the above business risks, which would generally affect HITONEs competitors as well, will not have a material adverse effect on the HITONE. However, the above risks could be reduced and mitigated through its effective and efficiency in management and with good internal control in place.

8. EFFECTS OF THE SUBSCRIPTION

a) Share capital

There will be no effect on the issued and paid-up share capital of TDEX arising from the Subscription as it will be satisfied entirely by cash.

b) Substantial shareholders
There will be no effect on the shareholdings of the substantial shareholders of TDEX arising from the Subscription as the Subscription Consideration will be satisfied entirely by cash.

c) Earnings Per Share

The Subscription is expected to create value and contribute positively to the current financial year ending 30 June 2008 and future earnings per share of the Group.

d) Net Assets Per Share

The Subscription is not expected to have any material effect on the net assets per share of the TDEX as at 30 June 2008.

e) Gearing

There will be no effect on the gearing of TDEX as the subscription will be satisfied entirely by cash via internally generated funds.

9. APPROVALS REQUIRED FOR THE SUBSCRIPTION

The Subscription is not subject to the approval of any regulatory authorities or TDexs shareholders.

10. SECURITIES COMMISSION GUIDELINES

The Subscription has not departed from the Guidelines for Initial Public Offerings and Listings on the MESDAQ Market issued by the Securities Commission.

11. INTEREST OF THE DIRECTORS, MAJOR SHAREHOLDERS AND PERSON CONNECTED TO THEM

None of the directors or major shareholders of TDEX or any persons connected to them have any interest, direct or indirect, in the Subscription.

12. DIRECTORS STATEMENT

The Directors of TDEX, after careful deliberation, are of the opinion that the Subscription is in the best interest of the Company.

13. ESTIMATED TIMEFRAME FOR COMPLETION

The Subscription is envisaged to be completed within three (3) months from the date of the SA.

14. DOCUMENTS AVAILABLE FOR INSPECTION

The Shareholders Agreement is available for inspection at the registered office of TDex at Third Floor, No 79 (Room A), Jalan SS21/60, Damansara Utama, 47400 Petaling Jaya, Selangor Darul Ehsan during normal office hours from Monday to Friday (except for public holidays) for a period of three (3) months from the date of this announcement.

This announcement is dated 29 October 2007.

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