Rego Interactive Co., Ltd — Capital/Financing Update 2003

Oct 9, 2003

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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(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

Announcement

Establishment of the Joint Venture Company, Guizhou Capital Water Co., Ltd.

Summary

The Directors have noted the recent increase in the trading volume of shares of the Company. Except for the matter mentioned below, the Company is not aware of any reasons for such increases.

The Board is pleased to announce that on 9th October, 2003, the Company entered into a joint venture agreement with Long Li Group, pursuant to which the two parties agreed to set up a joint venture company under the name of Guizhou Capital Water Co., Ltd. The scope of business of the Joint Venture Company is principally engaged in the provision of water works, investment, construction and operation of environmental protection related businesses in Guizhou, the PRC.

The registered capital of the Joint Venture Company is RMB100 million (approximately HK$93.9 million), of which RMB 70 million (approximately HK$65.7 million) (constituting 70% thereof) will be contributed by the Company and RMB30 million (approximately HK$28.2 million) (constituting 30% thereof) will be contributed by Long Li Group.

This announcement is made at the request of The Stock Exchange of Hong Kong Limited.

The directors of the Company (the “Directors”) have noted the recent increase in the trading volume of shares of the Company. Except for the matter mentioned below, the Company is not aware of any reasons for such increases.

BACKGROUND

The Company has issued an announcement in respect of the establishment of the Joint Venture Company in the PRC today. This announcement is made to provide details on this joint venture establishment transaction to the shareholders of the Company for information purpose only.

Reference is made to the No. 7 resolution as disclosed under the “Announcement of the Resolutions of the 31st Meeting of the Second Board” issued by the Company dated 24th July, 2003 and published on , and <the

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Standard> on 25th July, 2003, regarding the proposal in respect of the establishment of a joint venture company, preliminarily named as Gui Yang Capital Water Works Company, with Long Li Group. In this connection, the board of directors of the Company is pleased to announce that the Company has entered into a joint venture agreement (the “Joint Venture Agreement”) with Long Li Group on 9th October, 2003, pursuant to which the two parties agreed to set up a joint venture company under the name of Guizhou Capital Water Co., Ltd. (the “Joint Venture Company”).

JOINT VENTURE AGREEMENT

1. Date of the agreement: 9th October, 2003

2. Parties: (i) Tianjin Capital Environmental Protection Company Limited (the “Company”); and

   • (ii) Long Li Group Company Ltd. (“Long Li Group”), a limited company incorporated in the British Virgin Islands, who is not a connected person to the Company as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

3. Details of the Joint Venture Company

• (i) Name Guizhou Capital Water Co., Ltd.

• (ii) Form of the Sino-foreign joint venture company incorporated under the company Company Law of the People’s Republic of Chine (the “PRC”)

• (iii) Registered capital RMB100 million (approximately HK$93.9 million), of which RMB 70 million (approximately HK$65.7 million) (constituting 70% thereof) will be contributed by the Company and RMB30 million (approximately HK$28.2 million) (constituting 30% thereof) will be contributed by Long Li Group

• (iv) Scope of business Principally engaged in the provision of water works, investment, construction and operation of environmental protection related businesses in Guizhou, the PRC

• (v) Board composition

  • Comprises of 6 directors in total, under which the Company can appoint 4 directors and Long Li can appoint 2 directors

• (vi) Profit distribution

  • The profit distribution and the responsibilities of risk will be allocated in proportion to the shareholding of the shareholders of the Joint Venture Company

• (vii) Duration of the Joint Venture Company

• 35 years from the issue date of the business license

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GENERAL

The board of the Directors (the “Board”) confirms that save as disclosed herein, there are no negotiations or agreements relating to intended acquisitions or realisations which are discloseable under paragraph 3 of the Listing Agreement, neither is the Board aware of any matter discloseable under the general obligation imposed by paragraph 2 of the Listing Agreement, which is or may be price-sensitive nature.

Made by the order of the Board, the Directors individually and jointly accept responsibility for the accuracy of the information contained in this announcement.

In this announcement, unless otherwise stated, certain amounts denominated in RMB have been converted (for information only) into HKD using an exchange rate of HK$1.00 to RMB 1.065.

By order of the Board Ma Baiyu Chairman

Tianjin, the PRC, 9th October, 2003

Please also refer to the published version of this announcement in The Standard.

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