Rego Interactive Co., Ltd — Capital/Financing Update 2011

Mar 16, 2011

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim 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)

(Stock Code: 1065)

DISCLOSEABLE TRANSACTION IN RELATION TO THE PROJECT OF THE CENTRALISED ENERGY STATIONS OF TIANJIN CULTURAL CENTRE

References are made to the announcements of the Company dated 28 September 2010 and 18 October 2010 in relation to the winning of the bid for the Project as well as its announcement dated 24 January 2011 in relation to the incorporation of the Project Company for the Project.

In compliance with the relevant PRC requirements and with a view to setting out the rights and obligations of TCAC, being the governmental agency for the People’s Government of Tianjin City for the Project, and the Project Company over the Project as well as ensuring the smooth implementation thereof, on 16 March 2011, the Project Company and TCAC entered into the Agreement. Pursuant to the Agreement, TCAC has agreed to grant the Exclusive Operation License to the Project Company for the investment in, construction, operation, management, maintenance and renovation of the Facilities as well as provision of heat and cold supply services in Tianjin Cultural Centre. Upon expiry of the term of the Exclusive Operation License, the Project Company shall, after restorative repairment, transfer all the Facilities (including, without limitation, all the heat and cold supply facilities, equipment and spare parts which are owned or being used or constructed by it but excluding the movable property which is used for operating or constructing the Facilities) to TCAC at a price to be determined with reference to any depreciation rates as stipulated under the applicable PRC law and regulations.

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The estimated investment amount for the Project is approximately RMB423,000,000 (equivalent to approximately HK$499,140,000). Since the applicable percentage ratios for the Agreement are more than 5% but less than 25%, the transaction contemplated under the Agreement constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

INTRODUCTION

References are made to the announcements of the Company dated 28 September 2010 and 18 October 2010 in relation to the winning of the bid for the Project as well as its announcement dated 24 January 2011 in relation to the incorporation of the Project Company for the Project.

In compliance with the relevant PRC requirements and with a view to setting out the rights and obligations of TCAC, being the governmental agency for the People’s Government of Tianjin City for the Project, and the Project Company over the Project as well as ensuring the smooth implementation thereof, on 16 March 2011, the Project Company and TCAC entered into the Agreement.

THE AGREEMENT

Set out below is a summary of the principal terms of the Agreement:

(1) Date

16 March 2011

(2) Parties

• (a) the Project Company, a wholly-owned subsidiary of the Company; and

• (b) TCAC. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, TCAC and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

(3) Details of the Project

Pursuant to the Agreement, TCAC has agreed to grant the Exclusive Operation License to the Project Company for the investment in and operation of the Project.

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Scope and term of the Exclusive Operation License

Pursuant to the Agreement, TCAC, as authorized by the People’s Government of Tianjin City, has agreed to grant the Exclusive Operation License to the Project Company to invest in, construct, operate, manage, maintain and renovate the Facilities as well as to provide heat and cold supply services in Tianjin Cultural Centre.

The term of the Exclusive Operation License shall last for 26 years (including the construction period for the Facilities) commencing on 2 March 2011 and is subject to any renewal or early termination pursuant to the terms of the Agreement.

Subject to the relevant PRC law and regulations, the Project Company shall have the pre-emptive right to renew the Exclusive Operation License on the same terms and conditions under the Agreement, provided that the Project Company shall raise such renewal request not later than 1 year prior to the expiry of the term of the Exclusive Operation License. The Exclusive Operation License may be renewed upon consent by TCAC.

Facilities to be constructed for the Project

Pursuant to the Agreement, the Project Company shall construct the Facilities in Tianjin Cultural Centre, including but not limited to three centralised energy stations to be built in the southern, northern and western areas of Tianjin Cultural Centre, transformer station(s), centralised cooling tower(s), tube well(s), underground well(s) as well as other facilities for heat and cold supplies, in accordance with the relevant construction plans and technical requirements. The Project Company shall also be responsible for the maintenance and renovation of the Facilities.

The Project Company shall obtain the land use rights of the lands, on which the Facilities are built, from the relevant government unit(s) by lease. TCAC has agreed to assist the Project Company in obtaining such land use rights.

Operation, management, maintenance and renovation of the Facilities

During the term of the Agreement, the Project Company shall be responsible for the operation, management, maintenance and renovation of the Facilities in Tianjin Cultural Centre. Any expenses incurred therefrom shall be borne by the Project Company.

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Provision of the heat and cold supply services and the service fees collectable by the Project Company

During the term of the Exclusive Operation License, the Project Company shall be responsible for provision of the heat and cold supply services in Tianjin Cultural Centre and shall collect service fees for the heat and cold supply services from each user, which shall be determined in accordance with the following manners:

• (i) For the first two years of provision of the heat and cold supply services:

• Price for centralised RMB36/m[2] or RMB45/GJ, being the bidding heat supply: price for the heat supply

• Price for centralised RMB65/m[2] or RMB94/GJ, being the bidding cold supply: price for the cold supply

• (ii) Since the third year of provision of the heat and cold supply services, the Project Company shall collect an annual fee and a monthly fee from each user for the heat and cold supply services which are calculated according to the following formulas:

Annual Fee (payable in advance) Monthly Fee Price for RMB36 x 50% of the RMB45 x 50% of the centralised building area of the user actual used amount heat supply: Price for RMB65 x 50% of the RMB94 x 50% of the centralised building area of the user actual used amount cold supply:

The prices for the centralised heat supply and centralised cold supply were determined with reference to the uniform price for the centralised heat supply, the market price for the centralised cold supply as well as the users’ building areas and their actual used amounts.

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The prices for the centralised heat supply and centralised cold supply are subject to adjustment upon occurrence of any of the following:

• (i) In respect of the centralised heat supply, change in the uniform price for the centralised heat supply as announced by the People’s Government of Tianjin City.

• (ii) In respect of the centralised cold supply, it is agreed that adjustment to the price for the centralised cold supply shall, in principle, only be made every two years, unless occurrence of any of the following recognized by TCAC:

• (a) excessive change in the annual Consumer Price Index as announced by the Department of Statistics, Tianjin (天津市統計局);

• (b) significant increase in the applicable electricity price for the Project;

• (c) significant increase in the average wage of the labour in Tianjin City;

• (d) significant change in the tax rates to which the Project Company is subject, such as enterprise income tax or value-added tax, etc; or

• (e) significant increase in the Project Company’s operating costs from the previous year without any default on the part of the Project Company.

Supervision of the Project by TCAC

During the term of the Agreement, TCAC will supervise the Project Company in respect of the operation of the Project as well as control and adjust the development and annual plans of the Project. TCAC will also appoint its agents to supervise and manage the Facilities as well as the heat and cold supply services to be provided by the Project Company. Where necessary, TCAC may expropriate the Facilities for public interests.

Transfer of the Facilities upon expiry of the term of the Exclusive Operation License

Upon expiry of the term of the Exclusive Operation License, the Project Company shall, after restorative repairment, transfer all the Facilities (including, without limitation, all the heat and cold supply facilities, equipment and spare parts which are owned or being used or constructed by it but excluding the movable property which is used for operating or constructing the Facilities) (collectively, the “ Transferring Facilities ”) to TCAC at a price to be determined with reference to any depreciation rates as stipulated under the applicable PRC law and regulations.

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Prior to 1 year of the expiry of the term of the Exclusive Operation License (where applicable, the renewed Exclusive Operation License), the Project Company and TCAC shall set up a committee to formulate the proposal for transferring the Transferring Facilities as well as to ascertain the items of the Transferring Facilities and the transferring price.

(4) Estimated investment amount for the Project

The estimated investment amount for the Project is approximately RMB423,000,000 (equivalent to approximately HK$499,140,000), which will be paid by the Project Company in cash out of its internal resources and by means of bank loans. The estimated investment amount was determined with reference to the State’s relevant regulations in relation to the construction of infrastructures and the prevailing market rate.

(5) Performance Guarantee

The Project Company should, within 15 days prior to the signing date of the Agreement, obtain guarantee in the form of undertaking letter(s) from financial institution(s) recognized by both parties for its performance in connection with the construction, operation and maintenance of the Facilities as well as the transfer of the Transferring Facilities with a maximum guarantee amount of RMB3,000,000, such that if the Project Company is in default on its performance under the Agreement, TCAC is entitled to deduct the guarantee amount as damages.

Each of the undertaking letters shall be valid for 12 months. The Project Company shall deliver a new undertaking letter to TCAC not less than 30 days prior to the expiry date of each of the undertaking letters for replacement. The last undertaking letter issued with respect to the transfer of the Transferring Facilities for the guarantee that the Transferring Facilities will function normally for 1 year after the transfer shall remain valid until expiry of the guarantee period (i.e. 12 months after the Transferring Facilities are transferred to TCAC).

(6) Term

Subject to renewal or early termination of the Exclusive Operation License pursuant to the terms of the Agreement, the Agreement shall be effective for a term of 26 years since the effective date of the Exclusive Operation License. Where applicable, the term of the Agreement shall be extended until expiry of the term of the renewed Exclusive Operation License.

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(7) Undertakings

Subject to the terms of the Agreement and consent by TCAC, the Project Company, during the term of the Exclusive Operation License (where applicable, including the term of the renewed Exclusive Operation License), shall not transfer, lease or create any security over the Facilities nor lease, pledge or create any security over the Exclusive Operation License and any interests in relation thereto.

REASONS FOR BIDDING THE PROJECT AND ENTERING INTO THE AGREEMENT

With a view to developing new energy business and expanding the sources of income of the Company, as well as to fully utilizing the Company’s expertise and experience in construction work, the Company has participated in the bid for the Project. In September 2010, the Company received a notice of winning of the bid for the Project, details of which were disclosed in the Company’s announcement dated 18 October 2010. Upon further negotiations, the Company and TCAC reached a consensus that the Company set up the Project Company for implementation of the Project, details of which were disclosed by the Company in its announcement dated 24 January 2011. In compliance with the relevant PRC requirements and with a view to setting out the rights and obligations of the Project Company and TCAC over the Project as well as ensuring the smooth implementation thereof, the Project Company and TCAC entered into the Agreement.

The entering into of the Agreement gives the Company an opportunity to make profit from the Project. The terms of the Agreements were determined after arm’s length negotiation between the parties. The Directors (including the independent non-executive Directors) consider that the terms of the Agreement are on normal commercial terms, fair and reasonable and in the interest of the Group and the Shareholders as a whole.

INFORMATION OF THE COMPANY, THE PROJECT COMPANY AND TCAC

The Company is principally engaged in the construction, design, management, operation, technical consultation and auxiliary services of sewage water treatment facilities; construction, design, toll-collection, repair and maintenance, management, operation, technical consultation and auxiliary services of Southeastern Half Ring Urban Road of the Middle Ring of Tianjin City, Tianjin City Indebted Road Construction for Vehicle-passage Toll Collection Office and their related auxiliary facilities and the development and operation of environmental protection technology and products.

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The Project Company is a wholly-owned subsidiary of the Company and incorporated for the purpose of implementing the Project. Its business scope includes development and comprehensive utilization of subsurface thermal systems; technology of clean energy and renewable energy, research and development and industrialization of techniques and equipment; energy-saving projects, design consultation of park energy center, investment and construction, technical services and operation charge management.

TCAC is a governmental agency for the People’s Government of Tianjin City. Its principal activities include supervision of the construction and management of the urban and rural areas of Tianjin City, management of city infrastructures, management of public affairs and supervision of the construction system of state-owned assets. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, TCAC and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

LISTING RULES IMPLICATIONS

Since the applicable percentage ratios for the Agreement are more than 5% but less than 25%, the transaction contemplated under the Agreement constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements pursuant to Chapter 14 of the Listing Rules.

DEFINITIONS

In this announcement, the following terms have the following meanings:

“Agreement” the license operation agreement entered into between the Project Company and TCAC on 16 March 2011 in relation to the Project “Board” the board of Directors “Company” Tianjin Capital Environmental Protection Group Company Limited, a joint stock limited company established in the PRC whose A Shares and H Shares are listed on the Shanghai Stock Exchange and the Stock Exchange respectively “Directors” the directors of the Company, including the independent non-executive directors

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• “Exclusive Operation the exclusive operation license to be granted by TCAC License” to the Project Company to invest in, construct, operate, manage, maintain and renovate the Facilities as well as to provide heat and cold supply services in Tianjin Cultural Centre for a term of 26 years (subject to any renewal or early termination under the Agreement)

• “Facilities” the facilities to be constructed in Tianjin Cultural Centre for the Project, including but not limited to three centralised energy stations, transformer station(s), centralised cooling tower(s), tube well(s), underground well(s) as well as other facilities for heat and cold supplies

• “GJ” giga-joule, unit price for heat supply or cold supply

• “Group” the Company and its subsidiaries

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “percentage ratio(s)” has the meaning ascribed to this term under the Listing Rules, as applicable to a transaction

• “PRC” the People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong, Macau and Taiwan

• “Project” the project for the investment in, construction, operation, management, maintenance and renovation of the Facilities as well as provision of heat and cold supply services in Tianjin Cultural Centre

• “Project Company” Tianjin Jiayuanxing Innovative Energy Technology Company Limited* (天津佳源興創新能源科技有限公 司), a wholly-owned subsidiary incorporated by the Company in Tianjin City, the PRC, for the investment in and operation of the Project

• “RMB” Renminbi, the lawful currency of the PRC

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“Share(s)”

• ordinary share(s) of nominal value of RMB1.00 each in the existing share capital of the Company

• “Shareholder(s)”

holder(s) of the Shares

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

• “TCAC”

• Tianjin Construction Administration Committee (天津市城鄉建設和交通委員會), a governmental agency for the People’s Government of Tianjin City

• “Tianjin Cultural Centre”

• Tianjin Cultural Centre (天津市文化中心), located at Hexi District of Tianjin City, the PRC, with a total area of approximately 90 hectares

By Order of the Board Tianjin Capital Environmental Protection Group Company Limited Zhang Wenhui Chairman

Note: For the purpose of this announcement, foreign currency amounts have been converted into Hong Kong dollars using an exchange rate of RMB1 = HK$1.18. Tianjin, the PRC

Tianjin, the PRC 16 March 2011

As at the date of this announcement, the Board comprises four executive Directors: Mr. Zhang Wenhui, Mr. Lin Wenbo, Ms. Fu Yana and Ms. Zhong Huifang; two non-executive Directors: Mr. An Pindong and Ms. Chen Yinxing; and three independent non-executive Directors: Mr. Xie Rong, Mr. Di Xiaofeng and Ms. Lee Kit Ying, Karen.

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