Rego Interactive Co., Ltd — Interim / Quarterly Report 2003

Apr 30, 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)

FIRST QUARTERLY REPORT 2003

This announcement is made pursuant to the disclosure obligation under Paragraph 2(2) of the Listing Agreement.

1 IMPORTANT

• 1.1 This quarterly report has been prepared in compliance with the information disclosure of the quarterly report of a listed company required by the China Securities Regulatory Commission (the “CSRC”). The information provided in this report is the same with that published by the Shanghai Stock Exchange, and this report is published simultaneously in Shanghai and Hong Kong. All financial information set out in this quarterly report has been prepared in accordance with the PRC accounting regulations but unaudited. Shareholders of the Company and public investors should exercise their caution when dealing in the shares of the Company.

• 1.2 The Board of Directors and the Directors of the Company confirmed that the information in this announcement does not contain any false information, misleading statements or material omissions, and accept joint and several responsibility for the truthfulness, accuracy and completeness of the content.

• 1.3 Madam Ma Baiyu, the chairman, Mr. An Pindong, the financial controller, and Mr. Sha Naiqiang, the manager of the finance department, have declared that they are responsible for the truthfulness and completeness of the financial statements in the first quarterly report 2003.

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2 COMPANY INFORMATION

2.1 Basic information

	Short form of the	Short form of the	Tianjin Capital	Tianjin Capital		Tianjin Capital	Tianjin Capital
	Company’s listed shares
	Stock code		600874			1065
	Place for listing of the		A	Shares — Shanghai		H	Shares — The Stock
	Shares		Stock Exchange (the			Exchange of Hong Kong
			“SSE”)			Limited (the “Hong Kong
						Stock Exchange”)
	Name		Secretary to the Company’s			Company Secretary in
			Board of Directors (The			Hong Kong
			People’s Republic of China			Ip	Pui Sum
			(the “PRC”))
			Fu Yana
	Correspondence address		No. 45 Guizhou Road			Flat A, E, F, 16/F
			Heping District			Yardley Commercial
			Tianjin			Building
			the PRC			3 Connaught Road West
						Sheung Wan
						Hong Kong
	Telephone number		86-22-2352 3036			852-2803 2373
	Facsimile number		86-22-2352 3100			852-2540 6365
	E-mail address		tjcep@public.tpt.tj.cn			ippuisum@pacific.net.hk

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• 2.2 Accounting Data prepared in accordance with the Accounting Standards and the Accounting Regulations for Business Enterprises of the PRC (collectively “PRC GAAP”)

2.2.1 Principal accounting data and business statistics highlights

	31st March	31st March	31st December	31st December	Percentage (%)
		2003		2002	Increase (+)
	(Unaudited)			(Audited)	Decrease (-)
Total assets (Rmb’000)		2,806,433		2,757,008	+1.79
Shareholder’s equity (after
minority interest)
(Rmb’000)		1,798,679		1,742,074	+3.25
Net asset value per share
(Rmb per share)		1.352		1.310	+3.21
Adjusted net asset value per
share (Rmb per share)		1.352		1.310	+3.21
				Three months
				ended
				31st March	Percentage (%)
				2003	Increase(+)
				(Unaudited)	Decrease(-)
Net cash flow from operating activities (Rmb’000)				47,590	-2.64
Earnings per share (Rmb per share)				0.0426	-0.23
Return on net assets (%)				3.15	-10.00
Return on net assets after extraordinary item (%)				3.15	-10.00
Extraordinary item
Non-operating income (Rmb)				0	N/A
Non-operating expenses (Rmb)				(97,000)	N/A
Total of extraordinary item (Rmb)				(97,000)	N/A

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2.2.2 Profit and loss account

Preparing Unit: Tianjin Capital Environmental Protection Company Limited

				Group	Group		Company	Company	Company
				**For the **	**three months ended 31st **			March
				2003		2002	2003			2002
				(Unaudited)	_(Audited) _		(Unaudited)	(Audited)
				Rmb’000	Rmb’000		Rmb’000	Rmb’000
i)	Income from principal
	operations			135,149	133,895		135,149	133,895
	Less: Costs for principal
	operations			(29,648)	(33,535)		(29,648)		(33,535)
	Business tax and
	subcharges			(7,433)		(7,364)	(7,433)		(7,364)
ii)	Profit from principal
	operations			98,068		92,996	98,068		92,996
	Add: Profit from other
	operations			235		102	55			4
	(Less)/Add: Administrative
	expenses			(9,018)		(8,790)	(8,108)		(8,132)
	Financial
	(expenses)/
	income			(4,775)		457	(4,782)			429
iii)	Operating profit			84,510		84,765	85,233		85,297
	Add/(Less): Investment
	income/(loss)			0		0	(651)			(479)
	Non-operating
	income			0		3	0			3
	Less: Non-operating
	expenses			(97)		0	(97)			0
(iv)	Total profit			84,413		84,768	84,485		84,821
	Less: Income tax			(27,880)	(27,991)		(27,880)		(27,991)
	Add: Minority interests			72		53	0			0
(v)	Net profit			56,605		56,830	56,605		56,830
	Undistributed profits at
	beginning of the year			258,450	127,349		258,450	127,349
	Profit available for
	appropriation			0		0	0			0
	Transfer to statutory
	common reserve			0		0	0			0
	Profit attributable to
	shareholders			315,055	184,179		315,055	184,179
	Dividend paid			0		0	0			0
	Undistributed profit at the
	end of the year			315,055	184,179		315,055	184,179
Ma Baiyu			An Pindong				Sha Naiqiang
Company Representative		Chief Accountant				Accounts Preparer

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2.3 Total number of shareholders at the end of the reporting period

As at 31st March 2003, the Company had a total of 31,267 shareholders.

3 MANAGEMENT DISCUSSION AND ANALYSIS

3.1 Management discussion and analysis on the major operating results of the Company

During the reporting period, the Company completed the procedures and obtained approval for the amendment to its Articles of Association and business licence. The Company strengthened its management and standardized operation through a consolidated accreditation system with respect to quality, environment and occupational health. We also proactively explored opportunities for our sewage treatment business both in local and other cities markets, and enhanced our strength in research and development, so as to become the leader in the industry.

Application made by the Company to the CSRC for the proposed issue of A Shares Convertible Bonds is still pending. The Eleventh Shareholders’ Meeting of the Company held on 8th April 2003 passed the resolution to extend the validity period of the Scheme for the A Shares Convertible Bonds. We will continue to obtain the respective clearance with the regulatory authorities.

During the reporting period, sewage treatment, construction of sewage treatment plants, road and toll station businesses had been stable. Income derived from the principal operations amounted to RMB135,150,000. Profit from the principal operations amounted to RMB98,070,000. Net profit amounted to RMB56,610,000. Earnings per share amounted to RMB0.0426. Operational result was basically similar to the level of the corresponding period last year. As Tianjin Municipal Investment Company Limited (“TMICL”) ceased to contribute to the Haihe Bridge project commencing from 1st January 2003, the Company did not receive any income from the construction and management services regarding the Haihe Bridge project, and did not incur any relevant fee and expense. Upon the approval of the board of directors of the Company, the Company proposed to enter into a termination agreement with TMICL. As the income derived from such business represents a small amount of the Company’s income (constituting 0.76% of income from principal operations in 2002 and 0.46% of income from principal operations in 2001), termination of such business will not have any material effect on the business operational result of the Company.

For the development of Tianjin peripheral highway network, the Company’s toll stations may relocate to locations further away from Tianjin so as to facilitate the traffic in and out of Tianjin. This proposal is still under discussion. It is expected that the relocation of toll stations will not have any material impact to the income of the Company. The Company will prepare a detailed forecast on the impact of the relocation of the toll stations to the Company’s earnings. Once the proposal is finalised, the Company will promptly complete the corresponding approval and information disclosure procedures.

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• 3.1.1 A description of the principal segment or product that accounted for more than 10% of the income or total profit from the principal operations

�applicable	�not applicable
Particular segment or product	Income from	Costs of the	Gross profit
	the principal	principal	margin (%)
	operations	operations
	Rmb’000	Rmb’000
Sewage treatment and construction	116,055	22,435	80.67
of sewage treatment plants
Road and toll collection	18,860	7,160	62.04
Of which: Connected transactions	116,055	0	N/A

• 3.1.2 Seasonality or cyclical characteristics of the Company’s operation

� applicable �not applicable

• 3.1.3 The composition of the profit for the reporting period (the percentage accounted by profit from principal operations, profit from other operations, investment gain, subsidy income, and net non-operating income and expenses in total profit, any significant change compared with the previous reporting period and the reasons therefor)

  • applicable �not applicable

• 3.1.4 Any significant change on the principal operations and its structure, compared with the previous reporting period and the reasons therefor

  • applicable �not applicable

• 3.1.5 Any significant change on the profitability (gross profit margin) of the principal operations compared with the previous reporting period and the reasons therefor

  • applicable �not applicable

• 3.2 An analysis on the significant events and the effects and solutions therefor

• applicable �not applicable

• 3.3 Accounting policies, accounting estimates, changes on scope after merger and significant accounting differences and the reasons therefor

• applicable �not applicable

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• 3.4 Any relevant statement from the Board of Directors and Supervisory Committee for circumstances of qualified opinion on audit

• applicable

  • �not applicable

• 3.5 Any warning for a turnaround from accumulated net profit to loss that may be incurred from the beginning of the year to the next reporting period, or on changes that may be regarded as substantial compared with that of last year and the reasons therefor

• applicable

  • �not applicable

• 3.6 Any adjustment made by the Company to the annual operating plan or movement within the budget as disclosed

• applicable

• �not applicable

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Appendix:

Financial Information of Tianjin Capital Environmental Protection Company Limited (Prepared in accordance with the PRC GAAP) Balance Sheet (Unaudited)

	Group	Group	Company	Company
	31st	31st	31st	31st
	March	December	March	December
	2003	2002	2003	2002
	(Unaudited)	_(Audited) _	(Unaudited)	(Audited)
	Rmb’000	Rmb’000	Rmb’000	Rmb’000
ASSETS
CURRENT ASSETS
Cash and bank balances	573,228	537,929	552,701	515,507
Short-term investment	0	0	0	0
Bills receivable	0	0	0	0
Dividend receivable	0	0	0	0
Interest receivable	0	0	0	0
Accounts receivable	29,922	28,704	29,888	28,232
Other receivables	1,639	1,419	1,075	1,078
Prepayment to suppliers	1,289	1,871	503	253
Inventories	2,353	2,440	2,353	2,440
Deferred expenses	0	0	0	0
Long-term debenture within one year	0	0	0	0
Other current assets	0	0	0	0
Total current assets	608,431	572,363	586,520	547,510
LONG-TERM INVESTMENTS
Long-term equity investments	4,000	4,000	18,734	19,439
Long-term liability investments	0	0	0	0
Total long-term investments	4,000	4,000	18,734	19,439
FIXED ASSETS
Fixed assets - cost	1,755,826	1,757,717	1,753,529	1,755,436
Less: Accumulated depreciation	(502,571)	(493,021)	(502,250)	(492,771)
Fixed assets - net book value	1,253,255	1,264,696	1,251,279	1,262,665
Fixed assets written off	0	0	0	0
Under construction	940,747	915,949	848,249	825,625
Construction materials	0	0	0	0
Total Fixed assets	2,194,002	2,180,645	2,099,528	2,088,290
INTANGIBLE FIXED ASSETS AND
OTHER ASSETS
Intangible fixed assets	0	0	0	0
Other long-term assets	0	0	0	0
Total intangible fixed assets and other assets	0	0	0	0
TOTAL ASSETS	2,806,433	2,757,008	2,704,782	2,655,239

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				Group	Group	Group					Company	Company	Company
			31st				31st				31st			31st
		March			December					March			December
			2003				2002				2003			2002
	(Unaudited)					(Audited) (Unaudited)							(Audited)
		Rmb’000				Rmb’000				Rmb’000			Rmb’000
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES
Short-term loan		30,000				30,000						0			0
Accounts payable		3,901				1,862					679			414
Bills payable				0				0				0			0
Advances from customer		88,871				89,597				88,870			89,597
Other payable		165,636				176,523				165,618			174,635
Wages payable				0				0				0			0
Welfare payable		6,119				5,753				6,079			5,733
Taxes payable		14,599				21,196				14,589			21,191
Other accruals			47				482					0		465
Dividend payable		115,268				115,268				115,268			115,268
Estimate liabilities				0				0				0			0
Accrued expenses		5,000				5,861				5,000			5,862
Long-term liabilities within one year				0				0				0			0
Other current liabilities				0				0				0			0
Total current liabilities		429,441				446,542				396,103			413,165
LONG-TERM LIABILITIES
Long-term loan		510,000				500,000				510,000			500,000
Debenture payable				0				0				0			0
Specific payable		66,676				66,676						0			0
Total long-term liabilities		576,676				566,676				510,000			500,000
TOTAL LIABILITIES		1,006,117			1,013,218					906,103			913,165
MINORITY INTERESTS		1,637				1,716						0			0
SHAREHOLDERS’ EQUITY
Share capital		1,330,000			1,330,000				1,330,000				1,330,000
Capital reserve fund		69,289				69,289				69,289			69,289
General reserves		84,335				84,335				84,335			84,335
Including:
Statutory common reserve		56,223				56,223				56,223			56,223
Statutory provident fund		28,112				28,112				28,112			28,112
Undistributed profits		315,055				258,450				315,055			258,450
Profit for the year				0				0				0			0
Total shareholders’ equity		1,798,679			1,742,074				1,798,679				1,742,074
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY		2,806,433			2,757,008				2,704,782				2,655,239

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Profit and Loss Account (Unaudited)

1. Principal operation income Less: Principal operation cost Business tax and surcharges 2. Profit from principal operations Add: Profit from other operations (Less)/Add: Administrative expenses Financial (expenses)/income 3. Operating profit Add/(Less): Investment income/(loss) Non-operating income Less: Non-operating expenses 4. Total profit Less: Income tax Add: Minority interests 5. Net profit Undistributed profits at beginning of the year Profit available for appropriation Transfer to statutory common reserve Profit attributable to shareholders Dividend paid Undistributed profits at the end of the year	Group Company 1st January to 31st March 2003 2002 2003 2002 (Unaudited) (Audited) (Unaudited) (Audited) Rmb’000 Rmb’000 Rmb’000 Rmb’000 135,149 133,895 135,149 133,895 (29,648) (33,535) (29,648) (33,535) (7,433) (7,364) (7,433) (7,364) 98,068 92,996 98,068 92,996 235 102 55 4 (9,018) (8,790) (8,108) (8,132) (4,775) 457 (4,782) 429 84,510 84,765 85,233 85,297 0 0 (651) (479) 0 3 0 3 (97) 0 (97) 0 84,413 84,768 84,485 84,821 (27,880) (27,991) (27,880) (27,991) 72 53 0 0 56,605 56,830 56,605 56,830 258,450 127,349 258,450 127,349 0 0 0 0 0 0 0 0 315,055 184,179 315,055 184,179 0 0 0 0 315,055 184,179 315,055 184,179	Group Company 1st January to 31st March 2003 2002 2003 2002 (Unaudited) (Audited) (Unaudited) (Audited) Rmb’000 Rmb’000 Rmb’000 Rmb’000 135,149 133,895 135,149 133,895 (29,648) (33,535) (29,648) (33,535) (7,433) (7,364) (7,433) (7,364) 98,068 92,996 98,068 92,996 235 102 55 4 (9,018) (8,790) (8,108) (8,132) (4,775) 457 (4,782) 429 84,510 84,765 85,233 85,297 0 0 (651) (479) 0 3 0 3 (97) 0 (97) 0 84,413 84,768 84,485 84,821 (27,880) (27,991) (27,880) (27,991) 72 53 0 0 56,605 56,830 56,605 56,830 258,450 127,349 258,450 127,349 0 0 0 0 0 0 0 0 315,055 184,179 315,055 184,179 0 0 0 0 315,055 184,179 315,055 184,179	Group Company 1st January to 31st March 2003 2002 2003 2002 (Unaudited) (Audited) (Unaudited) (Audited) Rmb’000 Rmb’000 Rmb’000 Rmb’000 135,149 133,895 135,149 133,895 (29,648) (33,535) (29,648) (33,535) (7,433) (7,364) (7,433) (7,364) 98,068 92,996 98,068 92,996 235 102 55 4 (9,018) (8,790) (8,108) (8,132) (4,775) 457 (4,782) 429 84,510 84,765 85,233 85,297 0 0 (651) (479) 0 3 0 3 (97) 0 (97) 0 84,413 84,768 84,485 84,821 (27,880) (27,991) (27,880) (27,991) 72 53 0 0 56,605 56,830 56,605 56,830 258,450 127,349 258,450 127,349 0 0 0 0 0 0 0 0 315,055 184,179 315,055 184,179 0 0 0 0 315,055 184,179 315,055 184,179	Group Company 1st January to 31st March 2003 2002 2003 2002 (Unaudited) (Audited) (Unaudited) (Audited) Rmb’000 Rmb’000 Rmb’000 Rmb’000 135,149 133,895 135,149 133,895 (29,648) (33,535) (29,648) (33,535) (7,433) (7,364) (7,433) (7,364) 98,068 92,996 98,068 92,996 235 102 55 4 (9,018) (8,790) (8,108) (8,132) (4,775) 457 (4,782) 429 84,510 84,765 85,233 85,297 0 0 (651) (479) 0 3 0 3 (97) 0 (97) 0 84,413 84,768 84,485 84,821 (27,880) (27,991) (27,880) (27,991) 72 53 0 0 56,605 56,830 56,605 56,830 258,450 127,349 258,450 127,349 0 0 0 0 0 0 0 0 315,055 184,179 315,055 184,179 0 0 0 0 315,055 184,179 315,055 184,179
	98,068 235 (9,018) (4,775) 84,510 0 0 (97) 84,413 (27,880) 72 56,605 258,450 0 0 315,055 0	92,996 102 (8,790) 457 84,765 0 3 0 84,768 (27,991) 53 56,830 127,349 0 0 184,179 0	98,068 55 (8,108) (4,782) 85,233 (651) 0 (97) 84,485 (27,880) 0 56,605 258,450 0 0 315,055 0	92,996 4 (8,132 429
				85,297 (479 3 0
				84,821 (27,991 0
				56,830 127,349 0 0
				184,179 0
	315,055	184,179	315,055

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Cash Flow Statements (Unaudited)

For the three months ended 31st March 2003

	Group	Company
	1st January to 31st March
Items	2003	2003
	(Unaudited)	(Unaudited)
	Rmb’000	Rmb’000
Cash flows from operating activities
Cash inflows:
Cash received from rendering of services	124,350	124,350
Other cash received relating to operating activities	641	303
Sub-total of cash inflows	124,991	124,653
Cash outflows:
Cash paid for goods and services	(14,771)	(14,601)
Cash paid to and on behalf of employees	(7,880)	(7,335)
Taxes paid	(52,267)	(52,213)
Other cash paid relating to operating activities	(2,483)	(2,188)
Sub-total of cash outflows	(77,401)	(76,337)
Net cash flows from operating activities	47,590	48,316
Cash flows from investing activities
Cash inflows:
Cash received from settlement of the related assets and liabilities
of the sewage water processing plants construction projects	0	0
Cash received from disposal of fixed assets, intangible assets and
other long-term assets	53	53
Other cash received relating to investing activities	453	453
Sub-total of cash inflows	506	506
Cash outflows:
Cash paid to acquire fixed assets, intangible assets and other
long-term assets	(22,797)	(21,628)
Sub-total of cash outflows	(22,797)	(21,628)
Net cash flows from investing activities	(22,291)	(21,122)
Cash flows from financing activities
Cash inflows:
Cash received from borrowings	10,000	10,000
Cash received relating to other financing activities	0	0
Sub-total of cash inflows	10,000	10,000
Cash outflows:
Cash payments for distribution of dividends or profits	0	0
Cash payments for interest expenses	0	0
Sub-total of cash outflows	0	0
Net cash flows from financing activities	10,000	10,000
Net increase in cash	35,299	37,194

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Supplementary Information	Supplementary Information		Group	Company	Company
			**1st January to 31st **		March
			2003		2003
			(Unaudited)	(Unaudited)
			Rmb’000	Rmb’000
(i)	Reconciliation of net profit to net cash flows from
	operating activities
	Net profit		56,605		56,605
	Add/(Less):
	Minority interests		(72)		0
	Depreciation and amortisation of	fixed assets	10,465		10,394
	Amortisation of intangible fixed assets		0		0
	Losses on disposal of fixed assets		98		98
	Interest expense		5,000		5,000
	Loss on investments		0		651
	Decrease in inventories		87		87
	Increase in operating receivables		(2,761)		(2,305)
	Decrease in operating payables		(21,832)	(22,214)
	Net cash flows from operating activities		47,590		48,316
(ii)	Net increase in cash
	Cash at end of the year		573,228	552,701
	Less: Cash at beginning of the year		537,929	515,507
	Net increase in cash		35,299		37,194
	Ma Baiyu	An Pindong	Sha Naiqiang
	Company Representative	Chief Accountant	Accounts Preparer

Tianjin Capital Environmental Protection Company Limited Ma Baiyu Chairlady

Tianjin, the PRC 29th April 2003

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

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