Rego Interactive Co., Ltd — Proxy Solicitation & Information Statement 2005

Nov 14, 2005

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Tianjin Capital Environmental Protection Company Limited, you should at once hand this circular to the purchaser or the transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee(s).

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

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(a joint stock limited company incorporated in the People’s Republic of China with limited liability)
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(Stock Code: 1065)

DISCLOSEABLE TRANSACTION FORMATION OF A JOINT VENTURE ENTERPRISE

A letter from the Board is set out on pages 4 to 13 of this circular.

14 November 2005

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Joint Venture Agreement and Joint Venture Articles	. . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Reasons for the establishment of the Project Company . . . . . . . . . . . . . . . . . . . . . . . . . .		10
Information of HCPO . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Information of Hangzhou Sewage Water Company	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Information of City Management Office . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Information of the Hangzhou Qige Sewage Water Treatment Plant . . . . . . . . . . . . . . . . .		12
Information of the Group . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Discloseable transaction . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Additional information . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix — General information . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14

— i —

DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the content requires otherwise:

“A Shares” Renminbi-denominated domestic shares of nominal value of RMB1.00 each in the ordinary share capital of the Company “Assets Transfer Agreement” an assets transfer agreement to be entered into between the Project Company and HCPO in relation to the acquisition of the Hangzhou Qige Sewage Water Treatment Plant, upon the establishment of the Project Company “associates” has the meaning ascribed thereto in the Listing Rules “Board” the board of Directors “City Management Office” (City Management Office of the People’s Government of Hangzhou City), a governmental department of the city management of the government of Hangzhou City established in June 2003 “Company” Tianjin Capital Environmental Protection 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 “Group” the Company and its subsidiaries “H Shares” overseas listed foreign shares in the ordinary share capital of the Company, with a nominal value of RMB1.00 each, which are listed on the Stock Exchange “Hangzhou Project” a project in relation to the grant of licence to the Project Company for the exclusive rights to operate and manage the Hangzhou Qige Sewage Water Treatment Plant and the provisions of sewage water treatment services to Hangzhou Sewage Water Company “Hangzhou Qige Sewage Water the sewage water treatment plant situated at a zone in between Treatment Plant” Hangzhou City and Xia Sha Economic Technological Development District, together with all buildings, constructions, equipments, facilities and other assets constructed thereon “Hangzhou Sewage Water Hangzhou Sewage Water Company Limited, a state-owned Company” enterprise established in accordance with the laws of the PRC in October 1993

— 1 —

DEFINITIONS

“HCPO”	(Hangzhou City Construction
	Property Operation Company Limited), a state-owned
	enterprise established in accordance with the laws of the PRC
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Joint Venture Agreement”	a joint venture agreement to be entered into between the
	Company and HCPO upon receiving the Notice Form issued
	by the Committee to the Company
“Joint Venture Articles”	the articles of association of the Project Company to be
	entered into between the Company and HCPO upon receiving
	the Notice Form issued by the Committee to the Company
“Latest Practicable Date”	9 November 2005, being the latest practicable date prior to
	the printing of this circular for ascertaining information
	contained therein
“Licensed Operation Agreement”	a licensed operation agreement to be entered into between the
	City Management Office and the Project Company in relation
	to the Hangzhou Project, upon the establishment of the
	Project Company
“Licensed Period”	a period of 25 years, commencing from the date of signing of
	the Licensed Operation Agreement, or extend for such a
	period as agreed between the parties
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“Project Company”	the joint venture enterprise to be established in the PRC by
	the Company and HCPO, with the registered capital of
	RMB257,445,000, of which RMB180,211,500, representing
	70% of the registered capital, will be contributed by the
	Company through its internal resources, and RMB77,233,500,
	representing 30% of the registered capital will be contributed
	by HCPO
“RMB”	Renminbi, the lawful currency of the PRC
“Sewage Water Processing	a sewage water processing agreement to be entered into
Agreement”	between the Project Company and Hangzhou Sewage Water
	Company in relation to the provisions of sewage water
	treatment services to Hangzhou Sewage Water Company,
	upon the establishment of the Project Company

— 2 —

DEFINITIONS

“SFO”	the Securities and Futures Ordinance (Chapter 571 of the laws
	of Hong Kong) (as amended from time to time)
“Shareholders”	holders of Shares
“Shares”	A Shares and H Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“%”	per cent

— 3 —

LETTER FROM THE BOARD

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

Executive Directors: Ms. Ma Baiyu (Chairman) Mr. An Pingdong Mr. Gu Qifeng Mr. Wang Zhanying Mr. Tan Zhaofu Ms. Fu Yana

Registered address: No. 45 Guizhou Road Heping District Tianjin the PRC Postal Code: 300051

Independent non-executive Directors:

Mr. Wang Xiangfei Mr. Gao Zongze Mr. Ko Poming

14 November 2005

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE TRANSACTION FORMATION OF A JOINT VENTURE ENTERPRISE

INTRODUCTION

On 21 October 2005, the Company announced that the Board approved, upon receiving the form of notice (the “ Notice Form ”) issued by the Guidance Committee of Tender Invitation for the Hangzhou Project (the “ Committee ”) to the Company stating that the Company has won the tender of the Hangzhou Project and was granted the rights to set up the Project Company with HCPO, the Company and HCPO will enter into (i) the Joint Venture Agreement and (ii) the Joint Venture Articles in relation to the establishment of the Project Company in the PRC pursuant to the tender documents of the Hangzhou Project. The Company also announced that the terms of the Joint Venture Agreement and the Joint Venture Articles were approved by the Board.

The registered capital of the Project Company shall be RMB257,445,000, of which RMB77,233,500, representing 30% of the registered capital, shall be contributed by HCPO, and RMB180,211,500, representing 70% of the registered capital, shall be contributed by the Company through its internal resources. The registered capital of the Project Company will be injected by way of cash. The purpose of this circular is to provide you with details of the establishment of the Project Company.

— 4 —

LETTER FROM THE BOARD

JOINT VENTURE AGREEMENT AND JOINT VENTURE ARTICLES

The major terms of the Joint Venture Agreement and the Joint Venture Articles approved by the Board are set out below:

Date :

To be entered into between the Company and HCPO upon receiving the Notice Form issued by the Committee to the Company

• Parties: (i) The Company; and

• (ii) HCPO, an independent third party not connected with the Directors, promoters or supervisors, chief executives, substantial shareholders of the Company and its subsidiaries or any of their respective associates.

Effective Date:

Upon signing of the Joint Venture Agreement and the Joint Venture Articles by the Company and HCPO (there is no other condition required to be fulfilled for the Joint Venture Agreement and the Joint Venture Articles to become effective).

Term :

26 years, commencing from the date of issue of the business licence of the Project Company and ending on the date one year after the expiry of the Licensed Period.

Registered capital: RMB257,445,000 Total investment : RMB858,150,000

Financing :

The difference between the total investment and the registered capital, RMB600,705,000, shall be financed by the Project Company itself through bank borrowings. If required by the bank, the Company would consider to execute a guarantee (the “ Guarantee ”) in favour of the bank in respect of such bank borrowings.

The execution of the Guarantee by the Company shall constitute a connected transaction under Chapter 14A of the Listing Rules. The Company shall comply with the reporting, announcement and independent Shareholders’ approval requirements under the Listing Rules and the relevant rules and regulations in the PRC.

— 5 —

LETTER FROM THE BOARD

Supplemental agreement(s) will be agreed and signed by the Company and HCPO in the event if there are any changes in the total investment of the Project Company. Any amount exceeds RMB600,705,000 (i.e. the difference between the total investment and the registered capital) shall be funded by the methods to be agreed between the Company and HCPO. Further announcement will be made if supplemental agreement(s) is/are entered into by the Company.

The Company will monitor the total amount of commitment made to the Project Company from time to time, and will comply with the relevant provisions of the Listing Rules and the laws and regulations in the PRC as and when necessary.

Shareholding structure :

• (i) The Company shall contribute RMB180,211,500, representing 70% of the registered capital thereof, to the Project Company by way of cash through its internal resources; and

• (ii) HCPO shall contribute RMB77,233,500, representing 30% of the registered capital thereof, to the Project Company by way of cash.

Transfer of interest:

• (i) Within the first three years after the signing of the Licensed Operation Agreement, the Assets Transfer Agreement and the Sewage Water Processing Agreement by the Project Company (the “ Restriction Period ”), the Company and HCPO are not allowed to transfer or in any other method to dispose their equity interests in the Project Company, all or in partial, to the other joint venture party or the other independent third party; and

• (ii) after the Restriction Period, the Company and HCPO are allowed to transfer their equity interests in the Project Company, all or in partial, to the other joint venture party or the other independent third party given that prior written consents/approvals are obtained from the other joint venture party, the general meeting of the Project Company and the other relevant governmental authorities.

— 6 —

LETTER FROM THE BOARD

• Conditions to be fulfilled before contribution made by the joint venture partners:

• (i) The Joint Venture Agreement and the Joint Venture Articles were signed by the Company and HCPO and became effective;

• (ii) the Licensed Operation Agreement in draft form was signed by the Company, HCPO and the City Management Office;

• (iii) the Assets Transfer Agreement in draft form was signed by the Company and HCPO; and

• (iv) the Sewage Water Processing Agreement in draft form was signed by the Company and Hangzhou Sewage Water Company.

The above agreements mentioned in conditions (i) to (iv) will be signed by the Company and HCPO upon receiving the Notice Form issued by the Committee to the Company. The terms of the above draft agreements mentioned in conditions (ii) to (iv) have not yet been finalised and are subject to amendments upon further negotiations between the relevant parties. They will be formally entered into by the Project Company to replace the ones to be signed by the Company and HCPO upon the establishment of the Project Company pursuant to the tender documents of the Hangzhou Project. The date of establishment of the Project Company shall be the date of the issue of the business licence of the Project Company.

— 7 —

LETTER FROM THE BOARD

Date of contribution:

Subject to the above conditions (i) to (iv), the Company and HCPO shall contribute their respective capital contributions to the Project Company within five days from the date of signing of the Joint Venture Agreement. In the event if either joint venture party fails to contribute its capital contribution to the Project Company under the Joint Venture Agreement, the defaulting party shall, within 30 days after the issue of a written notice by the non-defaulting party, contribute its capital contribution to the Project Company, failing which shall be regarded as a breach of the Joint Venture Agreement. The Joint Venture Agreement shall then lapse and the winding up procedures for the Project Company shall be commenced unless other legal remedial procedures could be agreed between the Company and HCPO. In any event, the defaulting party shall indemnify the non-defaulting party and the Project Company for all losses and damages incurred as a result of such breach.

Besides, the Company shall assist the Project Company to complete the necessary procedures for obtaining the bank borrowings in the sum of RMB600,705,000 (i.e. the difference between the total investment and the registered capital of the Project Company), either by providing financial guarantee or by other methods to be agreed by the Company and the Project Company which the Company can assist the Project Company to obtain the financial assistance in more favourable terms, within 22 days from the date of signing of the Joint Venture Agreement. As at the Latest Practicable Date, no arrangements for the bank borrowings have been done by the Company and no bank borrowings have been obtained by the Project Company.

Board of directors:

Profit distribution :

The board of directors of the Project Company shall consist of seven directors in total, among which, four directors shall be nominated by the Company, two directors shall be nominated by HCPO and one independent director shall be appointed by the Company and HCPO jointly.

The profit distribution and liabilities of the Project Company shall be distributed in proportion to the shareholding in the Project Company held by the respective parties.

— 8 —

LETTER FROM THE BOARD

• Major roles and responsibilities (i) HCPO and the Company shall assist the Project of the joint venture partners: Company to obtain the necessary approval and registration for the establishment of the Project Company, and the necessary approval and licence for the operation of the Project Company;

• (ii) the Company shall assist and warrant that the Project Company is able to obtain the necessary bank borrowings in the sum of RMB600,705,000 (i.e. the difference between the total investment and the registered capital of the Project Company), either by providing financial guarantee or by other methods to be agreed by the Company and the Project Company which the Company can assist the Project Company to obtain the financial assistance in more favourable terms, within 22 days from the date of signing of the Joint Venture Agreement, while HCPO shall also give necessary assistance to the Project Company in that regard; and

• (iii) the Company shall be responsible for the implementation of (a) proposed advance enterprise management strategy; and (b) renovation plan and improved sewage water treatment method as recognised by the Committee to the Hangzhou Qige Sewage Water Treatment Plant. The Company shall appoint a qualified person as the senior management officer of the Project Company. In addition, the Company shall, according to the needs of the Project Company, provide necessary training for the management and technicians of the Project Company in various levels.

Business scope :

The Project Company shall be principally engaged in the management and operation of the Hangzhou Qige Sewage Water Treatment Plant. It shall also be engaged in the management, operation and technological consultation of sewage water treatment plants and their auxiliary services.

— 9 —

LETTER FROM THE BOARD

Termination:

Upon expiry of the Licensed Period, the Project Company shall hand over the Hangzhou Qige Sewage Water Treatment Plant and its relevant rights and interests, including but not limited to, the premises, facilities, machinery, accessories, chemicals and the relevant properties of the Hangzhou Qige Sewage Water Treatment Plant, to the City Management Office or its specified authority at nil consideration. The remaining assets of the Project Company shall be treated in proportion to the shareholding in the Project Company held by the respective parties upon expiry of the term of the Project Company. The treatment of the remaining assets of the Project Company shall be agreed by the respective parties at such time.

REASONS FOR THE ESTABLISHMENT OF THE PROJECT COMPANY

In order to increase the commercialisation on the municipal public utilities and to enhance operational efficiency of the municipal public utilities, the People’s Government of Hangzhou City decided to grant an operation licence to a joint venture enterprise (which shall be formed between HCPO and the winner of the public tender) to operate the Hangzhou Qige Sewage Water Treatment Plant during the Licensed Period. The People’s Government of Hangzhou City selected the suitable joint venture partner for the joint venture enterprise by way of public tender. The winner of the public tender shall be granted the rights to set up the joint venture enterprise with HCPO so as to operate the Hangzhou Qige Sewage Water Treatment Plant. On 18 July 2005, the Company received the Notice of Tender Invitation Assessment Results for Investors of Hangzhou Qige Sewage Water Treatment Plant issued by the Committee for which the Committee has listed the Company as the first candidate for winning the tender of the Hangzhou Project.

On 21 October 2005, the Board approved that, upon receiving the Notice Form issued by the Committee to the Company, the Company will enter into the Joint Venture Agreement and the Joint Venture Articles with HCPO. Under the tender documents of the Hangzhou Project, the Company shall establish a joint venture enterprise, the Project Company, with HCPO to operate and manage the Hangzhou Qige Sewage Water Treatment Plant so as to provide sewage water treatment services to Hangzhou Sewage Water Company in accordance with the Sewage Water Processing Agreement. The Project Company can charge the sewage water treatment fee and the other related fees in relation to the provision of sewage water treatment services to Hangzhou Sewage Water Company.

As advised by the Company, it usually takes approximately two months to obtain the business licence of the Project Company under normal circumstances. There is currently no expected date for the issuance of the business licence of the Project Company as the Joint Venture Agreement and the Joint Venture Articles have not yet been entered into by the Company and HCPO and there is no long-stop date stated in the Joint Venture Agreement. The Company and HCPO will make the application for the business licence of the Project Company upon signing of the Joint Venture Agreement and the Joint Venture Articles. The Project Company will become a non wholly-owned subsidiary of the Company and its account will be consolidated in the consolidated financial statements of the Group upon the establishment of the Project Company.

— 10 —

LETTER FROM THE BOARD

Besides, pursuant to the tender documents of the Hangzhou Project, the Project Company shall formally enter into (i) the Licensed Operation Agreement with the City Management Office, an independent third party of the Company; (ii) the Assets Transfer Agreement with HCPO; and (iii) the Sewage Water Processing Agreement with Hangzhou Sewage Water Company, an independent third party of the Company. If required by the bank, the Company would consider to execute the Guarantee in favour of the bank in respect of the bank borrowings provided to the Project Company. Further announcements will be made by the Company if and when the Company finalises the terms of the above agreements (i) to (iii) in compliance with the Listing Rules and the relevant laws and regulations in the PRC. The execution of the Guarantee by the Company shall constitute a connected transaction under Chapter 14A of the Listing Rules. The Company shall comply with the reporting, announcement and independent Shareholders’ approval requirements under the Listing Rules and the relevant rules and regulations in the PRC.

The Directors, including the independent non-executive Directors, are of the view that the terms of the Joint Venture Agreement and the Joint Venture Articles are on normal commercial terms which are fair and reasonable and are in the best interests of the Shareholders and the Company as a whole.

INFORMATION OF HCPO

HCPO is a state-owned enterprise established in accordance with the laws of the PRC in June 2003 with the approvals from the Hangzhou City Committee and the People’s Government of Hangzhou City. The registered capital of HCPO is RMB6,500 million. HCPO is principally engaged in the businesses of public transportation, supply of water and gas, public utilities facilities, wastes processing services, real estate development, construction project and research and development of techonolgies.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, HCPO and the ultimate beneficial owner of HCPO are independent third parties, not connected with the Directors, promoters or supervisors, chief executives, substantial shareholders of the Company and its subsidiaries or any of their respective associates.

INFORMATION OF HANGZHOU SEWAGE WATER COMPANY

Hangzhou Sewage Water Company is a state-owned enterprise established in accordance with the laws of the PRC in October 1993. It is a public service company principally engaged in the operation and maintenance of the city drainage facilities, sewage water treatment, and the management and maintenance of waterway distribution facilities in Hangzhou City. Its main responsibilities are upgrading and managing the maintenance of the urban sewage water facilities in Hangzhou City, including uplifting, transmission, treatment, discharge of sewage water, water quality testing, handling procedures of technical review in connection with sewage water pipelines and drainage facilities of the city, flood prevention and discharge and participation in the construction, design, engineering, technical consultation as well as operation and development of supporting projects of urban sewage water.

— 11 —

LETTER FROM THE BOARD

INFORMATION OF THE CITY MANAGEMENT OFFICE

The City Management Office is a governmental department of the urban management of the government of Hangzhou City established in June 2003 in the PRC. It is mainly responsible for the implementation and enforcement of the directions, policies, rules, laws and regulations imposed by the local and central governments and the State from time to time, drafting the development strategies, medium and long term plans and year plans for the urban management of the Hangzhou City, and planning and implementation of the industry development of urban planning.

INFORMATION OF THE HANGZHOU QIGE SEWAGE WATER TREATMENT PLANT

The Hangzhou Qige Sewage Water Treatment Plant situated at a zone in between Hangzhou City and Xia Sha Economic Technological Development District, together with all buildings, constructions, equipments, facilities and other assets constructed thereon. The designed capacities of phase 1 (“ Phase 1 ”) and phase 2 (“ Phase 2 ”) of the Hangzhou Qige Sewage Water Treatment Plant are 400,000 and 200,000 cubic meters per day respectively. Phase 1 has commenced operations for more than one year but certain water treatment equipments of capacity of 50,000 tonnes per day have to be procured and installed. Construction of Phase 2 is expected to be completed in the third quarter of 2006.

INFORMATION OF THE GROUP

The Group is principally engaged in (i) the design, management, operation, technological consultation of sewage water treatment plants and their related infrastructure facilities and auxiliary services; (ii) the design, toll collection, repair and maintenance, management, operation, technological consultation of toll roads and auxiliary services in relation to the operation of the South-eastern Half Ring Road of the Middle Ring of Tianjin, Tianjin City Indebted Road Construction for Vehicle-passage Toll Collection Office and their related auxiliary facilities; and (iii) the development and operation of environmental protection technology and products.

The Board considers that the licensed operations of the Hangzhou Qige Sewage Water Treatment Plant through the Project Company will win good reputation for the Company in the industry. Being the holder of 70% of the registered capital of the Project Company, the Project Company’s accounts will be consolidated into the consolidated financial statements of the Group, and its profits/losses, assets, and liabilities will be reflected on the Group’s consolidated financial statements. Also, upon the establishment of the Project Company, if required by the bank, the Company would consider to execute the Guarantee in favour of the bank in respect of the bank borrowings provided to the Project Company.

DISCLOSEABLE TRANSACTION

As each of the percentage ratios of the capital contribution to the Project Company by the Company is more than 5% but less than 25%, the establishment of the Project Company constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. It is subject to the reporting and announcement requirements, but is exempt from the Shareholders’ approval requirement.

— 12 —

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is drawn to the general information set out in the Appendix to this circular.

Yours faithfully, For and on behalf of the Board Ma Baiyu Chairman

— 13 —

GENERAL INFORMATION

APPENDIX

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

DISCLOSURE OF INTERESTS

Directors’ Interests

As at the Latest Practicable Date, the interests and/or short positions of the Directors, supervisors and chief executives of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO), which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO, or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or otherwise, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers, to be notified to the Company and the Stock Exchange were as follows:

				Approximate
				percentage in the
				issued share
	The Company/			capital of the
	name of		Number and	Company/
	associated		class of	associated
Name	corporations	Capacity	securities	corporations
			(Note)
Director
Wang Zhanying	The Company	Beneficial owner	5,000 domestic	0.0038%
			Shares (L)
Supervisor
Nie Youzhuang	The Company	Beneficial owner	700 domestic	0.00053%
			Shares (L)

Note: The letter “L” represents the person’s long positions in the Shares.

As at the Latest Practicable Date, none of the Directors, supervisors or chief executive of the company or their spouses or children under 18 years of age were granted or had exercised any right to subscribe for any equity or debt securities of the Company or any of its associated corporations (within the meaning of Part XV of the SFO).

None of the Directors has any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2004, the date to which the latest published audited financial statement of the Company were made up.

— 14 —

GENERAL INFORMATION

APPENDIX

None of the Directors is materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries which the contract or arrangement subsisting at the date of this circular and which is significant in relation to the business of the Group taken as a whole.

As at the Latest Practicable Date, none of the Directors or supervisors of the Company and their respective associates have interests in a business, apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with the business of the Group.

As at the Latest Practicable Date, none of the Directors or supervisors of the Company had entered or was proposing to enter into a service contract with the Company or any of its subsidiaries (excluding contracts expiring or determinable within one year without payment of compensation other than statutory compensation).

Substantial Shareholders’ Interests

• (a) As at the Latest Practicable Date, so far as is known to, or can be ascertained after reasonable enquiries by, the Directors, supervisors or chief executives of the Company, the following entities (other than a Director, supervisor or chief executive of the Company) had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO:

				Approximate
			Approximate	percentage
			percentage	in the total
			in the	issued share
			relevant	capital of
Name of		Number and	class of	the
Shareholder	Capacity	class of securities	securities	Company
		(Note 1)
Tianjin Municipal	Beneficial owner	839,020,000 state	84.75%	63.08%
Investment		Shares (L)
Company Limited
(“TMICL”)
Fidelity	Investment	23,570,000	6.93%	1.77%
International	manager	H Shares (L)
Limited
FIL (Note 2)	Interest in	23,570,000	6.93%	1.77%
	controlled	H Shares (L)
	corporation

Note 1: The letter “L” represents the entities’ long positions in the Shares. Note 2: The 23,570,000 H Shares were held by Fidelity International Limited. By virtue of the SFO, FIL, which holds 100% of the shareholding of Fidelity International Limited, was deemed to be interested in the same 23,570,000 H Shares held by Fidelity International Limited.

— 15 —

GENERAL INFORMATION

APPENDIX

• (b) As at the Latest Practicable Date, so far as is known to, or can be ascertained after reasonable enquiries by, the Directors, supervisors or chief executives of the Company, the following entities (other than a Director, supervisor or chief executive of the Company) were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any members of the Group:

		Approximate
		percentage of
		equity
Name of entity	Name of member of the Group	interests held
Tianjin Sewage Engineering	Tianjin Capital New Materials Co.,
Company	Ltd.	17.5%
Tianjin Senyuan Technology
Development Company	Tianjin Capital New Materials Co.,
Limited	Ltd.	16.25%

• (c) Save as disclosed above, there is no other person (other than a Director, supervisor or chief executive of the Company) so far as is known to the Directors, supervisors or chief executives of the Company who, as at the Latest Practicable Date, had an interest or a short position in the shares or underlying shares of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO, or, had, directly or indirectly, interested in 10% or more of nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any members of the Group.

• (d) As at the Latest Practicable Date, so far as known to the Directors, supervisors or chief executives of the Company, Ms. Ma Baiyu, the Chairman and executive Director, is also the chairman of TMICL, being the controlling shareholder and holding company of the Company. Save as disclosed above, none of the Directors or proposed Directors is a director or an employee of a company which had any interests or short positions in any shares and underlying shares of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO.

— 16 —

GENERAL INFORMATION

APPENDIX

SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date are as follows:

	Number of
Authorised:	Shares	RMB
ordinary Shares of RMB1.00 each	1,330,000,000	1,330,000,000
Issued and fully paid:
domestic Shares of RMB1.00 each	990,000,000	990,000,000
H Shares of RMB1.00 each	340,000,000	340,000,000

LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or arbitration or claim of material importance is known to the Directors to be pending or threatened by or against the Company.

GENERAL

The Company secretaries of the Company are Ms. Fu Yana and Mr. Ip Pui Sum. Mr. Ip Pui Sum, who is a fellow member of the Association of Chartered Certified Accountants and associate member of The Hong Kong Institute of Certified Public Accountants, is the Company secretary and the qualified accountant of the Company under the Listing Rules.

The H Share transfer office of the Company in Hong Kong is Hong Kong Registrars Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

The registered address of the Company is at No.45 Guizhou Road, Heping District, Tianjin, the PRC and the head office of the Company is at TCEP Building, 76 Weijin South Road, Nankai District, Tianjin, the PRC.

In the event of inconsistency, the English text of this circular shall prevail over the Chinese text.

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