RoboSense Technology Co., Ltd — Capital/Financing Update 2005

May 27, 2005

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)

(Stock Code: 1108)

MAJOR AND CONNECTED TRANSACTIONS FORMATION OF JOINT VENTURES

The Board of the Company wishes to announce that on 26 May 2005, the Company entered into the Long Hai Agreement and Long Hao Agreement with CLFG, the controlling shareholder of the Company, for the purpose of setting up Long Hai in order to, inter alia, engage in the production and sale of ultra-thin glass and the processing of raw materials for the production of glass related products and Long Hao to engage in the production and sale of float glass and the provision of related consultancy and technical support services.

The registered capital of Long Hai is RMB60 million (approximately HK$56.60 million), of which RMB48 million (approximately HK$45.28 million) (constituting approximately 80% thereof) will be contributed by the Company and RMB12 million (HK$11.32 million) (constituting approximately 20% thereof) will be contributed by CLFG. The total investment for Long Hai Project is currently estimated to amount RMB300 million (approximately HK$283.02 million).

The registered capital of Long Hao is RMB50 million (approximately HK$47.17 million), of which RMB40 million (approximately HK$37.74 million) (constituting approximately 80% thereof) will be contributed by the Company and RMB10 million (HK$9.43 million) (constituting approximately 20% thereof) will be contributed by CLFG. The total investment for Long Hao Project is currently estimated to amount RMB250 million (approximately HK$235.85 million).

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CLFG is the controlling shareholder (as defined in the Listing Rules and the Shanghai Listing Rules) of the Company and is interested in approximately 57.14% of the issued share capital of the Company. Pursuant to Rule 14A.13(6) of the Listing Rules and Rule 10.1.3 of the Shanghai Listing Rules, the transactions described above constitute connected transactions for the Company under the Listing Rules and the Shanghai Listing Rules. The transactions contemplated under the Long Hai Agreement and Long Hao Agreement constitute major transactions for the Company under the Listing Rules as the Company’s capital investment under the Long Hai Agreement and Long Hao Agreement exceed 25% of the average market capitalization of the Company for the five business days immediately preceding the date of the Long Hai Agreement and Long Hao Agreement. Therefore, the Company should make an announcement and issue a circular containing the particulars of the transactions and recommendation from an independent financial advisor to the Independent Board Committee and the Independent H Shares’ Shareholders for the approval of the agreements and the investment of the Company in Long Hai and Long Hao by the Independent H Shares’ Shareholders at the EGM. The transactions contemplated under the Long Hai Agreement and Long Hao Agreement exceed RMB30 million and are subject to the requirement of the Rule 10.2.5 of the Shanghai Listing Rules. The transactions are subject to the approval of the Independent Shareholders by poll.

In view of CLFG and its associates’ interests in Long Hai Agreement and Long Hao Agreement, CLFG and its associates shall abstain from voting at the EGM.

The Company will send a circular containing, among other things, (i) details of the terms and conditions of the Long Hai Agreement and Long Hao Agreement; (ii) the recommendation from the Independent Board Committee in respect of the Long Hai Agreement and Long Hao Agreement to the Independent H Shares’ Shareholders; and (iii) the advice of an independent financial adviser to the Independent Board Committee and the Independent H Shares’ Shareholders in respect of the Long Hai Agreement and Long Hao Agreement, to the H Shares’ Shareholders in due course. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent H Shares’ Shareholders on these transactions.

For the concern of A Shares’ Shareholders, please refer to the announcement published on the newspapers, namely, China Securities and Shanghai Securities Daily on 27 May 2005.

The Directors announcement that, on 26 May 2005, the Company entered into the Long Hai Agreement and Long Hao Agreement to set up Long Hai and Long Hao.

ESTABLISHMENT OF LONG HAI

The principal terms of the Long Hai Agreement are as follows:

Date 26 May 2005 Parties The Company and CLFG Initial registered RMB60 million (approximately HK$56.6 million), of which RMB48 capital of Long Hai million (approximately HK$45.28 million) (representing 80% of the registered capital thereof) will be contributed by the Company in cash with its internal resources and RMB12 million (approximately HK$11.32 million) (representing 20% of the registered capital thereof) will be contributed by CLFG, of which RMB6 million in cash and the remaining RMB6 million in the form of the specialized usage right of 洛陽浮法玻璃工藝專有技術 (Luoyang Float Glass Patent Technology) and usage right of the “CLFG 洛玻” registered trademark.

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CLFG has engaged 洛陽敬業會計師事務所有限責任公司, an independent third party, to value the specialized usage right of 洛陽浮法玻璃工藝專有 技術 (Luoyang Float Glass Patent Technology) and the usage right of the “CLFG 洛玻” registered trademark as at 31 March 2005 to be contributed by CLFG as intangible assets. The valuation of specialized usage right of 洛陽浮法玻璃工藝專有技術 (Luoyang Float Glass Patent Technology) and the usage right of the “CLFG 洛玻” registered trademark is approximately RMB7.03 million (approximately HK$6.63 million) for the Long Hai Project as at 31 March 2005 on the basis of generally accepted valuation methodology, being the income approach, details of which shall be set out in the circular to be issued to the H Shares’ Shareholders. The value of the intangible assets to be contributed by CLFG into Long Hai is determined as matter of commercial decision after arms length negotiation between the Company and CLFG and being 10% of the total initial registered capital of Long Hao contributed by the parties.

According to the Long Hai Agreement, the initial payment of RMB18 million (approximately HK$16.98 million) in the registered capital of Long Hai shall be paid by its respective shareholders in a proportion to their respective shareholding interest in Long Hai when Long Hai applies its business license immediately after the execution of the Long Hai Agreement by the Company and CLFG. The remainder of the initial registered capital shall be fulfilled in full within one year from the issuance date of the business registration license of Long Hai.

• Total amount of The total capital commitment including the amount contributed by the investment of the Company and CLFG for Long Hai Project is currently estimated to amount Long Hai Project RMB300 million (approximately HK$283.02 million), which is based on the estimated amount of capital investment and the general working capital required by Long Hai Project. Save for the initial registered capital contribution, there is currently no timetable for the contribution of the remaining amount of investment which shall be financed by Long Hai depending on the progress of the Long Hai Project. The Company estimated the Long Hai Project will be completed by the end of year 2005 and the remaining amount of investment will be totally invested into the Long Hai Project by that time.

• Save as disclosed in this announcement, there is no other capital commitment, guarantee or indemnity required from the Group under the Long Hai Agreement.

• Business scope principally engaged in (i) the production and sale of untra-thin glass and (ii) processing raw materials for the production of glass related products

• Board representation The board of Long Hai shall comprise seven directors, of which, the Company shall nominate five directors and chairman of the board of Long Hai and CLFG shall nominate the remaining two directors of Long Hai.

• Supervisory committee The supervisory committee of Long Hai shall comprise three supervisors, of which the Company shall nominate two supervisors and CLFG shall nominate the remaining one superviser. The term of supervisory committee is three years for each term.

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Profit sharing

The Company and CLFG shall share the profit and loss of Long Hai in accordance with their respective equity interest in Long Hai. Long Hai will be treated as a subsidiary of the Company.

Pre-emptive right Upon the formation of Long Hai, if any party intends to transfer its equity interest in Long Hai, it has to obtain the prior consent of the other party and on the same terms and conditions, the other party shall have the pre-emptive option to purchase the party’s interest in Long Hai.

ESTABLISHMENT OF LONG HAO

The principal terms of the Long Hao Agreement are as follows:

Date 26 May 2005 Parties The Company and CLFG Initial registered RMB50 million (approximately HK$47.17 million), of which RMB40 capital of Long Hao million (approximately HK$37.74 million) (representing 80% of the registered capital thereof) will be contributed by the Company in cash with its internal resources and RMB10 million (approximately HK$9.43 million) (representing 20% of the registered capital thereof) will be contributed by CLFG of which RMB5 million in cash and the remaining RMB5 million in the form of contribution of CLFG’s specialized right of 洛陽浮法玻璃工藝專有技術 (Luoyang Float Glass Patent Technology) and usage right of the “CLFG洛玻” registered trademark.

CLFG has engaged 洛陽敬業會計師事務所有限責任公司, an independent third party, to value the specialized usage right of 洛陽浮法玻璃工藝專有技 術 (Luoyang Float Glass Patent Technology) and the usage right of the “CLFG 洛玻” registered trademark as at 31 March 2005 to be contributed by CLFG as intangible assets. The valuation of specialized usage right of 洛陽浮法玻 璃工藝專有技術 (Luoyang Float Glass Patent Technology) and the usage right of the “CLFG 洛玻 ” registered trademark is RMB8.11 million (approximately HK$7.65 million) for the Long Hao Project as at 31 March 2005 on the basis of generally accepted valuation methodology, being the income approach, details of which shall be set out in the circular to be issued to the H Shares’ Shareholders. The value of the intangible assets to be contributed by CLFG into Long Hao is determined as matter of commercial decision after arms length negotiation between the Company and CLFG and being 10% of the total initial registered capital of Long Hao contributed by the parties.

According to the Long Hao Agreement, the initial registered capital shall be fulfilled in full within ten days from the date of execution of the Long Hao Agreement. Business license will be applied immediately after the execution of the Long Hao Agreement.

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• Total amount of The total capital commitment including the amount contributed by the investment of the Company and CLFG as initial registered capital for Long Hao Project is Long Hao Project currently estimated to amount RMB250 million (approximately HK$235.85 million) which is based on the estimated amount of capital investment and the general working capital required by Long Hao Project. Save for the initial registered capital contribution, there is currently no timetable for the contribution of the remaining amount of investment which shall be financed by Long Hao depending on the progress of the Long Hao Project. The Company estimated the Long Hai Project will be completed by the end of year 2005 and the remaining amount of investment will be totally invested into the Long Hai Project by that time.

• Save as disclosed in this announcement, there is no other capital commitment, guarantee or indemnity required from the Group under the Long Hao Agreement.

• Business scope principally engaged in (i) the production and sale of float glass and (ii) the provision of related consultancy and technical support services.

• Board representation The board of Long Hao shall comprise seven directors, of which, the Company shall nominate five directors and chairman of the board of Long Hao and CLFG shall nominate the remaining two directors of Long Hao.

• Supervisory committee The supervisory committee of Long Hao shall comprise three supervisors, of which the Company shall nominate two supervisors and CLFG shall nominate the remaining one superviser. The term of supervisory committee is three years for each term.

• Profit sharing The Company and CLFG shall share the profit and loss of Long Hao in accordance with their respective equity interest in Long Hao. Long Hao will be treated as a subsidiary of the Company.

• Pre-emptive right Upon the formation of Long Hao, if any party intends to transfer its equity interest in Long Hao, it has to obtain the prior consent of the other party and on the same terms and conditions, the other party shall have the pre-emptive option to purchase the party’s interest in Long Hao.

REASONS FOR THE ESTABLISHMENT OF LONG HAI AND LONG HAO

Reasons for the establishment of Long Hai

The following are the reasons for the establishment of Long Hai:

First, at present, glasses with thickness less than 1 mm used in the PRC are imported from overseas which incur higher costs and the establishment of Long Hai to manufacture 0.55 mm to 3 mm ultrathin glass in commercialize mass production can capture the first mover advantage in manufacturing the ultra-thin glass with thickness less than 1 mm in the PRC market. The Directors also consider that Long Hai can base on the experience of 洛玻集團龍門玻璃有限責任公司 (Luobo Group Longmen Glass Company), the non-wholly owned subsidiary of the Company to manufacture the ultra-thin glass since 洛玻集團龍門玻璃有限責任公司 (Luobo Group Longmen Glass Company) has successfully manufactured the 1.1 mm ultra-thin glass in 2001 with the use of the 洛玻浮法玻璃工藝專有技術 (Luoyang Float Glass Patent Technology).

Also, the market potential for the ultra-thin glass in the PRC is enormous. Under the tenth five-year plan of the PRC government, the state strongly supports the development of the photoelectric industry in the PRC. The ultra-thin glass is one of the major raw materials used in the production of electronic products such as TN-LCD display panels, STN-LCD display panels and PDA.

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Reasons for the establishment of Long Hao

The following are the reasons for the establishment of Long Hao:

First, the newly established Long Hao production lines will make use of coal purchased from the independent third parties extracted from 汝陽縣 (Ruyang Province) to generate coal gas by Long Hao itself as fuel for its production of float sheet glass to substitute the more expensive heavy oil which the Group currently used in the other production lines of the Group. Also, the state council of Ruyang Province has agreed to support Long Hao with favourable government policy like provision of basic infrastructure to the plant of Long Hao, government subsidies and preferential tax treatment to assist Long Hao for the establishment of the two new production lines in Ruyang Province. With the use of cheaper raw materials and the support from the local government, Long Hao’s cost to produce float sheet glasses can be reduced.

Second, for the past three years, the PRC government has launched in total of 36 new governmentbacked major projects with a total investment cost of more than RMB600 billion (approximately HK$566 billion) in the western region of the PRC. Float sheet glass is an important raw material for property development purpose. As such, the Directors consider that the float sheet glass market in the western region of the PRC has huge potential.

Finally, the Directors consider that Long Hao enjoys geographical advantage to establish at Ruyang Province. The Long Hao production lines is located at the north-eastern part of the 洛界公路(Luojie Expressway), south-eastern part of 汝安路 (Ruan Lu) and south-western part of 焦枝鐵路 (Jiaozhi Railway) in the Ruyang Province which Long Hao can efficiently deliver the finished products to different provinces in the PRC. Ruyang Province is also a region with abundant natural resources which are the source of raw materials used for the production of float sheet glass.

The Directors including all the independent non-executive Directors take the view that the establishment of Long Hai and Long Hao with CLFG has been made in the ordinary and usual course of business of the Company, on normal commercial terms and on terms which are fair and reasonable to and are in the best interest of the Company and its Shareholders taken as a whole having taken into account of the establishment of Long Hai and Long Hao. Apart from the capital contribution of the Company and CLFG as stated above, both the Company and CLFG have no other future capital commitment under the Long Hai Agreement and Long Hao Agreement.

FUNDING FOR THE PROJECTS

Amongst the estimated total amount of investment of approximately RMB300 million (approximately HK$283.02 million) and RMB250 million (approximately HK$235.85 million) for the Long Hai Project and Long Hao Project respectively, save as the initial registered capital contribution of Long Hai Project and Long Hao Project by the Company and CLFG, any further funding required by the Long Hai Project and Long Hao Project will be funded by bank borrowings, other financial borrowings and/or capital market fund raising activities under the name of the new companies. The Company and CLFG will provide further finance/guarantee for outside borrowings of Long Hai and Long Hao in accordance to their respective equity interest in Long Hai and Long Hao, if required in the future. If other capital commitment, guarantee or indemnity are required from CLFG in the future and shall constitute notifiable and connected transactions under the requirements of Rule 14.15(2) of Chapter 14 of the Listing Rules and the relevant requirements of Chapter 14A of the Listing Rules, the Company shall comply with the relevant requirements under Rule 14.15(2) of Chapter 14 of the Listing Rules and the relevant requirements of Chapter 14A of the Listing Rules when the abovementioned transactions conducted. The Stock Exchange has indicated that it will aggregate the Company’s total capital committment and any guarantee or indemnity provided in connection with the establishment of Long Hai and Long Hao under Rule 14.15(2) of the Listing Rules.

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LISTING RULES IMPLICATIONS

CLFG is the controlling shareholder (as defined in the Listing Rules and the Shanghai Listing Rules) of the Company and is interested in approximately 57.14% of the issued share capital of the Company. Pursuant to Rule 14A.13(6) of the Listing Rules and Rule 10.1.3 of the Shanghai Listing Rules, the transactions described above constitute connected transactions for the Company under the Listing Rules and the Shanghai Listing Rules. The transactions contemplated under the Long Hai Agreement and Long Hao Agreement constitute major transactions of the Company under the Listing Rules as the Company’s capital investment under the Long Hai Agreement and Long Hao Agreement exceeds 25% of the average market capitalization of the Company for the five business days immediately preceding the date of the Long Hai Agreement and Long Hao agreement. Therefore, the Company should make an announcement and issue a circular containing the particulars of the transactions and recommendation from an independent financial advisor to the Independent Board Committee and the Independent H Shares’ Shareholders for approval of the agreements and the investment of the Company in Long Hai and Long Hao by the Independent H Shares’ Shareholders at the EGM. The transactions contemplated under the Long Hai Agreement and Long Hao Agreement exceed RMB30 million and are subject to the requirement of the Rule 10.2.5 of the Shanghai Listing Rules. The transactions are subject to approval of the Independent Shareholders by poll.

In view of CLFG and its associates’ interests in Long Hai Agreement and Long Hao Agreement, CLFG and its associates shall abstain from voting at the EGM.

The Company will send a circular containing, among other things, (i) details of the terms and conditions of the Long Hai Agreement and Long Hao Agreement; (ii) the recommendation from the Independent Board Committee in respect of the Long Hai Agreement and Long Hao Agreement to the Independent H Shares’ Shareholders; and (iii) the advice of an independent financial adviser to the Independent Board Committee and the Independent H Shares’ Shareholders in respect of the Long Hai Agreement and Long Hao Agreement, to the H Shares’ Shareholders in due course. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent H Shares’ Shareholders on these transactions.

For the concern of A Shares’ Shareholders, please refer to the announcement published on the newspapers, namely, China Securities and Shanghai Securities on 27 May 2005.

GENERAL

The Company is principally engaged in the production and sale of float flat glass and reprocessed automobile glass.

CLFG is a registered company with limited liability incorporated in the PRC and its registered address is No.9, Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province. Its legal representative is Mr. Liu Baoying and its controlling beneficial owner is 洛陽市國資國有資產經營有 限公司(Luoyang State Capital State-Owned Assets Operation Company Limited). The business of CLFG includes, inter alia, the production of glass, related raw materials and equipment, import, export and domestic sales of glass, processing technology, design and sub-contracting of engineering works, labour export, provision of industrial production material (excluding those under control of the state), technological service, consultation service and goods transportation.

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The Company cooperates with CLFG because CLFG is one of the first batch of fifty-five enterprise groups in the PRC and it is also one of the twenty-two enterprises categorized by the State as special planning unit. Also, 河南省玻璃工程技術研究中心 (Henan Province Float Glass Technical Engineering Research Centre), a wholly owned subsidiary of CLFG which is principally engaged in the research, design and manufacture of float sheet glass and 河南省玻璃工程技術研究中心 (Henan Province Float Glass Technical Engineering Research Centre) can provide technical support to the Long Hai Project and Long Hao Project. Finally, Long Hai and Long Hao shall make use of the洛陽浮法玻璃工藝專有 技術 Luoyang Float Glass Patent Technology owned by CLFG to manufacture the float sheet glass and sell the float glass manufactured by Long Hai and Long Hao under the trademark of “CLFG洛玻” registered trademark.

洛陽玻璃工藝 (Luoyang Float Glass Technology) was named by 中國科學技術委員會 (the China Science and Technology Commission) and was presented State award in 1981 for this innovation. The Luoyang Float Glass Technology including 洛陽浮法超薄玻璃工藝技術 (The Craft of Luoyang Ultra-thin Float Glass Technology) and the related registered patent technology is registered and owned by CLFG.

As advised by the PRC legal adviser 河南九都律師事務所 of the Company, it is legally feasible for the CLFG to contribute the specialized usage right of 洛陽浮法玻璃工藝專有技術 (Luoyang Float Glass Patent Technology) and the usage right of the “CLFG 洛玻” registered trademark into Long Hai and Long Hao. The specialized usage right of 洛陽浮法玻璃工藝專有技術 (Luoyang Float Glass Patent Technology) and the usage right of the “CLFG 洛玻” registered trademark contributed into Long Hai and Long Hao are not exclusively granted to Long Hai and Long Hao and shall not affect other companies and CLFG itself to continue to using them.

DEFINITIONS

Terms used in this announcement shall have the following meaning:

• “A Shares” Renminbi denominated domestic shares of nominal value of RMB1.00 each in the ordinary share capital of the Company

• “associates” has the same meaning as ascribed to it under the Listing Rules “Board” the board of Directors “CLFG” 中國洛陽浮法玻璃集團有限責任公司(China Luoyang Float Glass (Group) Company Limited), the controlling shareholder of the Company

• “Company” 洛陽玻璃股份有限公司(Luoyang Glass Company Limited), a joint stock limited company incorporated in the PRC with limited liability, the Shares of which are listed on the Stock Exchange and the Shanghai Stock Exchange

• “Director(s)” director(s) of the Company “EGM” as extraordinary meeting of the Company to consider and approve, among others, the Long Hai Agreement and Long Hao Agreement and the transactions contemplated thereunder

• “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

• “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “HK$” Hong Kong dollar, the lawful currency of Hong Kong

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“Independent Board	an independent board committee of the Board comprising the independent
Committee”	non-executive Directors, namely Dai Zhiliang, Zhong Pengrong, Xi Shangyang
	and Dong Chao
“Independent	Shareholders other than CLFG and its associates (as defined in the Listing
Shareholders”	Rules and in the Shanghai Listing Rules)
“Independent H Shares’	H Shares’ Shareholders other than CLFG and its associates (as defined in the
Shareholders”	Listing Rules)
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Long Hai”	洛陽龍海電子玻璃有限公司(Luoyang Long Hai Electronic Glass Limited),
	to be jointly established by the Company and CLFG which is to be incorporated
	in the PRC with limited liability
“Long Hao”	洛玻集團龍昊玻璃有限公司(CLFG Group Long Hao Glass Limited), to be
	jointly established by the Company and CLFG which is to be incorporated in
	the PRC with limited liability
“Long Hai Agreement”	the agreement dated 26 May 2005 entered into by and between the Company
	and CLFG, relating to the establishment of Long Hai
“Long Hao	the agreement dated 26 May 2005 entered into by and between the Company
Agreement”	and CLFG, relating to the establishment of Long Hao
“Long Hai Project”	the development and operation of Long Hai pursuant to the Long Hai Agreement
“Long Hao Project”	the development and operation of Long Hao pursuant to the Long Hao Agreement
“PDA”	an acronym for Personal Digital Assistant
“PRC”	the People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC
“Shanghai Listing Rules”	The Listing Rules of Shanghai Stock Exchange
“Shareholder(s)”	shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“STN-LCD”	an acronym for Supertwisted Nematic Liquid Crystal Display
“TN-LCD”	an acronym Twisted Nematic Liquid Crystal Display

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: RMB1.06.

By the order of the Board Luoyang Glass Company Limited Liu Baoying Chairman

Henan, the PRC, 27 May 2005

As at the date of this announcement, the executive Directors are of Messrs. Liu Baoying, Ding Jianluo, Zhu Leibo, Zhang Shaojie, Zhu Liuxin, Jiang Hong and Wang Jie, and the independent non-executive Directors are Dai Zhiliang, Zhong Pengrong, Xi Shengyang and Dong Chao.

Please also refer to the published version of this announcement in The Standard / Sing Tao Daily.

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