RoboSense Technology Co., Ltd — Capital/Financing Update 2009

Jan 22, 2009

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: 1108)

MAJOR TRANSACTION AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF 37% EQUITY INTERESTS IN CLFG FINANCE COMPANY

The Board announces that after trading hours of the Stock Exchange on 22 January, 2009, the Company and CLFG entered into the Contract with Zhenglong Coal and Yongcheng Coal, which were both Independent Third Parties to the Company and CLFG, whereby the Company agreed to sell and Zhenglong Coal agreed to purchase a 37% equity interest in CLFG Finance Company for a cash consideration of RMB140,111,937.64 (or approximately HK$159,027,049.22).

Under the Contract, CLFG, the controlling shareholder of the Company, also agreed to sell and Yongcheng Coal agreed to purchase the remaining 63% equity interest in CLFG Finance Company for a cash consideration of RMB238,568,974.91 (or approximately HK$270,775,786.52).

The Disposal contemplated under the Contract constitutes a connected transaction of the Company under Rule 14A.13 (1)(b)(i) of the Listing Rules. Accordingly, the Disposal will be subject to, amongst other things, the Independent Shareholders’ approval.

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In addition, as the relevant percentage ratios are more than 25% but less than 75%, the Disposal contemplated under the Contract also constitutes a major transaction of the Company under Rule 14.06(3) of the Listing Rules.

A circular containing, amongst other things, further details of the Disposal, the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, and the notice of EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

Trading in the H shares of the Company on the Stock Exchange has been suspended since 31 October, 2006 and will remain to be suspended until further notice.

INTRODUCTION

The Board announces that on 22 January, 2009, the Company and CLFG entered into the Contract with Zhenglong Coal and Yongcheng Coal, which were both Independent Third Parties to the Company and CLFG, pursuant to which the Company agreed to sell and Zhenglong Coal agreed to purchase a 37% equity interest in CLFG Finance Company for a consideration in cash of RMB140,111,937.64 (or approximately HK$159,027,049.22). Under the Contract, CLFG also agreed to sell and Yongcheng Coal agreed to purchase the remaining 63% equity interests in CLFG Finance Company at a consideration in cash of RMB238,568,974.91 (or approximately HK$270,775,786.52).

THE DISPOSAL

The Contract

(1) Date

22 January, 2009

(2) Parties

Sellers: The Company and CLFG, being the substantial shareholder of the Company holding 35.8% of the issued shares in the Company as at the date of this announcement (collectively the “Sellers”)

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Purchasers: Zhenglong Coal and Yongcheng Coal (collectively the “Purchasers”). To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchasers and their respective ultimate beneficial owners are Independent Third Parties to the Company and CLFG

(3) Details of the transaction

The Sellers and the Purchasers entered into the Contract on 22 January, 2009 pursuant to which the Company will conditionally sell its entire 37% equity interests in CLFG Finance Company to Zhenglong Coal and CLFG will conditionally sell the remaining 63% equity interests in CLFG Finance Company to Yongcheng Coal. The respective sale of 37% equity interests and 63% equity interests in CLFG Finance Company by the Company and CLFG will take place simultaneously, and neither can complete without the completion of the other.

(4) Consideration

The consideration in respect of the Selling Interest is RMB140,111,937.64 (or approximately HK$159,027,049.22). The consideration will be satisfied in cash and will first be used to settle the debt owed to CLFG Finance Company by the Company.

The consideration in respect of the Selling Interest was determined by the Company and Zhenglong Coal after arm’s length negotiations with reference to 37%, being the attributable portion of equity interest in CLFG Finance Company to be disposed of by the Company, of the appraised net asset value of CLFG Finance Company of RMB328,680,912.55 (i.e. RMB121,611,937.64) as at 31 October, 2008. The appraisal was conducted by Henan Yatai, an independent professional valuer in the PRC on the basis of the asset based valuation approach. Based on the appraised value of the Selling Interest as at 31 October, 2008, the consideration contained a 13.2% premium of RMB18,500,000.

According to the management account of CLFG Finance Company and a confirmation of CLFG Finance Company dated 22 January, 2009, the debt owed to CLFG Finance Company by the Company as of 9 January, 2009 was RMB80,900,000. CLFG Finance Company also confirmed in the abovementioned confirmation that the amount of such debt will not increase during the period from 9 January, 2009 to Completion Date.

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In view of the substantial gain which is expected to be recorded by the Company on completion of the Disposal, the Board (excluding the independent non-executive Directors who will express their opinions on the Disposal after taking into account of the advice from the Independent Financial Adviser) considers that the consideration in respect of the Selling Interest is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

(5) Other Principal Terms

During the period from 1 November, 2008 to Completion Date, the Sellers will continue to assume the profits generated or losses incurred by CLFG Finance Company in proportion to their respective equity interests in CLFG Finance Company. Accordingly, any unaudited net profits or losses of CLFG Finance Company during the period from 1 November, 2008 to Completion Date, and calculated pro-rata to the Sellers’ respective equity interest in CLFG Finance Company will be returned by CLFG Finance Company to the Sellers (in case of having net profits) or settled by the Sellers (in case of having net losses). Based on management accounts, CLFG Finance Company recorded net profits of RMB2,589,318.31 during the period from 1 November, 2008 to 9 January, 2009.

(6) Conditions Precedent

Completion of the Contract shall be conditional upon the following:

• (i) the Company obtaining the requisite approval from the Independent Shareholders at the EGM in accordance with the Listing Rules;

• (ii) each of the Sellers and Purchasers passing resolutions at their respective board meeting and/or shareholders’ meeting in accordance with their respective Articles of Association;

• (iii) by Completion Date, CLFG Finance Company disposing of all assets, repaying all debts and releasing all its charges and guarantees. CLFG has confirmed to the Company that save for the debt of RMB80,900,000 owed by the Company to CLFG Finance Company as of 9 January, 2009 which shall be directly repaid by the Company, CLFG will be responsible for disposing of all assets and repaying all debts of CLFG Finance Company; and

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• (iv) the Purchasers obtaining all relevant and necessary approvals from the China Banking Regulatory Commission for the Purchasers to become the shareholders of a regulated non-bank finance company.

According to the consultation of the Company to the China Banking Regulatory Commission and the PRC legal advisor, non-bank finance companies in the PRC are required, at the time of its change of control, not to own any assets except for cash or have any liabilities in any form, hence the condition stated in paragraph (iii) above.

(7) Payment terms

Consideration shall be paid by Zhenglong Coal to the Company in the following terms:

• (i) Payment of RMB18,500,000 shall be made to the Company by Zhenglong Coal after execution of the Contract and before the Completion Date. Such payment shall be refunded to Zhenglong Coal if the Contract cannot be completed; and

• (ii) payment of RMB121,611,937.64 shall be paid by Zhenglong Coal within three working days after Completion Date to an account jointly managed by the Sellers and the Purchasers, and part of such amount shall first be used to settle the debt of RMB80,900,000 owed by the Company to CLFG Finance Company as of 9 January, 2009. It is expected that the Company will receive cash equivalent of approximately RMB40,711,937.64 as part of the consideration of the Disposal after the disposal of all assets and repaying all debts of CLFG Finance Company by CLFG prior to the Completion Date.

(8) Completion

Completion shall take place on the Completion Date after fulfillment of all conditions precedent set out above. The Sellers shall provide the Purchasers with all the accounts, contracts, records of transactions, detailed list of assets and all other documents relating to the operation of CLFG Finance Company within five working days after Completion Date.

The respective sale of 37% equity interests and 63% equity interests in CLFG Finance Company by the Company and CLFG will take place simultaneously, and neither can complete without the completion of the other.

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Reasons for the Disposal

The Company is principally engaged in the production and sale of float flat glass and reprocessed automobile glass. CLFG Finance Company is principally engaged in the provision of financial services including deposits taking services, entrusted loan services, loan services, guarantees services and settlement services to the Company and CLFG.

Prior to the Disposal and Completion, CLFG Finance Company is treated as a connected person of the Company in terms of the Listing Rules. Accordingly, the financial services provided by CLFG Finance Company to the Company constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules and subject to announcement, reporting and independent shareholders’ approval. The Disposal enables the Company to streamline its corporate structure by reducing the number of its continuing connected transactions pursuant to the Listing Rules. After the Disposal, the Company will use the financial services provided by commercial banks.

Further, the Directors consider the Disposal to present a good opportunity for the Company to realise the Selling Interest at a reasonable price and enable the Company to focus on its core business.

Upon Completion of the Disposal, based on both the generally accepted accounting standards in the PRC and the International Financial Reporting Standards, the Company is expected to realize a gain of approximately RMB18,887,232.02, which is the difference between the total consideration of RMB140,111,937.64 and 37%, being the attributable portion of equity interest in CLFG Finance Company to be disposed of by the Company, of the net book value of the Selling Interest of RMB121,224,705.62 as at 9 January, 2009. The Directors intend to apply the net sale proceeds of approximately RMB59,211,937.64 as general working capital of the Company.

The terms of the Contract have been determined after arm’s length negotiations and are on normal commercial terms. The Board (excluding the independent non-executive Directors who will express their opinions on the Disposal after taking into account of the advice from the Independent Financial Adviser) considers that the Disposal is in ordinary course of business and on normal commercial terms and is fair and reasonable and in the interest of the Company and its Shareholders as a whole.

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Listing Rules Implications

The Disposal contemplated under the Contract constitutes a connected transaction of the Company under Rule 14A.13(1)(b)(i) of the Listing Rules. Accordingly, the Disposal will be subject to, amongst other things, the Independent Shareholders’ approval.

In addition, as the relevant percentage ratios are more than 25% but less than 75%, the Disposal contemplated under the Contract also constitutes a major transaction of the Company under Rule 14.06(3) of the Listing Rules.

As mentioned above, the Disposal results in the cessation of the continuing connected transactions between the Group and CLFG Finance Company.

Information of CLFG Finance Company

CLFG Finance Company is a company incorporated in the PRC with limited liability and is owned as to 63% and 37% by CLFG and the Company respectively. It is a non-bank finance company approved and regulated by the PBOC and the China Banking Regulatory Commission and is principally engaged in the provision of financial services to the Company and CLFG. The capital contribution amount of CLFG Finance Company is RMB300,000,000.

The net asset value of CLFG Finance Company as at 31 October, 2008 and as appraised by Henan Yatai was RMB328,680,912.55.

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The net book value of CLFG Finance Company and net profits before and after taxation and extraordinary items of CLFG Finance Company calculated on the basis of generally accepted accounting standards in the PRC for each of the two years ended 31 December, 2007 and the ten months ended 31 October, 2008 are set out as follows:

					For the
	For	the year ended	For	the year ended	ten months ended
	31 December, 2006		31 December, 2007		31 October, 2008
		(audited)		(audited)	(audited)
		RMB’000		RMB’000	RMB’000
Net book value		310,691		320,007	322,615
Profit before taxation and
extraordinary items		4,858		13,866	15,882
Profit after taxation and
extraordinary items		732		8,593	11,369
Net book value attributable
to the Selling Interest		114,955		118,403	119,368
Profit before taxation and
extraordinary items attributable
to the Selling Interest		1,797		5,130	5,876
Profit after taxation and
extraordinary items attributable
to the Selling Interest		271		3,448	4,207

Note: The figures referred to above have been extracted from accounts of CLFG Finance Company audited according to the generally accepted accounting standards in the PRC.

Information of the Company, CLFG, Zhenglong Coal and Yongcheng Coal

The Company is the place of origin for one of three great float glass production methods“Luoyang Float Glass”. It is one of the largest manufacturers and distributors of float glass in glass industry in the PRC. The Company is principally engaged in the production and sale of float flat glass and reprocessed automobile glass.

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CLFG, the Company’s controlling shareholder, is principally engaged in 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 services, consultation services and goods transportation. CLFG is a substantial shareholder of the Company which holds a 35.8% interest in the Company and as such, is a connected person of the Company.

Zhenglong Coal is principally engaged in manufacture of mechanical equipments (excluding those under control of the state); sale of building materials, electronic products and communication equipments (excluding wireless equipments); agriculture, animal husbandry and fishery; and coal mining. Yongcheng Coal is principally engaged in investment and management in coal, chemicals and mining industries; transportation by self-constructed railways; power generation, transmission and transformation; manufacture and sale of mechanical equipments; processing and selling of industrial greases and garments; sale of building materials, electronic products, communication equipments (excluding wireless equipments), and petrochemicals (excluding hazardous chemicals, flammable and combustible products, and refined oil products); agriculture, animal husbandry and fishery; livestock; warehousing (excluding inflammable materials); technical service; advisory service; import and export of self-produced products and related technology. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Zhenglong Coal and Yongcheng Coal and their respective ultimate beneficial owners are Independent Third Parties to the Company and CLFG.

EGM

The Company will convene an EGM for the purpose of seeking Independent Shareholders’ approval on the Disposal. According to the Listing Rules, CLFG, being the controlling shareholder of the Company and hence a connected person of the Company, and its associates will abstain from voting in respect of the resolutions relating to the Disposal. The votes to be taken at the EGM in relation to the said resolutions will be taken by poll.

The Independent Board Committee will be established to consider the terms of the Contract and the Disposal and to advise the Independent Shareholders as to whether the transaction is on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

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GENERAL

A circular containing, among others things, further information on the Disposal, the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, and the notice of EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules.

Trading in the H shares of the Company on the Stock Exchange has been suspended since 31 October, 2006 and will remain to be suspended until further notice.

DEFINITIONS

“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*), a limited liability company incorporated in the PRC and the controlling shareholder of the Company holding a 35.8% equity interest in the Company;

“CLFG Finance Company” 中國洛陽浮法玻璃集團財務有限責任公司 (CLFG Finance Company Limited*), a limited liability company incorporated in the PRC and a subsidiary of CLFG;

“Company”

Luoyang Glass Company Limited（洛陽玻璃股份有限公 司）, a joint stock limited company incorporated in the PRC with limited liability, the H Shares of which are listed on the Main Board of the Stock Exchange (stock code: 1108);

“Completion” the completion of the Contract which will take place on the Completion Date;

“Completion Date” the registration date of the change of shareholders of CLFG Finance Company at the relevant industrial and commercial department of the PRC;

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“Contract”	a share transfer contract entered into between the Sellers
	and the Purchasers whereby the Company has agreed to sell
	the Selling Interest, being a 37% equity interest in CLFG
	Finance Company, to Zhenglong Coal and CLFG has agreed
	to sell the remaining 63% equity interests in CLFG Finance
	Company to Yongcheng Coal respectively;
“Directors”	the directors of the Company, including the independent
	non-executive directors;
“Disposal”	the disposal of the Selling Interest by the Company to
	Zhenglong Coal pursuant to the Contract;
“EGM”	an extraordinary general meeting of the Company to be
	convened for the purpose of considering, and if thought fit,
	approving the Contract and the Disposal;
“Group”	the Company and its subsidiaries;
“Henan Yatai”	河南亞太資產評估有限公司(Henan Yatai Asset Appraisal
	Company Limited*), an independent professional valuer;
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC;
“Independent Board	an independent board committee of the Company comprising
Committee”	all the independent non-executive Directors namely
	Mr. Zhang Zhanying, Mr. Guo Aimin, Mr. Xi Shengyang
	and Mr. Ge Tieming;
“Independent Financial	an independent financial adviser to be appointed to advise
Adviser”	the Independent Board Committee and the Independent
	Shareholders in relation to the Disposal;
“Independent Shareholders”	Shareholders other than CLFG and its associates;

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“Independent Third	person(s) or company(ies) and their respective ultimate
Party(ies)”	beneficial owner(s) which, to the best of the Directors’
	knowledge, information and belief, having made all
	reasonable enquiries, are third parties independent of and
	not connected with the Company and its subsidiaries and its
	connected persons (as defined in the Listing Rules);
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange;
“PBOC”	People’s Bank of China;
“percentage ratio”	has the meaning ascribed to this term under the Listing
	Rules, as application to a transaction;
“PRC”	the People’s Republic of China which, for the purpose of
	this announcement, excludes Hong Kong, Macau and Taiwan;
“Selling Interest”	a 37% equity interest held by the Company in the issued
	share capital of CLFG Finance Company;
“Share(s)”	share(s) of RMB1.00 each of the Company;
“Shareholder(s)”	registered holder(s) of the Shares;
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Yongcheng Coal”	永城煤電控股集團有限公司(Yongcheng Coal and
	Electricity Holdings Group Company Limited*), a limited
	liability company incorporated in the PRC;

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“Zhenglong Coal”

河南省正龍煤業有限公司 (Henan Province Zhenglong Coal Company Limited*), a limited liability company incorporated in the PRC.

By order of the Board Gao Tianbao Chairman

Luoyang, the PRC 22 January, 2009

As at the date of this announcement, the Board comprises five executive Directors: Mr. Gao Tianbao, Mr. Xie Jun, Mr. Cao Mingchun, Mr. Song Jianming and Ms. Song Fei, one non-executive Director: Mr. Shen Anqin, and four independent non-executive Directors: Mr. Zhang Zhanying, Mr. Guo Aimin, Mr. Xi Shengyang and Mr. Ge Tieming.

• For identification purposes only

Note : In this announcement, certain amounts expressed in RMB have been translated into HK$ at RMB1 = HK$1.135 for illustrative purposes only. No representation is made that any amount in HK$ or RMB could have been or can be converted at the above rates or at any other rates.

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