RoboSense Technology Co., Ltd — M&A Activity 1999

May 6, 1999

Listed Company Information

LUOYANG GLASS<1108> - Announcement 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. LUOYANG GLASS COMPANY LIMITED (A joint stock limited company incorporated in the Peoples' Republic of China) Connected Transactions Summary The directors ("Directors") of Luoyang Glass Company Limited (the "Company") wish to announce that the Company has entered into certain connected transactions (which had not been disclosed by way of a press announcement under Rule 14.25 of the Listing Rules) with China Luoyang Float Class Group Company of Limited Liability ("CLFG"). On 12th December, 1997, the Company converted its unsecured receivables due by four companies (all were then subsidiaries of CLFG) in an aggregate amount of approximately RMB12.79 million (equivalent to approximately HK$11.95 million, based on the exchange rate of HK$1.00 to RMB1.07) (the "Receivables") into equity interests of these companies (the "Conversions"). The aggregate amount of the transactions represented less than 3% of the consolidated net asset value of the Company and its subsidiareis as at 31st December, 1996. The conversions were recorded in the financial statements of the Company for the year ended 31st December, 1997. CLFG is the holding company of the Company holding approximately 57% of the issued share capital and was a connected person of the Company under the Listing Rules at the time of the transactions. Therefore, the above transactions constituted connected transactions of the Company and were subject to the disclosure requirements set out under Rule14.25 of the Listing Rules. Breaches of the Listing Rules have occurred and the Stock Exchange has indicated it will reserve the right to take any further action as may be appropriate in respect of this matter. During the year ended 31st December, 1997, the Company converted unsecured receivables amounted to approximately RMB5 million (equivalent to approximately HK$4.67 million), RMB4 million (equivalent to approximately HK$3.74 million), RMB2.29 million (equivalent to approximately HK$2.14 million) and RMB1.5 million (equivalent to approximately HK$1.4 million) owned to it by CLFG Luoyang Hoisting Machinery Company Limited, CLFG Luoyang Jingwei Glass Fibre Company Limited, CLFG Luoyang New Illuminating Source Company and CLFG Luoyang Jingjiu Glass Container Company Limited (together referred to as the "Acquired Companies" and were all then subsidiaries of CLFG) respectively into equity interests of these companies. The Conversions were recorded as long term investments in the financial statements of the Company for the year ended 31st December, 1997. The conversions of the Receivables into equity interests of the Acquired Company were in direct proportion to the amount of registered capital of the respective Acquired Companies. The following table sets out the registered capital and the last audited results of the Acquired Companies and their business scopes: Name of company Registered capital 1998 PRC- audited Business results (loss) scope (RMB*000) (RMB*000) CLFG Luoyang Hoisting 13,631.4 (1,784.5) Manufacture and Machinery Company Limited sale of hoisting machinery and glass processing equipment CLFG Luoyang Jingwei Glass 11,141.7 (9,470.9) Manufacture and sale of Fibre Company Limited fibre glass and fibre glass products CLFG Luoyang New Illuminating 7,780.5 (1,135.1) Manufacture and sale of Source Company Limited lighting equipment and light source materials CLFG Luoyang Jingjiu 4,826.4 (3,889.9) Manufacture and sale of Glass Container glass products Company Limited The following table further sets out the Company's investment amounts and percentage of equity shareholdings in the Acquired Companies upon completion of the above conversions as disclosed in the annual report of the Company for the year ended 31st December, 1997 (the "1997 Annual Report"): Name of company Amount of investment Percentage of equity (RMB*000) (%) CLFG Luoyang Hoisting Machinery Company Limited 5,000 36.68 CLFG Luoyang Jingwei Glass Fibre Company Limited 4,000 35.9 CLFG Luoyang New Illuminating Source Company Ltd 2,291.3 29.45 CLFG Luoyang Jingjiu Glass Container Company Ltd 1,500 31.08 The conversions of the Receivables into equity interests of the Acquired Companies were made with the intention of converting the Receivables which had been outstanding for an average of over 3 years at the time of the conversions into equity shareholdings in the Acquired Companies to further develop the Company's business scope and increase its profitability. Although the Acquired Companies are experiencing financial difficulties, the management of the Company is confident about their future prospects. On 20th December, 1998, CLFG entered into an undertaking agreement with each of the Acquired Companies pursuant to which CLFG, in view of the fact that the losses suffered by the Acquired Companies during the two years ended 31st December, 1998 were resulted from operation issues existed prior to the Conversions, undertakes to bear the whole amount of such losses. Consequently, no provision has been made by the Company in respect of the losses of the Acquired Companies for the two years ended 31st December, 1998 and such losses have not had any financial impact to the Company. For the year ending 31st December, 1999 and thereafter, the Acquiring Companies are to distribute profits and allocate losses to the shareholders in proportion to their respective equity interests in them. Accordingly, the Company, in consistent with the Company's accounting policy on long term investments, will consider making provisions for any permanent diminution in value of the Acquiring Companies by referencing to the respective losses of the Acquiring Companies attributable to the Company's equity interests in them and to record as income any dividends to be declared by the Acquiring Companies attributable to the Company's equity interests therein. Connected Transactions CLFG is the holding company of the Company holding approximately 57% of the issued share capital and is a connected person of the Company under the Listing Rules. Therefore, the above transactions constituted connected transactions of the Company. The aggregate amount of the Company's investments (which equals the amount of the Receivables) in the Acquired Companies mentioned above was less than 3% of the book value of the consolidated net tangible assets of the Company and its subsidiaries as at 31st December, 1996. Pursuant to Rule 14.25 of the Listing Rules, the Company is required to disclose by way of a press announcement containing the brief details of the transactions. The Company confirms that a press announcement pursuant to the Listing Rules in respect of the above transactions was not made as it intended to disclose such transactions in the 1997 Annual Report which was under preparation at the time of the transactions and nevertheless acknowledges that such non-compliance of Rule 14.25 of the Listing Rules is due to oversight. The Company further confirms that the Company has suffered no financial loss as a result of the above transactions. As such, breaches of the Listing Rules have occurred in respect of the Company's conversion of the Receivables into the equity interests of the Acquired Companies and the Stock Exchange has indicated it will reserve the right to take any further action as may be appropriate in respect of this matter. By order of the Board WANG JIE Secretary to the Board of Directors 6th May, 1999