RoboSense Technology Co., Ltd — Regulatory Filings 2018

Feb 1, 2018

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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CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcement of the Company dated 24 January 2018 in relation to, among other things, the continuing connected transactions under the Sale of Raw Materials Framework Agreement and the Sale and Purchase of Glass Products Framework Agreement.

The Sale of Raw Materials Framework Agreement and the Sale and Purchase of Glass Products Framework Agreement shall only take effect after the approval by the independent shareholders at the extraordinary general meeting of the Company to be held on 16 March 2018. In order to cope with the operational needs of the Group during the period before these two agreements become effective, on 1 February 2018, the Company entered into the Sale and Purchase of Sodium Carbonate Agreement with Triumph, pursuant to which Triumph agreed to supply sodium carbonate to the Group during the term of the agreement. On the same day, the Company also entered into the Sale and Purchase of Ultra-thin Glass Agreement with Triumph, pursuant to which the Group agreed to supply ultra-thin float glass products to Triumph Group during the term of the agreement.

Triumph is an indirect controlling shareholder of the Company and a direct wholly-owned subsidiary of CNBMG (the ultimate controlling shareholder of the Company), and is therefore a connected person of the Company. The transactions contemplated under the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

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As certain applicable percentage ratios are more than 0.1% but less than 5%, the transactions contemplated under the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement are subject to the reporting and announcement requirements only but are exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

INTRODUCTION

Reference is made to the announcement of the Company dated 24 January 2018 in relation to, among other things, the continuing connected transactions under the Sale of Raw Materials Framework Agreement and the Sale and Purchase of Glass Products Framework Agreement.

The Sale of Raw Materials Framework Agreement and the Sale and Purchase of Glass Products Framework Agreement shall only take effect after the approval by the independent shareholders at the extraordinary general meeting of the Company to be held on 16 March 2018. In order to cope with the operational needs of the Group during the period before these two agreements become effective, on 1 February 2018, the Company entered into the Sale and Purchase of Sodium Carbonate Agreement with Triumph, pursuant to which Triumph agreed to supply sodium carbonate to the Group during the term of the agreement. On the same day, the Company also entered into the Sale and Purchase of Ultra-thin Glass Agreement with Triumph, pursuant to which the Group agreed to supply ultra-thin float glass products to Triumph Group during the term of the agreement.

I. THE SALE AND PURCHASE OF SODIUM CARBONATE AGREEMENT

Set out below is a summary of the principal terms of the Sale and Purchase of Sodium Carbonate Agreement:

Date: 1 February 2018 Parties: (1) The Company; and (2) Triumph. Term: The Sale and Purchase of Sodium Carbonate Agreement shall take effect upon signing with company seals by authorized representatives of both parties and shall be valid until the Sale of Raw Materials Framework Agreement taking effect and, in any event, not later than 30 June 2018.

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Scope of the Agreement

Pursuant to the Sale and Purchase of Sodium Carbonate Agreement, Triumph agreed to supply sodium carbonate to the Group in accordance with the demand plan of the Group.

Payment Terms

Pursuant to the Sale and Purchase of Sodium Carbonate Agreement, the Group shall pay the consideration under the Sale and Purchase of Sodium Carbonate Agreement in cash within 1 month after the delivery of sodium carbonate by Triumph to the designated location of the Group and upon the acceptance of inspection by the Group.

Pricing terms

Pursuant to the Sale and Purchase of Sodium Carbonate Agreement, the price for sodium carbonate shall be determined based on the principle of justice, fairness and openness with reference to the prevailing market price at the time of a particular transaction as determined by tenders. The price of sodium carbonate offered by Triumph shall not be higher than that offered by Triumph to independent third parties for the provision of the same or similar products.

Pricing Standards

The procurement of sodium carbonate by the Group is conducted via the centralised procurement platform adopted by Triumph. In order to give play to the benefit of large scale procurement and further reduce the procurement costs of its glass manufacturers, Triumph has built a centralised procurement platform of sodium carbonate, and prepared relevant management measures and implementation plan. The centralised procurement of sodium carbonate shall be conducted by means of unified tender by Triumph for unified procurement from and unified payment to sodium carbonate suppliers. The marketing department of the Company will also collect market price information on a monthly basis. The deputy general manager in charge of centralised procurement of the Company will verify if the transaction price with Triumph is not less favourable than the market price with the reference to the quotations obtained from different sodium carbonate manufacturers and China’s bulk commodity service providers such as www.chem365.net.

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Historical Transaction Amounts and Proposed Transaction Cap under the Sale and Purchase of Sodium Carbonate Agreement

The following table sets out the historical transaction amounts for the three years ended 31 December 2017, and the Proposed Transaction Cap for the six months ending 30 June 2018 under the Sale and Purchase of Sodium Carbonate Agreement:

Historical	Historical	Historical	Proposed
transaction amount	transaction amount	transaction amount	Transaction Cap for
for the year ended	for the year ended	for the year ended	the six months ending
31 December 2015	31 December 2016	31 December 2017	30 June 2018
(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)
(audited)	(audited)	(unaudited)
RMB’000	RMB’000	RMB’000	RMB’000
(approximately)	(approximately)	(approximately)	(approximately)
5,420	17,820	22,860	13,500

The Proposed Transaction Cap under the Sale and Purchase of Sodium Carbonate Agreement is determined based on the estimated demand of sodium carbonate of the Group during the effective period of the agreement and after taking into account (i) the abovementioned historical transaction amounts; (ii) the selling prices and consumption of sodium carbonate in the previous three years; (iii) the need of sodium carbonate with higher quality for new product development and production in the future; and (iv) the expected consumption of sodium carbonate for the new production lines.

Measures of Internal Control

To ensure the Company’s conformity with the above pricing policies from time to time, the Company would adopt a series of internal control policies for its daily operation in relation to the procurement of sodium carbonate from Triumph:

• (i) For centralised procurement of sodium carbonate, the Company will appoint a deputy general manager in charge of marketing to directly participate in the centralised tender, bid negotiation and pricing for sodium carbonate of Triumph. A centralised tender for sodium carbonate shall be performed once a month or every two months depending on the market situation, and the tender is open to domestic major sodium carbonate manufacturers in the market.

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The marketing department of the Company will be responsible for collection of information on supply and demand and price fluctuation of sodium carbonate on a monthly basis from different sodium carbonate manufacturers and China’s bulk commodity service providers such as www.chem365.net. Relevant personnel of the business department will communicate and query with the sodium carbonate manufacturers or trade partners through telephone conversations, emails and site visits to obtain the prices of comparable transactions by independent suppliers in the same period and the prevailing market price at the time of a particular transaction.

• (ii) The deputy general manager in charge of marketing of the Company or the management of its subsidiaries will assess and determine the terms and pricing for procurement of sodium carbonate from Triumph based on the market information collected by the abovementioned methods or through the abovementioned channels in order to ensure that the prices offered by Triumph shall not be less favourable than those offered by other independent third parties for similar raw materials.

II. THE SALE AND PURCHASE OF ULTRA-THIN GLASS AGREEMENT

Set out below is a summary of the principal terms of the Sale and Purchase of Ultra-thin Glass Agreement:

Date: 1 February 2018 Parties: (1) The Company; and (2) Triumph.

Term: The Sale and Purchase of Ultra-thin Glass Agreement shall take effect upon signing with company seals by authorized representatives of both parties and shall be valid until the Sale and Purchase of Glass Products Framework Agreement taking effect and, in any event, not later than 30 June 2018.

Scope of the Agreement

Pursuant to the Sale and Purchase of Ultra-thin Glass Agreement, the Group agreed to supply ultra-thin float glass products produced by it to Triumph Group.

Payment Terms

Pursuant to the Sale and Purchase of Ultra-thin Glass Agreement, in principle, Triumph Group shall pay the consideration under the Sale and Purchase of Ultra-thin Glass Agreement in cash within 10 days after receipt of the goods and confirmation of its parameters including type, quality specifications and quantity.

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Pricing Terms

Pursuant to the Sale and Purchase of Ultra-thin Glass Agreement, as a general principle, the price of ultra-thin float glass products shall be determined on normal commercial terms and in the ordinary and usual course of business, based on the principle of justice, fairness and openness with reference to the prevailing market price at the time of a particular transaction. The price of ultra-thin float glass products offered by the Group to Triumph Group shall not be lower than that offered by the Group to independent third parties for the provision of the same or similar products.

Pricing Standards

The price of ultra-thin float glass products under the Sale and Purchase of Ultra-thin Glass Agreement will be determined with reference to:

• (i) comparable transactions (if any) conducted by the Group with independent third parties during the same period; and/or

• (ii) communication and exchange of price information by various means, including telephone conversations, emails and meetings with peers and business partners within the glass production industry; and/or

• (iii) sales staff will communicate and query with the customers, suppliers or trade partners through site visits to obtain the prices of comparable transactions in the same period and the prevailing market price at the time of a particular transaction; and/or

• (iv) supply and demand information and price information in the PRC market obtained from China National Bureau of Statistics (www.stats.gov.cn) and the glass network/the official website of China glass industry (www.glass.org.cn/) respectively. Relevant market price data will be used as the basis for the transactions with Triumph Group by the sales department.

The final price will be implemented after the approval of the general manager or the deputy general manager of the Company’s subsidiaries with reference to (i) to (iv) above.

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Historical Transaction Amounts and Proposed Transaction Cap under the Sale and Purchase of Ultra-thin Glass Agreement

The following table sets out the historical transaction amounts for the three years ended 31 December 2017, and the Proposed Transaction Cap for the six months ending 30 June 2018 under the Sale and Purchase of Ultra-thin Glass Agreement:

Historical	Historical	Historical	Proposed
transaction amount	transaction amount	transaction amount	Transaction Cap for
for the year ended	for the year ended	for the year ended	the six months ending
31 December 2015	31 December 2016	31 December 2017	30 June 2018
(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)	(inclusive of VAT)
(audited)	(audited)	(unaudited)
RMB’000	RMB’000	RMB’000	RMB’000
(approximately)	(approximately)	(approximately)	(approximately)
6,410	102,320	18,410	8,000

The Proposed Transaction Cap under the Sale and Purchase of Ultra-thin Glass Agreement is determined based on the Group’s internal projection on the estimated amount of ultra-thin float glass products to be sold to Triumph Group by the Group during the effective period of the agreement and after taking into account (i) the abovementioned historical transaction amounts; (ii) the anticipated demand of Triumph Group for ultra-thin float glass products; and (iii) the production capacity and the product type of the glass products of the Group.

Measures of Internal Control

To ensure the Company’s conformity with the above pricing policies from time to time, the Company would adopt a series of internal control policies for its daily operation in relation to the sales of ultra-thin float glass products to Triumph Group:

• (i) the marketing department of the Company will be responsible for collecting the market information including the supply and demand and the price fluctuation of ultra-thin float glass products on a monthly basis from China National Bureau of Statistics (www.stats.gov.cn) and the glass network/the official website of China glass industry (www.glass.org.cn/) respectively;

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• (ii) the marketing department of the Company will also communicate and query with the customers, suppliers or trade partners through telephone conversations, emails and site visits to obtain the prices of comparable transactions in the same period and the prevailing market price at the time of a particular transaction for verification of the prevailing market price implemented by the sales department;

• (iii) the marketing department of the Company will set up the floor price to the subsidiaries for ultra-thin float glass products after approval by the management of the Company according to the market price provided by the marketing department, and the selling price offered to Triumph Group will not be less than such floor price; and

• (iv) the marketing department will review the sales of ultra-thin float glass products of the Company’s subsidiaries based on the floor price and report to the management of the Company on a monthly basis.

REASONS FOR ENTERING INTO THE SALE AND PURCHASE OF SODIUM CARBONATE AGREEMENT AND THE SALE AND PURCHASE OF ULTRA-THIN GLASS AGREEMENT

The Group is principally engaged in the production and sale of ultra-thin electronic glass, and sodium carbonate is one of the raw materials for the production of glass. The entering into of the Sale and Purchase of Sodium Carbonate Agreement enables the Group to meet its normal production needs. The entering into of the Sale and Purchase of Ultra-thin Glass Agreement enables the Company to make profit from sale of ultra-thin float glass products. The terms of the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement were determined after arm’s length negotiations between the parties thereto.

The Directors (including the independent non-executive Directors) consider that the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement have been entered into on normal commercial terms and in the ordinary and usual course of business of the Group, and are fair and reasonable and in the interests of the Group and the Shareholders as whole.

INFORMATION OF THE COMPANY AND TRIUMPH

The Company is principally engaged in the production and sale of ultra-thin electronic glass.

Triumph is an indirect controlling shareholder of the Company and a direct wholly-owned subsidiary of CNBMG (the ultimate controlling shareholder of the Company), and is principally engaged in glass sector, new materials sector, new energy sector, new equipment sector and project management sector.

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LISTING RULES IMPLICATIONS

Triumph is an indirect controlling shareholder of the Company and a direct wholly-owned subsidiary of CNBMG (the ultimate controlling shareholder of the Company), and is therefore a connected person of the Company. The transactions contemplated under the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As certain applicable percentage ratios are more than 0.1% but less than 5%, the transactions contemplated under the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement are subject to the reporting and announcement requirements only but are exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

Mr. Zhang Chong, the executive Directors, and Mr. Xie Jun, the non-executive Directors, have abstained from voting in respect of the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement at the Board meeting due to the fact that they are connected with Triumph and CNBMG and are therefore not regarded as independent to make any recommendation to the Board.

DEFINITIONS

In this announcement, the following expressions shall have the following meanings unless the context requires otherwise.

“Board”	the board of Directors
“CNBMG”	China National Building Material Group Co., Ltd.*
	(中國建材集團有限公司), a wholly state-owned
	enterprise incorporated in the PRC and the ultimate
	controlling shareholder of the Company
“CNBMG Group”	CNBMG and its subsidiaries
“Company”	Luoyang Glass Company Limited* (洛陽玻璃股份
	有限公司), a joint stock company incorporated in the
	PRC with limited liability, the H shares and A shares
	of which are listed on the main board of the Stock
	Exchange (stock code: 1108) and the Shanghai Stock
	Exchange (stock code: 600876) respectively
“connected person(s)”	has the same meaning as ascribed to it under the Listing
	Rules

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“Directors” the directors of the Company, including the independent non-executive directors of the Company “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “percentage ratios” has the same meaning as ascribed to it under the Listing Rules, as applicable to a transaction

• “PRC” The People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Proposed Transaction the respective maximum aggregate transaction amounts Cap(s)” under the Sale and Purchase of Sodium Carbonate Agreement and the Sale and Purchase of Ultra-thin Glass Agreement

• “RMB” Renminbi, the lawful currency of the PRC

• “Sale and Purchase of Glass Products Framework Agreement”

• the sale and purchase of glass products framework agreement dated 24 January 2018 entered into between the Company and CNBMG, pursuant to which the Group agreed to supply certain glass products including ultra-thin glass to the CNBMG Group, details of which were set out in the announcement of the Company dated 24 January 2018

• “Sale and Purchase of Sodium Carbonate Agreement”

• the sale and purchase of sodium carbonate framework agreement dated 1 February 2018 entered into between the Company and Triumph, pursuant to which Triumph agreed to supply sodium carbonate to the Group during the term of the agreement

• “Sale and Purchase of Ultra-thin Glass Agreement”

• the sale and purchase of ultra-thin glass framework agreement dated 1 February 2018 entered into between the Company and Triumph, pursuant to which the Group agreed to supply ultra-thin float glass products to Triumph Group during the term of the agreement

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“Sale of Raw Materials	the sale of raw materials framework agreement dated
Framework Agreement”	24 January 2018 entered into between CNBMG and
	the Company, pursuant to which the CNBMG Group
	agreed to supply certain raw materials including sodium
	carbonate to the Group, details of which were set out
	in the announcement of the Company dated 24 January
	2018
“Shareholder(s)”	the shareholder(s) of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Triumph”	Triumph Technology Group Limited Company* (凱
	盛科技集團有限公司), a limited liability company
	incorporated in the PRC, and an indirect controlling
	shareholder of the Company and a direct wholly-
	owned subsidiary of CNBMG (the ultimate controlling
	shareholder of the Company)
“Triumph Group”	Triumph and its subsidiaries
“VAT”	value-added tax in the PRC
“%”	per cent

By order of the Board Luoyang Glass Company Limited* Zhang Chong Chairman

Luoyang, the PRC 1 February 2018

As at the date of this announcement, the Board comprises four executive Directors: Mr. Zhang Chong, Mr. Ni Zhisen, Mr. Wang Guoqiang and Mr. Ma Yan; one non-executive Director: Mr. Xie Jun; and four independent non-executive Directors: Mr. Jin Zhanping, Mr. Liu Tianni, Mr. Ye Shuhua and Mr. He Baofeng.

• For identification purposes only

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