Acquisition

Transense Technologies PLC
22 October 2007



                           Transense Technologies plc

                         ('Transense' or the 'Company')

                 Acquisition of Bishop Technology Group Limited



The Board of Transense, the UK-based technology licensing company is pleased to
announce the acquisition of Bishop Technology Group Limited ('Bishop') for a
total consideration of £8.6 million.

The consideration will be satisfied by the issue to Vendors of 37,535,553
Ordinary Shares of 10 pence each at 23 pence per share. A conditional placing
will raise £5.7 million (before estimated expenses) to provide working capital
for the Enlarged Group which was undertaken by Noble & Company Ltd ('Noble').
Completion of the acquisition of Bishop is expected to take place (subject,
inter alia, to shareholder approval) on 16 November 2007.


Highlights

  • The Directors and the Proposed Directors believe that the Acquisition and
    Placing will strengthen the existing management team, put the Enlarged Group
    onto a better financial footing and enable technology synergies between
    Transense and Bishop to be leveraged into the Enlarged Group's target
    markets

  • Bruce Grey and Tim Renfrey the Chief Executive Officer and the Finance
    Director of Bishop will become respectively Chief Executive Officer and
    Finance Director of Transense following completion of the Acquisition. The
    Enlarged Group's management will be located in England and Bishop will
    benefit by being closer to many of its major clients in the UK and Europe
    with the ability to make 'real' time decisions for the global business

  • Following the development of the Company's products over the last few
    years, the Board is now seeking to transform Transense into an IP led,
    integrated global automotive technology group

  • Bishop is a leading global technology licensing and know-how company
    serving the automotive industry. This historically family run business,
    founded in 1975, has its headquarters in Australia and employs 115 people
    around the globe (excluding people employed in its joint ventures). Bishop
    supplies intellectual property, tooling, special purpose machines and
    components to a number of automotive Original Equipment Manufacturers 
    ('OEMs') and tier one suppliers globally. Specifically, Bishop is focused on 
    the steering gear industry for passenger motor vehicles, with its technology
    being incorporated in approximately 24 per cent. of all motor vehicles
    manufactured annually around the world. Bishop, through its joint ventures,
    is the only independent global steering rack supplier.

  • The Acquisition (through Bishop's joint ventures) will provide access to 
    synergistic and profitable products and key relationships with OEMs and the
    top tier one, two and three automotive component suppliers, thereby 
    enhancing Transense's position in the automotive component sector.

  • The net proceeds of the Placing will be used as working capital for
    Transense to accelerate its commercialisation process, assist in targeting
    major tier one and two automotive component manufacturers and fund the
    continuing development of SAW technology. The proceeds will also be used as
    working capital for Bishop to reduce long term debt and assist in funding
    for a high speed warm forge facility in Asia.


Commenting on the acquisition, Chief Executive Jim Perry said:

'This acquisition confirms the commitment of the Board to enhancing shareholder
value. Acquiring Bishop transforms Transense into an IP led, integrated global
automotive technology group and secures a solid platform with a new management
team poised to deliver strong future growth for all shareholders.'


Bruce Grey, Bishop CEO and proposed Transense CEO said:

'This is a tremendous move for Bishop and our relocation of our head office to
the UK will put us in close proximity to many of our major clients in the UK and
Europe. I look forward to integrating our teams and growing our combined
business to enable technology synergies between Transense and Bishop to be
leveraged into the enlarged group's target markets.'


Enquiries:

Transense Technologies plc                             01869 238 380
Jim Perry

Noble & Company Limited                                020 7763 2200
John Llewellyn-Lloyd
Graeme Bayley


The admission document published in connection with the acquisition and the
re-admission of Transense following shareholder approval of the acquisition has
been posted to shareholders and prospective placees today. Copies of the
admission document will be available free of charge to the public on any weekday
(Saturdays, Sundays and public holidays in England excepted) from the principal
place of business of the Company, 66 Heyford Park, Upper Heyford, Bicester,
Oxfordshire OX25 5HD and the offices of the Company's Nominated Adviser and
Broker, Noble & Company Limited, 120 Old Broad Street, London EC2N 1AR from the
date of this announcement until at least one month after First Admission. The
admission document will be available on the Transense website at
www.transense.co.uk



1. Introduction

Your Board is pleased to inform you that the Company has today announced that it
has conditionally agreed to acquire the entire issued share capital of Bishop.
Bishop is a privately owned, Australian-based company which is a global
technology licensing and know-how company serving the automotive industry.
Bishop supplies IP, tooling, special purpose machines and components to
automotive manufacturers around the world. The consideration for the Acquisition
is Au$19.7 million to be satisfied by the issue of 37,535,553 Consideration
Shares to the Vendors at a price of 23 pence per share.

In order to provide the cash component of the Acquisition and provide the
Enlarged Group with sufficient working capital to enable it to implement its
strategy, the Board is also proposing to raise up to £5.7 million (£4.4 million
after expenses) by way of the Placing of 24,763,892 Ordinary Shares at 23 pence
per Placing Share. The Placing has been arranged by Noble. The Placing is not
being underwritten but has been pre-placed with institutional and other
investors.

The Acquisition constitutes a reverse takeover under the AIM Rules for Companies
and is therefore subject to the approval of Shareholders. Such approval is being
sought at the General Meeting which has been convened for 16 November 2007.
Shareholders who, in aggregate, own 8,444,712 Ordinary Shares representing 14.8
per cent. of the Existing Ordinary Shares have already irrevocably undertaken to
vote in favour of the Resolution to be proposed at the GM.

Trading in Ordinary Shares was suspended on 11 October 2007 following the
Board's announcement regarding the acquisition and will resume on the
publication of the admission document. If the Resolution is duly passed at the
GM and the other conditions set out in the Placing Agreement are met, the
dealing facility for the Existing Ordinary Shares will be cancelled.
Applications will be made by the Company for the Existing Ordinary Shares to be
re-admitted and for the New Ordinary Shares to be admitted to trading on AIM.

The Directors recognise the importance of ensuring that employees are well
motivated and identify closely with the success of the Company and that the
success of the Enlarged Group will be enhanced by the implementation of
appropriate share incentive arrangements. Accordingly, subject to Shareholder
approval at the GM, the Company has adopted the 2007 Unapproved Scheme. Further
details of the 2007 Unapproved Scheme are set out in paragraph 4.4 of Part VI of
the admission document. The purpose of the admission document is to provide you
with background to and information regarding the Acquisition, the Enlarged Group
and the Placing, to explain why the Directors consider the Acquisition to be in
the best interests of the Company and its Shareholders as a whole and to
recommend that you vote in favour of the Resolution to approve the Acquisition
and to adopt the 2007 Unapproved Scheme at the GM. Notice of the GM is set out
on page 152 of the admission document.


2. Reasons for the Acquisition

Following the development of the Company's products over the last few years, the
Board is now seeking to transform Transense into an IP led, integrated global
automotive technology group. The Directors and the Proposed Directors believe
that the Acquisition will strengthen the existing management team, put the
Enlarged Group onto a better financial footing and enable technology synergies
between Transense and Bishop to be leveraged into the Enlarged Group's target
markets. The Directors have known of and followed the progress of Bishop for
over 10 years. The Directors and the Proposed Directors also believe that the
Acquisition (through Bishop's joint ventures) will provide access to synergistic
and profitable products and key relationships with Original Equipment
Manufacturers ('OEMs') and the top tier one, two and three automotive component
suppliers, thereby enhancing Transense's position in the automotive component
sector. Following the Acquisition the Company intends to change its name to
better reflect the business of the Enlarged Group.


3. Information on Transense

Transense is a UK-based technology licensing company owning 20 patent families.
It has an innovative portfolio of sensor technologies designed for the
automotive industry. Founded in 1991, Transense develops non-contact,
batteryless sensors and electronic interrogation systems for measuring pressure
and temperature, and non-contact systems for measuring torque using the
Company's patented Surface Acoustic Wave ('SAW') technology.


SAW technology

A SAW is an acoustic wave that travels along the surface of an elastic material.
This kind of wave is commonly used in piezoelectric devices in electronic
circuits. These piezoelectric devices will convert electrical pulses into
mechanical vibrations and, conversely, mechanical vibrations into electrical
pulses. A SAW resonant sensor is designed to resonate at a certain frequency,
but if its piezoelectric substrate distorts through heat, mechanical stress or
pressure, it will resonate at a different frequency. When a radio wave is
directed at this device to interrogate its properties, it will, in the absence
of any external forces, reflect (back scatter) a wave of the same frequency to
the source. If, however, the device is subject to external force, e.g. heat or
stress, the reflected wave will be of a different frequency and that change in
frequency can be measured. The Company has developed a way of measuring the
difference in frequency between these waves in a range of sensors, which can be
used to accurately calculate torque, temperature and pressure. In order to read
this change in frequency, the Company has developed associated interrogation
electronics and software. These SAW devices are fabricated utilising common
processes employed in the manufacture of silicon integrated circuits.


Revenue model

The automotive industry is structured with OEMs producing vehicles in final form
ready for the consumer market. OEMs are supplied by tier one manufacturers, who
provide entire systems, which are in turn made up of the components produced by
tier two suppliers. Transense employs an IP licensing model which allows the
Company to retain its IP and know-how. Transense's licences fall into two
categories: supply licences and applications licences. Transense is focused on
research and development to create IP and know-how to generate revenues from
licence fees, implementation support and royalties. Transense's revenue model
capitalises on the structure of the automotive industry by ensuring that through
the supply licences and applications licences, revenues and royalties are
generated at each level of the supply chain.


Supply licences

Transense has entered into a number of licences permitting the development,
manufacture and supply of the various components that make up the tiers of the
SAW sensor system supply chain. Under the Company's licensing model, no one
company possesses all Transense's IP. The Company has entered into the following
licences with component manufacturers involved in the different stages of the
SAW sensor system supply chain.

• SAW devices: TAI-SAW Technology Co. Ltd ('TAI-SAW'), a company based in Taiwan
with a subsidiary near Shanghai in China, is now Transense's main licensee for
the manufacturing of SAW devices. A licence for tyre pressure monitoring system
('TPMS') SAW devices was granted in October 2002, which was followed by a
licence to manufacture torque SAW devices in November 2006. TAI-SAW is a rapidly
growing, high quality SAW supplier with full automotive quality approvals for
the US and large customers such as Hitachi in Japan. Transense and TAI-SAW are
also discussing the packaging of SAW devices. These licences are non-exclusive.
Negotiations are under way with another SAW manufacturer.

• Packages: The SAW device needs to be packaged to make it into a sensor.
Honeywell International Inc's ('Honeywell's') first licence, granted in April
2002, was to package TPMS sensors. The second Honeywell licence, granted in
November 2004, was to package torque sensors for automotive applications and the
third licence, granted in December 2006, was to package pressure sensors for
non-automotive applications. Honeywell is one of the largest sensor
manufacturers in the world. These licences are non-exclusive. Transense has just
announced a patent administration agreement with the German company, Schott AG
('Schott'), part of the Carl Zeiss Foundation and one of the leading packaging
suppliers and an approved supplier to Honeywell. This covers the filing of a
joint patent and the grant of licences to Schott for manufacturing rights in
return for a royalty and an undertaking to restrict the supply of SAW packages
to Transense's licensees.

• Digital Signal Processor ('DSP') chips: The DSP is an important part of the
SAW sensor
technology as it is the means of communication with the SAW sensor. After
several years working together, Transense signed a technical collaboration
agreement with Texas Instruments, a world leader in DSPs, in July 2006.

• Application Specific Integration Circuit ('ASIC'): The ASIC is the key enabler
of the SAW system that condenses the function of discrete radio frequency
components into a compact key device. Although there are several large ASIC
manufacturers, few are automotive qualified and only Transense's licensee makes
this complicated radio frequency ASIC. After working with a number of large ASIC
manufacturers, a licence was signed in November 2003 with Microelectronic
Integrated System NV ('Melexis'), a Belgian company with operations around the
world, to manufacture ASICs. The licence also provides for the supply of DSP
chips which may be integrated into the ASIC. Melexis supplies components to most
vehicle manufacturers. This agreement is exclusive until a certain quantity is
reached to enable Melexis to recover its large investment in the development,
after which it automatically becomes non-exclusive.

• Discrete systems: A supplementary, non-exclusive licence was signed with
Societe de Technologie Michelin ('Michelin') in September 2004, to enable
Michelin to use discrete components instead of ASICs, in certain TPMS
interrogation equipment.

• Integrated systems: The Honeywell November 2004 licence granted rights to
produce integrated systems for TPMS interrogation. This is non-exclusive.


Applications

The Company is currently targeting a number of immediate applications for its
SAW sensor systems, namely TPMS, torque measurement systems, including EPAS
systems and powertrain measurement systems for the automotive industry, as well
as more recently, pressure sensors for non-automotive applications. If four key
sensor applications were SAW enabled, for example TPMS, EPAS, flexplate and
driveshaft, then typically up to 15 SAW sensors per vehicle would be required as
shown in the diagram below:

                     Key strengths of Transense's products are:



• Sensor systems are batteryless powered by interrogating radio waves at MHz
frequencies

• Signal transmission is wireless and therefore there are no contacts to wear
out

• Interrogation can be continuous, up to 4,000 times a second, or periodic, as
required

• Sensors are small, typically 11mm x 3mm in diameter, and light weight, less
than 2 grams, up to 33 grams less than competitors

• Sensors are made from environmentally friendly materials such as steel and
quartz and combined with the absence of batteries (lithium or otherwise),
present no disposal hazards

• Sensors are robust and tests have demonstrated durability under extreme heat
and vibration conditions

• Piezoelectric SAW resonators are fabricated using standard high volume
manufacturing processes developed for SAW filters, as used in mobile phones

• Applications are typically environmentally beneficial facilitating improved
fuel consumption and component longevity by better control of engines,
transmissions and tyre pressures, meeting the requests of current vehicle
manufacturers.



Tyre Pressure Monitoring System ('TPMS')

Transense has developed a TPMS which remotely monitors the tyre pressure within
a tyre on a vehicle and alerts a user when the pressure within the tyre falls
below or rises above certain parameters. Sensors can be embedded within the tyre
itself or mounted on the back of the valve to measure directly the air pressure
and temperature in the tyre. Measurements can be obtained using either an
on-board monitoring system or an external monitoring system. Using an on-board
monitoring system, a signal is passed from the tyre pressure sensor to a small
antenna situated within the wheel arch which updates a main control system to
alert the driver to a change in tyre pressure. External monitoring devices can
also be used to identify the change in tyre pressure. The Company has provided
technology and prototypes for two external systems: handheld transponders and
kerbside transponders.



Market

There are two principal reasons for using tyre pressure sensors: safety and cost
savings. Following a series of fatal road accidents caused by tyre failures in
2000, the US National Highway Traffic Safety Administration ('NHTSA') put in
place the Transportation Recall Enhancement Accountability and Documentation ('
TREAD') Act, which mandated that every new car produced in the United States
from September 2007 be equipped with a basic TPMS which will warn the driver
when tyre pressure(s) vary by 25 per cent. from their recommended level. Car
manufacturers are therefore under extreme pressure to make purchasing decisions
on TPMS in order to comply with the TREAD Act. The second reason is that by
having tyres under-inflated by 25 per cent. or more, fuel economy can be
decreased by 3-4 per cent. and tyre life reduced by 40 per cent., demonstrating
a large cost saving in having correctly inflated tyres. As well as complying
with new laws and regulations concerning safety and the environment, car
manufacturers need to make their offerings more attractive, encourage customer
loyalty and boost their profits through product differentiation and faster next
generation model development. Tyres are key to satisfying these requirements.
According to Michelin, the global truck tyre market currently represents 166
million tyres, of which 85 per cent. are replacement tyres. This is a 3 per
cent. growth on the truck tyre market in 2006. Similarly the passenger car tyre
market and light truck tyre market, which currently consist of 1.1 billion
tyres, has grown 2.7 per cent. annually and is expected to reach 1.4 billion by
2016. This represents a vast market for Transense of over 1.2 billion tyres
today. Michelin's penetration of the US truck market with Transense's TPMS is
currently very small; however Michelin's share of the US truck tyre market is
approximately 20 per cent. The Directors and Proposed Directors believe that
fleet operators could make a significant cost saving through the better
management of tyres enabled with TPMS.



TPMS IP/Patents

Transense has filed a number of patents covering TPMS including: interrogation
of SAW devices, pressure monitor incorporating SAW devices, SAW device with
integral patch antenna, valve antenna, interrogation method for passive sensor
monitoring system and SAW pressure and temperature sensor using part of the
substrate as a diaphragm. Patents have been filed in Europe, US, China, Japan
and in specific instances are extended to further areas, such as Taiwan.



TPMS licences

The Company currently has in place four TPMS licences:



• Michelin: A licence was signed with Michelin in June 2001, which granted
Michelin exclusivity where the SAW sensor is embedded in, or attached to, the
rubber tyre. This was varied in May 2007, to enable Transense to pursue interest
from other parties for passenger vehicle applications. The 2001 agreement also
granted non-exclusive rights for on-the-wheel and behind-the-valve TPMS.
Transense assigned its 'Drive-by' patent to Michelin and, by a supplemental
agreement in July 2004, Michelin was licensed technology for this application.
In November 2006, Michelin launched eTire II TPMS to the North American truck
market incorporating Transense's technology. Michelin's eTire II TPMS improves
vehicle safety, tyre and fuel consumption. Honeywell supplies Michelin with all
the sensor systems, hand-held and drive-by readers.




• Honeywell: Under the November 2004 agreement, Honeywell is licensed to
manufacture Transense's TPMS sensors and systems for automotive applications.
Honeywell has been working closely with Michelin to industrialise Transense's
technology for the North American truck market and has a dedicated production
facility in its Intellisense plant in China.



• Lear Corporation ('Lear'): A non-exclusive TPMS agreement was signed in
September 2006, enabling Lear and Transense to work together to develop an
industrialisation process for passenger cars and trucks worldwide. Lear is
currently a supplier of battery TPMS. SAW systems have been installed in two
demonstration vehicles in North America. Initial funded development work has
been undertaken and, pending the outcome of a project review in October, a
further licence may be granted. Meanwhile, Transense is progressing developments
directly with the targeted vehicle manufacturers.



• Stack Limited ('Stack'): Stack is a specialist supplier to the motorsport
industry which has recently been acquired by a US tier one/aftermarket group,
Auto Meter. The licence, signed in October 2004, enables Stack to supply
motorsport and low volume requirements, taking the sensor from Honeywell. A
number of Formula One, motor cycle and racing applications are being developed.
Transense has also established key relationships within the automotive industry.
These relationships include TST, General Motors, Ford, Chrysler and BMW.



Intelliband

Intelliband is a safety band for road wheels integrated with Transense's TPMS
sensor. Installing a basic safety band to an existing wheel provides any tyre
with run flat capabilities by covering the circumferential wheel well. This
enables the tyre to remain on the rim should it deflate at speed. By fitting
Transense's tiny TPMS sensor to the band, the active safety of the band and
passive safety of the sensor are combined into a single product. The application
is pertinent to the after-market and especially to vehicles entrusted with
valuable cargoes be they human or material. Licences are currently in
negotiation.



Torque measurement sensors

Torque sensors use SAW technology to measure the mechanical strains due to
torque and temperature and hence calculate the temperature compensated torque in
specific automotive applications. The Company's sensors are being offered into
two areas, electric power assisted steering and powertrain.



Electric power assisted steering

Transense's SAW sensors measure torque in the steering column, which is a vital
input to enable the EPAS control system to function correctly. Unlike existing
EPAS torque sensors, the SAW approach does not require a low stiffness 'torsion
bar', over which to measure the twist, coupled with mechanical over-torque
protection. Instead, the SAW sensor is stiff and can be a simple modification of
a section of the steering column. Compared with conventional hydraulic power
assisted steering ('HPAS') systems, in which the engine driven power assisted
steering pump is always consuming power, EPAS systems only take power when
needed (at parking speeds primarily) from the vehicle battery. This results in
improved fuel economy (2-3 per cent. savings) and therefore cost savings,
reduced weight and easier installation.



Powertrain

In a typical modern vehicle's Engine Control Unit ('ECU'), torque is inferred
from in-vehicle sensors measuring air and fuel flow, temperature and ignition
timing in conjunction with 'look-up tables' derived from dynamometer tests of
sample engines by the vehicle manufacturer. The problems associated with this
approach are that, due to manufacturing tolerances, engines are not identical
and they change their characteristics over their service life. Accurate
real-time torque measurement can improve engine control, resulting in better
fuel efficiency and can also provide for smoother ratio changes within automatic
transmissions improving NVH (noise, vibration and harshness) and perceived
quality. Torque measurement in driveshafts and torque splitters enables better
control of actual torque to the individual road wheels for stability and
traction control in four wheel drive vehicles. Specific applications of
Transense's SAW torque sensors ('Powertrain') include:



• Flexplate: situated between the crankshaft and torque convertor, the flexplate
sensor provides direct measurement of engine output torque for engine and
transmission control



• Transmission output shaft: provides real time torque information to optimise
the control of automatic transmissions



• Torque splitter: enables optimised torque distribution between axles in 4WD
applications



• Driveshaft: individual sensors enable torque vectoring for improved stability
control during cornering



Market

Forecasts from industry analysts CSM Worldwide suggest that light vehicle
production will grow from 62.2 million vehicles in 2005 to 77.6 million globally
by 2012, with aggressive growth forecast in emerging markets. While industry
growth will inevitably play a part, the Directors and Proposed Directors believe
it will be less important to the Company than the rate at which the automotive
industry adopts innovative new technologies.



IP/Patents

The Company has filed a number of patents covering its torque sensors including:
interrogation of passive sensors, SAW sensor with improved temperature
stability, electrical signal coupling device, rotary signal 21 coupler,
split-ring rotary coupler incorporating dual resonant sensors, flexplate torque
sensor and SAW sensor for measurement of torque within a powertrain. Patents
have been filed in Europe, US, China, Japan and in specific instances are
extended to further areas, such as Taiwan.



Contracts/Licences

The Directors and the Proposed Directors believe that automotive torque
applications will far outnumber pressure applications. Transense currently has
granted two torque licences:



• Honeywell: In November 2004, Honeywell signed a licence agreement for the
Company's SAW torque technology with exclusivity for powertrain applications and
non-exclusive rights for other automotive torque applications. Transense is
supporting Honeywell working with two large US OEMs (with a third in
discussions) to provide direct torque measurement systems for engine,
transmission and driveline control, while in Europe a project with a prestige
car manufacturer for driveshaft torque sensing is proceeding. Measurement
performance of all these systems has exceeded OEM expectations and has generated
a great amount of interest as a result of the federal/industry study in North
America referred to earlier.



• Stack: Stack has rights to exploit motorsport and limited volume torque
applications and the Directors and Proposed Directors anticipate that Stack will
support Transense in working directly with a large US OEM's race engineering
team.



Products in development

The US sensor market is still expanding with automotive and industrial sectors
representing 51.6 per cent. of the market. The Company is continuing to develop
its sensors for applications in the industrial market of which pressure and
temperature respectively represent 9 per cent. and 8 per cent. of the entire
market. Non-automotive applications currently under consideration include liquid
food processing (in conjunction with one of Transense's licensees), and medical.
Further opportunities extend to the aeronautical and petro-chemical industries.




4. Information on Bishop



Bishop is a leading global technology licensing and know-how company serving the
automotive industry. This historically family run business, founded in 1975, has
its headquarters in Australia and employs 115 people around the globe (excluding
people employed in its joint ventures). Bishop supplies intellectual property,
tooling, special purpose machines and components to a number of automotive OEMs
and tier one suppliers globally. Specifically, Bishop is focused on the steering
gear industry for passenger motor vehicles, with its technology being
incorporated in approximately 24 per cent. of all motor vehicles manufactured
annually around the world. Bishop, through its joint ventures, is the only
global independent steering rack supplier.



Revenue model

Bishop derives its revenue from three main sources: royalties/licence fees,
provision of automotive engineering services and the sale of specialist machines
and tooling (protected by patents covering both products and processes).
Licences traditionally generate two forms of revenue stream, a one-off upfront
payment (licence fee) and a royalty stream, which represents an ongoing annuity
based on a per piece rate for use of Bishop's technology in the OEMs or tier one
manufacturing process. This proven technology underpins lucrative long term
agreements of up to eight years with OEMs. Significant demand for Bishop
products and services is derived from Bishop's two joint ventures created with
strategic partners that supply both the automotive OEMs and tier one suppliers
of automotive components. In the financial year ended 30 June 2007, Bishop
earned 44 per cent. of its sales, royalties and licence revenues in the US (year
ended 30 June 2006: 46 per cent.; year ended 30 June 2005: 42 per cent.); 23 per
cent. of its sales, royalties and licence revenues in Europe (year ended 30 June
2006: 30 per cent.; year ended 30 June 2005: 10 per cent.); and 33 per cent. of
its sales, royalties and licence revenues in Asia (year ended 30 June 2006: 24
per cent.; year ended 30 June 2005: 48 per cent.). These figures are sourced
from management accounts and have not been audited. The Bishop Technology Group
is split into three operating divisions: Bishop Steering Technology, Bishop
Innovation and Bishop Manufacturing Technology.



Bishop Steering Technology

Bishop Steering Technology comprises Bishop Steering Technology Limited and
Bishop Steering Technology Inc.



Bishop Steering Technology Limited ('BST')

BST is a leading participant in the automotive steering gear technology
innovation market. With offices serving Europe, Asia-Pacific, North and South
America, BST offers OEMs and component suppliers integrated IP and manufacturing
know-how solutions. BST is recognised around the world as a successful innovator
in automotive steering, from concept development and engineering design, through
to marketing and IP protection. BST's extensive research and development
capabilities help provide manufacturers with superior product performance at
minimum production costs. BST has developed a warm forging manufacturing
process. This process can be applied to a number of automotive components and
has ultimate application in other fields. BST originally developed this process
to manufacture variable ratio gear forms for steering racks. The BST warm
forging process enables the manufacture of net shape accurate gear forms,
without the need to remove excess material or 'flash' commonly found with other
forging processes. This reduces the weight of the product, the cost of materials
and increases overall strength. It is a very clean, precision process and the
surface finish is such that the gear teeth require no further manufacturing
processes. Due to the strength of this manufacturing process, Bishop decided to
commercialise this technology through a joint venture/licensing combination,
rather than taking a licensing only approach.



• BMB Steering Innovation GmbH, Germany - BMB was established as a 50/50 joint
venture between Bishop Steering Technology GmbH (a wholly owned subsidiary of
BST), and Mercedes Benz in 1998. Mercedes Benz has since sold its 50 per cent.
stake to ThyssenKrupp Presta Steertec GmbH. Through this joint venture, Bishop
licenses its technology know-how and IP to BMB. With these patented technology
processes, BMB manufactures steering racks for the passenger car market and is
the largest tier two supplier of steering racks in Europe. The Board of BMB
agreed to expand its operations into North America in 2005 and establish a
subsidiary, BMB Steering Innovation Inc. ('BMB US'). Bishop provided a new
non-exclusive licence to BMB US to allow it to manufacture and market steering
racks in North America for sale around the world. BMB US has opened a new
facility in a 255,000 sq ft building which is owned by it at Fort Mill, South
Carolina which is expected to start production in 2008. Bishop does the
worldwide marketing for BMB for a commission on each rack sold. The Directors
and Proposed Directors believe that, by the end of 2008, BMB US will have the
capacity to produce circa 1.2 million steering racks annually.



• Bishop Hando Steering Components Limited, Korea - Bishop has been advised by
their tier one customers in Asia that they need a tier two supplier of steering
racks. This is because they are supplying global platforms and need local
delivery of racks to a consistent design, quality and price. In January 2006,
BST signed a 50/50 joint venture agreement with Hando Machinery Company Limited
to set-up a manufacturing facility in Korea. BHSC, through licensing IP from
Bishop, manufactures steering gear components for the global automotive market.
The joint venture commenced production in January 2007. BHSC is an outsourced
manufacturing facility in Korea which supports the needs of steering gear
manufacturers. The Directors and Proposed Directors believe that, by mid 2009,
BHSC will have the capacity to produce circa 2 million steering racks annually.



Bishop Steering Technology Inc. ('BST Inc')

BST Inc, situated in Indianapolis, serves Bishop's existing customers in North
America. BST Inc primarily provides consultancy services and support to major
tier one automotive component suppliers and OEMs including Ford, General Motors,
Delphi and ThyssenKrupp and also in the aeronautical sector to Raytheon
Incorporated and Triumph Controls Incorporated. BST Inc provides prototyping and
associated precision engineering work and will assist BMB's expansion into North
America.



Bishop Innovation Limited ('BI')

Based in Australia, BI is a technology division that develops and commercialises
products and processes that are potentially of real benefit to Bishop's global
market. BI identifies, generates and protects socially beneficial innovation in
the area of transportation technology.



Bishop Manufacturing Technology Limited ('BMT')

Based in Australia, BMT is a technology innovation business that manufactures
precision tools and special purpose equipment and offers precision engineering
services leveraging Bishop's overall know-how and IP. With a broad range of
engineering and precision toolmaking skills and a reputation for innovation and
design, BMT offers solutions to production problems and is a reliable and
versatile engineering partner for customers in the automotive, aerospace,
defence, medical devices and telecommunications industries. Customers include
Cochlear, ResMed and Portland Orthopaedics as well as internal customers such as
BMB and BHSC.



Applications and processes

Over its lifetime, Bishop has developed a number of patented products and
processes principally for steering gear in passenger motor vehicles. The
creation of these IP protected products and processes has established Bishop as
one of the largest independent suppliers of technology in this market segment.
Bishop has also been able to successfully create IP that is applicable to other
market opportunities as illustrated below.



• Bishop variable ratio rack & pinion steering: Bishop was the inventor of
variable ratio steering. The variable ratio reduces the 'twitchiness' of the
vehicle at high speed driving but also provides greater assistance with parking.



• F1 titanium rack: Bishop supplies vehicle dynamics consulting services and
produces steering racks for a number of the Formula One ('F1') teams. These
racks are variable ratio and provide improved handling performance in racing.



• Patented precision rack warm forging process: Bishop developed a unique
precision warm forging process that can be used for a number of components that
today are typically machined. This process is 'net shape' meaning that there is
no further work needed on the part.



• Bishop warm forging Y-Die: The patented Bishop Y-Die was the first die
developed to make use of the warm forging process. This is a complex closed die
which incorporates hydraulic and mechanical components. All the elements of the
die close together on the material to produce a Y form variable or constant
ratio steering rack.



• Bishop warm forging D-Die: Bishop recently developed the patented D-die to
further make use of the warm forging process. This constant diameter D shape
allows direct inter-changeability with existing broached rack designs. Further
variations of this rack include; dual diameter which allows for downsizing the
rack for weight reduction; U form which offers wider teeth for better strength,
mesh, quality and stability.



• Bishop on-centre detent system: Bishop developed this 'bolt-on' technology
mainly for the sports utility vehicle market in North America. The on-centre
detent system provides a firmer feel to the steering in the on-centre region.



• ATS hydraulic power steering valve: The ATS Power Steering Valve was developed
by Bishop to provide a quieter valve which was still able to be manufactured on
a very efficient high volume manufacturing process that Bishop had previously
developed.



• Bishop air balance valve centring machine: All hydraulic power steering valves
have to be centred, balanced and tested during manufacture. Bishop developed a
unique machine which uses air as the balancing medium instead of oil. This is
therefore a cleaner and faster process. When the valve is balanced it is then
pinned before assembly into the steering gear.



• Bishop SS11- CNC sleeve slot machine: Bishop invented this process to cut
slots on the sleeves of power steering valves. It is a unique machine which
moves the cutting tool through an arcuate movement to cut the slot very quickly.
Previously all sleeves manufactured were in three pieces. With the Bishop
process, they can be manufactured in one piece.



• Bishop CNC feather edge grinding machine: Bishop invented this process which
grinds metering edges on to power steering valve input shafts in a very fast
cycle time. These metering edges are ground to an accuracy of half a micron
which the Directors and Proposed Directors believe is the most accurate input
shaft grinding process in the world.



• Bishop rotary valve for internal combustion engines: Bishop has developed and
patented a unique rotary valve for internal combustion engines. This valve was
originally developed for the V10 F1 engine until the Federation Internationale
de L'Automobile revised the rules. Bishop had a licence agreement with Mercedes
High Performance Engines which has now lapsed due to the change in rules. Bishop
has substantially reduced the ongoing development cost and is now focused on the
motor cycle engine market.



• Bishop crown wheel forging Die: Bishop has patented a forging die to
manufacture crown wheels. The crown wheel is a critical component of the
differential in the rear axle of every rear wheel drive car. Bishop has not yet
manufactured a crown wheel forging die due to the investment required. Bishop
has carried out extensive experimentation and simulation to give assurance of
the feasibility of this process. A number of very large axle manufacturers are
currently showing interest in this process.



Market

The automotive market is under cost pressure and is consolidating. Bishop is
protected from these industry pressures with its IP development and
commercialisation through its joint ventures. Currently Bishop's steering rack
sales through its joint ventures account for 7 per cent. of the world's total
steering rack market. Through Bishop's German based joint venture BMB, 60 per
cent. of Bishop's total rack sales are concentrated in Europe. The Asia Pacific
region, which is one of the fastest growing markets, only accounts for 12 per
cent. of Bishop's total rack sales. Of the three largest steering gear markets,
the Asia Pacific region accounts for 39 per cent., North America 29 per cent.
and the balance of 32 per cent. is accounted for by Western Europe. This
illustrates the growing potential for penetration into the Asia Pacific region
and North America leveraging off Bishop's proven technology. This also supports
the expansion into these key regions through the upside potential of BHSC and
BMB US. The total steering gear market value (of which steering racks form a
subset) is forecast at €9.5 billion in 2008, which is set to grow alongside
light vehicle production, which is expected to grow from 62.2 million vehicles
in 2005 to 77.6 million vehicles globally by 2012.



IP/Patents

Vehicle and component manufacturers are continually striving to create more
efficient, higher performance and safer products, while at the same time
reducing costs. Bishop has invested over £10 million on research and development
to assist its professional and dedicated team to achieve this goal. Bishop
designs innovative products and associated manufacturing processes, drawing on
more than 40 years' of experience, and over 300 patents and patent applications
worldwide.



Contracts/Licences

Bishop currently has over 14 licences in place across the globe. European
licensees include teDrive GmbH, ZF Lenksysteme GmbH and Adwest Engineering.
Bishop's IP and processes deliver products into 24 per cent. of all cars
manufactured today and can be seen in vehicles made by Mercedes Benz, BMW, SAAB,
Ferrari, Audi, Ford, Jaguar, Bentley, Landrover, Mazda, Cadillac, Lincoln,
Pontiac, Volvo, Nissan, Mitsubishi, Chevrolet, General Motors and Chrysler.
Other key customers include NSK, Mando, TRW and JTEKT.



5. Potential synergies between Transense and Bishop



Safety and vehicle dynamics

Transense and Bishop are both technology licensing companies to the global
automotive industry. Individually they are focused on innovation for safety
critical aspects of commercial and passenger motor vehicles. The Directors and
Proposed Directors believe that steering and tyres are two of the most safety
critical aspects of any motor vehicle. Bishop has developed a strong market
position in the supply of IP for products and processes for components which are
critical to the steering performance of passenger motor vehicles, while
Transense has developed a strong market position in the supply of IP for
products and processes for components to enable tyre pressure monitoring and
torque sensing for improved vehicle control characteristics. Bishop has marketed
its IP and know-how to end customers by explaining the component or system
performance in the context of the total vehicle dynamics performance. For
example, a vehicle manufacturer needs to understand how a variable ratio
steering rack (Bishop technology) will improve the handling of its vehicle.



Bishop has an experienced professional team consisting of 5 PhD, 3 MSc and 38
BSc/BEng qualified engineers. The Directors and Proposed Directors believe that
Bishop's vehicle dynamics expertise can be applied to the analysis of
Transense's TPMS to determine the importance of correct tyre pressure on the
vehicle performance and safety. The Enlarged Group will be in a position to take
a combined approach to marketing the importance of steering, tyres and stability
control systems to a vehicle's performance to the major vehicle manufacturers.
This can be implemented through Bishop's regional offices in North America,
Europe and Asia.



Environmental improvements in vehicle performance

Transense and Bishop have a secondary focus on fuel efficiency aspects of motor
vehicles. Transense's SAW based torque sensing technology provides cumulative
fuel consumption benefits by the combination of TPMS, EPAS and real time engine
torque monitoring. Bishop's vehicle dynamics expertise (summarised above) could
also be employed to quantify the impact of tyre inflation pressure on vehicle
handling and safety.



Future steering developments incorporating both Bishop and Transense technology

EPAS is growing faster than HPAS and is expected to reach a total value in
Western Europe, the Asia Pacific region and North America of €3.1 billion in
2011 from €1.9 billion in 2006. HPAS in the same three markets will grow from
€5.1 billion in 2006 to €5.4 billion in 2011.



Combined UK based management and technical expertise

Transense has significant electronic and software engineering expertise while
Bishop has significant mechanical engineering expertise. The combination of
these two talent pools provides a very comprehensive mechatronics capability
focused on the creation of IP in the field of automotive engineering. Bishop
also has a precision engineering operation in Sydney capable of providing
design, tooling and prototyping services for the Enlarged Group. The Enlarged
Group's management will be located in England to make 'real' time decisions for
the global business.



Global marketing

Bishop has a global presence, with operations in Indianapolis serving North and
South America, Magdeburg, Germany serving Europe and Sydney serving Asia. Bishop
also has representatives in Japan and China. Bishop and Transense generally deal
with different tier one suppliers around the world, however Bishop's global
offices will provide back-office functions for Transense when it needs to expand
its local marketing activities.



Formula One business

Bishop and Transense are currently marketing their technologies to the F1 teams
across Europe. Bishop is supplying variable ratio steering racks to four F1
teams, while Transense is offering both TPMS and torque sensing technologies.
The Directors and the Proposed Directors believe that via a combined approach to
motor sport the Enlarged Group's penetration into F1 could be expanded.



6. Strategy of the Enlarged Group



The Acquisition will create an integrated global sensor and automotive
technology group, with international IP poised for growth. The relocation of the
Proposed Directors to the UK will enhance an experienced UK based management
team and offer succession planning for the Enlarged Group, supported by a world
class research and development operation. The Enlarged Group will use its
vehicle dynamics capability to market safety critical IP protected products to
global vehicle manufacturers and appropriate selected tier one automotive
component suppliers. The Enlarged Group will also market key components such as
steering, torque sensing for powertrain, TPMS and internal combustion engine
rotary valves on the basis of enhancements to safety, environment and
performance. The Enlarged Group has very experienced electronics and mechanical
engineering IP creation capability which will enable it to employ a licensing
and joint venture strategy to extract the maximum profit return from each IP
investment.



7. Transense audited results for the year ended 31 December 2006



The Company announced its preliminary results for the year ended 31 December
2006 on 30 March 2007. These results showed that during the year ended 31
December 2006, Transense reported a revenue of £0.60 million (year ended 31
December 2005: £0.55 million). This revenue generated gross profit of £0.55
million in 2006 (year ended 2005: £0.47 million) and the Company made a loss
after tax of £1.21 million (year ended 2005: loss of £1.05 million).



8. Transense audited results for the six months ended 30 June 2007



The Company announced its audited results for the six months ended 30 June 2007
on 28 September 2007. During this period Transense generated a revenue of £0.14
million (six months ended 30 June 2006: £0.02 million), gross profit of £0.12
million (six months ended 30 June 2006: £0.003 million) and the Company made a
loss after tax of £0.76 million (six months ended 30 June 2006: loss of £0.81
million).



9. Bishop audited results for the year ended 30 June 2007



Bishop reported revenue of Au$25.1 million for the year ended 30 June 2007 on 28
September 2007 (year ended 30 June 2006: Au$29.5 million). This revenue
generated gross profit of Au$15.2 (year ended 30 June 2006: Au$17.3) and Bishop
made a loss after tax of Au$1.6 million (year ended 30 June 2006: profit of
Au$2.3 million).



Bishop incurred one off costs for the year ended 30 June 2007 of Au$2.3 million
(year ended 30 June 2006: Au$0.1 million). The adjusted profit after tax
excluding these one off costs for the year ended 30 June 2007 was Au$0.8 million
(year ended 30 June 2006: Au$2.4 million). These one off costs incurred in 2007
were due to adjustments required to stock, recognition of foreign exchange
movements and start up costs incurred in relation to creating BMB US. These one
off costs are explained in further detail below.



(a) Stock write offs

Bishop's manufacturing operation builds special purpose machinery and tooling.
Items not sold immediately are placed into stock ready for future sale. Each
quarter the carrying value of this stock is reviewed and if required items are
reduced in value in line with their net realisable value. These write downs are
typically very small, less than one per cent. of the total carrying value, but
are required to ensure compliance with accounting standards. The year ended 30
June 2007 had an exceptional write off due to the delay of opening BMB US.
Adjustments in 2007 equated to Au$640,000.



(b) Foreign exchange movements

Bishop has some exposure in relation to transactions undertaken that are not in
Australian dollars. With the use of hedging and forward contracts the impact of
movements in relation of the translation of foreign currencies to Australian
dollars can be managed, however, there are other theoretical translations that
occur due to the need to consolidate foreign controlled entities into the Bishop
Technology Group results. These translations are non cash but any gains or
losses must be recognised in the accounts. In the past these gains or losses
were recognised in the profit and loss. In 2007, under the new accounting
standards, the foreign exchange movements relating to specific accounts are now
to be recognised in the balance sheet. For the financial year ending 30 June
2007, a one off adjustment was required to correct foreign exchange gains in
relation to translation of the Bishop US dollar loan, the net result was a one
off adjustment to the profit and loss account. Adjustments in 2007 equated to
Au$786,000.



(c) BMB US

As discussed above, in recognition of the market potential for the sale of racks
in North America, BMB has decided to build a new facility in Fort Mill, South
Carolina. Prior to the start of production there are start up losses associated
with creating this new venture. These are recognised in the 2007 accounts.
Adjustments in 2007 equated to Au$918,000.



10. Current trading and future prospects



Transense



Current trading

Trading remains in line with management expectations. Transense has reached an
advanced stage with another licensee to make TPMS SAW devices. The Directors and
Proposed Directors expect the licence to be signed on the acceptance of working
devices by the Company. Under the terms of the licence, Transense will receive
an up front payment followed by a royalty on all sales. Transense continues to
work closely on torque sensing with Honeywell and the Company has recently
hosted three Honeywell engineers to transfer technology in readiness for volume
production.



Future prospects

The Company has recently been focussing on three major projects - two with large
US auto manufacturers for engine and transmission torque applications and one
with a major European premium car manufacturer for drive-shaft torque sensing.
The engine and transmission programs have now completed two years of inlab dyno
testing and are moving to road trials. One company is pushing for production
ready systems by the end of next year while the other plans, in addition, to
proliferate the SAW technology into other torque and TPMS applications
throughout the Group. Michelin is now marketing the Company's TPMS technology in
truck tyres and several thousand sensors have been ordered to start marketing in
the off-highway and agricultural vehicle sector. The Company is still fine
tuning its batteryless TPMS technology for passenger vehicles and, although it
is taking longer than anticipated to bring to the OEM market, the Board is
targeting smaller specialist after-market suppliers and working towards market
entry over the next twelve months. Apart from the automotive sector, the Board
has identified that customers for pressure sensors in the industrial market are
also showing a keen interest.



Bishop

Bishop's revenue has displayed a declining trend from June 2005 to June 2007.
Management attributes the decline to invoicing in US$, a weakening currency
compared to the Au$. Further, Bishop's slowdown in revenues in 2007 was directly
attributable to the delay in commencement of BMB's new North American warm
forging rack manufacturing joint venture. This BMB joint venture is now underway
and will commence production in 2008 with 75 per cent. of capacity already
committed. In addition to this, Bishop is expected to complete negotiations for
an additional facility in Asia in 2008. As explained earlier, a number of one
off costs were incurred by Bishop in 2007, totalling Au$2.3 million and have
therefore affected Bishop's profit after tax figures for the year ended June
2007. These one off costs incurred in 2007 were due to adjustments required to
stock, recognition of foreign exchange movements and start up costs incurred in
relation to creating the joint venture in the US. In addition, a Au$3.3 million
order (gross contribution Au$1.2 million) was taken but not delivered due to the
delay in setting up BMB US.



11. Principal terms of the Acquisition



The Company has agreed to acquire the entire issued share capital of Bishop. The
acquisition price is to be satisfied by the issue of 37,535,553 Consideration
Shares to the Vendors. In connection with the Acquisition Bruce Grey and Daimler
AG have agreed to cancel options to acquire shares in the capital of Bishop. The
consideration for the cancellation is to be satisfied by the issue of 445,823
Consideration Shares to Bruce Grey and 397,425 Consideration Shares to Daimler
AG.



The Acquisition Agreement is conditional, inter alia, upon:



(a) Second Admission occurring on or before 5.00 p.m. on 4 December 2007;



(b) no fact or circumstance having occurred which would amount to a material
breach of any of the warranties contained in the Acquisition Agreement; and



(c) the passing of the Resolution by Shareholders to approve the Acquisition and
the Placing at the GM to be held at the offices of Travers Smith, 10 Snow Hill,
London EC1A 2AL on 16 November 2007 at 11.00 a.m., notice of which is set out at
the end of the admission document.



It is expected that completion of the Acquisition and Second Admission will take
place on 20 November 2007. Further details of the Acquisition Agreement are
contained in paragraph 14(v) of Part VI of the admission document.



12. Board of the Enlarged Group



The Board of Transense currently consists of Peter Woods, James Perry, Howard
Pearl, Graham Eves, Raymond Lohr, Antony Baldry and Rodney Westhead:



• Peter Woods Non-Executive Chairman- Peter was until recently a Senior
Investment Advisor with the Exports to Japan Unit, British Trade International.
He was President of Rover Japan Ltd, Regional Director Overseas of Rover Group
Ltd and in 1996 received the OBE for services to Export. He is also
Non-executive Chairman of Image Scan Holdings plc and of Mastermailer Holdings
plc. Peter joined Transense in November 2000.



• James Perry Chief Executive Officer- Jim is responsible for the day-to-day
running of the Company and carrying out the function of Chief Executive. He has
considerable experience in the financing and development of smaller companies.
He is also a Non-executive Director of Mastermailer Holdings plc. Jim founded
the Company in 1991.



• Howard Pearl Finance Director- Howard is a Chartered Accountant with a
background in the oil industry. He spent 26 years with Ultramar PLC and then
Lasmo PLC in New York, London and Montreal. In 1994 he joined the management
team that started MMS Petroleum PLC, which went to AIM in 1996. MMS was taken
over in 1998. Howard joined the Company in November 1999.



• Graham Eves Commercial Director- Graham has considerable experience within the
automotive technology market place with an extensive network of contacts
throughout the world in that industry. He was formerly with GKN for 13 years in
their international operations and held a number of directorships. He is a
member of the AIM Advisory Committee of the London Stock Exchange. Graham joined
the Company in September 1998.



• Dr Raymond Lohr Technical Director- After completing a PhD at Bristol
University in 1978, Ray joined Instron progressing to Technical Director and
finally Corporate Research Director. A Visiting Professor at Oxford University,
he represents the UK internationally for materials testing standards. Ray joined
the Company in May 2002.



• Antony Baldry MP Non-Executive Director- Tony is the Member of Parliament for
Banbury and North Oxfordshire and formerly a Foreign Office Minister of eight
years in the last Conservative government. He is a member of the Commons Trade
and Industry Select Committee and a Barrister at Law specialising in
construction, commercial and international matters. Tony joined the Company in
November 1999.



• Rodney Westhead Non-Executive Director- Rodney is a Chartered Accountant by
training and until 2005 was Chief Executive of Ricardo plc, the major automotive
consulting engineering group with sales of £150 million a year. He is also
Chairman and interim Chief Executive of Carter & Carter plc, Chairman of Clean
Air Power plc and Non-executive Director of Mouchel Parkman plc and AEA
Technology plc. Rodney joined the Company in April 2007.



Transense has made significant progress with its technology over recent years,
and the Board feel it is now the right time to strengthen the management team
and importantly secure its succession. Bruce Grey will become Chief Executive
Officer of the Enlarged Group and James Perry, the current Chief Executive
Officer, will move to Non-Executive Deputy Chairman position. Tim Renfrey will
become the Finance Director of the Group. These changes will become effective
once the two new executives have completed their planned resettlement in the UK.
Howard Pearl, who is currently employed part time as Transense Finance Director,
will continue to provide support until the new team has fully settled in.



Subject to the changes outlined above, the Board, following Second Admission,
will consist of the Directors and the Proposed Directors:



• Bruce Grey Chief Executive Officer of Bishop (Proposed Chief Executive
Officer) (aged 61) - Bruce has been with Bishop for 11 years. He has 35 years
experience in senior management positions in engineering, manufacturing and
international market development. He is a fellow of the Australian Academy of
Technological Scientists and Engineers (FTSE).



• Tim Renfrey Chief Financial Officer of Bishop (Proposed Finance Director)
(aged 38) - Tim has been with Bishop for 7 years. He has 20 years experience in
accounting and financial management with engineering and service companies.





13.        Share Option Schemes



The Directors recognise the importance of ensuring that employees are well
motivated and identify closely with the success of the Company. Accordingly, the
Company has in place, at the date of the admission document, the Share Option
Schemes detailed in paragraphs 4.1 to 4.3 of Part VI of the admission document.



On Second Admission, the Company will (excluding the proposed grants referred to
below) have 2,778,850 Ordinary Shares, representing 2.3 per cent. of the
Enlarged Share Capital under option under the Share Option Schemes. The
Directors have determined that after Second Admission, subject to Shareholder
approval of the 2007 Unapproved Scheme at the GM, further options under the 2007
Unapproved Scheme and the Transense Technologies plc 2005 Enterprise Management
Incentive Share Option Contract may be granted to selected employees and
directors of the Enlarged Group (such options not to exceed the maximum limits
(statutory or otherwise) set out in the 2007 Unapproved Scheme and the Transense
Technologies plc 2005 Enterprise Management Incentive Share Option Contract,
further details of which are set out in paragraphs 4.3 and 4.4 of Part VI of the
admission document).



Under the Transense Technologies plc 2005 Enterprise Management Incentive Share
Option Contract, the Company proposes to grant the following:



(a) after close of business on the date of the admission document, the Company
proposes to grant options over that number of Ordinary Shares equal to £215,000
divided by the market value of an Ordinary Share at close of business on the
date of the admission document (each grant being rounded up to the nearest 5,000
Ordinary Shares) in aggregate to existing Transense employees; and



(b) immediately following Second Admission, the Company proposes to grant
options over that number of Ordinary Shares equal to £100,000 divided by the
market value of an Ordinary Share at close of business on the date of Second
Admission (each grant being rounded down to the nearest whole Ordinary Share) to
each of the Proposed Directors.



Immediately following Second Admission, the Company proposes to grant options
over the following numbers of Ordinary Shares under the 2007 Unapproved Scheme:



(a) an aggregate of 1,250,000 Ordinary Shares to the Proposed Directors and
Raymond Lohr; and



(b) an aggregate of 1,140,000 Ordinary Shares to Bishop employees.



14. Corporate governance



Board



The Board is responsible for establishing the strategic direction of the
Company, monitoring the Company's performance against its business plan and its
trading performance. The Board currently consists of four Executive Directors
and three Non-Executive Directors and, following Second Admission, the Board
will consist of six Executive Directors and three Non-Executive Directors.



The Board has a procedure through which the Directors are able to take
independent advice in the furtherance of their responsibilities. The Directors
have access to the advice and services of the Company Secretary, Watlington
Securities Limited, who are responsible for ensuring that Board procedures are
followed and compliance with applicable rules and regulations.



The Company complies with the Combined Code so far as is reasonably practicable
for a company of its size. Where full compliance is not appropriate, the Board
refers to guidance issued by the Quoted Companies Alliance.



The Board meets regularly throughout the year and all necessary information is
supplied to the Directors on a timely basis to enable them to discharge their
duties effectively. Additionally, special meetings take place or other
arrangements are made when Board decisions are required in advance of regular
meetings. The Board has established guidelines requiring specific matters to be
subject to a decision by the full Board (with other matters delegated to Board
committees). The Board is responsible for leading and controlling the Group and
following completion of the Acquisition, the Enlarged Group and, in particular,
for formulating, reviewing and approving its strategy, budget, major items of
capital expenditure and acquisitions and disposals. In addition, the Board has
established a remuneration committee and an audit committee with formally
delegated duties and responsibilities, which have written terms of reference as
summarised below.



All of the Non-Executive Directors are deemed to be independent non-executive
directors for the purposes of the Combined Code. Each of the Non-Executive
Directors holds options in the Company, but as no Non-Executive Director holds
options exceeding one per cent. of the Existing Ordinary Shares, the Board is
satisfied that their independence is not compromised.



Following Second Admission, Jim Perry will hold 1,955,892 Ordinary Shares,
equating to1.6 per cent. of the issued Ordinary Shares, and hold 640,000 options
in the Company. Due to the size of his interest in the Company, Jim will not be
considered an independent Non-Executive Director.



The remuneration committee

This committee is chaired by Peter Woods. Its other members are Tony Baldry and
Rodney Westhead. Only Non-Executive Directors will be on the remuneration
committee. The remuneration committee meets formally at least once a year and
otherwise as required. The remuneration committee, within agreed terms of
reference, considers all material elements of remuneration policy, remuneration
and incentives of Executive Directors (including pension rights and compensation
payments) and senior management with reference to independent remuneration
research and professional advice. The Board is then responsible for implementing
the recommendations and agreeing the remuneration packages of individual
Directors and senior management. Whilst the actual grant of options under the
Share Option Schemes is made by the Board, it is the remuneration committee that
is responsible for making recommendations for the grants of options to the Board
as well as, where appropriate, setting performance conditions attached to the
grant of options. The remuneration committee also has responsibility for
considering the advice of the Chief Executive on the terms and conditions of the
appointment of Directors and to review Directors' fees and other payments,
including approved and unapproved options and for considering and reviewing the
advice of the Chief Executive on the general remunerations policies of the
Company, including the approved option scheme.



The audit committee

The audit committee is chaired by Rodney Westhead and also comprises Peter Woods
and Tony Baldry. It meets whenever there is business to discuss and at least
twice each year. The audit committee is responsible for ensuring that the
financial performance of the Group (and following completion of the Acquisition,
the Enlarged Group) is properly monitored, controlled and reported on. It also
meets the auditors and reviews reports from the auditors relating to accounts
and internal control systems. The Guidance published by the Institute of
Chartered Accountants in England and Wales (commonly known as the Turnbull
Report) concerning the internal control requirements of the Combined Code has
been brought to the attention of the Directors. In line with the Turnbull
Report, the Board keeps under regular review key business risks in addition to
the financial risks facing the Group in the operation of its business. The
Directors comply with Rule 21 of the AIM Rules for Companies relating to
dealings by directors and applicable employee(s) dealings in the Company's
securities and, to this end, the Company has adopted an appropriate share
dealing code.



Internal controls

The Board will be responsible for establishing and maintaining the Enlarged
Group's system of internal controls and places importance on maintaining a
strong control environment. The key procedures which the Board intends to
establish with a view to providing effective internal controls are expected to
be as follows:

• the Board will be responsible for identifying the major business risks faced
by the Enlarged Group and for determining the appropriate courses of action
required to manage those risks;

• the Enlarged Group's organisational structure will have clear lines of
responsibility and reporting; and

• the Enlarged Group will prepare a comprehensive annual budget that is approved
by the Board. Monthly results will be reported against the budget and variances
will be closely monitored by the Board. The Directors and the Proposed Directors
recognise, however, that such a system of internal controls will only provide
reasonable, not absolute, assurance against material misstatement or loss. The
Board has reviewed the effectiveness of the system of internal controls as it
will be operated by the Enlarged Group.



15. Dividend policy



In the short term, the Board does not intend to declare a dividend but will
reconsider this as and when the growth and profitability of the Company allow.
The declaration and payment of any future dividends by the Company and the
quantum thereof will be dependent upon the Enlarged Group's results, financial
position, cash requirements, future prospects, profits available for
distribution and factors deemed by the Board to be relevant at the time.



16. Details of the Placing



The Company and Noble have today entered into the Placing Agreement pursuant to
which Noble, as agent for the Company, has agreed, subject to the fulfilment of
certain conditions, to use its reasonable endeavours to procure subscribers for
the Placing Shares at the Placing Price.



The obligations of Noble under the Placing Agreement are conditional upon, inter
alia, First Admission taking place by 8.00 a.m. on 19 November 2007 (or such
later date, being not later than 5.00 p.m. on 4 December 2007, as the Company
and Noble may agree).



The Placing is intended to raise up to £4.4 million for the Company (net of
expenses). The Placing Shares (assuming the maximum number of Placing Shares are
placed) will represent 21 per cent. of the Enlarged Share Capital of the Company
immediately following Second Admission. The Placing Price represents a discount
of approximately 35 per cent. to 35.25 pence per share, the share price at 18
October 2007 (being the latest practicable date prior to the publication of the
admission document).



The Placing Shares will, on Admission, rank in full for all dividends and other
distributions declared, paid or made in respect of the issued ordinary share
capital of the Company and otherwise will rank pari passu in all respects with
the Existing Ordinary Shares and the Consideration Shares in issue.



It is expected that the proceeds of the Placing will be received by the Company
on or around 26 November 2007. The Placing is not being underwritten but has
been pre-placed with institutional and other investors. Further details of the
Placing Agreement are set out in paragraph 12 of Part VI of the admission
document.



17. Reasons for the Placing and use of proceeds



The net proceeds of the Placing will be used as working capital for Transense to
accelerate its commercialisation process, assist in targeting major tier one and
two automotive component manufacturers and fund the continuing development of
SAW technology. The net proceeds will also be used as working capital for Bishop
to reduce long term debt and assist in funding for a high speed warm forge
facility in Asia. These net proceeds of the Placing will be used to provide the
Enlarged Group with sufficient working capital to enable it to implement its
organic growth strategy.



18. Taxation



General information relating to UK taxation with regards to Admission and the
Placing is summarised in paragraph 13 of Part VI of the admission document. A
Shareholder or potential Shareholder who is in any doubt as to their tax
position, or is subject to tax in a jurisdiction other than the United Kingdom,
should consult their professional advisers immediately.



19. Admission to AIM and dealings



The Acquisition constitutes a reverse takeover under the AIM Rules and is
therefore dependent upon the approval of Shareholders being given at the General
Meeting, notice of which is set out at the end of the admission document. A
Resolution will be proposed at the GM, inter alia, to approve the Acquisition.
If the Resolution is duly passed at the GM, and the other conditions set out in
the Acquisition Agreement and in the Placing Agreement are met, application will
be made for the Existing Ordinary Shares to be readmitted to trading on AIM and
the Placing Shares and the Consideration Shares to be admitted to trading on
AIM.



It is anticipated that the First Admission will become effective and that
dealings will commence in the Existing Ordinary Shares and the New EIS Shares at
8 a.m. on 19 November 2007, that Second Admission will become effective and that
dealings will commence in the Consideration Shares and Non-EIS Shares at 8 a.m.
on 20 November 2007. The reason for the two admissions is to enable the company
to issue eligible shares whilst the Group's gross assets are less than
£7,000,000 pre-investment and £8,000,000 post investment to individuals
investing under the EIS, following the introduction of the £2,000,000 annual
investment limit introduced by the Finance Act 2007.



20. General Meeting



Set out at the end of the admission document is a notice convening an General
Meeting of the Company to be held at the offices of Travers Smith, 10 Snow Hill,
London EC1A 2AL at 11.00 a.m. on 16 November 2007. A Form of Proxy to be used in
connection with the General Meeting is enclosed. The purpose of the General
Meeting is to seek Shareholder approval of the Resolution to:



(i) approve the Acquisition, in accordance with the terms of the Acquisition
Agreement;



(ii) increase the authorised share capital of the Company from £7,000,000 to
£18,000,000 by the creation of an additional 110,000,000 Ordinary Shares,
representing an increase of approximately 157 per cent. of the current
authorised share capital;



(iii) authorise the Directors, for the purposes of section 80 of the Act, to
allot (a) relevant securities up to an aggregate nominal amount of £6,229,944.50
(62,299,445 New Ordinary Shares) pursuant to the Acquisition and the Placing
(representing approximately 110 per cent. of the number of Existing Ordinary
Shares and approximately 52 per cent. of the Enlarged Share Capital) and (b) an
amount equal to £3,575,028.33 (provided that, to the extent that such nominal
amount represents more than one-third of the nominal value of the issued share
capital immediately following Second Admission, the Directors undertake not to
exercise such power), such authority to expire, unless sooner revoked or varied
by the Company in general meeting, at the conclusion of the next annual general
meeting of the Company;



(iv) disapply the statutory provision of section 89 of the Act to allow (a) the
Placing Shares to be issued for cash other than on a pre-emptive basis and (b)
the allotment of equity securities up to an aggregate nominal amount of
£595,838.06 (provided that to the extent that such nominal amount represents
more than 5 per cent. of the nominal value of the issued share capital
immediately following Second Admission, the Directors undertake not to exercise
such power); and



(v) adopt the 2007 Unapproved Scheme, further details of which are set out in
paragraph 4.4 of Part VI of the admission document.



The Resolution will be proposed as a special resolution and, accordingly, will
require the approval of 75 per cent. of Shareholders voting in person or by
proxy at the GM.



21. Irrevocable undertakings



The Company has received irrevocable undertakings from existing institutional
shareholders and the Directors to vote, or to procure the votes of Ordinary
Shares held, in favour of the Resolution to be proposed at the GM in respect of
a total of 8,444,712 Ordinary Shares representing, approximately 14.8 per cent.
of the Existing Ordinary Shares.



22. EIS Qualifying Investment Status



On the basis of the information provided, HMRC has given provisional
confirmation that Transense will comply with the requirements of Chapter four of
Part VI of the Income Tax Act 2007. Furthermore, on the basis of information
provided to HMRC, the Company has received provisional approval that a
proportion of the Placing Shares should be eligible for EIS purposes, subject to
the submission of the relevant claim form in due course. Such a claim by the
Company does not guarantee EIS qualification for an individual, whose claim for
relief will be conditional upon his circumstances and is subject to holding the
Placing Shares throughout the three year relevant period. In addition, for EIS
relief not to be withdrawn, the Company and the individual must comply with a
number of conditions throughout the qualifying period relating to those shares,
and no guarantee can be given that the Company will so comply.



23. Further information



Your attention is drawn to Parts I and III to VI of the admission document which
provide additional information on the Group and on the Bishop Technology Group.



24. Action to be taken



Whether or not you intend to be present at the General Meeting, as a Shareholder
you are requested to complete and return the accompanying Form of Proxy which is
enclosed with the admission document, in accordance with the instructions
printed thereon, as soon as possible and in any event so as to be received by
the Company's registrars, Capita Registrars, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU not later than 11.00 a.m. on 14 November 2007.
Completion and return of the Form of Proxy will not prevent you, as a
Shareholder, from attending the General Meeting and voting in person should you
wish to do so.



In the event that the Resolution is not approved at the GM, and subject to the
development of royalties, up front licence fees and engineering support, it is
likely that within 12 months Transense would be required to conduct a new
fundraising exercise to develop its business and to generate cash resources.
Transense's capital requirements will depend on numerous factors, including its
ability to develop and expand its existing business. The Directors believe that
as Transense grows it will naturally require additional working capital until
growth of revenue and licence income allows it to become self sufficient. In
addition, in the medium term, Transense would need to secure and develop a new
management team to lead the business.



25. Recommendation



The Directors, who have been advised by Noble, consider the terms of the
Acquisition to be fair and reasonable so far as Shareholders as a whole are
concerned. In giving its advice, Noble has taken into account the Directors'
commercial assessments. Accordingly, the Directors unanimously recommend that
Shareholders vote in favour of the Resolution to be proposed at the GM, as they
have irrevocably undertaken to do in respect of their own beneficial
shareholdings amounting to, in aggregate, 2,559,648 Ordinary Shares
(representing 4.5 per cent. of the Existing Ordinary Shares). Combined with
those shares in respect of which irrevocable undertakings have been given, as
described in paragraph 21 above, Shareholders who in aggregate own 8,444,712
Existing Ordinary Shares, representing approximately 14.8 per cent. of the
Existing Ordinary Shares, have irrevocably undertaken to vote in favour of the
Resolution.







DEFINITIONS



In the admission document, where the context permits, the expressions set out
below shall bear the following meanings:



'2006 Act' Companies Act 2006



'2007 Unapproved Scheme' Transense Technologies 2007 Unapproved Discretionary
share Option Scheme, further details of which are set out in paragraph 4.4 of
Part VI of the admission document



'Acquisition' proposed acquisition, by the Company, of the entire issued share
capital of Bishop and the proposed cancellation of options to acquire shares in
Bishop



'Acquisition Agreement' conditional agreement, dated 22 October 2007, between
the Vendors and the Company relating to the sale and purchase of the entire
issued share capital of Bishop and the cancellation of options to acquire shares
in Bishop, more particularly described at paragraph 14 of Part VI of the
admission document



'Act' Companies Act 1985, as amended



'Admission' First Admission and/or Second Admission, as the context may require
or permit



'AIM'   AIM, an exchange regulated market operated by the London Stock Exchange



'AIM Rules' AIM Rules for Companies and the AIM Rules for Nominated Advisers



'AIM Rules for Companies' rules for AIM companies, as published by the London
Stock Exchange from time to time



'AIM Rules for Nominated Advisers' rules for the nominated advisers to AIM
companies, as published by the London Stock Exchange from time to time



'Articles' articles of association of the Company in force as at the date of the
admission document



'Au$' Australian dollars, the lawful currency of Australia



'Bishop' Bishop Technology Group Limited, a company incorporated in Australia
under registered number ABN 95 002 954 672



'Bishop Technology Group' Bishop and its subsidiary undertakings at the date of
the admission document, details of which are set out in paragraph 9 of Part VI
of the admission document



'Board' or 'Directors' existing directors of Transense, being Peter Woods, James
Perry,

Howard Pearl, Antony Baldry, Graham Eves, Rodney Westhead and Ray Lohr



'Combined Code' combined code on corporate governance issued by the Financial
Reporting Council, as amended from time to time



'Company' or 'Transense' Transense Technologies plc, a company incorporated in
England and Wales under registered number 1885075



'Consideration Shares' 37,535,553 new Ordinary Shares to be issued to the
Vendors pursuant to the Acquisition Agreement



'CREST' the relevant system (as defined in the CREST Regulations) in respect of
which Euroclear UK & Ireland is the operator



'CREST Regulations' Uncertificated Securities Regulations 2001 (SI 2001/3755)
(as amended)

'€' Euros, the unit of money used in all European Union countries which have
adopted the single European currency unit



'EIS' Enterprise Investment Scheme



'Enlarged Group' Group as enlarged by the acquisition of Bishop



'Enlarged Share Capital' ordinary share capital of the Company immediately
following Second Admission, as enlarged by the issue of the New Ordinary Shares



'EPAS' electric power assisted steering



'Euroclear UK & Ireland' Euroclear UK & Ireland Limited, the operator of CREST



'Existing Ordinary Shares' existing Ordinary Shares in issue at the date of the
admission document



'First Admission' re-admission of the Existing Ordinary Shares and the admission
of the New EIS Shares to trading on AIM becoming effective in accordance with
the AIM Rules for Companies



'First Placing' proposed placing of New EIS Shares pursuant to the Placing
Agreement



'Form of Proxy' form of proxy accompanying the admission document for use by
Shareholders in connection with the GM



'FSA' Financial Services Authority, the regulator under the FSMA



'FSMA' Financial Services and Markets Act 2000, as amended



'General Meeting' or 'GM' general meeting of the Company to be held at 11.00
a.m. on 16 November 2007, at the offices of Travers Smith, 10 Snow Hill, London,
EC1A 2AL, notice of which is set out at the end of the admission document



'Group' Transense and its subsidiary undertakings at the date of the admission
document, details of which are set out in paragraph 9 of Part VI of the
admission document



'Hertz' or ('Hz') a unit of frequency of one cycle per second



'HMRC' Her Majesty's Revenue and Customs



'HPAS' hydraulic power assisted steering



'IP' intellectual property



'kHz' one thousand Hertz



'Lock-in Agreement' conditional agreement dated 22 October 2007 between Noble,
the Company, the Directors and Bruce Grey pursuant to which the Directors and
Bruce Grey have undertaken, inter alia, not to dispose of their Ordinary Shares
(subject to limited exceptions) for a period of 12 months following First
Admission, summary details of which are set out in paragraph 12 of Part VI of
the admission document



'London Stock Exchange' London Stock Exchange plc



'MHz' one million Hertz



'New Ordinary Shares' 62,299,445 new Ordinary Shares to be issued pursuant to
the Acquisition Agreement and the Placing, being the Consideration Shares and
the Placing Shares (assuming all the Placing Shares are placed)



'New EIS Shares' up to 130,435 new Ordinary Shares which are to be placed with
certain qualifying investors under the EIS



'Noble' Noble & Company Limited, which is authorised and regulated by the
Financial Services Authority



'Non-EIS Shares' up to 24,633,457 new Ordinary Shares which are to be placed
other than the New EIS Shares



'OEM' original equipment manufacturer



'Official List' Official List of the Financial Services Authority



'Ordinary Shares' ordinary shares of 10p each in the capital of the Company



'Placing' placing, by Noble on behalf of the Company, of the Placing Shares at
the Placing Price pursuant to the Placing Agreement



'Placing Agreement' conditional agreement dated 22 October 2007, between the
Company and Noble relating to the Placing, summary details of which are set out
in paragraph 12 of Part VI of the admission document



'Placing Price' 23 pence per Placing Share



'Placing Shares' New EIS Shares and the Non-EIS Shares



'Proposed Directors' Bruce Grey and Tim Renfrey, being proposed directors of
Transense



'Prospectus Rules' the prospectus rules made by the FSA under Part VI of the
FSMA



 'Resolution' the resolution set out in the notice of General Meeting



'SAW' surface acoustic wave



'Second Admission' admission of the Non-EIS Shares and the Consideration Shares
to trading on AIM becoming effective in accordance with the AIM Rules for
Companies



'Second Placing' proposed placing of Non-EIS Shares pursuant to the Placing
Agreement



'Shareholders' holders of Ordinary Shares



'Share Option Schemes' the Transense Technologies plc 2005 Unapproved
Discretionary Share Option Scheme, the Transense Technologies plc 2004
Enterprise Management Incentive Share Option Plan and the Transense Technologies
plc 2005 Enterprise Management Incentive Share Option Plan, further details of
which are set out in paragraphs 4.1 to 4.3 of Part VI of the admission document



'TPMS' tyre pressure monitoring system



'US$' US dollars, the lawful currency of the United States of America



 'Vendors' Lawrence Bishop, John Baxter, Klaus Roeske, Daimler AG, Glory B Pty
Ltd as trustee of the Bishop Family Trust and Bruce Grey






                      This information is provided by RNS
            The company news service from the London Stock Exchange    

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