Flat Glass Group Co., Ltd. — Capital/Financing Update 2017

Oct 11, 2017

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.

福萊特玻璃集團股份有限公司 Flat Glass Group Co., Ltd.

(a joint stock company incorporated in the People’s Republic of China with limited liability)

(stock code: 6865)

DISCLOSEABLE TRANSACTION SUPPLEMENTAL CONSTRUCTION CONTRACT FOR ANHUI PV GLASS PROJECT

SUPPLEMENTAL CONSTRUCTION CONTRACT

On 11 October 2017 (after trading hours), Anhui Flat Glass, a wholly-owned subsidiary of the Company, entered into the Supplemental Construction Contract to the Original Construction Contract with Zhejiang Nanhu Construction, as the construction service provider, for the construction services of Anhui PV Glass Project’s production lines with a total estimated price of RMB110 million. The aggregate amount of the construction work to be provide by Zhejiang Nanhu Construction under the Construction Contracts amounted to at least RMB230 million.

LISTING RULES IMPLICATIONS

As the Supplemental Construction Contract is to amend and supplement the Original Construction Contract, the amounts under the contracts have been aggregated for the purpose to calculate the applicable percentage ratios. As one or more of the applicable percentage ratios in respect of the Construction Contracts is more than 5% but less than 25%, the transaction contemplated under the Construction Contracts constitutes discloseable transaction of the Company and is subject to the reporting and announcement requirements but exempt from circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

1

INTRODUCTION

As disclosed in 2017 Interim Report, for the Group’s expansion in Anhui Province, PRC, Anhui PV Glass Project’s infrastructure construction is progressing well. Construction work of the Anhui PV Glass Project commenced in the second half of 2016. The construction work is being provided by Zhejiang Nanhu Construction under the Original Construction Contract, who has obtained the work under the contract through tender.

In light of the increase in the price of the raw material and the increase of construction services to be provided, Anhui Flat Glass and Zhejiang Nanhu Construction entered into the Supplemental Construction Contract on 11 October 2017 (after trading hours) to amend and supplement the Original Construction Contract.

CONSTRUCTION CONTRACTS

A summary of the major terms of the Construction Contracts is set out below

Date: 21 July 2016 (Original Construction Contract) 11 October 2017 (Supplemental Construction Contract) Parties: (1) Anhui Flat Glass, as client; and (2) Zhejiang Nanhu Construction, as contractor. Scope of services: Constructions services with a total area of 331,876 square meters for the construction work for Anhui Flat Glass PV Project, including civil engineering works for the production facilities (such as for processing lines, warehouse and raw materials) infrastructures (such as roads, rain water pipes, sewage system, pipe racks and streetlight foundation work), administrative office and office building, and utilities installation (including water and electricity system). Anhui Flat Glass may appoint other professional installers if deemed necessary. Consideration: The total contract price under the Original Construction Contract is RMB120 million and the total contract price under the Supplemental Construction Contract is estimated RMB110 million, which, in total, amount to at least RMB230 million.

2

The consideration under the Original Construction Contract was agreed among the parties by Anhui Flat Glass accepting the tender offer from Zhejiang Nanhu Construction, and the consideration under the Supplemental Construction Contract has been determined using the same standardised rate under the Original Construction Contract. In particular, the price was determined with reference to relevant governmental regulations, including but not limited to, 2005 Anhui Province Construction Projects Consumption Quota Comprehensive Unit Price, 2005 Anhui Province Construction Projects Quota, 2005 Anhui Province Construction Scale List of Construction Machinery and 2009 Anhui Province Construction, Renovation and Interior Decoration Projects Fixed Pricing (Frequent Use Edition).

The estimated contract price under the Construction Contracts would be funded by a combination of internal resources and proceeds from the BOC Loan. It is expected that part of the net proceeds from the Proposed A Share Offering as disclosed in the circular dated 4 October 2017 will be used to repay the BOC Loan after completion of the Proposed A Share Offering.

Payment Terms:

Pursuant to the Original Construction Contract, Zhejiang Nanhu Construction paid performance bond of RMB2 million to Anhui Flat Glass prior to the signing of the Original Construction Contract.

Pursuant to the Original Construction Contract, before the 30th of every month, Zhejiang Nanhu Construction shall prepare a report of qualified construction work completed for the month and estimated construction cost of the work completed. Project supervisor shall confirm the content and submit the report to Anhui Flat Glass. Anhui Flat Glass will then review the report and pay 60% of the construction cost on the 10th of the following month. Under the Supplemental Construction Contract, reporting date is the 25th of every month and payment date is the 5th of the following month.

After the completed construction work passes quality check, Anhui Flat Glass, Zhejiang Nanhu Construction and the project supervisor shall confirm and sign off the result of the quality check. Up to 65% of the construction cost is then paid to Zhejiang Nanhu Construction. Once construction of the project is completed and passes quality check, the project account shall be submitted and all relevant documentation shall be filed and archived. Up to 75% of the construction cost is then paid. Within one month of completion of audit on all project accounts, up to 80% of the total cost of construction shall be paid. Within one year of the audit, up to 95% of the total cost of construction shall be paid. The remaining 5% of the total cost of construction shall be held by Anhui Flat Glass as quality warranty.

3

Within 15 days of all construction projects passing inspection and quality check (being quality of construction, time spent and other performance indicators satisfy the requirements stipulated in the Construction Contracts), performance bond of RMB2 million shall be returned to Zhejiang Nanhu Construction with no accrued interests.

Warranty:

Warranty period is five years. Within five years of completion of the construction, retention monies shall be repaid in full by two instalments. 3% of the total cost of construction shall be repaid on the second anniversary of completion date, and the remaining 2% shall be repaid at the end of the warranty period. Grace period for the repayments is 14 days.

REASONS OF AND BENEFITS FOR ENTERING INTO THE SUPPLEMENTAL CONSTRUCTION CONTRACT

The Anhui Flat Glass PV Project to establish photovoltaic glass production facilities in Anhui, PRC by Anhui Flat Glass, with an aggregate annual production capacity of 900,000 tons of photovoltaic glass, which will be used as covers for photovoltaic module. The construction works for the project is necessary to carry out the project in order for the Group to establish its production base in Anhui Province, the PRC.

The Directors consider that the terms of the Construction Contracts are entered into on arms’ length basis and on normal commercial terms based on arm’s length negotiation among the parties. The Directors, including the independent non-executive Directors, believe and consider the terms of the Construction Contracts are fair and reasonable, and are in the interests of the Company and its shareholders as a whole.

INFORMATION ON THE COMPANY AND ANHUI FLAT GLASS

The Company is a joint stock company established in the PRC with limited liability, the H shares of which are listed on the main board of the Stock Exchange.

Anhui Flat Glass is a limited liability company established in the PRC and a wholly-owned subsidiary of the Company. Anhui Flat Glass was established for our Anhui Flat Glass PV Project, and to better serve our customers located in the Northern and Western China.

The Group is one of the largest photovoltaic glass manufacturers globally and in the PRC in terms of photovoltaic raw glass and processed photovoltaic glass. The Group also manufacture and sell float glass, household glass and architectural glass.

4

INFORMATION ON ZHEJIANG NANHU CONSTRUCTION

Zhejiang Nanhu Construction is a company established in the PRC with limited liability and is a housing construction contractor in the PRC with first class qualification. Zhejiang Nanhu Construction has more than 30 years of industry experience.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, Zhejiang Nanhu Construction and its ultimate beneficial owners are third parties independent from the Company and its connected persons (as defined in the Listing Rules).

LISTING RULES IMPLICATIONS

As the Supplemental Construction Contract is to amend and supplement the Original Construction Contract, the amounts under the contracts have been aggregated for the purpose to calculate the applicable percentage ratios. As one or more of the applicable percentage ratios in respect of the Construction Contracts is more than 5% but less than 25%, the transactions contemplated under the Construction Contracts constitutes discloseable transaction of the Company and is subject to the reporting and announcement requirements but exempt from circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

As the contract price under the Supplemental Construction Contract is an estimate, the Company will constantly monitor the contract amount as aggregated under the Construction Contracts to not exceed 25% of the applicable percentage ratios. If one or more of the applicable percentage ratios in respect of the Construction Contracts is more than 25%, the Company will comply with the requirements under the Listing Rules before continuing to proceed with the transaction contemplated under the Construction Contracts to ensure compliance with the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms shall have the meanings as set out below:

• “2017 Interim Report” the interim report of the Group covering the period from 1 January 2017 to 30 June 2017 published on 28 September 2017

“Anhui Flat Glass” Anhui Flat Glass Co., Ltd.* ( 安徽福萊特光伏玻璃有限公司 ), a limited liability company established in the PRC and a wholly-owned subsidiary of the Company

• “Anhui Flat Glass PV Project” the project to establish photovoltaic glass production facilities in Anhui, PRC by Anhui Flat Glass, with an aggregate annual production capacity of 900,000 tons of photovoltaic glass, which will be used as covers for photovoltaic module

“Board” the board of Directors

5

“Company”

Flat Glass Group Co., Ltd., a joint stock company established in the PRC with limited liability, the H Shares of which are listed on the main board of the Stock Exchange (Stock code: 6865)

• “Construction Contracts” the Original Construction Contract as amended and supplemented by the Supplemental Construction Contract

• “Directors” the directors of the Company

• “Group” the Company and its subsidiaries

• “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• “Original Construction the construction contract entered into between Anhui Flat Glass and Contract” Zhejiang Nanhu Construction on 21 July 2016 for the construction services to be provided by Zhejiang Nanhu Construction to Anhui Flat Glass for the Anhui Flat Glass PV Project

• “Proposed A Share Offering” the Company’s proposed initial public offering of not more than 200,000,000 A Shares, which are proposed to be listed on the Shanghai Stock Exchange and the application has been submitted to the CSRC in June 2017

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

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

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Supplemental Construction the contract entered into between Anhui Flat Glass and Zhejiang Contract” Nanhu on 11 October 2017 as a supplement agreement to the Original Construction Contract

6

“Zhejiang Nanhu Construction”

Zhejiang Nanhu Construction Co., Ltd.* ( 浙江南湖建設有限公司 ), a company established in the PRC and which, to the best knowledge of the Directors knowledge and belief, is a third party independent from the Company and its connected persons

By order of the Board of Flat Glass Group Co., Ltd. Ruan Hongliang Chairman

Jiaxing, Zhejiang Province, PRC, 11 October 2017

As at the date of this announcement, the executive directors of the Company are Mr. Ruan Hongliang, Ms. Jiang Jinhua, Mr. Wei Yezhong and Mr. Shen Qifu; and the independent non-executive directors of the Company are Dr. Cui Xiaozhong, Mr. Li Shilong and Mr. Ng Ki Hung.

7