Flat Glass Group Co., Ltd. — Capital/Financing Update 2021

Oct 12, 2021

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)

SUPPLEMENTAL ANNOUNCEMENT TO THE PROPOSED ADOPTION OF THE A SHARE OPTION INCENTIVE SCHEME

References is made to the announcements of the Company in relation to the proposed adoption of the A Share Option Incentive Scheme dated 17 August 2021 for the grant of the Share Options to the Participants (the “ Announcement ”). Unless the context otherwise requires, capitalised terms used herein shall have the same meanings as defined in the Announcement.

SUPPLEMENTAL ANNOUNCEMENT TO THE PROPOSED ADOPTION OF THE A SHARE OPTION INCENTIVE SCHEME

In order to ensure that the pricing principles of the Scheme obtains the relevant waiver concerning option exercise prices under Rule 17.03(9) of the Listing Rules of the Hong Kong Stock Exchange in accordance with the conditions under Rule 19A.39C of the Listing Rules, on 12 October 2021, the Board resolved certain adjustments to the A Share Option Incentive Scheme, including the following:

(1) Exercise Price under the First Grant of Share Options

The Exercise Price under the First Grant of Share Options under the Scheme shall be adjusted from RMB35.22 per Share to RMB44.02 per Share. Upon fulfillment of the Exercise Conditions, each Share Option granted to the Participants can purchase one Share of the Company at the price of RMB44.02.

(2) Basis of determination of the Exercise Price under the First Grant of Share Options

The Exercise Price under the First Grant of Share Options shall not be less than the nominal value of the Shares and in principle and adjusted to the higher of:

• (i) the average trading price of the A Shares of the Company on the trading day immediately preceding the date of announcement of the Scheme (draft), being RMB44.02 per Share (as compared to 80% of the average trading price on such date as set out in the Announcement, being RMB35.22 per Share); or

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• (ii) the average trading price of the A Shares of the Company for the 120 trading days immediately preceding the date of announcement of the Scheme (draft), being RMB34.90 per Share (as compared to 80% of the average trading price for such period as set out in the Announcement, being RMB27.92 per Share).

(3) Basis of determination of the Exercise Price of the Reserved Share Options

The Exercise Price of the Reserved Share Options shall be adjusted to be identical to the Exercise Price under the First Grant of Share Options, being RMB44.02 per Share (as compared to the Exercise price of RMB35.22 per Share as set out in the Announcement).

Expected impact of the implementation of Share Options on operating performance in each period

The Company granted 5,353,072 Share Options to the Participants under the First Grant of Share Options. The fair value of the Share Options on the date of Grant was estimated based on the projected fair value of Share Options on the date of Grant which was calculated according to the closing price of the trading day prior to the publication of the draft. The total fair value of the equity instruments granted this time is estimated to be RMB31,781,200 (as adjusted from the total fair value of the equity instruments estimation of RMB60,332,200 as set out in the Announcement). The total fair value as the Company’s incentive cost of the Scheme will be recognized in stages during the implementation of the Scheme in accordance with the exercise percentage, and will be charged to the recurring profit or loss. According to the requirements of the relevant accounting standards, the specific amount shall be subject to the fair value of the Shares calculated on the actual Date of Grant. Assuming that the Company grants Share Options on or before October 2021 where all the granted Participants meet the Exercise Conditions specified in the Scheme and have exercised during respective Exercise Periods, the amortization of Share Options costs from 2021 to 2026 is as follows:

Unit: 10’000

Amortized costs
of the Share Options	2021	2022	2023	2024	2025	2026
3,178.12	185.69	1073.04	827.31	586.08	354.46	151.54

Notes:

1. The above costs are projected costs related to the Grant Price, Grant Date, closing price on Grant Date, number of grants and estimate of the largest number of exercisable equity instruments;

2. Shareholders are reminded to be aware of the possible dilutive effect of the above-mentioned share-based payments;

3. The final impact of the above amortization costs projections on the Company’s operating results is subject to the audit report issued by the accountant;

4. Any difference in the mantissa of the sum of the totals and the breakdown in the table above, if any, is due to rounding.

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This supplemental announcement should be read in conjunction with the Announcement. Save as disclosed in this announcement, other information set out in the Announcement remain unchanged and shall continue to be valid for all purposes.

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

Jiaxing, Zhejiang Province, PRC, 12 October 2021

As at the date of this announcement, the executive Directors are Mr. Ruan Hongliang, Ms. Jiang Jinhua, Mr. Wei Yezhong and Mr. Shen Qifu, and the independent non-executive Directors are Ms. Xu Pan, Ms. Hua Fulan and Ms. Ng Yau Kuen Carmen.

• This announcement is prepared in both Chinese and English versions. In case of inconsistency, the Chinese version shall prevail.

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