Shanghai Electric : ANNOUNCEMENT ON THE PROGRESS OF MATERIAL LITIGATION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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SHANGHAI ELECTRIC GROUP COMPANY LIMITED

上海電氣集團股份有限公司

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

(Stock Code: 02727)

ANNOUNCEMENT ON THE PROGRESS OF MATERIAL LITIGATION

This announcement is made by the board of directors of Shanghai Electric Group Company Limited (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"), Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and with reference to Rule 13.10B of the Listing Rules.

References are made to the announcement of the Company dated 16 January 2018 in relation to the material litigation of the Company involving the Company and Shanghai Electric Rongchuang Financial Leasing Co., Ltd. ( 上海電氣融創融資租賃有限公司) ("Electric Leasing"), a subsidiary of the Company and the announcements of the Company dated 17 January 2018 and 23 October 2019, respectively, in relation to the progress of material litigation of Electric Leasing. Unless otherwise indicated, capitalised terms used in this announcement shall have the same meaning as those defined in the aforementioned announcements.

Electric Leasing, as the appellant, filed an appeal to the Supreme People's Court on the date of this announcement as it dissatisfied with the civil judgment ((2018) Hu Min Chu No. 1) issued by Shanghai High People's Court (the "Judgment") in relation to a financial leasing contract dispute with Xinjiang Jiarun Resources Holdings Co., Ltd. (新疆嘉潤資源控股有限公司), Qingdao Antaixin Group Co. Ltd. (青島安泰信集團有限公司), Wang Zhijun and Qingdao Shengshi Jiaye Business Development Co., Ltd. (青島盛世嘉業商業發展有限公司), as the appellees. Particulars are as follows:

I. requesting a change of the ruling I in the Judgment to: Xinjiang Jiarun Resources Holdings Co. Ltd. shall pay Electric Leasing all rentals due but unpaid as well as rentals not yet due in the aggregate amount of RMB746,535,167.04, penalty for delayed performance calculated at the interest rate of 24% per annum and based on the overdue payment of rentals due in an

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amount of RMB294,966,415.96 for the period from 24 October 2016 to the date of actual repayment, and residual value transfer fee of the leased item of RMB10,000;

1. requesting a ruling that Xinjiang Jiarun Resources Holdings Co., Ltd. shall pay liquidated damage in an amount of RMB92,533,000 to Electric Leasing;

1. requesting a change of the ruling II in the Judgment to: Qingdao Antaixin Group Co. Ltd., and Wang Zhijun shall assume joint liability of guarantee for the payment obligation under the above claims I and II; Qingdao Antaixin Group Co. Ltd. and Wang Zhijun may claim compensation from the Xinjiang Jiarun Resources Holdings Co., Ltd. after assuming the liability of guarantee;

IV. requesting a ruling that Electric Leasing shall be entitled to auction or sell the collaterals provided by Qingdao Shengshi Jiaye Business Development Co., Ltd. to the extent of the aforementioned claims I and II with priority of compensation;

V. requesting a ruling that all appellees shall jointly assume the appellant's loss of attorney fee in an amount of RMB200,000.

VI. requesting a ruling that all appellees jointly assume all legal fees of the case including court acceptance fee and property preservation expenses.

The Company will make further announcement(s) on the progress of the case as and when required in accordance with the Listing Rules.

Shareholders and potential investors of the Company are advised to exercise caution when dealing in the securities of the Company.

By order of the Board

Shanghai Electric Group Company Limited

ZHENG Jianhua

Chairman of the Board

Shanghai, the PRC, 1 November 2019

As at the date of this announcement, the executive directors of the Company are Mr. ZHENG Jianhua, Mr. HUANG Ou, Mr. ZHU Zhaokai and Mr. ZHU Bin; the non-executive directors

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of the Company are Ms. YAO Minfang and Ms. LI An; and the independent non-executive directors of the Company are Mr. KAN Shun Ming, Dr. CHU Junhao and Dr. XI Juntong.

* For identification purpose only

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