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 (i) 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; (ii) the announcement of the Company dated 17 January 2018 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.

Recently, Electric Leasing received the civil judgment of first instance from Shanghai High People's Court. Particulars are as follows:

1. It is ruled that Xinjiang Jiarun Resources Holdings Co. Ltd. (新疆嘉潤資源控股有限公司) ("Jiarun Company"), as the defendant, 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 representing an increase of 50% as compared with the benchmark interest rate for the five-year loans as prescribed by the People's Bank of China and based on the overdue payment of rentals due in an 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. It is ruled that Qingdao Antaixin Group Co. Ltd. (青島安泰信集團有限公司) ("Antaixin Company") and Wang Zhijun, as the defendants, shall assume joint liability of guarantee for the payment obligation under the clause I in this judgment and Antaixin Company and Wang
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Zhijun may claim compensation from the defendant Jiarun Company after assuming the joint liability of guarantee; and

1. It is ruled that the rest claims of Electric Leasing, the plaintiff, shall be not ruled in favour
   of;

IV. For the court acceptance fee of RMB4,531,718.62 and property preservation expenses of RMB5,000, totalling RMB4,536,718.62, in respect of the case, Jiarun Company, Antaixin Company and Wang Zhijun, as the defendants, shall jointly assume RMB4,000,000 and Electric Leasing shall assume RMB536,718.62; and

V. If any party disagrees with this judgment, it may submit an appeal to the Shanghai Higher People's Court within 15 days from the date of service of this judgment.

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, 23 October 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 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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