Shanghai Electric : Circular

October 28, 2019 at 05:37 am EDT

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Shanghai Electric Group Company Limited, you should at once hand this circular and the form of proxy and the reply slip to the purchaser or transferee or to the bank or licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

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

(Stock Code: 02727)

PROPOSED APPOINTMENT OF INDEPENDENT NON-EXECUTIVE

DIRECTOR

PROPOSED ADJUSTMENT OF MAXIMUM OUTSTANDING AMOUNT

FOR PROVISION OF EXTERNAL GUARANTEES BY

THE COMPANY FOR THE YEAR OF 2019

PROPOSED CHANGE IN USE OF PROCEEDS

PROPOSED AMENDMENTS TO THE ARTICLES

OF ASSOCIATIONS OF THE COMPANY

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE OF H SHARE CLASS MEETING

AND

SUPPLEMENTAL NOTICE OF EXTRAORDINARY GENERAL MEETING

All capitalised terms used in this circular have the meanings set out in the section headed "Definitions" of this circular. A letter from the Board is set out on pages 1 to 49 of this circular.

A notice convening the EGM of the Company to be held at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai Caohejing, No. 509 Caobao Road, Shanghai, the PRC, at 9:00 a.m. on Thursday, 14 November 2019 is set out on pages 50 to 51 of this circular. The Supplemental Notice of Extraordinary General Meeting dated 29 October 2019 is enclosed with this circular and set out on pages 54 to 55, for the purpose of notifying the Shareholders of the addition of new resolutions in relation to the proposed election of Mr. XU Jianxin as an independent non-executive director of the fifth session of the Board, the proposed adjustment of maximum outstanding amount for provision of external guarantees by the Company for the year of 2019 and the proposed amendments to the Articles of Association of the Company to the agenda of the EGM. The resolution originally proposed to be considered at the EGM and contained in the original notice of the EGM remain unchanged. A notice convening the H Share Class Meeting is set out on pages 52 to 53 of this circular.

A reply slip and a form of proxy for use at the EGM and a reply slip and a form of proxy for use at the H Share Class Meeting have been published on the website of the Hong Kong Stock Exchange (http://www.hkexnews.hk) on 27 September, 2019, and a supplemental form of proxy for use at the EGM has been published on 28 October 2019, reflecting new resolutions as proposed in the Supplemental Notice of Extraordinary General Meeting enclosed in this circular. If you intend to appoint a proxy to attend the EGM and/or the H Share Class Meeting, you are requested to complete and return the forms of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the EGM and/or the H Share Class Meeting or any adjournment thereof (as the case may be). Completion and return of the forms of proxy will not preclude you from attending the EGM and/or the H Share Class Meeting and voting in person if you so wish. Shareholders who intend to attend the EGM and/or the H Share Class Meeting in person or by proxy should complete and return the reply slip in accordance with the instructions printed thereon on or before Friday, 25 October 2019.

29 October 2019

For identification purpose only

CONTENTS
	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	50
Notice of H Share Class Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Supplemental Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54

- i -

DEFINITIONS

Unless the context otherwise requires, the following expressions in this circular shall have the following meanings:

"A Share(s)"	the domestic ordinary share(s) of nominal value RMB1.00 each in
	the share capital of the Company, which are listed on the Shanghai
	Stock Exchange and traded in RMB;
"Articles of Association"	the articles of association of the Company as amended from time
	to time;
"associate(s)"	has the meaning ascribed thereto under the Listing Rules;
"Beinei Road Project"	the Innovative Industry Park Reformation Project of the Company
	at Beinei Road;
"Board"	the board of Directors of the Company;
"Chief Executive Officer"	has the meaning ascribed thereto under the Listing Rules;
"Class Meetings"	the A Shares Class Meeting and the H Shares Class Meeting;
"Company"	Shanghai Electric Group Company Limited, a joint stock limited
	company duly incorporated in the PRC with limited liability, the H
	shares of which are listed on The Stock Exchange of Hong Kong
	Limited under stock code 02727 and the A Shares of which are
	listed on the Shanghai Stock Exchange under stock code 601727;
"connected person(s)"	has the meaning ascribed thereto under the Listing Rules;
"controlling shareholder(s)"	has the meaning ascribed thereto under the Listing Rules;
"CSRC"	China Securities Regulatory Commission;
"Directors"	the directors of the Company;
"EGM"	the extraordinary general meeting of the Company to be convened
	at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai
	Caohejing, No. 509 Caobao Road, Shanghai, the PRC, at 9:00 a.m.
	on Thursday, 14 November 2019;

- ii -

	DEFINITIONS

"EGM Notice"	the notice of the Extraordinary General Meeting dated 27
	September, 2019;
"Gonghe New Road Project"	the Emerging Industrial Park Development Project of the
	Company at Gonghe Xin Road;
"Group"	the Company and its subsidiaries;
"H Share(s)"	the overseas listed foreign capital share(s) of nominal value
	RMB1.00 each in the share capital of the Company, which are
	listed on the Hong Kong Stock Exchange and traded in Hong
	Kong dollars;
"H Share Class Meeting"	the H Share Class Meeting of the Company to be convened on
	Thursday, 14 November 2019 immediately after the conclusion
	or adjournment of EGM and the class meeting for holders of A
	Shares of the Company to be convened on Thursday, 14 November
	2019 at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai
	Caohejing, No. 509 Caobao Road, Shanghai, the PRC;
"Hong Kong"	the Hong Kong Special Administrative Region of the People's
	Republic of China;
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Independent Financial Adviser "	Guotai Junan Securities Co., Ltd.;
"Independent Non-Executive	independent non-executive director(s) of the Company;
Director(s)"
"Independent Third Party(ies)"	any entity or person who is not a connected person of the
	Company within the meaning ascribed thereto under the Listing
	Rules;
"Jinshajiang Branch Road Project"	the Technology Innovation Park Reformation Project of the
	Company at Jinshajiang Branch Road;
"Jungong Road Project"	the Industrial R&D and Design and High-end Equipment
	Manufacturing Base Project of the Company at Jungong Road;
"Latest Practicable Date"	23 October 2019, being the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining certain
	information contained in this circular;

- iii -

	DEFINITIONS

"Listing Rules"	The Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited;
"Ningbo Hi-Firm"	Ningbo Hi-Firm Environmental Protection Company Limited (寧
	波海鋒環保有限公司);
"Non-Public Issuance"	The issuance and placing of 416,088,765 A Shares to no more
	than 10 specific target subscribers (including SEC) by the
	Company through the way of non-public issuance at the price
	of RMB7.21 per A Share with gross proceeds of approximately
	RMB3,000,000,000, as disclosed in the circular of the Company
	dated 23 March 2017 and the announcement of the Company dated
	7 November 2017;
"Orient Landscape"	Orient Landscape Group Environmental Protection Company
	Limited (東方園林集團環保有限公司);
"PRC" or "China"	the People's Republic of China, but for the purposes of this
	circular only, excludes Hong Kong Special Administrative Region,
	Macau Special Administrative Region and Taiwan;
"RMB"	Renminbi, the lawful currency of the PRC;
"SEC"	Shanghai Electric (Group) Corporation (上海電氣（集團）總公
	司), the controlling shareholder of the Company (as defined in
	the Listing Rules) holding approximately 59.18% equity interests
	in the total issued share capital of the Company as at the Latest
	Practicable Date;
"SEI"	Shanghai Electric Investment Company Limited, a wholly-owned
	subsidiary of the Company;
"Share(s)"	the ordinary share(s) of nominal value RMB1.00 each in the share
	capital of the Company, including both A Share(s) and H Share(s);
"Shareholder(s)"	the shareholder(s) of the Company, including both holder(s) of A
	share(s) and holders of H share(s) of the Company;
"subsidiary(ies)"	has the meaning ascribed thereto under the Listing Rules; and

- iv -

	DEFINITIONS

"Supervisory Committee"	the supervisory committee of the Company;
"Taihu Company"	Wujiang Taihu Industrial Wastes Treatment Company Limited. (吳
	江市太湖工業廢棄物處理有限公司);
"Taizhou Zongze"	Taizhou Zongze Equity Investment Management LP (台州宗澤股
	權投資管理合夥企業（有限合夥);
"%"	percent.

- v -

LETTER FROM THE BOARD

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

	(Stock Code: 02727)
Executive Directors:	Registered office:
Mr. ZHENG Jianhua	30th Floor, Maxdo Center
Mr. HUANG Ou	No. 8 Xingyi Road
Mr. ZHU Zhaokai	Shanghai
Mr. ZHU Bin	PRC
Non-executive Directors:	Principal place of business in Hong Kong:
Ms. YAO Minfang	Room 901-903, Tower Two Lippo Centre
Ms. LI An	89 Queensway
	Hong Kong
Independent non-executive Directors:
Mr. KAN Shun Ming
Dr. CHU Junhao
Dr. XI Juntong	29 October 2019
To the Shareholders
Dear Sir or Madam,

PROPOSED APPOINTMENT OF INDEPENDENT NON-EXECUTIVE

DIRECTOR

PROPOSED ADJUSTMENT OF MAXIMUM OUTSTANDING AMOUNT

FOR PROVISION OF EXTERNAL GUARANTEES BY

THE COMPANY FOR THE YEAR OF 2019

PROPOSED CHANGE IN USE OF PROCEEDS

PROPOSED AMENDMENTS TO THE ARTICLES

OF ASSOCIATIONS OF THE COMPANY

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE OF H SHARE CLASS MEETING

AND

SUPPLEMENTAL NOTICE OF EXTRAORDINARY GENERAL MEETING

- 1 -

LETTER FROM THE BOARD

INTRODUCTION
References are made to the announcements dated 21 October 2019 of the Company in relation to the proposed change of an independent non-executive director and the proposed amendments to the Articles of Association of the Company, respectively.
References are made to the circular dated 23 March 2017 of the Company in relation to, among other things, the proposal of the Company's fundraising of not more than RMB3,000,000,000 by the Non-Public Issuance and the proposed use of proceeds, the announcement of the Company dated 8 May 2017 in relation to the poll results of the extraordinary general meeting in respect of the Non-Public Issuance, the announcement of the Company dated 7 November 2017 in relation to the completion of fundraising through the Non-Public Issuance and the subsequent changes in shareholdings, the announcement of the Company dated 22 October 2018 and the circular published by the Company on 16 November 2018 in relation to, among other things, the proposed change in use of proceeds, the poll voting results announcement of the Company dated 10 December 2018, in relation to, among other things, the approval of the resolution in respect of the proposed change in use of proceeds, and the announcement of the Company dated 16 November 2018, in relation to the proposed change in use of proceeds and additional capital injection into SEI for its acquisition of the 100% equity interests in Taihu Company and Ningbo Hi-Firm.
The purpose of this circular, to which this letter forms a part of, is to give you an EGM Notice and a notice of the H Share Class Meeting, and to provide you with all the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the proposed resolutions at the EGM and H Share Class Meeting.

At the EGM, resolutions to consider and approve 1) the election of Mr. XU Jianxin as an independent non-executive director of the fifth session of the Board; 2) the adjustment of maximum outstanding amount for provision of external guarantees by the Company for the year of 2019;

the resolution in respect of the proposed change in use of proceeds and 4) the resolution on the proposed amendments to the Articles of Association of the Company will be proposed for the Shareholders to approve.

At the H Share Class Meeting, special resolution to consider and approve the resolution in respect of the proposed change in use of proceeds will be proposed for the Shareholders' approval.

- 2 -

LETTER FROM THE BOARD

PROPOSED APPOINTMENT OF INDEPENDENT NON-EXECUTIVE DIRECTOR
The Board agreed to nominate Mr. XU Jianxin ("Mr. XU") as the candidate for an independent non-executive director of the fifth session of the Board of the Company. The term of office of Mr. XU will be from the date on which his appointment is approved at the general meeting to the end of the term of the fifth session of the Board.
The biography of Mr. XU is as follows:
Mr. XU Jianxin, aged 63, currently serves as the senior vice president of Shanghai Purest Investment Management Co., Ltd., an independent director of Bank of Shanghai Co., Ltd. and Shanghai Shunho New Materials Technology Co., Ltd. From February 1982 to November 1997, Mr. XU served as a lecturer and associate professor of accounting at Shanghai University of Finance and Economics. From November 1997 to December 2014, he served as the deputy chief accountant, director, chief financial officer, and chief economist of Orient International (Holding) Co., Ltd. From May 2014 to May 2017, he served as an independent director of Baida Group Co., Ltd., a company listed on the Shanghai Stock Exchange (stock code: 600865). Since January 2015, he has served as the senior vice president of Shanghai Purest Investment Management Co., Ltd. Since June 2015, he has served as an independent director of Shanghai Shunho New Materials Technology Co., Ltd., a company listed on the Shanghai Stock Exchange (stock code: 002565). Since August 2015, he has served as an independent director of Bank of Shanghai Co., Ltd., a company listed on the Shanghai Stock Exchange (stock code: 601229). From September 2015 to June 2019, he served as an independent non-executive director of Shanghai Jin Jiang International Hotels (Group) Co., Ltd., a company listed on The Stock Exchange of Hong Kong Limited (stock code: 02006). Mr. XU graduated from Shanghai University of Finance and Economics with a doctorate. He is a professor- level senior accountant and a Chinese certified public accountant.
Save as disclosed above, Mr. XU has not held any directorship in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the past three years; Mr. XU does not have any relationship with any directors, supervisors, senior management, substantial or controlling shareholders of the Company within the meaning of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"); as at the Latest Practicable Date, Mr. XU does not have any interest in the shares of the Company or its associated companies within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong); during Mr. XU's term of office being an independent non-executive director of the Company, the amount of Mr. XU's emoluments will be determined based on a number of factors, including the operating results of the Company, his responsibilities, performance and market conditions. As at the Latest Practicable Date, the Company has not yet entered into any director service contract with Mr. XU.

- 3 -

LETTER FROM THE BOARD

Save as disclosed above, there is no other information in relation to the appointment of Mr. XU Jianxin which is required to be disclosed pursuant to the requirements set out in Rules 13.51(2) (h) to (v) of the Listing Rules nor are there any matters which need to be brought to the attention of the Shareholders.

THE ADJUSTMENT OF MAXIMUM OUTSTANDING AMOUNT FOR PROVISION OF EXTERNAL GUARANTEES BY THE COMPANY FOR THE YEAR OF 2019
1. Summary of External Guarantees
  In order to ensure the normal business activities of the Company and its subordinate enterprises and as considered at the ninth meeting of the fifth session of the board of directors of the Company and approved at the 2018 annual general meeting of the Company, the estimated total maximum outstanding amount for new guarantees of the Company and its subordinate enterprises in 2019 (from the date on which it was approved at the 2018 annual general meeting of the Company held on 10 June 2019 to the date of the 2019 annual general meeting of the Company) will be RMB22,475,795,000, including external guarantees of Shanghai Electric Group Finance Co., Ltd. (上海電氣集團財務有限責任公司)(the "SEC Finance"), a majority-owned subsidiary of the Company, amounting to RMB2,000 million. For details of the above guarantees, please refer to the Announcement on External Guarantees of Shanghai Electric in 2019 (Announcement No.: Lin 2019-022) published on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 23 March 2019.
  In view of the fact that the orders undertaken by the new energy and high efficiency and clean energy segments of the Company in 2019 exceeded expectation, the Company proposes to adjust the maximum outstanding amount for the letters of corporate guarantee issued or to be issued by the SEC Finance for the Company and its subsidiaries and other investee companies from RMB2,000 million to RMB5,500 million, of which the maximum outstanding amount for letters of corporate guarantee issued or to be issued for the Company and its subsidiaries will be increased from RMB1,970 million to RMB5,470 million and those for other investee companies of the Company will remain unchanged at RMB30 million.
  In accordance with relevant requirements of the Notice on Regulating Provision of External Guarantees by Listed Companies 《( 關於規範上市公司對外擔保行為的通知》) (Zheng Jian Fa [2005] No. 120) issued by China Securities Regulatory Commission, when the total maximum outstanding amount for external guarantees provided by a listed company and its majority-owned subsidiaries has exceeded 50% of the latest audited net assets of the Company, any guarantee to be provided thereafter shall be subject to approval at general meetings of the company.

- 4 -

LETTER FROM THE BOARD

As the total maximum outstanding amount for external guarantees of the Company in 2019 has exceeded 50% of its latest audited net assets, the above guarantee shall be subject to consideration and approval at the EGM of the Company, and if being approved thereat, shall be effective for a term from the date of approval until the date of the next annual general meeting of the Company.

General Information of Obligors and Major Contents of Guarantees
The Company holds, either directly or indirectly, an aggregate of 89% equity interest in the SEC Finance. As a non-banking financial institution established with the approval of the People's Bank of China, the SEC Finance offers deposit-taking,loan-lending, guarantee services, electronic bank acceptance bills and other services to members of the Group and is subject to the supervision and regulation of the China Banking Regulatory Commission.
The expected total maximum outstanding amount for letters of corporate guarantee issued or to be issued by the SEC Finance will be adjusted from RMB2,000 million to RMB5,500 million, details of which are as follows:

	Limit for	Limit for	Maximum
	the year	the year	outstanding
	2019 before	2019 after	amount
	adjustment	adjustment	adjusted
	(RMB100	(RMB100	(RMB100
	million)	million)	million)
Maximum outstanding amount for letters of
corporate guarantee issued or to be issued
by the SEC Finance for the Company
and its subsidiaries	1,970	5,470	3,500
Maximum outstanding amount for letters
of guarantee issued or to be issued by
the SEC Finance for other investee
companies of the Company	30	30	-
Total maximum outstanding amount for
letters of corporate guarantee issued or
to be issued by the SEC Finance	2,000	5,500	3,500

- 5 -

LETTER FROM THE BOARD

Opinions of the Board of Directors
After careful consideration, the Board believes that the cash of the guaranteed parties generated under the additional guarantee limit will be mainly used for the undertaking of projects to carry out normal business activities. Further, the guaranteed parties being granted the additional guarantee limit are wholly-owned or majority-owned subsidiaries of the Company and the Company can keep itself informed of their credit standings from time to time. Thus, the Board has approved the provision of guarantees to such subsidiaries.

After careful consideration, the independent non-executive Directors of the Company are of the opinion that the adjustment to the expected total maximum outstanding amount for external guarantees for 2019 is in line with the actual business needs of the Company without prejudice to the interests of the shareholders of the Company. Upon consideration, all Directors of the Company approved the resolution. The consideration and voting procedures of the meeting are in compliance with relevant provisions of applicable laws and administrative regulations, the rules of the stock exchanges where the shares of the Company are listed and the Articles of Association of the Company.

IV. Maximum Outstanding Amount for Accumulated External Guarantees and Overdue Guarantees

It is expected that new external guarantees of the Company will be RMB25,975,795,000 in 2019, of which, new external guarantees for wholly-owned and majority-owned subsidiaries of the Company will be RMB25,665,795,000, accounting for 45.3% and 44.8% of the audited net assets of the Company in 2018, respectively.

The Company has no overdue external guarantees.

- 6 -

LETTER FROM THE BOARD

IV. PROPOSED CHANGE IN USE OF PROCEEDS

General Information of the Proceeds
1. Basic Information of the Proceeds

As approved by the CSRC with the "Approval for Issuance of Shares by Shanghai Electric Group Company Limited to Shanghai Electric (Group) Corporation for Assets Acquisition as well as Supporting Funds Raising" (Zheng Jian Xu Ke [2017] No. 1390), the Company issued 416,088,765 RMB-denominated ordinary shares (A shares) through non-public issuance at the price of RMB7.21 per share and raised proceeds in an aggregate amount of RMB2,999,999,995.65. After deduction of underwriting fees of RMB14,999,999.98 (tax inclusive), the net proceeds from the Non-Public Issuance amounted to RMB2,984,999,995.67.

After deduction of underwriting fees, the net proceeds from the Non-Public Issuance were deposited into the Company's special account for proceeds maintained with Industrial and Commercial Bank of China Limited, Waitan Sub- Branch, Shanghai (account number: 1001262129040525666) on 19 October 2017. PricewaterhouseCoopers Zhong Tian LLP issued the "Capital Verification Report on the Non-public Issuance of RMB-denominated Ordinary Shares (A Shares) by Shanghai Electric Group Company Limited in 2017" (PwC Zhong Tian Yan Zi (2017) No. 968) in relation to the receipt of the abovementioned proceeds.

For the purposes of regulating the management of the proceeds and protecting the interests of investors, on 15 November 2017, the Company, Industrial and Commercial Bank of China Limited, Waitan Sub-Branch, Shanghai and Guotai Junan Securities Co., Ltd., the financial adviser of the Company, entered into the Tripartite Custodian Agreement on the Designated Saving Account for Proceeds Raised 《( 募集資金專戶存儲三方監管協議》) in respect of the Company's special account for proceeds (account number: 100126212904052566) in Shanghai according to relevant laws and regulations.

Use and Balance of the Proceeds

As of the Latest Practicable Date, RMB225 million (including relevant issuance fees of RMB15 million) out of the proceeds had been used by the Company, and RMB2,500 million had been used for temporary replenishment of working capital. The remaining balance of the proceeds amounts to RMB281 million (including interest income of RMB6 million).

- 7 -

LETTER FROM THE BOARD

The Proceeds-Funded Projects and the Changes Thereof
1. Proceeds-fundedProjects

According to use of supporting funds as disclosed in the Report for Assets Acquisition by Issuance of Shares and Supporting Funds Raising (Related-partyTransaction) by Shanghai Electric Group Company Limited (Revised) 《( 上海電氣集團股份有限公司發行股份購買資產並募集配套資金暨關聯交易報告書（修訂稿)》), the proceeds- funded projects of the Company are as follows:

		Unit: RMB100 million
			Amount of
		Total	proceeds to
No.	Use of proceeds	investment	be used
1	Emerging Industrial Park Development
	Project at Gonghe New Road	18.15	10.55
2	Innovative Industry Park Reformation
	Project at Beinei Road	2.65	2.26
3	Technology Innovation Park Reformation
	Project at Jinshajiang Branch Road	3.85	3.28

4 Industrial Research, Development and Design and High-end Equipment Manufacturing Base Project at Jungong

	Road	13.70	11.66
5	Taxes and Other Expenses related to the
	Reorganization	2.25	2.25
Total
	40.60		30.00

Note: As the net proceeds raised by the Company after deduction of issuance fees amounted to RMB2,985 million, the amount of "Taxes and Other Expenses related to the Reorganization" paid out of the proceeds was adjusted from RMB225 million to RMB210 million.

- 8 -

LETTER FROM THE BOARD

Change in Use of Proceeds

1. Change in Use of Proceeds as Approved at the Meeting of the Board on 22 October 2018

As considered and approved at the meeting of the Board held on 22 October 2018, and the 2018 third extraordinary general meeting, the 2018 first A share class meeting and the 2018 first H share class meeting of the Company held on 10 December 2018, the Company will no longer use any of the proceeds of RMB2,554 million (including interest income and the actual amount is subject to the balance after interest settlement of the bank on the date when the funds are transferred out) to finance the Emerging Industrial Park Development Project at Gonghe New Road, the Technology Innovation Park Reformation Project at Jinshajiang Branch Road and the Industrial Research, Development and Design and High-end Equipment Manufacturing Base Project at Jungong Road, including proceeds of RMB2,549 million and interest income on the proceeds of RMB5 million.

Proposed proceeds-funded projects after the above change are as follows:

		Unit: RMB100 million
			Amount of
			proceeds
		Total	proposed to
No.	Name of proceeds-funded projects	investment	be used
1	Innovative Industry Park
	Reformation Project at Beinei
	Road	2.65	2.26
2	Taxes and Other Expenses related to
	the Reorganization	2.25	2.25

3 Proceeds-funded projects under investigation yet pending for

confirmation	-	25.49
Total
4.90		30.00

2. Change in Use of Proceeds as Approved at the Meeting of the Board on 16 November 2018

- 9 -

LETTER FROM THE BOARD

As considered and approved at the meeting of the Board held on 16 November 2018, the Company planned to use RMB342 million out of the proceeds to acquire, through SEI, a wholly-owned subsidiary of the Company, the 100% equity interests of Taihu Company from Orient Landscape and Taizhou Zongze; and use RMB756 million out of the proceeds to acquire, through SEI, the 100% equity interests of Ningbo Hi-Firm. The Company intended to proceed with the aforesaid acquisitions with its self-owned funds through SEI. Then, upon consideration and approval of the resolutions in relation to the proposed change in use of proceeds at the shareholders' general meeting of the Company, it would supplement the self-owned funds with the proceeds. The above- mentioned matters had been considered and approved at each of the 2019 first extraordinary general meeting, the 2019 first A share class meeting and the 2019 first H share class meeting of the Company held on 6 May 2019.

Proposed proceeds-funded projects after the above change are as follows:

	Unit: RMB100 million
		Amount of
		proceeds
Name of proposed	Total	proposed to
No. proceeds-funded projects	investment	be used

1 Innovative Industry Park Reformation Project at Beinei

	Road	2.65	2.26
2	Taxes and Other Expenses related to
	the Reorganization	2.25	2.25

3 Acquisition of 100% Equity Interests in Wujiang Taihu Industrial Wastes Treatment Company

	Limited	3.42	3.42
4	Acquisition of 100% Equity Interests
	in Ningbo Hi-Firm Environmental
	Protection Company Limited	7.56	7.56

5 Proceeds-funded projects under investigation yet pending for

confirmation	-	14.51
Total
15.88		30.00

The Company has proceeded with the aforesaid acquisitions with its self-owned funds through SEI, and will use the proceeds to supplement the self-owned funds after the final payments for the acquisitions are made.

- 10 -

LETTER FROM THE BOARD

Reasons for the Previous Change in Use of Proceeds and the Actual Progress Thereof
1. Emerging Industrial Park Development Project at Gonghe New Road

The Gonghe New Road Project is located at the intersection of Gonghe New Road and Jiangchang Road, Jing'an District, stretching north-to-south from Jiangchang Road to Pengpu Machinery Factory and west-to-east from Gonghe New Road to Beilong Business Building, and covering a total site area of 55,800 square metres. The project will mainly comprise six five-storey scientific research buildings and auxiliary service structures. Upon completion, the project will have a total gross floor area of 119,900 square metres. The total investment in the project is RMB1,815.3 million. Upon completion, the project will serve as a scientific research platform for emerging industries including intelligent equipment, software and information services. In March 2017, the project was approved by the Development and Reform Commission of Jing'an District, Shanghai which issued the Opinions on the Filing of Projects to be Invested by Enterprises of Shanghai 《( 上海市企業投資項目備案意見》) (Jing Fa Gai Wei Bei [2017] No. 37).

In September 2018, the government adjusted the planning parametres for the area where the project is located, which resulted in fundamental changes in the planning, investment conditions, investment intensity, unit tax output and other conditions of the project and thus makes it impossible to implement the project according to the original plan and the change of investment projects. As considered and approved at the meeting of the Board of the Company held on 22 October 2018 and the 2018 third extraordinary general meeting, 2018 first A share class meeting and 2018 first H share class meeting of the Company held on 10 December 2018, the Gonghe New Road Project no longer qualifies as a proceeds-funded project and will not be financed by the proceeds. The Company proposed to use its own funds or project loans to finance the development and construction of the project.

During the advancement of the project, as the project is located in Shibei High-tech Park in Jing'an District, Shanghai, the relevant government authorities suggested that the state-owned enterprises of the district and the Company should jointly participate in the development of the project. As of the Latest Practicable Date, Shanghai Yun Zhong Xin Enterprise Development Co., Ltd. (上海雲中芯企業發展有限公司) has been established as the project company for the project with the registered capital of RMB1.2 billion, of which, SEC Property contributed RMB660 million, representing 55% of equity interests, Shanghai Shibei Hi-Tech Co., Ltd. (上海市北高新股份有限公司) contributed RMB360 million, representing 30% of equity interests, and Shanghai Shibei Hi-Tech (Group) Co., Ltd. (上海市北高新（集團）有限公司) contributed RMB180 million, representing 15% of equity interests. In October 2018, the land use rights involved in the project construction were obtained.

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LETTER FROM THE BOARD

Technology Innovation Park Reformation Project at Jinshajiang Branch Road

The Jinshajiang Branch Road Project stretches north-to-southfrom Jinsha 3131 Creativity Park in Shanghai to Wusong River and west-to-eastfrom the green belt on the east side of the outer ring expressway to the existing watercourse, covering a total site area of 126,500 square metres. The project will mainly comprise 14 single- storey buildings and 2 two-storeybuildings, with a total gross floor area of 76,900 square metres. The project will be developed into a technology innovation park, which will serve as the Group's base for industrial R&D, design and information services focusing on research and development, design, trial production of high-efficiencyphotovoltaic, biomass power generation and factory energy-savingsystems, as well as system integration services. In March 2017, the project was approved by the Development and Reform Commission of Jiading District, Shanghai which issued the Reply on the Project of Intelligent Transportation and Technology Innovation Park at Jinshajiang Branch Road 《( 關於金沙江支路智能交通科技創新園區改造項目的覆函》).

As the region is the confluence of the land parcels owned by each of the three state- owned conglomerates, i.e., the Company, Shanghai Jiaoyun Group Co., Ltd. (上海交運（集團）有限公司) ("Shanghai Jiaoyun") and Shangtex Holding Co., Ltd. (上海紡織（集團）有限公司) ("Shangtex Holding"), pursuant to the new planning adjustments and the principle of intensive utilization of land resources, the government of Jiading District requests the land in the "Nansikuai" region be subject to transformational development in an intensive manner and be jointly developed and utilised by the three land right holders in such region through cooperation. However, given that the three parties have different interest pursuits and other shareholders are unable to make pro- rata contributions to the project, the Jinshajiang Branch Project does not qualify as a proceeds-funded project and was thus ceased to be implemented as a proceeds-funded project upon consideration and approval at the Board meeting of the Company held on 22 October 2018 and the 2018 third extraordinary general meeting, the 2018 first A share class meeting and 2018 first H share class meeting of the Company held on 10 December 2018.

As of the Latest Practicable Date, the project company Shanghai Jinshajiang Asset Management Company Limited (上海金沙江資產管理有限公司) has been established for the project. Registered capital of the project company amounts to RMB50 million, of which, RMB27,045,000, RMB13,940,000 and RMB9,015,000 was contributed by each of the Company, Shanghai Jiaoyun and Shangtex Holding, representing 54.09%, 27.88% and 18.03% of the equity interests, respectively. The conceptual scheme for the project has been preliminarily composed and submitted to the government for approval. It is expected that land planning adjustments will be completed by the end of 2019 and development and construction of the project will commence in 2020.

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LETTER FROM THE BOARD

Construction of Industrial R&D, Design and High-end Equipment Manufacturing Base at Jungong Road

The Jungong Road Project is located in Yangpu District, Shanghai and stretches west-to-eastfrom Jungong Road to Fuxing Island Canal and north-to-southfrom the University of Shanghai for Science and Technology to Chunjiang Road, covering a total site area of 35,900 square metres. The project will mainly comprise 12 two- storey buildings and one single-storeyplant, with a total gross floor area of 274,100 square metres after the construction. The project will be developed into the R&D, design and high-endequipment manufacturing base of Shanghai Electric, mainly focusing on the R&D, manufacturing and sales of high-voltagecables, special cables and submarine cables, as well as the R&D, testing and sales of 3D printing equipment systems used in the intelligent manufacturing industry. Moreover, the base can also serve as a scientific research service platform for the energy-savingtransformation of traditional mechanical and electrical equipment and the R&D, production and sales of efficient and clean energy systems such as smart grids and distributed energy sources. In November 2016, the project was approved by the Development and Reform Commission of Yangpu District, Shanghai which issued the Reply on the Construction of Industrial R&D, Design and High-endEquipment Manufacturing Base at No. 1076 Jungong Road 《( 關於軍工路1076號實施工業研發設計和高端裝備製造基地建設項目的意見回函》).

The Jungong Road Project, located at the riverside area of the Huangpu River, was originally planned for redevelopment into a "mass entrepreneurship and innovation park" at the time of the design and application for approval. However, with the implementation of the development and construction plans of the North Bund area and the East Bund area, the relevant government authority is in the process of planning the development and construction of the area where the project is located. The government authority has engaged Shanghai Urban Planning and Design Research Institute to study and adjust the planning for the area stretching from riverside of Huangpu River in the north of Dinghai Bridge to Qiujiang section in Yangpu District. Accordingly, the development plan of the Jungong Road Project will be revised in accordance with the adjusted planning of the government. As the adjustment to the planning is still in process, there is uncertainty as to the commencement of the project and whether the original plan would be implemented. In order to avoid the risk that the project cannot be implemented, the Company decides not to use the raised proceeds to finance the project, and ceases to implement the project as a proceeds-funded project upon consideration and approval at each of the Board meeting of the Company held on 22 October 2018 and the 2018 third extraordinary general meeting, the 2018 first A share class meeting and the 2018 first H share class meeting of the Company held on 10 December 2018.

As of the Latest Practicable Date, as the planning adjustments along Jungong Road where the project is located have not been completed, the Company will not proceed with the planning and construction of the project until more explicit plan for development along Jungong Road is rolled out.

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LETTER FROM THE BOARD

IV. The Proposed Change in Proceeds-Funded Projects

In accordance with the requirements under the "Several Opinions on Accelerating the Innovation and Development of Cultural and Creative Industries in the City" published by Shanghai government ("50 Guidelines for Cultural and Creative Industries") 《( 關於加快本市文化創意產業創新發展的若干意見》("文創五十條")), upon communication with the relevant competent government authorities, the Company proposes to change the total investment and implementation mode of as well as the amount of proceeds earmarked for the Beinei Road Project. In particular, the total investment will be adjusted to RMB130 million; a project company will be jointly established by SEC Property and Shanghai Yuanying Investment Management Co., Ltd. (上海元盈投資管理有限公司) ("Shanghai Yuanying"), a controlled subsidiary of Shanghai Guorun Investment and Development Company Limited (上海國潤投資發展有限公司) ("Guorun Investment") to function as the implementation entity. The project company (the name of which shall be subject to the approved business name) has a registered capital of RMB20 million, and is owned as to 60% by SEC Property through its contribution of self-financed funds in the amount of RMB12 million; Proceeds earmarked for the project will be reduced from RMB226 million to RMB66 million, which will be provided to SEC Property by the Company through capital contribution, and in turn allocated to the project company by SEC Property by way of entrusted bank loans at an interest of 8% per annum for construction of No. 32 park zone reformation project at Beinei Road.

In addition, upon intensive research and demonstration, the Company proposed to appropriate RMB726 million from the RMB1,451 million previously set apart for proceeds-funded projects yet pending for confirmation to invest in the "Shanghai Electric Nantong Central Research Institute Project", and use the remaining proceeds of RMB891 million (including interest income and the actual amount is subject to the balance after interest settlement of the bank on the date when the funds are transferred out. Such funds comprise proceeds of RMB885 million and interest income therefrom of RMB6 million) to replenish working capital permanently.

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LETTER FROM THE BOARD

Proceeds-funded projects after the change are as follows:

						Unit: RMB100 million
				Amount of
				proceeds
		Total	proposed to
No.	Name of proceeds-funded projects	investment	be used	Note
1	Innovative Industry Park Reformation	1.30		0.66	For the same proceeds-funded
	Project at Beinei Road					project, the total investment
						was reduced to RMB130
						million from RMB265
						million and the amount of
						proceeds proposed to be
						used was reduced to RMB66
						million from RMB226
						million
2	Taxes and Other Expenses related to	2.25	2.25	No change was made.
	the Reorganization
3	Acquisition of 100% Equity Interests	3.42	3.42	No change was made.
	in Wujiang Taihu Industrial Wastes
	Treatment Company Limited
4	Acquisition of 100% Equity Interests	7.56	7.56	No change was made.
	in Ningbo Hi-Firm Environmental
	Protection Company Limited
5	Shanghai Electric Nantong Central	7.77	7.26	Project newly initiated after the
	Research Institute Project					change.
6	Permanent replenishment of working	8.85	8.85	Project newly initiated after the
	capital					change.
Total
	31.15		30.00

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LETTER FROM THE BOARD

Reasons for the Proposed Change in Use of Proceeds
1. The Beinei Road Project

The Beinei Road Project is located at the intersection of Huancheng Road and Wazi Lane, Songjiang District. The project extends to Wazi Lane in the west and connects Huancheng Road in the north, covering a total site area of 107,600 square metres. The project will mainly comprise 14 single-storeybuildings and 2 two-storeybuildings, with a total gross floor area of 54,000 square metres. The project will be developed into a modern creative industrial park, which will serve as a display window for creative achievements, a trading center for creative industry, an incubation area for creative enterprises, and a training base for creative talents. In March 2017, the project was approved by the Development and Reform Commission of Songjiang District, Shanghai which issued the Reply on the Opinions on the Innovative Industry Park Reformation Project at No. 32 Beinei Road, Songjiang District 《( 關於松江區北內路 32號創意產業園區改造項目建設意見的覆函》) (Song Fa Gai Zi [2017] No. 16).

In accordance with the requirements of the "50 Guidelines for Cultural and Creative Industries" of Shanghai, the Company reapplied for positioning of the Beinei Road Project. Upon communication with the government of Songjiang District, Shanghai, in accordance with the legal requirements for land utilisation, the Company will conduct reformation of the park according to the gross floor area stated in the original permits but will not conduct expansion. Therefore, the Company adjusted the construction plan of the Beinei Road Project including adjustment of the gross floor area from the original 54,000 square metres to 41,600 square metres, reduction of civil engineering and structure fortification projects, and adjustment of interior decoration and heating ventilation engineering of the project to be solely used for public area. Therefore, the total investment in the project will be adjusted from RMB265 million to RMB130 million.

In order to promote the implementation of the proceeds-funded project as soon as possible and in light of the inadequate investment attraction capability of SEC Property, as the implementation entity of the project, in the remote suburbs of Shanghai, SEC Property proposed to select a company with the capabilities in terms of investment attraction and park operation through an open tender process for cooperation with a view to ensuring the project's operating income in the future. Guorun Investment is a company specialized in park building and operation and has experience in park building. It has established sound partnership with the Company thanks to its past cooperation with the Company in 2 park reformation projects, and its project development progress and operation efficiency have been recognized by the Company. Upon appraisal and selection by the bid evaluation panel of SEC Property, Guorun Investment was selected as the partner for the project. SEC Property intends to establish a joint-ventured project company with Shanghai Yuanying, a subsidiary of Guorun Investment, to jointly participate in the project's construction, investment attraction and operation management.

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LETTER FROM THE BOARD

Shanghai Electric Nantong Central Research Institute Project

As considered and approved at the meeting of the Board held on 16 November 2018, the Company used RMB1,098 million out of the proceeds for acquisitions of 100% equity interests in Taihu Company and 100% equity interests in Ningbo Hi-Firm and the remaining proceeds for proceeds-funded projects under investigation yet pending for confirmation amounted to RMB1,451 million. After thorough research and rounds of demonstrations, the Company proposes to use RMB726 million out of the proceeds for proceeds-funded projects under investigation yet pending for confirmation amounting to RMB1,451 million for investment in "Shanghai Electric Nantong Central Research Institute Project".

(III) Remaining proceeds for permanent replenishment of working capital

As of the Latest Practicable Date, the remaining proceeds after the usage under the abovementioned plans amounted to RMB885 million and the interest income arising from the proceeds was RMB6 million. In order to improve the usage efficiency of proceeds, the Company proposes to use the remaining proceeds of RMB891 million (including interest income, the actual amount is subject to the balance after bank interest settlement on the date of transfer, including proceeds of RMB885 million and interest income arising from the proceeds of RMB6 million) for permanent replenishment of working capital to meet the daily production and operation needs of the Company.

VI. Details of the Proposed Change in Use/Use of Proceeds for Proceeds-Funded Projects

Beinei Road Project

1. Project Overview

Project name: Innovative Industry Park Reformation Project at Beinei Road

Project implementation entity: The implementation entity is the project company established with the joint contribution by SEC Property and Shanghai Yuanying, a subsidiary of Guorun Investment. The project company has a registered capital of RMB20 million (the name of the project company is subject to approval by the industry and commerce authority) of which SEC Property makes a capital contribution of RMB12 million, representing 60% of equity interests, with the funds raised by itself. The construction funds of the project shall be raised by the parties in proportion on their own and injected into the project company in the form of entrusted loan.

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LETTER FROM THE BOARD

Project construction content: the project is located at the intersection of Huancheng Road and Wazi Lane, Songjiang District and is industrial land with a total site area of 107,600 square metres and a gross floor area of 41,576 square metres. The project company will lease the land and the property built above for the project from the Company and implement project construction. The project will be offered for lease upon completion.

Total investment in the project: RMB130 million including construction fees of RMB110 million and other fees in an aggregate amount of RMB20 million. The specific investment composition is as follows:

		Investment		Investment
No.	Particulars	amount		proportion
		(RMB'000)	(%)
1	Construction fees	110,000	84.62
2	Other unexpected expenses	5,600	4.31
3	Administrative expenses	5,600	4.31
4	Financial costs during the
	construction period	8,800	6.77
Total
	130,000	100.00

For the proceeds proposed to be used for the project in an amount of RMB66 million, the Company shall make a capital contribution to SEC Property. SEC Property shall provide funds to the project company in proportion to investment in the form of entrusted loan at the interest rate of 8%. The proceeds will be used for construction fees and the rest will be raised by the construction unit itself.

Project construction period: 12 months

Project income forecast: calculated at 16 years, the project's annual average income is RMB47.51 million, the annual average profit before tax is RMB14.83 million, the financial internal rate of return is 11.18% (before tax) and the investment pay-back period before tax is 8.3 years.

Upon completion, the project will become a leading cultural and creative park in Songjiang District focusing on emerging cultural media, film and television production, VR and game production industry, cultural education, etc., and become a gathering place for cultural media and creative industries while providing cultural display and interaction experience functions.

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LETTER FROM THE BOARD

Necessity of project construction
1. The construction of the project is requisite for optimizing the industrial distribution in Songjiang District
  The construction of industrial parks and science and technology parks is the current development focus of Songjiang District, Shanghai and there are certain disadvantages in respect of construction of creative industries. The construction of the project is conducive to the rational layout of functional parks in Songjiang District, expansion of the economic growth mode of the parks, enriching the industrial structure of the parks, and promoting the coordinated and sustainable development of Songjiang District. Meanwhile, it is also conducive to achieving the goal of building Shanghai into a cultural and creative center and a global city by revitalizing the urban brownfield with cultural and creative industries and revitalizing the industrial heritage with innovative design.
2. The construction of the project is necessary for enhancing the comprehensive competitiveness of the Company
  The construction of the project is the need for the Company to revitalize the existing assets and improve the utilization efficiency of land resources, and at the same time meet the planning needs of regional development and industrial upgrading. The construction of this project will also help to improve the economic benefits of the development of the parks in this project and enhance the competitiveness of the Company in the service field.
Rationality of project construction
1. The construction of the project is in line with the relevant national requirements for the development of creative industries.
  During the shift from "Made in China" to "Created in China", core creative industrial parks, serving as boosters and incubators, are in line with the national industrial development policy. In the report of the 16th National Congress of the CPC, the state has made the development of cultural industry a key strategy, proposing to improve the cultural industry policy, support the development of cultural industry, and enhance the overall strength and competitiveness of China's cultural

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LETTER FROM THE BOARD

industry. The construction of creative industrial parks is necessary for boosting the competitiveness of China's cultural industries and accords with the national policy orientation. The construction of the project will give rise to the cluster effect of regional creative industries, facilitate the integration and development of creative industries and related traditional industries, accelerate the transformation and upgrading of traditional industries towards creative industries, and enhance urban innovation and competitiveness, which is consistent with the national requirements for the development of creative industries.

The construction of the project is conducive to improving the efficiency of resource utilization.
The construction of the project takes creative industries as an entry point to help, on one hand, strengthen the intensive and economical use of land resources by changing the existing inefficient land-use patterns and promoting the efficiency and optimization of urban industrial land, and on the other hand, to improve the economic benefits of the development of the parks in this project.

4. Market prospects and risk warnings of the project

Risks relating to changes in land policies
The renovation of cultural and creative parks is highly susceptible to land policies. During the subsequent operation period of these parks, there may be policy changes in relation to effectiveness and regulatory compliance of land use, and governmental authorities may put forward some necessary requirements for the rational use of land. As such, the Company will keep a close eye on any changes in land policies, maintain good communication with the local competent authorities in the place where the project is located, and timely formulate response plans according to policy changes to ensure the smooth implementation and operation of the project.
Risks relating to intensified market competition
In recent years, cultural and creative parks have been emerging one after another and are in the process of steady development in Shanghai. With the continued substantial supply of commercial land in Shanghai, there will be plenty of commercial property in the market in coming years.

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LETTER FROM THE BOARD

Given the oversupply of commercial property in general at the present stage, the continuous increase of new commercial property will inevitably lead to further intensified market competition. As a result, in the process of urban renewal and revitalization of industrial land, the operation of R&D offices and cultural and creative parks is facing intense competitive pressure. Therefore, the Company has selected, through an open tender process, Guorun Investment, a company with capabilities in investment attraction and park operation, as its partner for the project, so as to boost the capabilities for investment attraction and park operation and enhance the market competitiveness of the project.

Risks relating to less-than-expected economic growth
The operation of the project is susceptible to the overall economic development of Shanghai. If the overall economic development of Shanghai falls short of expectations in the future, it may affect the operating income of the project. In this regard, the Company will formulate an effective investment attraction strategy and set up a high- calibre team to take charge of investment attraction, so as to achieve the expected investment attraction goals and reduce risks relating to the operation of the project.

5. Project approval documents

Relevant land certificates have been obtained for the project, and applications have been made for other construction related qualification documents.

Shanghai Electric Nantong Central Research Institute Project

1. Project overview

Project name: Shanghai Electric Nantong Central Research Institute Project

Project implementation entity: Shanghai Electric (Nantong) Technology Innovation Center Co., Ltd. (上海電氣（南通）科創中心有限公司), a wholly- owned subsidiary of the Company

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LETTER FROM THE BOARD

Project construction content: The construction land of the project is located in plot 87, southeast corner of Zilang Lake, Central Innovation District, Nantong, Jiangsu Province, for research and commercial use. It covers an area of approximately 31,100 square meters (approximately 46.6 mu), approximating the shape of a rectangle. The project enjoys a perfect location, with No. 2 road in the east, Sixu River in the south, Huanhu Road in the west and north where Zilang Lake lies in the west. The project is mainly used for research and development, office and commercial service purposes. The project intends to build no.1 and No. 2 building and basement with various ancillary facilities. The new buildings occupy a site area of 12,440 square meters, with a floor area of 96,815 square meters, including ground building areas of 50,892 square meters and underground building areas of 45,923 square meters.

Total investment in the project: RMB777 million, including construction investment of RMB726 million and land premium of RMB51 million. The specific investment composition is as follows:

		Investment	Investment
No.	Name	amount	proportion
		(RMB'000)	(%)
1	Construction works	673,610		86.69
2	Engineering construction related
	expenses	52,390		6.74

Sub-total	726,000		93.44


3	Land premium	51,000		6.56
Total
	777,000		100.00

The project is expected to cost RMB726 million of proceeds. To this end, the Company plans to make an additional contribution to Shanghai Electric (Nantong) Technology Innovation Center Co., Ltd. to fund the construction works and engineering construction related expenses, while the rest will be raised by the construction unit itself.

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LETTER FROM THE BOARD

Project construction period: 32 months

Project income forecast: calculated at 20 years, the project's annual average income is RMB120.49 million, the annual average profit before tax is RMB57.12 million, the financial internal rate of return is 8.54% (before tax) and the investment pay-back period before tax is 11.9 years.

Upon completion, the project will become a service-oriented industry platform for Jiangsu manufacturing segment established by the Company, with "enterprises headquarter, research & development center, information center and service center" as its four main functions. It will focus on the development of "new energy and environmental protection equipment industry, construction assembly industry, new energy battery industry and heavy equipment industry" as four core development industries, work one step at a time and eventually develop four core segments of "research segment, information segment, sales segments and service segment". The direct income of the project will come from the leasing and property revenue upon the completion of the project.

2. Necessity of project construction

The construction of the project is necessary for the Company to be integrated in the integrated development of the Yangtze River Delta
The Outline on the Integrated Regional Development of the Yangtze River Delta (the "Outline") set out the strategic positioning of the Yangtze River Delta as "one pole, three zones and one highland", namely building the Yangtze River Delta into the national growth pole for strong and active development, the sample zone for high-quality development, the leading zone for firstly achieving modernization on the whole and the demonstration zone for regional integration as well as the highland for reform and opening in new times.
Through the implementation of the project, the Company will take the opportunity of the integrated development of the Yangtze River Delta. Through the platform and channel of the Yangtze River Delta, the Company will fully leverage on domestic and overseas resources and attract capitals, technology and talents to a larger extent to enhance the industrial upgrading and the core competitiveness of the Company on the whole, achieve higher-quality development of the Company and facilitate its participation in domestic and international competition and cooperation.

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LETTER FROM THE BOARD

The construction of the project is necessary for the implementation of the Company's strategy on sustainable development
With the implementation of the Company's strategy on sustainable development, the Company has been actively seeking the destination of production capacities exportation in recent years. According to the Outline, Nantong enjoys significant regional advantages, supplementary advantages in industrial chains and cost advantages, which is an optimal choice for the Company to conduct industrial cooperation.
Upon completion, Shanghai Electric Nantong Central Research Institute Project will, with "regional headquarter, research & development center, information center and service center" as its four main functions and the development of "new energy and environmental protection equipment industry, construction assembly industry, new energy battery industry and heavy equipment industry" as four core development industries, work one step at a time and eventually develop four core segments of "research segment, information segment, sales segments and service segment", which is conducive to integrating the corporate and project resources of the Company in Nantong and its surrounding cities to the utmost.

3. Rationality of project construction

The construction of the project is in compliance with the Outline and conducive to the sustainable development of the Company
Nantong enjoys significant opportunities arising from the integrated development of the Yangtze River Delta, the Yangtze River Economic Belt and other strategies. The planning on the construction of Nantong New Airport and the high-speed railway along the north bank of the Yangtze River are included in the Outline. Nantong has become the gateway city of the north-wing of Shanghai metropolis with the implementation of the construction of Nantong New Airport and the high- speed railway along the north bank of the Yangtze River. It has taken the initiative to benefit from the influence of Shanghai and integrate itself into the half-hour economy circle of Shanghai, bringing such advantages as promoting transportation connectivity, industrial collaboration and regional coordination and innovation. The implementation of this project represents an opportunity for the Company to capture the integration of Yangtze River Delta. In the future, the Company will create conditions to gradually transfer some R&D projects and manufacturing bases to Nantong and promote the faster and better development of industries such as new energy and environmental protection in Nantong.
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LETTER FROM THE BOARD

The construction of the project is conducive to guaranteeing talents for the development of the Company
The sustainable development and R&D capacity building of the Company require a large number of high-caliber talents. However, the high cost of living, high housing prices and difficulties in setting up households in Shanghai have also increased the cost and difficulty in attracting talents. With the Central Innovation Zone as the carrier, Nantong City has introduced policies like "Double Hundred Policy" to attract talents, which has enhanced the attractiveness to talents. Through the construction of this project, the Company selects to build its regional headquarter in a region with relatively rich scientific and technological talents as well as appropriate environmental and living costs, attracting talents for the Company with its regional advantages and excellent living environment conditions. It will become an important talent training base for the Company to meet its demands in the talent development strategy.

4. Market prospects and risk warnings of the project

Risks on the construction of the project
During the construction of this project, there may be risks due to factors such as geological conditions, rising raw material prices and labour costs, and changes in construction works and safety production. For this project, the Company will invite tenders for the design, construction and supervision of buildings, select the partners with high strength, high qualifications and high credibility, strictly control the progress and quality of the project construction, and endeavour to minimize the risks during the construction of the project.
Risks on failing to advance the project construction as scheduled
During the construction of this project, if the construction land cannot be granted on time, or it cannot commence construction on time due to approval, planning adjustment of the project or other reasons after the construction land is granted, it may result in risks that the project cannot be completed as scheduled due to the delay in project construction. At present, the Company has made relevant preparations and maintained good communication with the relevant competent authorities on the construction land for the project. The Company guarantees that it will actively invest resources in all aspects and make full use of external favourable conditions to ensure the smooth progress of the project.

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LETTER FROM THE BOARD

Risks on the operation of the project
The project is subject to the economic development and supporting policies of Nantong during its operation. The actual economic returns of the proceeds-funded project may underperform the expectation in case of insufficient resource integration by Shanghai Electric Nantong Central Research Institute, resulting in poor investment attraction and benefits of properties and lease below expectations. The Company will conduct a detailed investigation on the lease of properties surrounding the project, determine the project's operation orientation based on the development plan of the Company, formulate an effective investment attraction strategy, and establish a high-quality investment attraction team to achieve the expected investment attraction target and reduce the project operation risk. At the same time, the Company will improve the synergy within the Group and give further rein to the competitive edges of Shanghai Electric Nantong Central Research Institute so as to ensure the effectuation of the expected economic benefits.

5. Project approval documents

Relevant land certificates have been obtained for the project, and applications have been made for other construction related qualification documents.

VII. The Effects of the Change in Use of Proceeds and Utilization of the Remaining Proceeds for Permanent Replenishment of Working Capital on the Company

The change in use of proceeds is the optimization adjustment made by the Company according to the actual development of the project construction and will not adversely affect the normal production and operation of the Company. The change in use of proceeds and utilization of the remaining proceeds for permanent replenishment of working capital can help to increase the utilization efficiency of the raised funds, reduce the financial expenses, promote the sustainable and stable development of the Company's business, and create greater benefits for shareholders.

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LETTER FROM THE BOARD

VIII. Opinions of Independent Directors, the Supervisory Committee and the Financial Adviser Regarding the Proposed Changes in Use of Proceeds

Opinion of Independent Directors Independent directors are of the view that:

"Upon review over the Resolution in Relation to Change in Use of Proceeds and Utilization of the Remaining Proceeds for Permanent Replenishment of Working Capital, we did not identify any situations that would violate any requirements or jeopardize the interests of the shareholders of the Company. According to the resolution, change is to be made to the use of proceeds under the issuance of shares by the Company to its controlling shareholder for funds raising which constitutes a related-party transaction. The voting procedures regarding the abovementioned related-party transaction are in compliance with the requirements of relevant laws, regulations and the articles of association of the Company. Mr. Zheng Jianhua and Mr. Zhu Bin, being related directors, have abstained from voting, while all of the other directors have voted in favor of the resolution. The related-party transaction will not prejudice the interests of the Company and its shareholders. The voting procedures regarding the related-party transaction conducted by the Board are in compliance with relevant requirements and in line with the principles of openness, fairness and equality. We agree to present the abovementioned related-party transaction at the general meeting of the Company for consideration and related persons interested in such transaction shall abstain from voting on the transaction at the general meeting."

Opinion of the Supervisory Committee

Upon verification, the Supervisory Committee is of the view that:

"Approve the following changes to the Beinei Road Project:

1. The total investment in the Beinei Road Project will be adjusted from RMB265 million to RMB130 million; the amount of proceeds to be used for the Beinei Road Project will be reduced from RMB226 million to RMB66 million;

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LETTER FROM THE BOARD

The implementation entity of the Beinei Road Project will be changed from SEC Property, a wholly-owned subsidiary of the Company, to the project company (the name of which shall be subject to the approved business name) established by SEC Property and Shanghai Yuanying Investment Management Co., Ltd. The project company has a registered capital of RMB20 million and is held as to 60% by SEC Property which contributed RMB12 million with the funds raised by itself;
The Company will use proceeds to make a capital contribution to SEC Property in an amount of RMB66 million and the proceeds will be provided by SEC Property to the project company in the form of entrusted bank loan at an interest rate of 8% per annum for the construction of the Beinei Road Project.

Approve the Company to use proceeds for a capital contribution to Shanghai Electric (Nantong) Technology Innovation Center Co., Ltd., a wholly-owned subsidiary of the Company, in an amount of RMB726 million which will be used as the construction costs of Shanghai Electric Nantong Central Research Institute Project.

Approve the Company to use the remaining proceeds of RMB894 million (including interest income and the actual amount is subject to the balance after interest settlement of the bank on the date when the funds are transferred out. Such funds comprise proceeds of RMB885 million and interest income therefrom of RMB6 million) to replenish working capital permanently to satisfy the needs of daily production and operation of the Company.

Approve the submission of the above matters to the general meeting for approval."

(III) Opinion of Independent Financial Adviser

Upon verification, the independent financial adviser is of the view that:

"1. The change in use of proceeds and utilization of the remaining proceeds for permanent replenishment of working capital have been considered and approved at the 20th meeting of the fifth session of the board of directors and the 18th meeting of the fifth session of the supervisory committee of Shanghai Electric, and the independent directors of Shanghai Electric have issued their independent opinions on approval of the change in use of proceeds and utilization of the remaining proceeds for permanent replenishment of working capital and performed necessary review and decision-making procedures, which is in compliance with the relevant requirements under the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (Revised in 2018).

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LETTER FROM THE BOARD

Shanghai Electric's change in use of proceeds and utilization of the remaining proceeds for permanent replenishment of working capital have been made by the listed company based on the objective changes in the implementation of the proceeds-funded projects, and will not prejudice the interests of shareholders. The change in use of proceeds and utilization of the remaining proceeds for permanent replenishment of working capital are in compliance with the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange (Revised in 2018), the Guidelines for the Supervision and Administration on Listed Companies No. 2 - Supervision and Administration Requirements for Listed Companies on the Management and Use of Funds Raised and the requirements of relevant laws and regulations.
The plan is subject to approval by shareholders in general meeting of Shanghai Electric.

To sum up, we, as independent financial adviser, have no objection to Shanghai Electric's change in use of proceeds and utilization of the remaining proceeds for permanent replenishment of working capital."

The aforesaid proposed change in use of proceeds was considered and approved by the Board on 27 September 2019 and is hereby proposed at the EGM and the H Share Class Meeting for consideration and approval.

PROPOSED AMENDMENTS TO ARTICLES OF ASSOCIATION
References are made to (i) the announcement of the Company dated 22 January 2019 in relation to the proposed adoption of the Restricted A Share Incentive Scheme (the "Incentive Scheme"); (ii) the announcement of the Company dated 22 March 2019 in relation to the confirmation of the list of the participants under the Incentive Scheme (the "Participant(s)") who are connected persons;
1. the circular of the Company dated 11 April 2019, in relation to, among others, the proposed adoption of the Incentive Scheme; (iv) the announcement of the Company dated 29 April 2019 in relation to the approval by Shanghai Municipal State-owned assets Supervision and Administration Commission on the Incentive Scheme; (v) the announcement of the Company dated 6 May 2019 in relation to the poll results of the extraordinary general meeting passing the resolutions of the Incentive Scheme; (vi) the announcement of the Company dated 6 May 2019 in relation to the Grant of restricted A shares to Participants under the Restricted A Share Incentive Scheme; and (vii) the announcement of the Company dated 24 June 2019 in relation to the results of the grant of restricted A shares under the Incentive Scheme. Certain amendments to the Articles of Association are to reflect the change of share capital.

- 29 -

LETTER FROM THE BOARD

In addition, considering the actual needs of the Company, and in order to improve the corporate governance structure and to further improve the quality and efficiency of corporate governance, according to the latest amended Company Law of the People's Republic of China (the "Company Law"), the Guidelines on Governance of Listed Companies and other laws, regulations and normative documents, it was proposed that certain amendments shall be made to the Articles of Association, details of which are set out as below:

Comparison Chart of Amendments to the Articles of Association

- 30 -

LETTER FROM THE BOARD

Original articles	To be amended as

Senior management officers as referred to in the	Senior management officers as referred to in the
preceding Paragraph shall include the personnel	preceding Paragraph shall include the personnel
in charge of financial affairs of the Company	in charge of financial affairs of the Company
and the secretary of the board of directors of the	and the secretary of the board of directors of
Company.	the Company (for the avoidance of doubt, the
	"senior management officers" and "secretary
	of the board of directors" in these Articles
	of Association do not comprise the company
	secretary appointed by the Company under the
	Rules Governing the Listing of Securities on
	The Stock Exchange of Hong Kong Limited).

Article 20	Article 20
Upon completion of the initial capital increase	Upon completion of the initial capital increase
and issuance of A Shares in 2008, the private	and issuance of A Shares in 2008, the private
placement of A Shares in 2010, the conversion	placement of A Shares in 2010, the conversion
of part of the convertible corporate bonds issued	of part of the convertible corporate bonds
domestically in 2015 into shares, the issuance of	issued domestically in 2015 into shares, the
shares to Shanghai Electric (Group) Corporation	issuance of shares to Shanghai Electric (Group)
in 2016 for assets acquisition and the issuance	Corporation in 2016 for assets acquisition, the
of shares to Shanghai Electric (Group)	issuance of shares to Shanghai Electric (Group)
Corporation for assets acquisition and raising of	Corporation for assets acquisition and raising of
supporting funds in 2017, the registered capital	supporting funds in 2017, and the completion
of the Company is RMB14,725,174,944. The	of grant of the restricted shares under the
change of the registered capital of the Company	Restricted A Share Incentive Scheme of the
shall be conducted in accordance with the	Company in 2019,the registered capital of the
procedures prescribed by relevant laws and	Company is RMB15,152,461,836 (as of 30
regulations of the PRC.	September 2019).The change of the registered
	capital of the Company shall be conducted in
	accordance with the procedures prescribed by
	relevant laws and regulations of the PRC.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 29	Article 29
Under any of the following circumstances, the	Under any of the following circumstances, the
Company may repurchase its outstanding shares	Company may repurchase its outstanding shares
in accordance with the procedures prescribed	in accordance with the procedures prescribed
in relevant laws, administrative regulations and	in relevant laws, administrative regulations and
these Articles of Association:	these Articles of Association:

1. reducing the registered capital of the 1. reducing the registered capital of the

	Company;			Company;
2.	merging with any other companies which	2.	merging with any other companies which
	is/are also a shareholder/shareholders of			is/are also a shareholder/shareholders of
	the Company;			the Company;
3.	awarding shares to staffs and employees	3.	applying the shares for employee share
	of the Company;			ownership plans or employee share
				incentives;

4. shareholders raise objections to resolutions

by the shareholders' general meeting on 4. acquiring shares ofshareholders who

	the merger or division of the Company,	raise objections to resolutions by the
	and require the Company to acquire such	shareholders' general meeting on the
	shareholders' shares; or	merger or division of the Company, and
			requestthe Company to acquire their
5.	other means as prescribed by laws and	shares;
	administrative regulations.
	5.	applying the shares for conversion into
Other than under the above circumstances, the		corporate bonds to be issued by the
Company shall not purchase or sell its shares.	Company which are convertible into
			shares;
	6.	protecting corporate value and the rights
			and interests of shareholders of the
			Company where necessary; or
	7.	other means as prescribed by laws and
			administrative regulations.
	Other than under the above circumstances, the
	Company shall not acquire the shares of the
	Company.

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LETTER FROM THE BOARD

	Original articles		To be amended as

Article 30	Article 30
The Company may acquire its own shares by	The Company may acquire its own shares by
any of the following means:	any of the following means:
1.	centralized price biding on the stock	1.	centralized price biding on the stock
	exchange;		exchange;
2.	offer; or	2.	offer; or
3.	other means approved by the competent	3.	other means approved by the competent
	securities regulatory authority of the		securities regulatory authority of the
	State Council.		State Council.
		If the Company intends to acquire its own
		shares due to circumstances specified in Items
		3, 5 and 6 of Article 29 of these Articles of
		Association, the transaction shall be conducted
		through centralized trading in an open way.

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LETTER FROM THE BOARD

Original articles		To be amended as

Article 32		Article 32
If the Company intends to acquire its own		If the Company intends to acquire its own
shares due to reasons mentioned in Items 1 to 3		shares due to circumstances specified in Items
of Article 29 of these Articles of Association, a	1 and 2 of Article 29 of these Articles of

resolution shall be adopted by the shareholders'	Association, a resolution shall be adopted in a
general meeting for such purchase.	general meeting of the shareholders for such
	purchase; if the Company intends to acquire its
I f t h e C o m p a n y r e p u r c h a s e s s h a r e s b y	own shares due to circumstances specified in
agreement without involving any stock	Items 3, 5 and 6 of Article 29 of these Articles
exchange, prior approval shall be obtained	of Association, a resolution shall be adopted
from the general meeting of the shareholders in	in a board meeting with more than two thirds
accordance with the provisions of these Articles	of the directors attending in accordance with
of Association. Upon prior approval by the	the authorization of the general meeting of the
general meeting of shareholders in the same	shareholders. Where the laws, administrative
manner, the Company may terminate or revise	regulations, departmental rules, provisions
contracts concluded in the aforesaid manner or	of the Articles of Association and securities
waive any of its rights thereunder.	regulatory authorities of the listing places of
	the Company provide otherwise in terms of
For the purpose of the preceding Paragraph,	the matters involved in share repurchase, such
contracts of share repurchase shall include (but	relevant provisions thereof shall prevail.
not limited to) the agreements whereby the
obligation to repurchase shares is undertaken	I f t h e C o m p a n y r e p u r c h a s e s s h a r e s b y
and the right to repurchase shares is acquired.	agreement without involving any stock
	exchange, prior approval shall be obtained
The Company may not transfer any contract of	from the general meeting of the shareholders in
share repurchase or any of the rights thereunder.	accordance with the provisions of these Articles
	of Association. Upon prior approval by the
	general meeting of shareholders in the same
	manner, the Company may terminate or revise
	contracts concluded in the aforesaid manner or
	waive any of its rights thereunder.
	For the purpose of the preceding Paragraph,
	contracts of share repurchase shall include (but
	not limited to) the agreements whereby the
	obligation to repurchase shares is undertaken
	and the right to repurchase shares is acquired.
	The Company may not transfer any contract of
	share repurchase or any of the rights thereunder.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 33	Article 33
In the event that the circumstances described	In the event that the circumstances described
under Item 1 of Article 29 above occurs after	under Item 1 of Article 29 above occurs after
the Company has acquired its own A Shares	the Company has acquired its own A shares
corresponding to Article 29, the acquired shares	corresponding to Article 29, the acquired shares
shall be canceled within ten (10) days of such	shall be canceled within ten (10) days of such
acquisition. If the circumstances described	acquisition. If the circumstances described
under Items 2 and 4 of Article 29 above occur	under Items 2 and 4 of Article 29 above
after the Company has acquired its own A	occur after the Company has acquired its own
Shares as per Article 29, the acquired shares	shares as per Article 29, the acquired shares
shall be transferred or canceled within six (6)	shall be transferred or canceled within six (6)
months from the said acquisition;	months from the said acquisition; under the
	circumstances described in Items 3, 5 and 6 of
Shares of the Company acquired by the	Article 29 above, the total number of shares of
Company in accordance with Item 3 of Article	the Company held by the Company shall not
29 shall not exceed 5% of the total shares issued	exceed 10% of the total number of issued A
by the Company. The funds used for the said	Shares of the Company and such shares shall be
acquisition shall come from the after-tax profit	transferred or canceled within three (3) years.
of the Company, and the acquired shares shall
be transferred to the employees of the Company	After the Company has acquired its own H
within one (1) year thereafter.	shares corresponding to Article 29, the acquired
	shares shall be canceled as soon as possible in
The Company shall not accept its own shares as	compliance with laws, regulations, normative
the collateral of any pledge or charge.	documents, and the Rules Governing the Listing
	of Securities on the Stock Exchange of Hong
	Kong Limited.
	The Company shall not accept its own shares as
	the collateral of any pledge or charge.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 53	Article 53
Holders of ordinary shares of the Company	Holders of ordinary shares of the Company
shall be entitled to the following rights:	shall be entitled to the following rights:

1. receiving dividends and other forms of 1. receiving dividends and other forms of

	profit distribution in accordance with the			profit distribution in accordance with the
	number of shares held;			number of shares held;
2.	attending general meetings of shareholders	2.	p e t i t i o n i n g, c o n v e n i n g, p r e s i d i n g

	and exercising their voting rights		over,attending general meetings of
	personally or by proxy;			shareholders and exercising their voting
				rights personally or by proxy pursuant to
3.	conducting supervision and administration			the law;
	over the business activities of the
	Company, and making suggestions or	3.	c o n d u c t i n g s u p e r v i s i o n a n d
	inquiries;			a d m i n i s t r a t i o n o v e r t h e b u s i n e s s
				activities of the Company, and making
⋯				suggestions or inquiries;

No powers shall be taken by the Company to ⋯ freeze or otherwise impair any of the rights

attaching to any share by reason only that the No powers shall be taken by the Company to person or persons who are interested directly or freeze or otherwise impair any of the rights indirectly therein have failed to disclose their attaching to any share by reason only that the

interests to the Company.person or persons who are interested directly or indirectly therein have failed to disclose their interests to the Company.

- 36 -

LETTER FROM THE BOARD

Original articles	To be amended as

Article 59	Article 59
The general meeting shall exercise the	The general meeting shall exercise the
following functions and powers:	following functions and powers:

1. determining the business policies and 1. determining the business policies and

investment plans of the Company;

2. electing and replacing directors, and 2. electing and replacing directors, and

deciding on matters concerning the	deciding on matters concerning the
remuneration of directors;	remuneration of directors;

⋯⋯⋯⋯

22. the general meeting may authorize or 22. the general meeting may authorize or

entrust the board of directors to perform	entrust the board of directors to perform
its authorized or entrusted matters.	its authorized or entrusted matters,
	but the board of directors shall not be
⋯⋯	authorized to exercise the functions and
	powers to be exercised by the general
	meeting as stipulated by law.

The general meeting shall make resolutions on matters to be resolved by the general meeting as prescribed by laws, administrative regulations and the Articles of Association so as to guarantee its decision-making power on such matters. Where necessary and reasonable, the general meeting may authorize the board of directors to make decisions on specific matters relating to the resolutions which cannot be decided immediately at the general meeting under the mandate granted at such meeting and the authorized matters shall be specific.

⋯⋯

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 62	Article 62
General meetings shall be divided into annual	General meetings shall be divided into annual
general meeting and extraordinary general	general meeting and extraordinary general
meetings. General meetings shall be convened	meetings. General meetings shall be convened
by the board of directors. The annual general	by the board of directors. The annual general
meeting shall be convened once a year, and be	meeting shall be convened once a year, and be
held within six (6) months after the end of each	held within six (6) months after the end of each
accounting year.	accounting year.
⋯⋯	The general meeting shall have a meeting place
	for convening the onsite meetings. In addition,
	the Company shall provide convenience for
	the shareholders' participation in the general
	meetings via network voting. Shareholders who
	attend the general meetings in the aforesaid
	manner shall be deemed to be present at such
	meetings.
	⋯⋯

Article 78	Article 78
W h e n v o t i n g a t t h e g e n e r a l m e e t i n g ,	W h e n v o t i n g a t t h e g e n e r a l m e e t i n g ,
shareholders (including proxies) shall exercise	shareholders (including proxies) shall exercise
their voting rights according to the number of	their voting rights according to the number of
voting rights represented by the shares thereof.	voting rights represented by the shares thereof.
Each share shall carry one voting right. Shares	Save for the requirement that the cumulative
of Company which are held by the Company	voting system shall be adopted in the election
shall carry no voting rights, and the number	of directors or supervisors who are not the
of such shares shall not be calculated into the	employee representatives under Article 105 of
number of voting shares of the shareholders	these Articles of Association,each share shall
attending the meeting.	carry one voting right. Shares of Company
	which are held by the Company shall carry no
	voting rights, and the number of such shares
	shall not be calculated into the number of
	voting shares of the shareholders attending the
	meeting.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 105	Article 105
A cumulative voting system may be adopted	A cumulative voting system may be adopted
for the election of directors or supervisors at	for the election of directors or supervisors at
the shareholders' general meeting according to	the shareholders' general meeting according to
the Articles of Association or the resolutions of	the Articles of Association or the resolutions of
the shareholders' general meeting. In the event	the shareholders' general meeting. The election
that the shareholding ratio of the controlling	of directors or supervisors shall fully reflect
shareholder of the Company exceeds 30%, the	minority shareholders' opinions. In the event
cumulative voting system should be adopted.	that the shareholdings of a single shareholder
	of the Company together with parties acting
The cumulative voting system referred to in	in concert with him/her/it is 30% or morethe
the previous paragraph means that during	cumulative voting system shall be adopted.
the election of directors or supervisors at the
shareholders' general meeting, each share	The cumulative voting system referred to in
entitled to vote carries a number of voting	the previous paragraph means that during
rights equivalent to the number of directors or	the election of directors or supervisors at the
supervisors to be elected. The voting rights held	shareholders' general meeting, each share
by a shareholder may be used in a concentrated	entitled to vote carries a number of voting
way. The Board shall announce the biographies	rights equivalent to the number of directors or
and basic information of candidates for	supervisors to be elected. The voting rights held
directors and supervisors to shareholders.	by a shareholder may be used in a concentrated
	way. The Board shall announce the biographies
	and basic information of candidates for
	directors and supervisors to shareholders.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 117	Article 117
Board meetings shall be attended by the	Board meetings shall be attended by the
directors in person. If a director is unable to	directors in person. If a director is unable to
attend a meeting in person for any reason,	attend a meeting in person for any reason,
such director may appoint, in writing, another	such director may appoint, in writing, another
director to attend the meeting on his/her behalf.	director to attend the meeting on his/her behalf.
The authority delegated shall be specified in the	The authority delegated shall be specified in
power of attorney.	the power of attorney. An independent director
	shall not appoint a non-independent director to
A director who attends a board meeting on	vote on his/her behalf.
behalf of another director shall exercise
the rights of a director within the delegated	A director who attends a board meeting on
authority. If a director fails to attend a board	behalf of another director shall exercise
meeting in person, and has not appointed a	the rights of a director within the delegated
representative to attend the meeting on his/her	authority. If a director fails to attend a board
behalf, the director shall be deemed to have	meeting in person, and has not appointed a
waived his/her right to vote at the meeting.	representative to attend the meeting on his/her
	behalf, the director shall be deemed to have
Any director who fails to attend in person	waived his/her right to vote at the meeting.
two (2) consecutive meetings of the board
of directors and further fails to entrust other	Any director who fails to attend in person
directors to attend the meeting, and any	two (2) consecutive meetings of the board
independent director who fails to attend in	of directors and further fails to entrust other
personnel three (3) consecutive meetings of the	directors to attend the meeting, and any
board of directors, shall be deemed incapable	independent director who fails to attend in
of performing his/her duties and the board of	personnel three (3) consecutive meetings of the
directors shall propose a general meeting to	board of directors, shall be deemed incapable
replace such director.	of performing his/her duties and the board of
	directors shall propose a general meeting to
	replace such director.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 120	Article 120
The Company shall have a secretary of the	The Company shall have a secretary of the
board of directors. The secretary of the board of	board of directors, who shall be responsible
directors shall be a senior management officer	for preparing the general meetings and board
of the Company.	meetings of the Company, keeping relevant
	documents, managing the information of
Management officers of any controlling entity	shareholders of the Company, dealing with
of the Company may not concurrently hold the	information disclosure related matters, investor
position of secretary of the board of directors of	relations related work and others.
the Company.
	The secretary of the board of directors shall be
	a senior management officer of the Company,
	who shall be entitled to attend relevant
	meetings, review relevant documents, and
	keep himself/herself abreast of the Company's
	financial position and operations to perform
	his/her duties. The board of directors and other
	senior management officers shall support the
	work of the secretary of the board of directors.
	Any institution or individual shall not interfere
	with the secretary of the board of directors in
	performing his/her duties.
	Management officers of any controlling entity
	of the Company may not concurrently hold the
	position of secretary of the board of directors of
	the Company.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 123	Article 123
The Company shall have one (1) general	The Company shall have one (1) general
manager whose appointment and removal shall	manager whose appointment and removal shall
be decided by the board of directors and several	be decided by the board of directors and several
deputy general managers to assist the work of	deputy general managers to assist the work of
the general manager. The board of directors	the general manager. The board of directors
may decide that a board member shall hold	may decide that a board member shall hold
the position of general manager concurrently,	the position of general manager concurrently,
but the member of the management officer of	but the member of the management officer of
any controlling entity of the Company may	any controlling entity of the Company may
not concurrently hold the position of general	not concurrently hold the position of general
the manager, deputy general manager, chief	the manager, deputy general manager, chief
financial officer of the Company.	financial officer of the Company.
	Any person who holds an executive position
	in the controlling shareholder of the Company
	other than as a director or supervisor may not
	serve as a senior management officer of the
	Company.

Article 131	Article 131
The directors, general manager, deputy	The directors and senior management officers
general managers and the person in charge of	of the Company may not serve concurrently as
financial affairs of the Company may not serve	supervisors.
concurrently as supervisors.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 144	Article 144
If the general meeting requires a director,	All the directors, supervisors, secretary of the
supervisor, general manager, deputy general	board of directors of the Company and the legal
manager or other senior management officer	counsels engaged by the Company shall attend
to be present at a general meeting, such person	general meetings, and the general manager
shall be present at meeting, answer the inquiries	and other senior management officers shall
of shareholders, and make explanation and	be present at general meetings.The directors,
illustration according to the shareholders'	supervisors, general manager, deputy general
inquiries and advices.	managers and other senior management officers
	shallanswer the inquiries of shareholders, and
The directors, supervisors, general manager,	make explanation and illustration according to
deputy general managers or other senior	the shareholders' inquiries and advices.
management officers shall provide to the board
of supervisors truthful and genuine documents	The directors, supervisors, general manager,
and information and shall not obstruct the board	deputy general managers or other senior
of supervisors or supervisors from performing	management officers shall provide to the board
duties.	of supervisors truthful and genuine documents
	and information and shall not obstruct the board
	of supervisors or supervisors from performing
	duties.

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 9 of the Rules of Procedure for	Article 9 of the Rules of Procedure for
Shareholders' General Meeting	Shareholders' General Meeting
The general meeting is the governing organ of	The general meeting is the governing organ of
the Company, and shall exercise the following	the Company, and shall exercise the following
functions and powers pursuant to law:	functions and powers pursuant to law:

1. determining the business policies and 1. determining the business policies and

investment plans of the Company;

2. electing and replacing directors, and 2. electing and replacing directors, and

deciding on matters concerning the	deciding on matters concerning the
remuneration of directors;	remuneration of directors;

⋯⋯⋯⋯

22. the general meeting may authorize or 22. the general meeting may authorize or

entrust the board of directors to perform	entrust the board of directors to perform
its authorized or entrusted matters.	its authorized or entrusted matters,
	but the board of directors shall not be
⋯⋯	authorized to exercise the functions and
	powers to be exercised by the general
	meeting as stipulated by law.

⋯⋯

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LETTER FROM THE BOARD

Original articles	To be amended as

Article 41 of the Rules of Procedure for	Article 41 of the Rules of Procedure for
Shareholders' General Meeting	Shareholders' General Meeting
Every shareholder or shareholder's proxy	Every shareholder or shareholder's proxy shall
shall exercise their voting rights according	exercise their voting rights according to the
to the number of voting rights represented by	number of voting rights represented by the
the shares thereof. Each share shall carry one	shares thereof. Save for the requirement that the
voting right.	cumulative voting system shall be adopted in
	the election of directors or supervisors who are
	not the employee representatives under Article
	105 of these Articles of Association,each share
	shall carry one voting right.

Article 3 of the Rules of Procedure for Board	Article 3 of the Rules of Procedure for Board
Meetings	Meetings
The Board shall be accountable to the general	The Board shall be accountable to the general
meeting, and exercise the following functions	meeting, and exercise the following functions
and powers:	and powers:

1. convening the general meeting, and 1. convening the general meeting, and

	reporting its work thereto;	reporting its work thereto;
2.	implementing resolutions adopted by the 2.	implementing resolutions adopted by the
	general meeting;	general meeting;

⋯⋯⋯⋯

15. other functions and powers as stipulated 15. attending hearings regarding report on

in the Articles of Association or granted	risk management and internal controls of
by the general meeting.	the audit committee, and reviewing, at
		least once in a year, the effectiveness of
⋯⋯	the risk management and internal control
		systems of the Company and its principal
		subsidiaries;
16.		other functions and powers as stipulated
			in the Articles of Association or granted
			by the general meeting.
⋯⋯

- 45 -

LETTER FROM THE BOARD

In addition, the Board has resolved to propose a resolution at the general meeting of the Company to authorise the Board in turn to authorise the management of the Company to handle the approval and filing procedures with relevant regulatory authorities involved in such amendments, and to make wording adjustments to such amendments according to opinions of the regulatory authorities.

- 46 -

LETTER FROM THE BOARD

VI. EGM AND H SHARE CLASS MEETING

A notice convening the EGM to be held at 9:00 a.m. on Thursday, 14 November 2019 at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai Caohejing, No. 509 Caobao Road, Shanghai, the PRC, is set out on pages 50 to 51 of this circular and a supplemental notice of the EGM is set out on pages 54 to 55 of this circular. A notice convening the H Share Class Meeting is set out on pages 52 to 53 of this circular.

In order to determine the list of Shareholders who are entitled to attend the EGM and the H Share Class Meeting, the register of members of the H Shares will be closed from Tuesday, 15 October 2019 to Thursday, 14 November 2019 (both days inclusive) during which period no transfer of H Shares will be effected. Holders of the Company's H Shares whose names appear on the register of members of the H Shares on Thursday, 14 November 2019 are entitled to attend the EGM and the H Share Class Meeting.

In order to attend and vote at the EGM and the H Share Class Meeting, holders of H Shares whose transfers have not been registered shall deposit the transfer documents together with the relevant share certificates at the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, at or before 4:30 p.m. on Monday, 14 October 2019. The address of the transfer office of Computershare Hong Kong Investor Services Limited is Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.

A reply slip and a form of proxy for use at the EGM and a reply slip and a form of proxy for use at the H Share Class Meeting have been published on the website of the Hong Kong Stock Exchange (http://www.hkexnews.hk) on 27 September 2019 and dispatched to the Shareholders, and a supplemental form of proxy for use at the EGM has also been published on 28 October 2019 and dispatched to the Shareholders. If you intend to appoint a proxy to attend the EGM and/ or the H Share Class Meeting, you are requested to complete and return the forms of proxy in accordance with the instructions printed thereon not less than 24 hours before the time fixed for holding the EGM and/or the H Share Class Meeting or any adjournment thereof (as the case may be). Completion and return of the forms of proxy will not preclude you from attending the EGM and/or the H Share Class Meeting and voting in person if you so wish. Shareholders who intend to attend the EGM and/or the H Share Class Meeting in person or by proxy should complete and return the reply slips in accordance with the instructions printed thereon on or before Friday, 25 October 2019.

- 47 -

LETTER FROM THE BOARD

If you do not duly complete and deliver the Supplemental Form of Proxy but have duly completed and delivered the original proxy form and validly appointed a proxy to attend and act for you at the EGM, your proxy will be entitled to vote at his discretion on the ordinary resolutions and special resolution 2 set out in the Supplemental Notice of the EGM dated 29 October 2019. If you do not duly complete and deliver the original proxy form for the EGM but have duly completed and delivered the Supplemental Form of Proxy and validly appointed a proxy to attend and act for you at the EGM, your proxy will be entitled to vote at his discretion on the resolution set out in the Notice of the EGM dated 27 September 2019.

SEC is the controlling shareholder of the Company holding approximately 59.18% interest in the total issued share capital of the Company as at the Latest Practicable Date. SEC shall, at the EGM and the H Share Class Meeting, abstain from voting on the special resolution in respect of the proposed change of use of proceeds. Save as disclosed above and as far as the Directors are aware, no Shareholder has a material interest in the abovementioned resolutions proposed at the EGM and the H Share Class Meeting and thus is not required to abstain from voting at the EGM and the H Share Class Meeting on the resolutions.

Mr. Zheng Jianhua and Mr. Zhu Bin, both being Directors, hold directorship(s) or act as senior management in SEC and its associates and thus have material interests in the proposed change in use of proceeds. They have therefore abstained from voting on such board resolution approving the proposed change in use of proceeds. Save as disclosed above, none of the other Directors has material interests in all resolutions proposed at the EGM and the H Share Class Meeting.

VII. RECOMMENDATION

The Directors are of the view that the resolution described in this circular are in the interests of the Company and the Shareholders as a whole.

Accordingly, the Directors (including the independent non-executive Directors) recommend all the relevant Shareholders to vote in favour of the relevant resolution to be proposed at the EGM and the H Shares Class Meeting.

- 48 -

LETTER FROM THE BOARD

VIII. VOTING BY POLL

According to Rule 13.39(4) of the Listing Rules, all resolutions at the general meeting of the Company will be taken by way of poll.

By order of the Board

Shanghai Electric Group Company Limited

ZHENG Jianhua

Chairman of the Board

Shanghai, the PRC

- 49 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

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

(Stock Code: 02727)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the "EGM") of Shanghai Electric Group Company Limited (the "Company") will be held at 9:00 a.m. on Thursday, 14 November 2019 at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai Caohejing, No. 509 Caobao Road, Shanghai, the PRC for the purpose of considering and, if thought fit, approving the following resolution:

SPECIAL RESOLUTION:

1. To consider and approve the resolution in respect of the proposed change in use of proceeds.

By order of the Board

Shanghai Electric Group Company Limited

ZHENG Jianhua

Chairman of the Board

Shanghai, the PRC, 27 September 2019

As at the date of this notice, 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

- 50 -

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes to Notice of EGM:

The voting at the EGM shall be conducted by way of poll.
The holders of A Shares and H Shares will vote as one class of shareholders. The Company's register of members for the H Shares will be closed from Tuesday, 15 October 2019 to Thursday, 14 November 2019, both days inclusive, during which period no transfer of H Shares will be effected. The holders of H Shares whose names appear on the Company's register of members on Thursday, 14 November 2019 are entitled to attend the EGM. In order to qualify for attending the EGM, the holders of H Shares whose transfers have not been registered must deposit transfer documents together with the relevant share certificates at the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, no later than 4:30 p.m. on Monday, 14 October 2019. The address of Computershare Hong Kong Investor Services Limited is Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.
Each Shareholder entitled to attend and vote at the EGM may appoint one or more proxies to attend and vote on his or her behalf. A proxy need not be a Shareholder. Each Shareholder who wishes to appoint one or more proxies should first review the Circular in respect of the EGM.
The instrument appointing a proxy must be in writing under the hand of a Shareholder or his attorney duly authorised in writing. If the Shareholder is a corporation, that instrument must be either under its common seal or under the hand of its director(s) or duly authorised attorney(s). If that instrument is signed by an attorney of the Shareholder, the power of attorney authorising that attorney to sign or other authorisation document must be notarised.
In order to be valid, the form of proxy together with the power of attorney or other authorisation document (if any) signed by the authorised person or notarially certified power of attorney must be deposited to Computershare Hong Kong Investor Services Limited for holders of H Shares at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time fixed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of a form of proxy will not preclude a Shareholder from attending and voting in person at the EGM if he/she so wishes.
Shareholders who intend to attend the EGM in person or by proxy should return the reply slip to Computershare Hong Kong Investor Services Limited for holders of H Shares on or before Friday, 25 October 2019. The address of Computershare Hong Kong Investor Services Limited is 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.
The EGM is expected to last for no more than one day. Shareholders (or their proxies) attending the meeting are responsible for their own transportation and accommodation expenses. Shareholders (or their proxies) attending the meeting shall produce their identity documents.
Please refer to the circular of the Company in relation to the EGM to be published on or before 29 October 2019 for details of the resolutions to be proposed at the EGM for consideration and approval.

- 51 -

NOTICE OF H SHARE CLASS MEETING

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

(Stock Code: 02727)

NOTICE OF H SHARE CLASS MEETING

NOTICE IS HEREBY GIVEN that a class meeting for holders of H Shares (the "H Share Class Meeting") of Shanghai Electric Group Company Limited (the "Company") will be held on Thursday, 14 November 2019 immediately after the conclusion or adjournment of the extraordinary general meeting (the "EGM") and the class meeting for holders of A Shares (the "A Share Class Meeting") of the Company to be convened at 9:00 a.m. on Thursday, 14 November 2019 at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai Caohejing, No. 509 Caobao Road, Shanghai, the PRC for the purpose of considering and, if thought fit, approving the following resolution:

SPECIAL RESOLUTION:

1. To consider and approve the resolution in respect of the proposed change in use of proceeds.

By order of the Board

Shanghai Electric Group Company Limited

ZHENG Jianhua

Chairman of the Board

Shanghai, the PRC, 27 September 2019

For identification purpose only

- 52 -

NOTICE OF H SHARE CLASS MEETING

Notes:

The voting at the H Share Class Meeting shall be conducted by way of poll.
The Company's register of members for the H Shares will be closed from Tuesday, 15 October 2019 to Thursday, 14 November 2019, both days inclusive, during which period no transfer of H Shares will be effected. The holders of H Shares whose names appear on the Company's register of members on Thursday, 14 November 2019 are entitled to attend and vote at the H Share Class Meeting. In order to qualify for attending the H Share Class Meeting, the holders of H Shares whose transfers have not been registered must deposit transfer documents together with the relevant share certificates at the H share registrar of the Company, Computershare Hong Kong Investor Services Limited, no later than 4:30 p.m. on Monday, 14 October 2019. The address of Computershare Hong Kong Investor Services Limited is Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.
Each Shareholder entitled to attend and vote at the H Share Class Meeting may appoint one or more proxies to attend and vote on his or her behalf. A proxy needs not be a Shareholder. Each Shareholder who wishes to appoint one or more proxies should first review the Circular in respect of the EGM and the H Share Class Meeting.
The instrument appointing a proxy must be in writing under the hand of a Shareholder or his attorney duly authorised in writing. If the Shareholder is a corporation, that instrument must be either under its common seal or under the hand of its director(s) or duly authorised attorney(s). If that instrument is signed by an attorney of the Shareholder, the power of attorney authorising that attorney to sign or other authorisation document must be notarised.
In order to be valid, the form of proxy together with the power of attorney or other authorisation document (if any) signed by the authorised person or notarially certified power of attorney must be deposited to Computershare Hong Kong Investor Services Limited for holders of H Shares at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong not less than 24 hours before the time fixed for holding the H Share Class Meeting or any adjournment thereof (as the case may be). Completion and return of a form of proxy will not preclude a Shareholder from attending and voting in person at the H Share Class Meeting if he/she so wishes.
Shareholders who intend to attend the H Share Class Meeting in person or by proxy should return the reply slip to Computershare Hong Kong Investor Services Limited for holders of H Shares on or before Friday, 25 October 2019. The address of Computershare Hong Kong Investor Services Limited is 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong.
The H Share Class Meeting is expected to last for no more than one day. Shareholders (or their proxies) attending the meeting are responsible for their own transportation and accommodation expenses. Shareholders (or their proxies) attending the meeting shall produce their identity documents.
Please refer to the circular of the Company in relation to the EGM and the H Share Class Meeting to be published on or before 29 October, 2019 for details of the resolutions to be proposed at the H Share Class Meeting for consideration and approval.

- 53 -

SUPPLEMENTAL NOTICE OF EXTRAORDINARY GENERAL MEETING

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

(Stock Code: 02727)

SUPPLEMENTAL NOTICE OF

EXTRAORDINARY GENERAL MEETING

SUPPLEMENTAL NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the "EGM") of Shanghai Electric Group Company Limited (the "Company") will be held at 9 a.m. on Thursday, 14 November 2019 at Xingyuan Hall, 3/F, B Block, Ramada Plaza Shanghai Caohejing, No. 509 Caobao Road, Shanghai, the PRC to consider and, if thought fit, to pass the following ordinary resolutions and special resolution in addition to the resolution set out in the previous notice of the EGM of the Company dated 27 September 2019.

ORDINARY RESOLUTIONS

To consider and approve the election of Mr. XU Jianxin as an independent non-executive director of the fifth session of the Board.
To consider and approve the adjustment of maximum outstanding amount for provision of external guarantees by the Company for the year of 2019.

SPECIAL RESOLUTION

2. To consider and approve the resolution on the proposed amendments to the Articles of Association of the Company.

By order of the Board

Shanghai Electric Group Company Limited

Zheng Jianhua

Chairman of the Board

Shanghai, the PRC, 29 October 2019

For identification purpose only

- 54 -

SUPPLEMENTAL NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

Please refer to the circular of the Company in relation to the EGM to be published on or before 29 October 2019 for details of the above resolutions.
A supplemental form of proxy is enclosed with this supplemental notice of the EGM.
Please refer to the notice dated 27 September 2019 for details of the other resolution to be considered at the EGM, closure of register of members and eligibility for attending the EGM and other relevant matters.
Shareholders who intend to appoint a proxy shall complete and return the enclosed supplemental form of proxy in accordance with the instructions printed thereon and return it no later than 24 hours before the time appointed to hold the EGM or any adjourned meeting.

- 55 -

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Shanghai Electric Group Co. Ltd. published this content on 28 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2019 09:36:08 UTC

Market Closed - Hong Kong S.E. Other stock markets 04:08:20 2024-04-26 am EDT			5-day change	1st Jan Change
1.71 ^HKD	+1.18%		0.00%	+4.91%

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Shanghai Electric to Return to Profit in 2023	Jan. 31	MT
Shanghai Electric Group Co., Ltd. Provides Earnings Guidance for the Period from 1 January 2023 to 31 December 2023	Jan. 30	CI
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	1st Jan change	Capi.
SHANGHAI ELECTRIC GROUP COMPANY LIMITED	+4.91%	8.49B
ABB LTD	+20.03%	90.13B
SIEMENS LIMITED	+43.12%	24.49B
ABB INDIA LIMITED	+36.74%	16.37B
CG POWER AND INDUSTRIAL SOLUTIONS LIMITED	+22.07%	9.94B
ZHUZHOU CRRC TIMES ELECTRIC CO., LTD.	+35.20%	8.02B
DOOSAN ENERBILITY CO., LTD.	-0.25%	7.4B
FORTUNE ELECTRIC CO., LTD.	+163.91%	6.91B
CHINA XD ELECTRIC CO., LTD	+51.12%	5.27B
SHIHLIN ELECTRIC & ENGINEERING CORP.	+167.09%	5.06B

Shanghai Electric Group Company Limited

Equities

2727

CNE100000437

Heavy Electrical Equipment

Shanghai Electric : Circular

Latest news about Shanghai Electric Group Company Limited

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Sector Other Heavy Electrical Equipment

Original articles	To be amended as

Article 7	Article 7
The Company's Articles of Association are	The Company's Articles of Association are
binding on the Company and its shareholders,	binding on the Company and its shareholders,
directors, supervisors, general manager, deputy	directors, supervisors, general manager, deputy
general managers and other senior management	general managers and other senior management
officers, all of whom may, according to the	officers, all of whom may, according to the
Company's Articles of Association, assert	Company's Articles of Association, assert
rights in respect of the affairs of the Company.	rights in respect of the affairs of the Company.
I n a c c o r d a n c e w i t h t h e s e A r t i c l e s o f	I n a c c o r d a n c e w i t h t h e s e A r t i c l e s o f
Association, shareholders may institute legal	Association, shareholders may institute legal
proceedings against the Company, the Company	proceedings against the Company, the Company
may institute legal proceedings against the	may institute legal proceedings against the
directors, supervisors, managers and other	directors, supervisors, managers and other
senior management officers of the Company,	senior management officers of the Company,
shareholders may institute legal proceedings	shareholders may institute legal proceedings
against other shareholders, and shareholders	against other shareholders, and shareholders
may institute legal proceedings against the	may institute legal proceedings against the
directors, supervisors, the general manager,	directors, supervisors, the general manager,
deputy general managers and other senior	deputy general managers and other senior
management officers of the Company.	management officers of the Company.
Instituting legal proceedings as referred to in	Instituting legal proceedings as referred to in
the preceding Paragraph shall include instituting	the preceding Paragraph shall include instituting
legal proceedings before a court or applying for	legal proceedings before a court or applying for
arbitration with an arbitration commission.	arbitration with an arbitration commission.

Original articles	To be amended as

Article 10 of the Rules of Procedure for	Article 10 of the Rules of Procedure for
Board Meetings	Board Meetings
If, after the written notice of a regular Board	If, after the written notice of a regular Board
meeting is sent, there is any need to change the	meeting is sent, there is any need to change the
time, venue or other matters of the meeting,	time, venue or other matters of the meeting,
or to add, change or cancel proposals to the	or to add, change or cancel proposals to the
meeting, a written notice of change shall be sent	meeting, a written notice of change shall be sent
three (3) days before the original designated	three (3) days before the original designated
date for convening the meeting, to explain the	date for convening the meeting, to explain the
reasons and provide the contents and documents	reasons and provide the contents and documents
relating to the new proposals. Where the notice	relating to the new proposals. Where the notice
of change is sent less than three (3) days in	of change is sent less than three (3) days in
advance, the date of meeting shall be postponed	advance, the date of meeting shall be postponed
accordingly or the meeting shall be held on	accordingly or the meeting shall be held on
schedule upon approval by all the attending	schedule upon approval by all the attending
directors in writing.	directors in writing.
If, after the notice of an extraordinary Board	If, after the notice of an extraordinary Board
meeting is sent, there is any need to change the	meeting is sent, there is any need to change the
time, venue or other matters of the meeting,	time, venue or other matters of the meeting,
or to add, change or cancel proposals to the	or to add, change or cancel proposals to the
meeting, a prior written consent of all the	meeting, a prior written consent of all the
attending directors and shall be obtained and	attending directors and shall be obtained and
well documented.	well documented.
	If two or more independent directors deem
	the information incomplete or the rationales
	inadequate, they may jointly file a written
	request with the Board to postpone the
	convening of the meeting or the consideration
	of the matter, which shall be accepted by the
	Board.