Xinjiang La Chapelle Fashion : SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO REPLY TO ENQUIRY LETTER FROM THE SHANGHAI STOCK EXCHANGE REGARDING LITIGATION MATTERS

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อᖛזࢀԎဧ؂ٰུ΅Ϟࠢʮ̡

Xinjiang La Chapelle Fashion Co., Ltd.

(formerly known as "Shanghai La Chapelle Fashion Co., Ltd.

€ɪऎזࢀԎဧ؂ٰུ΅Ϟࠢʮ̡")

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

(Stock code: 06116)

SUPPLEMENTAL ANNOUNCEMENT IN RELATION TO

REPLY TO ENQUIRY LETTER FROM THE SHANGHAI STOCK EXCHANGE

REGARDING LITIGATION MATTERS

Reference is made to the announcement of Xinjiang La Chapelle Fashion Co., Ltd. (the "Company") dated 23 February 2021 in relation to a reply to an enquiry letter from the Shanghai Stock Exchange regarding litigation matters in respect of the Company (the "Announcement"). Unless otherwise defined, capitalised terms used in this announcement shall have the same meanings as defined in the Announcement.

As the Company has obtained an Entrusted Loan of RMB550 million from the High-tech Group and in consideration of the supply chain procurement cooperation, the Company and its subsidiaries, namely, Xinjiang Tongrong, Shanghai Nuoxing, and Candie's Shanghai entered into a Debt Set-off Agreement with Xinjiang Hengding on December 31, 2020, under which the Company offset the debts of Xinjiang Hengding owing to Xinjiang Tongrong (a wholly-owned subsidiary of the Company) of approximately RMB189 million against the portion in the amount of approximately RMB189 million out of the total debts of the Company's subsidiaries, namely Shanghai Nuoxing and Candie's Shanghai, owing to Xinjiang Hengding of approximately RMB202 million, to solve the debt burden of the Company and its subsidiaries within the scope of the consolidated statements. The Company will continue to assume the obligation to repay the remaining debts of approximately RMB13,130,000 that have not been offset.

In accordance with the Guidelines for the Implementation of Connected Transactions of Listed Companies on the Shanghai Stock Exchange* ( ɪऎᗇՎʹ׸הɪ̹ʮ̡ᗫᑌʹ׸ྼ݄ܸˏ'), as Mr. Duan Xuefeng, the former chairman of the company who had served as the Company's chairman and director from May 8, 2020 to January 11, 2021 is also serving as a director of Xinjiang Hengding.

Xinjiang Hengding therefore constitutes a related legal person of the Company under the Rules Governing the Listing of Shares on the Shanghai Stock Exchange* ( ɪऎᗇՎʹ׸הٰୃɪٰ̹ۆ'), and the above-mentioned debt offset constitutes an associated party transaction.

The Company will, in accordance with the relevant provisions in the Rules Governing the Listing of Shares on the Shanghai Stock Exchange (amended in December 2020)* (ɪऎᗇՎʹ׸הٰୃɪ ٰ̹ۆ€2020ϋ12˜ࡌࠈ'), hire an asset appraisal firm qualified to conduct securities and futures related businesses as soon as possible to evaluate the debts offset under the Debt Set-off Agreement. The Company will convene a board meeting and a general meeting to review and confirm the above-mentioned debts offset after the formal evaluation report is issued.

By Order of the Board Xinjiang La Chapelle Fashion Co., Ltd.

Mr. Wu Jinying

Chairman

Shanghai, the People's Republic of China

24 February 2021

As of the date of this announcement, the executive directors of the Company are Mr. Wu Jinying, Ms. Zhang Ying and Ms. Zhang Danling; the non-executive director of the Company is Mr. Yin Xinzai; the independent non-executive directors of the Company are Mr. Xing Jiangze, Ms. Wong Sze Wing and Mr. Zhu Xiaozhe.

* For identification purpose only.