Datang Environment Industry : INSIDE INFORMATION - RECEIPT OF REDEMPTION REQUEST OF PERFORMANCE GUARANTEE BY A SUBSIDIARY

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Datang Environment Industry Group Co., Ltd.*

大 唐 環 境 產 業 集 團 股 份 有 限 公 司

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

(Stock Code: 1272)

INSIDE INFORMATION

RECEIPT OF REDEMPTION REQUEST OF

PERFORMANCE GUARANTEE BY A SUBSIDIARY

This announcement is made by Datang Environment Industry Group Co., Ltd. (the "Company", together with its subsidiaries, the "Group") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The Company has recently been informed that China Datang Technologies & Engineering Co., Ltd. ("Datang Technologies & Engineering"), a subsidiary of the Company, received a request from NLC India Limited (the "Proprietor") to redeem the Performance Guarantee (the "Performance Guarantee") of NLC NNTPP 2 X 500 MW desulphurization project (the "NLC Project").

INTRODUCTION

In August 2019, Datang Technologies & Engineering received a letter of award from the Proprietor in respect of the NLC Project. Pursuant to the letter of award, Datang Technologies & Engineering issued the Performance Guarantee with an amount of INR556,500,000 to the Proprietor in December 2019 with a termination period up to November 2023.

In March 2020, Datang Technologies & Engineering entered into a general contract with the Proprietor in relation to the NLC Project with an amount of INR5.56 billion. In the same month, Datang Technologies & Engineering issued an advance payment guarantee with an amount of INR570,508,420 to the Proprietor with a termination period up to May 2022.

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Affected by the outbreak of the COVID-19 epidemic in the first half of 2020, the area where the NLC Project is located have been kept blocked. In addition, the Proprietor's refusal to issue the admission permit kept the NLC Project from commencing construction until September 2020.

In September 2020, the Proprietor issued a letter to Datang Technologies & Engineering, requesting to terminate the contract of NLC Project, and requiring the relevant Indian reissuing bank (the "Indian Reissuing Bank") to redeem the Performance Guarantee.

REDEMPTION OF PERFORMANCE GUARANTEE

Given that the delay of the NLP Project was due to the force majeure as well as the refusal of cooperation by the Proprietor, Datang Technologies & Engineering has applied to the relevant courts in China and India to stop the payment for the Performance Guarantee.

As of the date of this announcement, a stop payment order has been issued by the relevant court in India, and the India Reissuing Bank has been notified to suspend the payment in written.

Currently, Datang Technologies & Engineering is seeking for further legal advice on relevant matters to protect its lawful interests.

IMPACT ON THE FINANCIAL AND OPERATING CONDITIONS OF THE COMPANY

Given that (i) the relevant court in India has issued a stop payment order; and (ii) Datang Technologies & Engineering has taken active measures to protect its lawful interests, redemption of the Performance Guarantee has no material impact on the financial and operating conditions of the Group.

The Company will make further announcement(s) to disclose the material progress of the aforesaid matters in due course.

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

By order of the Board

Datang Environment Industry Group Co., Ltd.

Jin Yaohua

Chairman

Beijing, the PRC, 14 September 2020

As at the date of this announcement, the non-executive directors of the Company are Mr. Jin Yaohua, Mr. Hou Guoli, Mr. Liu Quancheng, Mr. Liu Ruixiang and Mr. Li Zhenyu; the executive director of the Company is Mr. Wang Yanwen; and the independent non-executive directors of the Company are Mr. Ye Xiang, Mr. Mao Zhuanjian and Mr. Gao Jiaxiang.

• For identification purpose only

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