Xinjiang La Chapelle Fashion : UPDATE ANNOUNCEMENT IN RELATION TO LITIGATION INVOLVING THE COMPANY AND ITS SUBSIDIARIES

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新 疆 拉 夏 貝 爾 服 飾 股 份 有 限 公 司

Xinjiang La Chapelle Fashion Co., Ltd.

(formerly known as "Shanghai La Chapelle Fashion Co., Ltd. （上海拉夏貝爾服飾股份有限公司）")

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

(Stock code: 06116)

UPDATE ANNOUNCEMENT IN RELATION TO LITIGATION

INVOLVING THE COMPANY AND ITS SUBSIDIARIES

This announcement is made by Xinjiang La Chapelle Fashion Co., Ltd. (the "Company") pursuant to Rule 13.09(2) and Rule 13.10B of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined in the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Reference is made to the announcements of the Company dated 27 November 2019, 7 December 2020,

12 January 2021 and 19 January 2021 in relation to an entrusted loan provided by Urumqi High-tech Investment Development Group Co., Ltd.* (烏魯木齊高新投資發展集團有限公司) (the "Plaintiff") to

the Company in the amount of RMB550 million through Bank of Urumqi Co., Ltd. Urumqi Siping Road Technology Branch* (烏魯木齊銀行股份有限公司烏魯木齊四平路科技支行) as well as the litigation

involving the entrusted loan (together, the "Announcements"). Unless otherwise defined, capitalised terms used in this announcement shall have the same meaning as defined in the Announcements.

1. OVERVIEW OF THE LITIGATION
   On 18 January 2021, the Company received a Writ of Summons (2021) Xin 01 Minchu No. 27* ((2021)新01民初27號《傳票》), a Civil Complaint* 《( 民事起訴狀》), and a Notice of Producing Evidence* 《( 舉證通知書》) from the Xinjiang Uygur Autonomous Region Urumqi Intermediate People's Court (the "Court"). The Court accepted the case brought by the Plaintiff against the Company, Xinjiang Tongrong, La Chapelle Taicang, Shanghai Weile and Mr. Xing Jiaxing in respect of the litigation involving the Entrusted Loan Agreement.

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1. PROGRESS OF THE LITIGATION
   On 22 April 2021, the Company received a Civil Judgment (2021) Xin 01 Minchu No. 27* ((2021） 新01民初27號《民事判決書》) (the "Judgment") from the Court, which heard the case at first instance and handed down the Judgment, details of which are as follows:
2. 1. The Company and Xinjiang Tongrong shall repay the Plaintiff the principal of RMB550,000,000, the interest of RMB32,965,107, and the compound interest of RMB291,235.22 during the loan period within 10 days from the date on which this Judgment takes effect;
   2. The Company and Xinjiang Tongrong shall repay the Plaintiff overdue interest from 28 November 2020 to the date of full repayment of the outstanding principal amount (based on the principal of RMB550,000,000 at an annual interest rate of 6.8%) within 10 days from the date on which this Judgment takes effect;
   3. The Company and Xinjiang Tongrong shall repay the Plaintiff overdue interest from 28 November 2020 to the date of full repayment of the outstanding principal amount (based on the amount of RMB32,965,107 at an annual interest rate of 3.85%) within 10 days from the date on which this Judgment takes effect;
   4. The Company and Xinjiang Tongrong shall pay the Plaintiff the legal fees of RMB910,951.20 within 10 days from the date on which this Judgment takes effect;
   5. The Company and Xinjiang Tongrong shall pay the Plaintiff asset preservation fees of RMB5,000 and guarantee letter fees of RMB234,000 within 10 days from the date on which this Judgment takes effect;
   6. To the extent that the debts due to the Plaintiff specified in paragraphs 1 to 5 are not fully settled, the Plaintiff shall have the right to receive in priority the proceeds arising from a
      discounted sale or auction of the two pledged immovable properties of La Chapelle Taicang (real estate certificate numbers: Su (2019) Taicang Real Estate Right No. 0006322* (蘇(2019) 太倉市不動產權第0006322號) and Su (2018) Taicang Real Estate Right No. 0029259* (蘇 ( (2018)太倉市不動產權第0029259號) for the settlement of the remaining debts, and La Chapelle Taicang shall have the right to claim compensation from the Company and Xinjiang Tongrong after payment;

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1. Mr. Xing Jiaxing shall be jointly and severally liable for the debts due to the Plaintiff specified in paragraphs 1 to 5, and shall have the right to claim compensation from the Company and Xinjiang Tongrong after payment; and
2. If the debts due to the Plaintiff cannot be fully settled after the compulsory enforcement against the properties of the Company and Xinjiang Tongrong, Shanghai Weile shall be jointly liable for the debts under paragraph 1 to the extent that they remain unpaid, and shall have the right to claim compensation from the Company and Xinjiang Tongrong after payment.

Where payments are not made within the period stipulated in the Judgment, interest on the relevant

debts for the period of delay in performance shall be doubled pursuant to Article 253 of the Civil Procedure Law of the People's Republic of China* 《( 中華人民共和國民事訴訟法》).

The claimed amount in this case is RMB586,527,923.93, and the ordered amount is RMB584,406,293.42, representing 99.64% of the claimed amount. The case acceptance fee is RMB2,974,439.62 (prepaid by the Plaintiff), of which RMB10,759.35 shall be borne by the Plaintiff, and RMB2,963,680.27 shall be borne by the Company, Xinjiang Tongrong, La Chapelle Taicang, Mr. Xing Jiaxing, and Shanghai Weile.

If any party refuses to accept the Judgment, it or he may, within 15 days after the Judgment is served upon it or him, submit a written appeal to the Court, provide the photocopies thereof in the number of the other parties or in the number of representatives of the other parties, and appeal to the Xinjiang Uygur Autonomous Region Urumqi High People's Court.

1. IMPACT OF THE LITIGATION ON THE PROFITS OF THE COMPANY IN CURRENT OR SUBSEQUENT PERIODS
   The Judgment is a first-instance judgment. As at the date of this announcement, the Judgment has not taken effect, and it is uncertain whether the parties will appeal against the Judgment. In view of the fact that the Company has made provision for the interest of the Entrusted Loan in accordance with the accounting standards, the major impact of the Litigation on the profits and losses of the Company would be in terms of possible asset disposal losses and legal fees and litigation costs that may be borne by the Company. As the case is still at the stage of first instance as at the date of this announcement, the final impact of the Litigation will be subject to the judgment of the Court and the annual audited financial results of the Company.

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The Company will pay close attention to the progress of Litigation, and promptly perform information disclosure obligations in accordance with the relevant laws and regulations.

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

By Order of the Board

Xinjiang La Chapelle Fashion Co., Ltd.

Mr. Wu Jinying

Chairman

Shanghai, the People's Republic of China

23 April 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.

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