Stock Code: 600835(A) 900925(B) Stock Abbreviation: Shanghai M & E, M & E B Share Code: Lin 2014-017 Announcement of Shanghai Mechanical & Electrical Industry Co., Ltd. on the Implementation Results of Shareholders’ Stake Increasing Plan of the Company’s Actual Controller The company’s board of directors and all the directors guarantee that the report do not have any false records, misleading statement or significant omission, and individually and collectively undertake the responsibility for the correctness, accuracy and completeness of its content. Shanghai Mechanical & Electrical Industry Co., Ltd. (“the Company”) received a notice from its actual controller Shanghai Electric (Group) Corporation (“Electric Group”), stating that the stake increasing plan of Electric Group in the Company has been fulfilled (See the Announcement of Shanghai Electric on Actual Controller’s Stake Increase in the Company published by the Company on the website of Shanghai Stock Exchange www.sse.com.cn on December 25, 2013 for details about the stake increase plan). Following is the announcement on the implementation results: From December 24, 2013 to June 23, 2014, the fully owned subsidiary of Electric Group Shanghai Electric Group Hong Kong Co., Ltd. purchased another 860,659 B shares of the Company through the B-share market of Shanghai Stock Exchange, which accounted for 0.084% of the shares offered by the Company. Prior to this stake increase, Electric Group has not held any share of the Company directly, and just held shares of the Company indirectly through its holding subsidiary Shanghai Electric Group Co., Ltd. (controlling shareholder of the Company, hereinafter referred to as “Shanghai Electric”). Currently, Shanghai Electric held 484,220,364 A shares and 346,620 B shares of the Company, up to 47.379% of the total shares offered by the Company. After the stake increase plan implemented by Electric Group, Electric Group and Shanghai Electric held 484,220,364 A shares and 1,207,279 B shares of the Company in total, accounting for 47.463% of the total shares issued by the Company. The stake increasing plan of Electric Group has been completed, but Shanghai Electric is still implementing the plan of increasing its stake in the Company, which is expected to fall due on May 21, 2015. All the matters above are announced hereby. Shanghai Mechanical & Electrical Industry Co., Ltd. June 26th, 2014