Sinopec Engineering Group Co Ltd. — Capital/Financing Update 2016

Apr 15, 2016

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

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中石化煉化工程（集團）股份有限公司 SINOPEC Engineering (Group) Co., Ltd.[*]

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

(Stock Code: 2386)

VOLUNTARY ANNOUNCEMENT TOTAL NEW CONTRACT VALUE AND BACKLOG

This announcement is made voluntarily by SINOPEC Engineering (Group) Co., Ltd. (the “ Company ”, together with its subsidiaries, the “ Group ”). The board of directors of the Company (the “ Board ”) is pleased to update shareholders of the Company and potential investors with certain information in connection with the representative new contracts entered into by the Group for the three months ended 31 March 2016, the total value of the new contracts for the three months ended 31 March 2016 and the backlog as at 31 March 2016.

This announcement is made by the order of the Board. The Board collectively and individually accepts responsibility for the accuracy of this announcement.

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

This announcement is made voluntarily by the Company. The Board is pleased to update shareholders of the Company and potential investors the following information.

During the three months ended 31 March 2016, the total value of new contracts entered into by the Group amounted to RMB4.358 billion, representing a decrease of 46.75% as compared to RMB8.184 billion for the three months ended 31 March 2015. As at 31 March 2016, the backlog of the Group amounted to RMB107.770 billion, representing a decrease of 3.00% as compared to RMB111.100 billion as at 31 December 2015.

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New Contract Value and Backlog

Representative New Contracts

New contract value represents the value of the contracts the Group entered into during a specified period. The value of a contract is the amount that the Group expects to receive under the terms of the contract if the contract is performed in accordance with its terms. During the three months ended 31 March 2016, the total value of new contracts entered into by the Group amounted to RMB4.358 billion, and contracts that are representative are as follows:

1. a contract of engineering, procurement and construction (EPC) entered into with SINOPEC Pipeline Storage & Transportation Company Limited (中國石化管道 儲運有限公司) in relation to the commercial reserve base project for crude oil in Dongjiakou. The total contract value is RMB1.100 billion;

2. an EPC contract entered into with SINOPEC Tianjin Company (中國石油化工股 份有限公司天津分公司) in relation to the gasoline quality upgrading project in Tianjin for its alkylation units with a capacity of 300 kilo tons per annum (“ Ktpa ”). The total contract value is RMB523 million;

3. an EPC framework agreement entered into with China and South Korea (Wuhan) Petrochemical Co., Ltd.* (中韓（武漢）石油化工有限公司) in relation to its newly-added cracking furnace with a capacity of 140 Ktpa. The total contract value is RMB180 million; and

4. an EPC contract entered into with CNOOC Refinery Co., Ltd., Huizhou Refinery Branch* (中海石油煉化有限責任公司惠州煉化分公司) in relation to the raw coal transportation and coal preparation units. The total contract value is RMB175 million.

Backlog

Backlog represents the total estimated contract value of work that remains to be completed pursuant to outstanding contracts as at a certain date, net of estimated value added tax and is based on the Group’s assumption that the relevant contracts will be performed in accordance with their terms. Backlog is not a measure defined by generally accepted accounting principles. Any modification, termination or suspension of these contracts by the Group’s clients may have a substantial and immediate effect on the Group’s backlog. Projects may also remain in the Group’s backlog for an extended period of time beyond what was initially anticipated due to various factors beyond the Group’s control.

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The table below sets out the details of the total value of new contracts entered into by the Group and its backlog categorised by (1) business segments; (2) the industries in which the Group’s clients operate; (3) regions; and (4) clients of each of (i) China Petrochemical Corporation (“ Sinopec Group ”) and its associates and (ii) the non-Sinopec Group and its associates during the periods or as at the date indicated:

**Total of New Contract **	**Total of New Contract **	**Total of New Contract **	Value
**For the three months **			ended	Backlog
	31 March 2016			**As at 31 March **		2016
(RMB thousand)		Percentage		(RMB thousand)	Percentage
			(%)			(%)
Business segments
Engineering, Consulting and
Licensing	430,104		9.87	6,896,942		6.40
EPC Contracting	2,180,317		50.03	88,335,934		81.97
Construction	1,712,486		39.30	12,418,684		11.52
Equipment Manufacturing	34,688		0.80	118,289		0.11
Total	4,357,595		100.00	107,769,849		100.00
Industries in which the Group’s	clients operate
Oil Refining	1,102,649		25.30	32,375,958		30.04
Petrochemical	1,718,268		39.43	21,912,170		20.33
New Coal Chemicals	81,352		1.87	35,292,071		32.75
Other Industries	1,455,326		33.40	18,189,650		16.88
Total	4,357,595		100.00	107,769,849		100.00
Regions
PRC	4,357,595		100.00	73,301,879		68.02
Overseas	—		—	34,467,970		31.98
Total	4,357,595		100.00	107,769,849		100.00

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Total of New Contract Value For the three months ended Backlog 31 March 2016 As at 31 March 2016 (RMB thousand) Percentage (RMB thousand) Percentage (%) (%)

Clients of each of (i) Sinopec Group and its associates and (ii) the non-Sinopec Group and its associates

Sinopec Group and its associates Non-Sinopec Group and its associates Total	3,161,615 1,195,980 4,357,595	72.55 27.45 100.00	41,884,158 65,885,691 107,769,849	38.86 61.14
				100.00

The Board wishes to emphasise that the above information in relation to the representative new contracts, the total value of new contracts and backlog shall not constitute any forecast or prediction of the profits of the Group.

This announcement is made by the order of the Board. The Board collectively and individually accepts responsibility for the accuracy of this announcement.

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

By order of the Board SINOPEC ENGINEERING (GROUP) CO., LTD. SANG Jinghua

Vice President, Secretary to the Board

Beijing, PRC 15 April 2016

As at the date of this announcement, the Company’s executive directors are LU Dong, YAN Shaochun, SUN Lili (employee representative director) and WU Derong (employee representative director); the non-executive directors are ZHANG Jianhua and LI Guoqing; and the independent non-executive directors are HUI Chiu Chung, Stephen, JIN Yong and YE Zheng.

This announcement will be available on the website of Hong Kong Exchanges and Clearing Limited (www.hkex.com.hk) and on the website of the Company (www.segroup.cn).

* For identification purposes only.

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