Inspur Digital Enterprise Technology Limited — Proxy Solicitation & Information Statement 2011

Dec 8, 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you are in doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Inspur International Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

DISCLOSEABLE AND CONNECTED TRANSACTION - ESTABLISHMENT OF JOINT VENTURE COMPANY IN CLOUD COMPUTING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders of the Company

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FIRST SHANGHAI CAPITAL LIMITED

A notice convening an Extraordinary General Meeting (“EGM”) of Inspur International Limited to be held at Flats B&C, 30/F., Tower A, Billion Center, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong on 28 December 2011 (Wednesday) at 10:00 a.m. is set out on pages 25 to 26 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Such form of proxy is also published on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk.

Whether or not you intend to attend the EGM, you are requested to complete the form of proxy and return the same to the office of the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time appointed for the meeting (or any adjourned meeting). Completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting (or any adjourned meeting) if you so wish.

9 December 2011

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**Letter from **	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
**Letter from **	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Letter of Advice from First Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		12
**Appendix — **	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		25

— i —

DEFINITIONS

In this circular, unless the context otherwise requires, the following expressions shall have the following meanings:

“associate(s)” has the meaning ascribed to it under the Listing Rules “Board” the board of Directors

• “Company”

Inspur International Limited, an exempted company incorporated in the Cayman Islands with limited liability, the ordinary shares of which are listed on the main board of the Stock Exchange

“Company Law” Company Law of the People’s Republic of China “connected person(s)” has the meaning ascribed to it under the Listing Rules “Director(s)” the director(s) of the Company

“EGM” the extraordinary general meeting of the Company to be convened and held for the approving, amongst other things, the JV Agreement and transactions contemplated thereunder

“First Shanghai” a licensed corporation to carry on type 6 regulated activity (advising on corporate finance) under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the JV Agreement and the transactions contemplated thereunder

• “Group” the Company and its subsidiaries

“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

“Independent Board Committee” an independent board committee, comprising Mr. Meng Xiang Xu, Mr. Zhang Tiqin and Mr. Wong Lit Chor, Alexis, all being the independent non-executive directors, to advise the Independent Shareholders as to the fairness and reasonableness of the JV Agreement

• “Independent Shareholders” Shareholders other than Inspur Group and its associates

“Inspur Cheeloo” Inspur Cheeloosoft Company Limited (浪潮齊魯軟件產業有 限公司), a company incorporated in the PRC and a subsidiary of Inspur Group

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DEFINITIONS

“Inspur Group” Inspur Group Limited (浪潮集團有限公司), which is a company incorporated in the PRC and through its wholly owned subsidiary, Inspur Electronics (HK) Limited, being the controlling shareholder of the Company, interested in approximately 32.19% of the existing issued ordinary shares of the Company

• “Joint Venture Company” the joint venture company in form of limited liability company to be established in Jinan City, Shandong Province, PRC under the Company Law pursuant to the JV Agreement with a tentative name of 山東浪潮雲海雲計算產業投資有限 公司 (Shandong Inspur Cloud Computing Industry Investment Co., Ltd.)

• “JV Agreement” the joint venture agreement dated 25 November 2011 among the JV Parties in relation to the formation of the Joint Venture Company

• “JV Formation” the formation of the JV Company pursuant to the terms of the JV Agreement

• “JV Parties” Party A, Party B and Party C

• “Latest Practicable Date” 7 December 2011, being the latest practicable date prior to printing of this circular for ascertaining certain information contained herein

“Listing Rules”	Rules Governing the Listing of Securities on	Rules Governing the Listing of Securities on	the Stock
	Exchange
“Party A”	浪潮電子信息產業股份有限公司	(Inspur	Electronic
	Information Industry Co., Ltd.)
“Party B”	山東浪潮齊魯軟件產業股份有限公司	(Shandong Inspur
	Software Co., Ltd.)
“Party C”	浪潮（山東）電子信息有限公司 (Inspur (Shandong)
	Electronic Information Co., Ltd.), a	company established in
	the PRC and a wholly owned subsidiary of the Company
“Preferred Shares”	series A senior redeemable convertible voting		preferred
	shares of HK$0.01 each in the share	capital of the	Company
“PRC”	the People’s Republic of China
“SFO”	Securities and Futures Ordinance (chapter 571 of the laws of
	Hong Kong)

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DEFINITIONS

“Share(s)”	ordinary share(s) of HK$0.002 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s) and the Preferred Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“substantial shareholder”	has the meaning ascribed to it under the Listing Rules
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent

Unless otherwise stated, the conversion of RMB into Hong Kong dollars are based on the exchange rate of RMB1 = HK$1.2265 for illustration purpose only. In addition, all the English translation of the Chinese names of the companies established in the PRC are also for illustration purpose only.

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LETTER FROM THE BOARD

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

Executive Directors:

Mr. Sun Pishu ( Chairman ) Mr. Wang Xingshan Mr. Chen Dongfeng Mr. Dong Hailong

Registered office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent non-executive Directors:

Mr. Meng Xiang Xu Mr. Zhang Tiqin Mr. Wong Lit Chor, Alexis

Head office and principal place of business in Hong Kong:

Flats B & C, 30/F. Tower A, Billion Centre 1 Wang Kwong Road Kowloon Bay Kowloon Hong Kong 9 December 2011

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION - ESTABLISHMENT OF JOINT VENTURE COMPANY IN CLOUD COMPUTING

INTRODUCTION

Reference is made to the Company’s announcement dated 25 November 2011. On 25 November 2011, the Party C (a wholly owned subsidiary of the Company) entered into the JV Agreement with Party A and Party B in relation to the establishment of the Joint Venture Company in the PRC. As Party A and Party B are associates of a substantial shareholder of the Company and the relevant percentage ratios of the subject transaction fall in the range from 5% to 25%, the JV Agreement constitutes a discloseable and connected transaction of the Company under the Listing Rules and is subject to the approval of the Independent Shareholders.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with information regarding, among other things, (i) further information about the JV Agreement; (ii) the letter from First Shanghai to the Independent Board Committee and the Independent Shareholders; (iii) the recommendation from the Independent Board Committee to the Independent Shareholders; and (iv) the notice of the EGM.

THE JV AGREEMENT

Date

25 November 2011

JV Parties

• (i) Party A — Inspur Electronic Information Industry Co., Ltd. (浪潮電子信息產業股份有限公司);

• (ii) Party B — Shandong Inspur Software Co., Ltd. (山東浪潮齊魯軟件產業股份有限公司); and

• (iii) Party C — Inspur (Shandong) Electronic Information Co., Ltd. (浪潮（山東）電子信息有限公司).

Party A and Party B are associates of a substantial shareholder of the Company and Party C is a wholly owned subsidiary of the Company. Detailed information about the JV Parties are set out in paragraph headed “Information on the Group and the JV Parties” below.

Scope of Business Activities

The Joint Venture Company will be principally engaged in operations, integral IT management outsourcing services, industry investment, venture investment and investment consulting services relating to cloud computing and their connected services subject to approval of the relevant authorities in the PRC.

Registered Capital

The registered capital of the Joint Venture Company is in the amount of RMB300,000,000 (equivalent to approximately HK$367,950,000). Each of the JV Parties will contribute its share of registered capital in amount of RMB100,000,000 (equivalent to approximately HK$122,650,000 and about 33.33% of the total registered capital) by cash injection which will be contributed within 30 days after obtaining of the approval of the respective governing body of the JV Parties. The contribution to the registered capital of the Joint Venture Company by Party C will be financed out of the internal resource of the Group. The total capital commitment of each of the JV Parties is only their respective contribution to the registered capital of the Joint Venture Company.

Term of the Joint Venture Company

The Joint Venture Company shall have a term of twenty years from the date of formation of the Joint Venture Company. Upon agreement by all the JV Parties, the Joint Venture Company may apply for extension to the relevant governmental authority in the PRC on or before 180 days of expiry of the business licence.

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LETTER FROM THE BOARD

Composition of Board of Directors and Board of Supervisors

The board of directors of the Joint Venture Company will comprise 3 directors and each of the JV Parties is entitled to appoint one director to join the board. Similarly, the board of supervisors of the Joint Venture Company will comprise 3 supervisors and each of the JV Parties is entitled to appoint one supervisor to join the board.

Profit and loss sharing

Under the Company Law, JV Parties will be entitled to share the profit or to bear the loss of the Joint Venture Company in proportion to their respective equity interests in the Joint Venture Company.

Distribution of Dividend

Under the Company Law, the dividends will be, upon approval of the JV Parties, distributed to each of the JV Parties in proportion to their respective equity interests in the Joint Venture Company out of the after-tax-profits deducted by statutory reserve and surplus reserve.

Condition Precedent

The JV Agreement takes effect upon the fulfilment of the following condition: “the approval of the governing body of each of the JV Parties having been obtained”.

In relation to the above condition, for Party C, the Company is required under the Listing Rules to obtain the approval of the Independent Shareholders of the JV Agreement and the transactions contemplated thereunder in the EGM and Party A and Party B are also required to obtain their shareholders’ approval under the Listing Rules of Shenzhen Stock Exchange and Shanghai Stock Exchange. If the approval of the governing body of one or two JV Parties cannot be obtained, the remaining JV Parties will continue to establish the Joint Venture Company and the shared amount of registered capital to be contributed by the remaining JV Parties will remain unchanged (but the percentage share of registered capital of the remaining JV Parties will be increased and the total registered capital of the Joint Venture Company will be decreased accordingly). If all the three JV Parties cannot obtain the required approval, the JV Agreement will be terminated. It is expected that the above condition precedent will be fulfilled on or before 31 March 2012. The establishment of the Joint Venture Company is also subject to the approval of the relevant authorities in the PRC.

Other JV Parties

If opportunities arise and the JV Parties may agree to accept other party or parties to invest in the JV Company, the registered capital of the Joint Venture Company will be increased in order to accommodate the new investment and the equity percentage in the Joint Venture Company of the JV Parties will be diluted accordingly.

FINANCIAL IMPACT OF THE JV FORMATION

Upon the completion of the registered capital injection, there will be re-classification of cash and bank balances in total amount of RMB100,000,000 (equivalent to approximately HK$122,650,000) to an interest in an associate.

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LETTER FROM THE BOARD

After the establishment of the Joint Venture Company, the investment in the Joint Venture Company will be accounted for in the consolidated financial statements of the Group by way of equity accounting and the Group’s share of the profit and loss of the Joint Venture Company will be included in the consolidated results of the Group.

REASONS FOR AND BENEFITS DERIVED FROM THE JV FORMATION

Cloud computing is one of the national emerging industries of strategic importance under the twelfth five-year plan of the PRC. It is expected the growth potential for the cloud computing market in the PRC is substantial in coming years. The Joint Venture Formation enables the Group to capture this golden opportunity in the development of the cloud computing industry by capitalizing the resources of the three JV Parties. There are two directions of business development of the JV Company. Firstly, The JV Company will directly invest in cloud computing operating companies together with local governmental agencies and corporations as partners, integrate the products and solutions of the three JV Parties and partners, establish cloud computing centres and provide integrated IT management outsourcing services and invest in cloud computing innovation products companies by way of private equity. Secondly, at the appropriate time, the JV Company will also act as promoter for funds to be invested in cloud computing operating companies and cloud computing innovation products companies. Given the JV Parties’ substantial resources and extensive experience in IT business, the JV Formation is expect to generate synergies of and benefits to the JV Parties.

The terms of the JV Agreement were negotiated between the parties at arm’s length. The Directors (excluding members of the Independent Board Committee, who will give their opinion based on the recommendation from First Shanghai) consider that the entering into of the JV Agreement is in the ordinary and usual course of business of the Group and believe that the terms of the JV Agreement are on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION OF THE GROUP AND THE JV PARTIES

The Group is an integrated IT services provider with services covering ERP, software and service, embedded solution and software outsourcing services.

Party A is a company established in the PRC and is listed on Shenzhen Stock Exchange of stock code 000977. Party A (including its subsidiaries) is principally engaged in developing, manufacture and marketing computers and software, electronic products and other communication devices (excluding Radio Transmission Equipment), commercial implements, electronics industry control devices, air-condition numerical control devices, electronic timer, electric toys and educational appliances. It also provides information technology service, computer leasing service, electrical appliances installation and maintenance and technical service. Meanwhile, it also involves in the business of self-managerial import and export (within the authorised scope) and property lease. Party B is a company established in the PRC and is listed on Shanghai Stock Exchange of stock code 600756. Party B (including its subsidiaries) are principally engaged in communication business, business of developing, manufacture and marketing the technology of computer software and hardware, business of communication and computer network engineering technology consulting and technical training, and import and export business (within the authorised scope). Party C is a foreign

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LETTER FROM THE BOARD

wholly owned enterprise established in the PRC and is a wholly owned subsidiary of the Company. It is engaged in developing and manufacture computer software and hardware products and providing related technology consulting and technical service. It is also involved in the business of comprehensive planning, designing, manufacture, installation, debugging and maintenance of the production line of computer products, as well as import and export business.

Party A has substantial experience in research, manufacture and marketing of products, such as the servers, memory and cloud computing operating system, which are necessary to the IAAS level of the cloud computing industry. On the other hand, Party B is experienced in research, design and marketing of the application software for various large industries such as tobacco industry. With its products, Party B could provide solutions to the SASA level of the clouding computing industry.

Inspur Group is an investment holding company established in the PRC. Inspur Group (including its subsidiaries) devotes itself to being the leading suppliers of Cloud Computer Solutions in China. Inspur Group (including its subsidiaries) provides IT services and products to the customers in more than 20 countries/regions, meeting the information-based demands of governments and corporations all-around. Inspur Group, through its wholly owned subsidiary, Inspur Electronics (HK) Limited, being the controlling shareholder of the Company, is interested in approximately 32.19% of the issued ordinary share capital of the Company as at the Latest Practicable Date and is a substantial shareholder of the Company. Inspur Group is interested in about 48.32% of the registered capital of Party A as at the Latest Practicable Date. Inspur Group, through its 70%-owned subsidiary, namely Inspur Cheeloo, is interested in about 22.20% of the registered capital of Party B where Inspur Cheeloo is the largest shareholder of Party B. Party A and Party B are considered to be associates of Inspur Group.

IMPLICATIONS UNDER THE LISTING RULES

As at the Latest Practicable Date, Inspur Group, through its wholly owned subsidiary Inspur Electronics (HK) Limited, is interested in 1,354,390,000 Shares representing approximately 32.19% of the issued ordinary share capital of the Company and is a substantial shareholder of the Company. As Party A and Party B are associates of Inspur Group, the JV Agreement constitutes a connected transaction of the Company under the Listing Rules. As the applicable percentage ratios in respect of the Group’s share of the registered capital of the Joint Venture Company are more than 5% but less than 25%, the Joint Venture Formation constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the approval of the Independent Shareholders. Inspur Group, its ultimate beneficial owners and their respective associates will abstain from voting in the EGM to be convened for the approval of the JV Agreement.

As Mr. Sun Pishu is a director of Inspur Group and a director of Party A, he has abstained from voting on the board resolution approving the JV Agreement. Save for the above, none of the Directors have a material interest in the transactions contemplated under the JV Agreement or need to abstain from voting on the board resolution approving the JV Agreement and the transactions contemplated thereunder.

Independent Board Committee comprising the independent non-executive Directors has been formed to advise the Independent Shareholders on the terms of the JV Agreement and First Shanghai has been appointed as an independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the JV Agreement.

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LETTER FROM THE BOARD

EGM

Set out on pages 25 to 26 of this circular is a notice convening the EGM which will be held at Flats B & C, 30/F, Tower A, Billion Centre, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong at 10:00 a.m. on 28 December 2011 (Wednesday) at which a resolution will be proposed to approve the JV Agreement and transactions contemplated thereunder.

The JV Agreement and the transactions contemplated thereunder are subject to, among other things, the approval by the Independent Shareholders at the EGM to be taken by way of a poll. Inspur Group and its associates shall abstain from voting for the relevant resolution approving the JV Agreement and the transactions contemplated thereunder at the EGM due to their interest in the concerned transaction. Other than the above, no other Shareholders have material interest in the above transactions and will abstain from voting at the EGM. As at the Latest Practicable Date, Inspur Group (including its associates), through its wholly owned subsidiary Inspur Electronics (HK) Limited, is interested in 1,354,390,000 Shares representing approximately 32.19% of the issued ordinary share capital of the Company. There is (i) no voting trust or other agreement or arrangement or understanding entered into by or binding upon Inspur Group (including its associates); and (ii) no obligation or entitlement of Inspur Group (including its associates) as at the Latest Practicable Date, whereby it has or may have temporarily or permanently passed control over the exercise of the voting right in respect of its Preferred Shares to a third party, either generally or on a case-by-case basis.

A form of proxy for the EGM is enclosed. Whether or not you wish to attend the EGM, you are requested to complete the form of proxy and return the same to the office of the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time appointed for the meeting (or any adjourned meeting). Completion and delivery of the form of proxy will not preclude you from attending and voting at the meeting (or any adjourned meeting) if you so wish.

RECOMMENDATIONS

The Independent Board Committee has been established to advise the Independent Shareholders whether the terms of the JV Agreement are fair and reasonable so far as they are concerned.

First Shanghai has been appointed to advise the Independent Board Committee and the Independent Shareholders in that connection.

The text of the letter from First Shanghai containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 12 to 18 of this circular and the text of the letter from the Independent Board Committee to the Independent Shareholders is set out on page 11 of this circular.

The Independent Board Committee, having taken into account the advice of First Shanghai, is of the opinion that the JV Agreement to be entered into is upon normal commercial terms, and the

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LETTER FROM THE BOARD

connected transactions contemplated thereunder to be entered into are in the ordinary and usual course of business of the Group and they are fair and reasonable and in the interests of the Company and the Shareholders as a whole and recommends the Independent Shareholders to vote in favour of the resolution to be proposed at EGM.

The Board considers that the JV Agreement and the transactions contemplated thereunder are both in the interests of the Company and the Shareholders as a whole and recommends the Independent Shareholders to vote in favour of the resolution to be proposed at EGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

Yours faithfully For and on behalf of the Board of Inspur International Limited Mr. Sun Pishu Chairman

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LETTER OF ADVICE FROM THE INDEPENDENT BOARD COMMITTEE

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

9 December 2011

To the Independent Shareholders

Dear Sir or Madam,

ESTABLISHMENT OF JOINT VENTURE COMPANY IN CLOUD COMPUTING

We refer to the circular dated 9 December 2011 issued by the Company (the “ Circular ”), of which this letter forms part. Terms used in this letter shall bear the same meanings as given to them in the Circular unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to consider the JV Agreement and the transactions contemplated thereunder and to advise the Independent Shareholders as to the fairness and reasonableness of the aforesaid matters, and to recommend how the Independent Shareholders should vote at the EGM. First Shanghai has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to the letter from the Board, as set out on pages 4 to 10 of the Circular, and the letter from First Shanghai to the Independent Board Committee and the Independent Shareholders which contains its advice to us in respect of the JV Agreement and the transactions contemplated thereunder, as set out on pages 12 to 18 of the Circular.

Having taken into account of the advice of First Shanghai, we consider that the JV Agreement to be entered into is upon normal commercial terms, and the connected transactions contemplated thereunder to be entered into are in the ordinary and usual course of business of the Group and they are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the JV Agreement and the transactions contemplated thereunder.

Yours faithfully, the Independent Board Committee Meng Xiang Xu Zhang Tiqin Wong Lit Chor, Alexis Independent non-executive Independent non-executive Independent non-executive Director Director Director

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LETTER OF ADVICE FROM FIRST SHANGHAI

The following is the text of a letter received from the First Shanghai setting out its advice to the Independent Board Committee and the Independent Shareholders for inclusion in this circular.

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FIRST SHANGHAI CAPITAL LIMITED

19th Floor, Wing On House 71 Des Voeux Road Central Hong Kong

9 December 2011

To the Independent Board Committee and the Independent Shareholders

Dear Sirs or Madams,

DISCLOSEABLE AND CONNECTED TRANSACTION — ESTABLISHMENT OF JOINT VENTURE COMPANY IN CLOUD COMPUTING

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the terms of the JV Agreement, details of which are set out in the circular of the Company dated 9 December 2011 (the “ Circular ”), of which this letter forms part. Unless otherwise defined, capitalised terms used in this letter shall have the same meaning as those defined in the Circular.

On 25 November 2011, Party C, a wholly-owned subsidiary of the Company, entered into the JV Agreement with Party A and Party B for the establishment of the Joint Venture Company in Jinan City, Shandong Province, PRC to engage in operations, integral IT Management outsourcing services, industry investment, venture investment and investment consulting services in relation to cloud computing and their connected services. The registered capital of the Joint Venture Company is in the amount of RMB300,000,000 (equivalent to approximately HK$367,950,000), which will be equally contributed by the three JV Parties.

As Party A and Party B are associates of a substantial shareholder of the Company and the relevant percentage ratios of the subject transaction fall in the range from 5% to 25%, the transaction contemplated under the JV Agreement constitutes a discloseable and connected transaction of the Company under the Listing Rules and is subject to the approval of the Independent Shareholders by wall of poll at the EGM.

— 12 —

LETTER OF ADVICE FROM FIRST SHANGHAI

The Independent Board Committee, comprising all the independent non-executive Directors, namely Mr. Meng Xiang Xu, Mr. Zhang Tiqin and Mr. Wong Lit Chor, Alexis, has been established to advise the Independent Shareholders as to the fairness and reasonableness of the terms of the JV Agreement and the transactions contemplated thereunder. We, First Shanghai Capital Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

In putting forth our opinion and recommendations, we have relied on the accuracy of the information and representations included in the Circular and provided to us by the management of the Group, and have assumed that all such information and representations made or referred to in the Circular and provided to us by the management of the Group were true at the time they were made and continued to be true up to the time of the holding of the EGM. We have also assumed that all statements of belief, opinion and intention made in the Circular were reasonably made after due enquiry. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the management of the Group and have been advised that no material facts have been withheld or omitted from the information provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent verification of the information included in the Circular and provided to us by the management of the Group nor have we conducted any form of investigation into the business, affairs or future prospects of the Group and its associates.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendations, we have taken into account the following principal factors and reasons:

1. Background to and reasons for the entering into of the JV Agreement

Information on the Group

The Group is an integrated IT services provider with services covering ERP, software and service, embedded solution and software outsourcing services.

Information on Party A

Party A is a company established in the PRC and is listed on the Shenzhen Stock Exchange of stock code 000977. Party A, together with its subsidiaries, are principally engaged in the development, manufacture and marketing of computers and software, electronic products and other communication devices, commercial implements, electronics industry control devices, air-condition numerical control devices, electronic timer, electric toys and educational appliances. Further, Party A provides information technology service, computer leasing service, electrical appliances installation and maintenance and technical service. Party A is also involved in the businesses of self-managerial import and export and property leasing.

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LETTER OF ADVICE FROM FIRST SHANGHAI

Information on Party B

Party B is a company established in the PRC and is listed on the Shanghai Stock Exchange of stock code 600756. Party B, together with its subsidiaries, are principally engaged in the communication business, development, manufacture and marketing of the technology of computer software and hardware, communication and computer network engineering technology consulting and technical training, and import and export business.

Information on Party C

Party C is a foreign wholly owned enterprise established in the PRC and is a wholly owned subsidiary of the Company. Party C is engaged in the development and manufacture of computer software and hardware products and provision of related technology consulting and technical service. Party C is also involved in the businesses of comprehensive planning, designing, manufacture, installation, debugging and maintenance of the production line of computer products, as well as import and export business.

Reasons for the entering into of the JV Agreement

As stated in the letter from the Board, the cloud computing market is one of the national emerging industries of strategic importance in the PRC and is expected to have substantial growth potential in the coming years. As such, we have reviewed an industry report relating to the PRC cloud computing industry titled 中國雲計算產業發展白皮書 (PRC Cloud Computing Industry Development Report) issued in 2011 by CCID Consulting Co., Ltd., which is a consulting firm listed on the Stock Exchange and a direct affiliate to China Center for Information Industry Development with business coverage of over 200 cities in the PRC. According to the industry report, the market size of the PRC cloud computing industry is estimated to surge from approximately RMB17 billion in 2010 to approximately RMB117 billion in 2013, representing a compound annual growth rate of approximately 90% during the period.

We understand from the interim report of the Company for the six months ended 30 June 2011 (the “ 2011 Interim Report ”) that the Company is committed to convert itself into a cloud computing solution and service provider and consolidate its position in all niche markets in three years, where the Company has increased investments in the research and development of cloud computing and launched new series of products using cloud computing technology to further enhance the core competitiveness of the Company. In addition, we understand that Party A and Party B are also principally engaged in the information technology industry and are listed in the PRC. Therefore, we are advised that Party C, which is a wholly owned subsidiary of the Company, can leverage on the resources of the JV Parties, including their business background, industry expertise, business connections and financial funding, to form the Joint Venture Company and jointly develop its cloud computing businesses with synergies, which otherwise may not be able to be accomplished as efficiently by the sole effort of the Group. As such, we have reviewed the latest published annual and interim reports of Party A and Party B and we understand that (i) Party A and Party B has been engaging in the computing businesses and, for instance, Party A developed a cloud computing system in December 2010 and Party B has

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LETTER OF ADVICE FROM FIRST SHANGHAI

constructed business systems for various provincial tobacco companies in the PRC; (ii) Party A and Party B recorded net asset value of approximately RMB1,089 million and RMB745 million as at 30 June 2011, respectively; and (iii) Party A and Party B are listed in the PRC, which provides an alternative platform for them to raise additional funds in future.

As stated in the letter from the Board in the Circular, the business development of the Joint Venture Company will principally follow two directions. Firstly, the Joint Venture Company will directly invest in cloud computing operating companies together with local governmental agencies and corporations as partners, integrate the products and solutions of the three JV Parties and partners, establish cloud computing operation centres and provide integrated IT management outsourcing services and invest in cloud computing innovation products companies by way of private equity, where we are advised that the Joint Venture Company may acquire equity interests in independent cloud computing companies. Secondly, at the appropriate time, the Joint Venture Company will act as promoter for funds to be invested in cloud computing operating companies and cloud computing innovation products companies, where we are advised that the Joint Venture Company may cooperate with independent cloud computing companies to form project companies to co-develop cloud computing businesses. Accordingly, we understand that the entering into of the JV Agreement allows the Group to further continue its strategic business development in the cloud computing industry whilst benefiting from the synergies generated amongst the JV Parties.

Taking into account (i) the potential growth of the cloud computing market in the PRC; (ii) the strategic intention of the Group to further develop in the cloud computing industry; (iii) the other two JV Parties are listed in the PRC and are also principally engaged in the information technology sector; (iv) the Joint Venture Company will be principally engaged in the investment of cloud computing companies by way of private equity and as fund promoters; and (v) the resources of the JV Parties, including their business background, industry expertise, business connections and financial funding, can be leveraged on to form the Joint Venture Company and jointly develop its cloud computing businesses with synergies, which otherwise may not be able to be accomplished as efficiently by the sole effort of the Group, we are of the view that the entering into of the JV Agreement is in the ordinary and usual course of business of the Group and is in the interest of the Company and the Shareholders as a whole.

2. Principal terms of the JV Agreement

Date : 25 November 2011 JV Parties : Party A - Inspur Electronic Information Industry Co., Ltd. (浪潮電子信 息產業股份有限公司);

Party B - Shandong Inspur Software Co., Ltd. (山東浪潮齊魯軟件產業股 份有限公司); and

Party C - Inspur (Shandong) Electronic Information Co., Ltd. (浪潮(山 東)電子信息有限公司).

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LETTER OF ADVICE FROM FIRST SHANGHAI

Registered capital

Pursuant to the JV Agreement, the registered capital of the Joint Venture Company is in the amount of RMB300,000,000 (equivalent to approximately HK$367,950,000), which we understand was arrived at after arms length negotiation among the JV Parties after making reference to the amount required by the Joint Venture Company for its currently intended scale of business projects. Each of the JV Parties will contribute its share of registered capital in amount of RMB100,000,000 (equivalent to approximately HK$122,650,000), representing approximately 33.33% of the total registered capital, by cash injection and the amount of which will be contributed within 30 days upon obtaining of the approval from the respective governing bodies of the JV Parties. We have reviewed the total registered capital amount and we note that the amount to be contributed by the Group represents only approximately 7% of the total cost of sales of the continuing operations of the Group for the year ended 31 December 2010 and only approximately 9% of the bank balances and cash of the Group as at 30 June 2011, therefore we consider the investment to be of an acceptable scale given we understand (i) the contribution to the Joint Venture Company is not expected to be of a material scale that would cause significant hindrance to the regular ongoing business development and operations of the Group; and (ii) the reasons and benefits for the entering into of the JV Agreement as discussed above. If opportunities arise, the JV Parties may agree to accept other party or parties to invest in the Joint Venture Company and the registered capital of the Joint Venture Company will be increased in order to accommodate the new investment and the equity percentage in the Joint Venture Company of the JV Parties will be diluted accordingly.

Composition of the board of directors and the board of supervisors

Pursuant to the JV Agreement, the board of directors of the Joint Venture Company will comprise three directors and each of the JV Parties is entitled to appoint one director to join the board of directors of the Joint Venture Company. Further, the board of supervisors of the Joint Venture Company will comprise three supervisors and each of the JV Parties is entitled to appoint one supervisor to join the board of supervisors of the Joint Venture Company.

Profit and loss sharing

Under the Company Law, JV Parties will be entitled to share the profit or to bear the loss of the Joint Venture Company in proportion to their respective equity interests in the Joint Venture Company. As such, each of the JV Parties is entitled to approximately 33.33% of the profit and loss sharing in accordance with their respective equity interests, pursuant to the JV Agreement.

Condition precedent

The JV Agreement takes effect upon the fulfilment of the condition where the approval of the governing body of each of the JV Parties has been obtained. In relation to the above condition, for Party C, under the Listing Rules the Company is required to obtain the approval for the JV Agreement and the transactions contemplated thereunder from the Independent Shareholders at the EGM. Party A and Party B are also required to obtain their shareholders’

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LETTER OF ADVICE FROM FIRST SHANGHAI

approval under the listing rules of Shenzhen Stock Exchange and Shanghai Stock Exchange, respectively. If the approval from the governing bodies of one or two of the JV Parties cannot be obtained, the remaining JV Parties will continue to establish the Joint Venture Company and the shared amount of registered capital to be contributed by the remaining JV Parties will remain unchanged (however the percentage share of registered capital of the remaining JV Parties will be increased, and the total registered capital of the Joint Venture Company will be decreased accordingly). If all the three JV Parties cannot obtain the required approval from their respective governing bodies, the JV Agreement will be terminated. It is expected that the above condition precedent will be fulfilled on or before 31 March 2012. The establishment of the Joint Venture Company is also subject to the approval of the relevant authorities in the PRC.

Taking into account (i) contribution of the registered capital from each of the JV Parties is proportionate to their respective equity interests in the Joint Venture Company; (ii) each of the JV Parties is entitled to appoint one director and one supervisor of the Joint Venture Company, which is proportionate to the equity interests of each of the JV Parties; and (iii) each of the JV Parties is entitled to share the profit or to bear the loss of the Joint Venture Company in proportion to their respective equity interests in the Joint Venture Company, we consider that the terms of the JV Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. Financial effects of the entering into of the JV Agreement

Earnings

Upon the establishment of the Joint Venture Company, the investment in the Joint Venture Company will be accounted for in the financial statements of the Group by way of equity accounting where the proportionate share of the profit and loss of the Joint Venture Company will be included in the financial results of the Group. Given that the Joint Venture Company is newly established, we are advised by the management of the Group that the Joint Venture Company is not expected to have any material impact on the earnings of the Group immediately upon the establishment of the Joint Venture Company.

Net assets

According to the 2011 Interim Report, the Group had bank balances and cash of approximately HK$1,312,261,000 and interests in associates of approximately HK$124,822,000 as at 30 June 2011. Subsequent to the completion of the registered capital injection, there will be re-classification of cash and bank balances in total amount of RMB100,000,000 (equivalent to approximately HK$122,650,000) to interest in associates. Accordingly, we are advised by the management of the Group that the investment in the Joint Venture Company, which basically involves the re-classification of assets of the Group. is not expected to have any significant immediate effect on the net assets of the Group.

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LETTER OF ADVICE FROM FIRST SHANGHAI

Gearing and working capital

According to the 2011 Interim Report, the Group had no bank borrowings as at 30 June 2011. As advised by the management of the Group, share of the registered capital of the Joint Venture Company contributed by the Group will be primarily financed by its internal cash resources and accordingly the investment in the Joint Venture Company is not expected to result in any material adverse impact on the gearing position of the Group.

Further, having taken into account that the cash contribution to the investment in the Joint Venture Company by the Group of RMB100,000,000 (equivalent to approximately HK$122,650,000) represented only approximately 9% of the bank balances and cash of the Group as at 30 June 2011, we are advised that the investment in the Joint Venture Company is not expected to have any material adverse impact on the working capital of the Group.

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that (i) the entering into of the JV Agreement is in the ordinary and usual course of business of the Group and is in the interest of the Company and the Shareholders as a whole; and (ii) the terms of the JV Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. As such, we advise the Independent Board Committee to recommend the Independent Shareholders, and we also advise the Independent Shareholders, to vote in favour of the resolution to be proposed at the EGM to approve the JV Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of

First Shanghai Capital Limited

Eric Lee Fanny Lee Managing Director Managing Director

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

2. DISCLOSURE OF INTERESTS

• (a) Interests and short positions of the Directors and the chief executive of the Company in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”) contained in the Listing Rules, were as follows:

(i) Long positions in Shares

				Percentage of
				issued share
				capital of the
**Name **	of Director	Type of interests	Number of Shares	Company
Dong	Hailong	Beneficial owner	5,000	0.00%

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GENERAL INFORMATION

APPENDIX

• (ii) Long positions in underlying Shares of the Company

				Percentage
				of the issued
			Number of	share capital
		Description of	underlying	of the
Name of Director	Type of interests	equity derivatives	Shares	Company
Sun Pishu	Beneficial owner	share option	20,000,000	0.48%
		(Note 1)
Wang Xingshan	Beneficial owner	share option	5,000,000	0.12%
		(Note 2)
Chen Dongfeng	Beneficial owner	share option	4,000,000	0.10%
		(Note 2)
Dong Hailong	Beneficial owner	share option	2,000,000	0.05%
		(Note 2)
Meng Xiang Xu	Beneficial owner	share option	200,000	0.01%
		(Note 2)
Wong Lit Chor, Alexis	Beneficial owner	share option	200,000	0.01%
		(Note 2)

• Note 1: The share options were granted under the pre-IPO share option scheme adopted by the Company on 8 April 2004 at a subscription price of HK$0.0648 per Share. Up to the Latest Practicable Date, none of the above share options had been exercised.

• Note 2: The share options were granted on 10 December 2010 under the 2008 share option scheme adopted by the Company on 10 November 2008 at a subscription price of HK$0.682 per Share. Up to the Latest Practicable Date, none of the above share options had been exercised.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and the chief executive of the Company had or was deemed to have any interests or short positions in the Shares, underlying Shares or debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code.

• (b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial Shareholders

So far as is known to the Directors and the chief executive, as at the Latest Practicable Date, the following person (not being Director or chief executive of the Company) had, or was deemed to have, interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO

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GENERAL INFORMATION

APPENDIX

or who were directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group:

Long positions in Shares

			Approximate
			percentage of
Name of Shareholders	Type of interests	Number of Shares	interests
Inspur Group Limited	Interest in a controlled	1,354,390,000	32.19%
	corporation (Note 1)
Inspur Electronics (HK)	Beneficial owner	1,354,390,000	32.19%
Limited
Cong Haipeng	Interest in a controlled	415,873,000	9.88%
	corporation (Note 3)
Starry Castle Limited	Beneficial owner	415,873,000	9.88%

• Note 1: Inspur Group Limited is deemed to be interested in 1,354,390,000 Shares due to its 100% shareholdings in the issued share capital of Inspur Electronics (HK) Limited.

• Note 2: Mr. Sun Pishu, who is a director of the Company, is also a director of Inspur Group Limited and a director of Inspur Electronics (HK) Limited.

• Note 3: The controlled corporation referred to above is Starry Castle Limited.

Long positions in series A senior redeemable convertible voting preferred shares of the Company

			Number of
			underlying	Approximate
			Ordinary	percentage of
		Number of	Shares	voting rights
Name of Shareholders	Type of interests	Preferred Shares	(Note 1)	of Shares
Microsoft Corporation	Beneficial owner	167,915,735	772,335,571	15.51%

Note 1: Microsoft Corporation held 167,915,735 class A senior redeemable voting preferred shares convertible into 772,335,571 Ordinary Shares. Microsoft Corporation has agreed that in the event that it becomes entitled to exercise or control the exercise of more than 28% of the voting rights at general meetings of the Company (other than meeting of the holder(s) of Preferred Shares), it shall not and shall procure its nominee(s) not to exercise such portion of the voting rights attaching to the Preferred Shares and/or Ordinary Shares in excess of 28% of the total voting rights at any general meeting of the Company. At the Latest Practicable Date, the above 772,335,571 underlying Ordinary Shares represented approximately 15.51% of the issued share capital of the Company as enlarged by the full exercise of the conversation rights attaching to the Preferred Shares.

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APPENDIX

GENERAL INFORMATION

Long positions in members of the Group

			Approximate
			percentage of
			shareholding
			in the
			members of
Name of shareholders	Types of Interest	Equity interest held	the Group
Wu Xi Yi Jie Xin Cheng	Beneficial owner	RMB200,000 in the registered	10%
Information Technology		capital of Wuxi Inspur
Company Limtied# (無錫		Business Technology Company
易捷信誠信息技術有限公		Limited# (無錫浪潮商服技術有
司)		限公司)
Fang Wensheng	Beneficial owner	RMB225,000 in the registered	37.5%
		capital of Inspur Fangzhi
Bao Jianhua	Beneficial owner	RMB90,000 in the registered	15%
		capital of Inspur Fangzhi
Shanghai Huili Co. Ltd.#	Beneficial owner	RMB50,000 in the registered	10%
(上海滙力有限公司)		capital of Shanghai Guoqiang
		Genersoft Incorporation# (上海
		國强通用軟件有限公司)
Webgroup Co.	Beneficial owner	US$14,504 in the registered	10.36%
		capital of Langchao Gaoyou
		(Shanghai) Services
		Incorporation# 高優(上海)信息
		科技有限公司
Shen Zhen Liang Long	Beneficial owner	RMB150,000 in registered	30%
Management & Consulting		capital of Shangdong Inspur
Company Limited# (深圳		Financial Information Systems
量龍管理諮詢有限公司)		Company Limited# (山東浪潮
		金融信息系統有限公司)

# English names are for identification purpose only

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interests or short positions in the Shares or underlying Shares (including any interests in options in respect of such capital), which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was expected, directly or indirectly, to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group.

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GENERAL INFORMATION

APPENDIX

3. DIRECTORS’ OTHER INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware of, none of themselves or their respective associates had any interest in a business which competes or may compete with the business of the Group or any other conflicts of interest with the Group.

As at the Latest Practicable Date, none of the Directors has any interest, either direct or indirect, in any assets which have been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2010, being the date to which the latest published audited financial statements of the Company were made up.

There is no contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date in which any Director is materially interested and which is significant to the business of the Group.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Group (excluding contracts expiring or terminable by the employer within one year without payment of compensation other than statutory compensation).

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2010, being the date to which the latest audited financial statements of the Company were made up.

6. EXPERT

First Shanghai has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and/or references to its name in the form and context in which they appear.

The following is the qualification of the expert who has provided its advice, which are contained in this circular:

Name Qualification First Shanghai A licensed corporation to carry out type 6 (advising on corporate finance) of the regulated activity under the SFO

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APPENDIX

GENERAL INFORMATION

As at the Latest Practicable Date, First Shanghai was not beneficially interested in the share capital of any member of the Group nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group nor did it have any interest, either direct or indirect, in any assets which have been, since the date to which the latest published audited financial statements of the Company were made up (i.e. 31 December 2010), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

7. MISCELLANEOUS

• (a) The registered office of the Company is at Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands, and the head office and principal place of business in Hong Kong of which is at Flats B & C, 30/F, Tower A, Billon Centre, 1 Wang Kwong Road, Kowloon Bay, Kowloon.

• (b) The principal share registrar and transfer office of the Company is Butterfield Fulcrum Group (Cayman) Limited at Butterfield House, 68 Fort Street, P.O. Box 609, George Town, Grand Cayman KY1-1107, Cayman Islands and the Hong Kong branch share registrar and transfer office of which is Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (c) The company joint secretaries of the Company are : Ms. Chan Wing who is an associate member of the Hong Kong Institute of Certified Public Accountants; and Mr. Zou Bo who is a non-practising member of The Chinese Institute of Certified Public Accountants and a member of the China Certified Tax Agents Association.

• (d) The English text of this circular and the accompanying form of proxy shall prevail over their respective Chinese texts in case of inconsistency.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the Company’s principal place of business in Hong Kong from the date of this circular up to and including the date of the EGM:

• (i) the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out on page 11 of this circular;

• (ii) the letter of advice from First Shanghai to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 12 to 18 of this circular;

• (iii) the written consent from First Shanghai as referred to in the paragraph headed “Expert” in this Appendix; and

• (iv) the JV Agreement.

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NOTICE OF THE EGM

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Inspur International Limited (the “ Company ”) will be held at Flats B & C, 30/F., Tower A, Billion Center, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong, on 28 December 2011 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

• (a) the Joint Venture Agreement (“ JV Agreement ”) dated 25 November 2011 among 浪潮電子 信息產業股份有限公司 (Inspur Electronic Information Industry Co., Ltd.), 山東浪潮齊魯 軟件產業股份有限公司 (Shandong Inspur Software Co., Ltd.) and 浪潮（山東）電子信息有 限公司 (Inspur (Shandong) Electronic Information Co., Ltd.), a wholly owned subsidiary of the Company, in relation to the establishment of a joint venture company of tentative name of 山東浪潮雲海雲計算產業投資有限公司 (Shandong Inspur Cloud Computing Industry Investment Co., Ltd.) (a copy of the JV Agreement has been tabled at the meeting and marked “Exhibit A” and signed by the Chairman of the meeting for the purpose of identification), and all the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

• (b) the directors of the Company, acting together, individually or by committee, be and are hereby authorised to take such actions, do such things and execute such further documents or deeds which in their opinion may be necessary, desirable or expedient for the purpose of implementation or giving effect to the JV Agreement and any of the transactions contemplated thereunder.”

By order of the Board Inspur International Limited Mr. Sun Pishu Chairman

Hong Kong, 9 December 2011

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NOTICE OF THE EGM

Registered office: Head office and principal place of Cricket Square business in Hong Kong: Hutchins Drive Flats B & C, 30/F. P.O. Box 2681 Tower A, Billion Centre Grand Cayman KY1-1111 1 Wang Kwong Road Cayman Islands Kowloon Bay Kowloon Hong Kong

Notes:

1. A form of proxy for use at the EGM or any adjournment thereof is enclosed.

2. A member entitled to attend and vote at the EGM is entitled to appoint one or more proxy to attend and, subject to the provisions of the articles of association of the Company, to vote on his behalf. A proxy need not be a member of the Company but must be present in person at the EGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of Shares in respect of which each such proxy is so appointed.

3. In order to be valid, the form of proxy must be duly completed and signed in accordance with the instructions printed thereon and deposited together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, at the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the EGM or any adjournment thereof, should he so wish.

4. In the case of joint holders of shares, any one of such holders may vote at the EGM, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holder are present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof.

5. The voting on the resolution at the EGM will be conducted by way of a poll.

As at the date of this notice, the Board comprised Mr. Sun Pishu, Mr. Wang Xingshan, Mr. Chen Dongfeng and Mr. Dong Hailong as executive Directors, and Mr. Meng Xiang Xu, Mr. Zhang Tiqin and Mr. Wong Lit Chor, Alexis as independent non-executive Directors.

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