Inspur Digital Enterprise Technology Limited — Proxy Solicitation & Information Statement 2012

Dec 19, 2012

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)

MAJOR TRANSACTION

MAIN CONTRACTOR CONTRACT REGARDING THE CONSTRUCTION OF S01 SCIENTIFIC RESEARCH ACTIVITIES BUILDING

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 Thursday, 10 January 2013 at 10:00 a.m. is set out on pages 18 to 19 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.

20 December 2012

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		3
Appendix I —	Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Appendix II —	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
Notice of the EGM	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18

— 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 “Building” S01 Scientific Research Activities Building (浪潮科技園S01科 研樓), a building to be constructed on the Land to be used by the Group for scientific research purpose and office use “Company” Inspur International Limited, an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the main board of the Stock Exchange “connected person(s)” has the meaning ascribed to it under the Listing Rules “Consideration” the sum payable to the Main Contractor under the Main Contractor Contract (excluding the Service Fee) “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 Main Contractor Contract and transactions contemplated thereunder “Foundation Construction the contract entered into between Inspur Mingda and the Main Contract” Contractor on 31 August 2012 in respect of the foundation work of the Building “Group” the Company and its subsidiaries “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “IPG” Inspur Group Limited (浪潮集團有限公司), which is a company incorporated in the PRC and through its wholly owned subsidiaries, interested in approximately 32.26% of the existing issued ordinary shares of the Company “Inspur Mingda” Jinan Inspur Mingda Information Technology Limited* (濟南浪潮 銘達信息科技有限公司), which is a company incorporated in the PRC and is a wholly-owned subsidiary of the Company “Land” a parcel of land with an estimated area of 17,159.4 sq.m. located in Jinan City, Shandong Province, the PRC

— 1 —

DEFINITIONS

• “Latest Practicable Date” 19 December 2012, 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 the Stock Exchange “Main Contractor” Tianyuan Construction Group Limited* (天元建設集團有限公司), a company established under the laws of the PRC

• “Main Contractor Contract” the main contractor contract entered into between Inspur Mingda and the Main Contractor on 19 November 2012 for the construction of the Building

• “Ordinary Share(s)” ordinary share(s) of HK$0.002 each in the share capital of the Company

• “Separate Contracted Work” separate contracted work including without limitation the network and telecom engineering work, elevator installation, fire engineering work, intelligent electrical engineering (light current), interior decoration work, and curtain-wall work (but including the prior pipe embedment work for the above mentioned excluded work) which would be separately contracted by Inspur Mingda with other independent third parties

• “Service Fee” the service fee payable to the Main Contractor by Inspur Mingda at the rate of 0.5% of the fees for Separate Contracted Work

• “PRC” the People’s Republic of China

• “Preferred Shares” 72,859,049 series A senior redeemable convertible voting preferred shares of the Company attached with rights of conversion to 297,052,141 Ordinary Shares issued by the Company to Microsoft Corporation

• “RMB” Renminbi, the lawful currency of the PRC “SFO” Securities and Futures Ordinance (chapter 571 of the laws of Hong Kong)

• “Share(s)” Ordinary Share(s) and Preferred Share(s) “Shareholder(s)” holder(s) of the Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “sq.m.” square metre “%” per cent

• All the English translation of certain Chinese names or words in this circular is included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.

— 2 —

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

Registered office:

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

Non-executive Director:

Mr. Samuel Y. Shen

Independent non-executive Directors:

Mr. Zhang Tiqin Mr. Wong Lit Chor, Alexis Ms. Dai Ruimin

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

20 December 2012

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION MAIN CONTRACTOR CONTRACT REGARDING THE CONSTRUCTION OF S01 SCIENTIFIC RESEARCH ACTIVITIES BUILDING

INTRODUCTION

Reference is made to the Company’s announcement dated 19 November 2012. On 19 November 2012, Inspur Mingda, a wholly-owned subsidiary of the Company, entered into the Main Contractor Contract with the Main Contractor for the construction of the Building in Jinan City, Shandong Province, PRC at a consideration of RMB276,863,120.73 (equivalent to approximately HK$337,773,007.29). As the applicable percentage ratios (as defined in the Listing Rules) for the Main Contractor Contract aggregated with the Foundation Construction Contract in relating to the construction of the Building are more than 25% but less than 100%, it constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to reporting, announcement and Shareholder’s approval requirements set out in Chapter 14 of the Listing Rules.

— 3 —

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among others, further details of the Main Contractor Contract, together with the notice of the EGM.

THE PROJECT AND PRE-CONSTRUCTION WORK

The Project

On 29 August 2012, Inspur Mingda had entered into the a land use rights transfer agreement with IPG whereby Inspur Mingda has conditionally agreed to acquire and IPG has conditionally agreed to sell the land use rights of the Land (principal terms of the land use rights transfer agreement have been set out under the section headed “Material Contracts” in Appendix II of this circular). It is intended that the Building named S01 Scientific Research Activities Building for the purpose of the Group’s own scientific research activities and office use will be constructed on the Land. It is expected that the total budget of the project for the construction of the Building will be approximately RMB550,200,000 including (1) costs for acquisition of the land use right of the Land (details have been set out in the Company’s announcement dated 29 August 2012); (2) costs for prior period construction work (including costs for planning and design); (3) costs for outside infrastructure facilities; (4) costs for main construction work under the Main Contractor Contract; (5) costs for matching facilities; and (6) other other costs and expenses for the whole construction project (including administrative expenses and other indirect costs and expenses).

It is anticipated that the Building will be made available for use in July 2016. The major purpose of the S01 Scientific Research Activities Building is for the Group’s own scientific research activities and office use.

The Pre-Construction Work

As at the date of this Announcement, the foundation work of the Building is nearly completed. The foundation work has been also conducted by the Main Contractor pursuant to the Foundation Construction Contract dated 31 August 2012 whereby the consideration for the foundation work is RMB7,672,365.44 (equivalent to approximately HK$9,360,285.84). As the relevant applicable percentage ratios for the Foundation Construction Contract are less than 5%, the transaction under the foundation construction work is exempt from reporting and announcement requirements set out in Chapter 14 of the Listing Rules. Upon execution of the Main Contractor Contract, Inspur Mingda will be moving into the construction stage of the project.

THE MAIN CONTRACTOR CONTRACT

The Main Contractor Contract has been awarded by public tender to the Main Contractor who has premium class building engineering general contract certificate qualification. Inspur Mingda had considered the tender price, construction qualifications and relevant construction experience of all the tenderers for determination of the successful tenderer.

— 4 —

LETTER FROM THE BOARD

Inspur Minda had also particularly considered the following facts in awarding the public tender to the Main Contractor:

• (1) The Main Contractor’s reasonable tender price;

• (2) The Main Contractor has premium class building engineering general contract certificate qualification, which is the highest PRC qualification on building engineering general contract; and

• (3) The Main Contractor has sufficient experience in building construction and had participated in various large construction projects in PRC and other countries in Asia, Africa and South America. Meanwhile, the construction projects which the Main Contractor participated in had been awarded several national high quality engineering award (國家級優質工程獎) in the past few years.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, the Main Contractor and its ultimate beneficial owners are third parties independent of the Company and connected persons of the Company.

The major terms of the Main Contractor Contract are set out as follows:

Date: 19 November 2012 Parties: Inspur Mingda (as the owner) Main Contractor (as the contractor) Specification of the work under The gross floor area of the Building will amount to the Main Contract: approximately 114,300 sq.m, including 37,100 sq.m. of gross floor area of 4-storey underground constructions. The ground building is a 34-storey structure (height: 154.60 meters) with podium buildings. The underground building comprises parking lots and other matching facilities. Location of the site: No. 1036 Lang Chao Road, Jinan City Scope of work: Civil work, decoration work and erection work under the construction drawings of Main Contractor Contract, excluding the Separate Contracted Work. Consideration: RMB276,863,120.73 (equivalent to approximately HK$337,773,007.29) inclusive of all labour, material and equipment costs, costs and expenses in respect of permits required for the development and construction work and repair work during warranty period but excluding the Service Fee, with adjustment provisions for any variation of work.

— 5 —

LETTER FROM THE BOARD

Fees for Separate Contracted It is expected that the fees for Separate Contracted Work Work would be approximately RMB132,109,355.92 (equivalent to approximately HK$161,173,414.22). Service Fee Although the Separate Contracted Work would be conducted by other independent third parties, the Main Contractor shall provide cooperation and assitance for completion of the Separate Contracted Work, and Inspur Mingda shall pay the Main Contractor a sum at the rate of 0.5% of the fees for Separate Contracted Work as the service fee to the Main Contractor. Variation of Scope of work: Subject to the agreement by the parties, the scope of work and related consideration may be adjusted. Payment terms: The Consideration shall be paid by way of progress payments. Within 14 days of the assessment of completion of work, Inspur Mingda shall pay Main Contractor each progress payment in respect of each stage of the construction work. Effective Date of Main After execution by the parties, filing with the relevant Contractor Contract: government authorities and approval by the Shareholders of the Company. Scheduled date of commencing of 28 November 2012, subject to any variation agreed by the the construction work: parties of the Main Contractor Contract. The construction work should commence after obtaining of the Shareholders’ approval at the EGM. Scheduled completion date for The construction work is scheduled to be completed by 26 the construction work: January 2015.

The Main Contractor Contract is conditional upon the approval of the Shareholders of the Main Contractor Contract at the EGM.

FUNDING

The Consideration is expected to be funded by internal resources of the Group.

INFORMATION OF THE PARTIES

The Group is an integrated IT services provider with services covering taxation, finance, ERP, telecommunication and software outsourcing services.

Inspur Mingda is principally engaged in system integration and the development, production and sale of computer software and hardware. Meanwhile, Inpsur Mingda is also engaged in the business of investment through its self-owned assets.

— 6 —

LETTER FROM THE BOARD

The Main Contractor is a company incorporated in PRC which is principally engaged in civil and foundation work, road engineering, mechanical and electrical installation engineering and building engineering who has premium class building engineering general contract certificate qualification.

REASONS FOR AND BENEFITS OF THE CONSTRUCTION OF BUILDING

Currently the Group is renting commercial offices for running the daily business of its office in Jinan. The rental costs spent by the Group for renting its Jinan office in the year of 2011 are approximately RMB9,908,800 (equivalent to approximately HK$12,088,736) and it is estimated that, under the current real estate market conditions in PRC, the same will be around RMB9,073,900 (equivalent to approximately HK$11,070,158) in the year of 2012. Meanwhile, the Group envisages ongoing need to increase its office capacity due to its business development and the increase in its staff number. In the circumstances, the Group plans to construct the Building for its own use so as to meets the Group’s needs for office capacity and to save the rental costs.

Meanwhile, the Building is situated in Olympic Athletic Park District (濟南奧體文博片區), the core area of the east new town of Jinan City (濟南東部新城), with easy access to transportation facilities and the central business district of Jinan City. The Company is of the view that the Building provides a convenient and favourable work location to the staff members and it is therefore conductive for the Group to attract and retain talents.

The Directors consider that the terms and conditions under the Main Contractor Contract are fair and reasonable and in the interests of the Company and its shareholders as a whole.

FINANCIAL EFFECT OF CONSTRUCTION OF THE BUILDING

The Consideration is expected to be funded by internal resources of the Group. Therefore, the Group’s fixed assets will increase following completion of construction of the Building, whilst current assets will decrease. The Board estimates that the construction of the Building will not have any material effect on the cash flow and business operation of the Group for 2012.

IMPLICATIONS UNDER THE LISTING RULES

As the relevant applicable percentage ratios for the Foundation Construction Contract are less than 5%, the transaction under the foundation construction work is exempt from reporting and announcement requirements set out in Chapter 14 of the Listing Rules. However, as the applicable percentage ratios (as defined in the Listing Rules) for the Main Contractor Contract aggregated with the Foundation Construction Contract in relating to the construction of the Building are more than 25% but less than 100%, it constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to reporting, announcement and Shareholder’s approval requirements set out in Chapter 14 of the Listing Rules.

— 7 —

LETTER FROM THE BOARD

EGM

Set out on pages 18 to 19 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 Thursday, 10 January 2013 for the purpose of considering and if thought fit approving the Main Contractor Contract and transactions contemplate thereunder. The Directors confirmed that to the best of their knowledge, as at the Latest Practicable Date, information and belief having made all reasonable enquiry, no Shareholders and their respective associates have interests in the transactions contemplated under the Main Contractor Contract which is different from other Shareholders and therefore no Shareholder is required to abstain from voting in respect of the proposed resolution to approve the above transaction at the EGM.

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 Board considers that the entering into the Main Contractor Contract with the Main Contractor for the construction of the Building is fair and reasonable and is in the best interests of the Company and the Shareholders as a whole and recommends the 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 Wang Xingshan Chairman

— 8 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

AUDITED CONSOLIDATED FINANCIAL STATEMENT OF THE GROUP

The Company is required to set out in this circular the information for the last three financial years with respect to the profits and losses, financial record and position, set out as a comparative table and the latest published audited statement of financial position together with the notes on the annual accounts for the last financial year for the Group.

The audited consolidated financial statements of the Group for the year ended 31 December 2011 have been set out in the Annual Report 2011 of the Company which was posted on 20 April 2012 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2011:

http://www.hkexnews.hk/listedco/listconews/SEHK/2012/0420/LTN20120420606.pdf

The audited consolidated financial statements of the Group for the year ended 31 December 2010 have been set out in the Annual Report 2010 of the Company which was posted on 14 April 2011 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2010:

http://www.hkexnews.hk/listedco/listconews/SEHK/2011/0414/LTN20110414647.pdf

The audited consolidated financial statements of the Group for the year ended 31 December 2009 have been set out in the Annual Report 2009 of the Company which was posted on 23 April 2010 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2009:

http://www.hkexnews.hk/listedco/listconews/SEHK/2010/0423/LTN20100423340.pdf

The three auditors’ reports for the consolidated financial statements of the Group for the years ended 31 December 2011, 2010 and 2009 are unqualified reports.

INDEBTEDNESS STATEMENT

As at 31 October 2012, being the latest practicable date prior to the printing of this circular for the purpose of this indebtedness statement, the Group had outstanding borrowings of HK$19,520,000,being unsecured, unguaranteed and non-trade related amount due to ultimate holding company. In addition, there are 72,859,049 series A senior redeemable convertible voting preferred shares (in the principal amount of approximately HK$63,519,000) attached with rights of conversion to 297,052,141 Ordinary Shares issued by the Company.

Save as otherwise disclosed in this circular, the Group did not, as at 31 October 2012, have any outstanding loan capital issued and outstanding or agreed to be issued, bank overdrafts, charges or debentures, mortgages, loans, or other similar indebtedness or any finance lease commitments, hire purchase commitments, liabilities under acceptance (other than normal trade bills), acceptance credits or any guarantees or other material contingent liabilities.

— 9 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

FINANCIAL AND TRADING PROSPECT

In the future, through pursuing active market expansion strategies, the Company will further expand into regional and industrial market and refine the synergy and coordination mechanism of products, regions and industry. In addition, the Company will increase the investment in the market and establish more sales channels, and strategically expand in provincial cities and major cities by stationing more employees in the cities. The Company will invest more resources in research and development, develop new products based on the requirements cloud technology, and strengthen the overall capabilities of solutions to innovate its business model and services model. The Company will also enhance the capability and efficiency of its services and actively seek strategic opportunities to enter into SMEs markets. By enhancing its external cooperation, merger and acquisition, the Company will proactively face various challenges and implement its plans to maintain the competitiveness of its cloud computing technology.

WORKING CAPITAL STATEMENT

The Directors are of the opinion that, after taking into account the financial resources available to the Group (including internal resources and available banking facilities), the Group will have sufficient working capital for its present requirements for at least the next 12 months from the date of this circular.

— 10 —

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This document, 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%

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

				Percentage of
			Number of	the issued share
	Type of	Description of	underlying	capital of the
Name of Director	interests	equity derivatives	Shares	Company
Wang Xingshan	Beneficial owner	share option (Note 1)	5,000,000	0.12%
Chen Dongfeng	Beneficial owner	share option (Note 1)	4,000,000	0.09%
Dong Hailong	Beneficial owner	share option (Note 1)	2,000,000	0.05%
Wong Lit Chor,	Beneficial owner	share option (Note 1)	200,000	0.01%
Alexis
Sun Chengtong	Beneficial owner	share option (Note 1)	4,000,000	0.09%

— 11 —

APPENDIX II

GENERAL INFORMATION

• Note 1: 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 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	1,357,390,000	32.26%
	controlled
	corporation (Note)
Jinan Inspur Wireless	Interest in a	1,357,390,000	32.26%
Communication Limited#	controlled
(濟南浪潮無線通信有限公司)	corporation (Note)
Inspur Qilu Software Industry Limited#	Interest in a	1,357,390,000	32.26%
(浪潮齊魯軟件產業有限公司)	controlled
	corporation (Note)
Inspur Cheeloo Overseas Investment	Interest in a	1,357,390,000	32.26%
And Development Co., Limited	controlled
(浪潮齊魯海外投資發展有限公司)	corporation and
	Beneficial owner
	(Note)
Inspur Overseas Investment Limited	Beneficial owner	1,354,390,000	32.19%
(浪潮海外投資有限公司)	(Note)
Wang Yukun	Beneficial owner	296,520,000	7.04%

— 12 —

APPENDIX II

GENERAL INFORMATION

Note: Inspur Overseas Investment Limited and Inspur Cheeloo Overseas Investment And Development Co., Limited have reported to be the beneficial owner of 1,354,390,000 Shares and 3,000,000 Shares respectively. Inspur Group Limited, Jinan Inspur Wireless Communication Limited, Inspur Qilu Software Industry Limited, and Inspur Cheeloo Overseas Investment And Development Co., Limited are holding companies of Inspur Overseas Investment Limited and thus are taken to be interested in 1,357,390,000 Shares.

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

			Number of	Approximate
		Number of	underlying	percentage of
	Type of	Preferred	Ordinary	voting rights of
Name of Shareholders	interests	Shares	Shares	Shares
			(Note 1)
Microsoft Corporation	Beneficial owner	72,859,049	297,052,141	6.59%

• Note: Microsoft Corporation held 72,859,049 class A senior redeemable voting preferred shares convertible into 297,052,141 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 297,052,141 underlying Ordinary Shares represented approximately 6.59% of the issued share capital of the Company as enlarged by the full exercise of the conversation rights attaching to the Preferred Shares.

Long positions in members of the Group

			Approximate
			percentage of
			shareholding
			in the
	Types of		members of
Name of shareholders	Interest	Equity interest held	the Group
Wu Xi Yi Jie Xin Cheng	Beneficial	RMB200,000 in the registered	10%
Information Technology	owner	capital of Wuxi Inspur Business
Company Limtied# (無		Technology Company Limited#
錫易捷信誠信息技術有		(無錫浪潮商服技術有限公司)
限公司)
Fang Wensheng	Beneficial	RMB225,000 in the registered	37.5%
	owner	capital of Inspur Fangzhi
Bao Jianhua	Beneficial	RMB90,000 in the registered	15%
	owner	capital of Inspur Fangzhi
Shanghai Huili Co. Ltd#	Beneficial	RMB50,000 in the registered	10%
(上海滙力有限公司)	owner	capital of Shanghai Guoqiang
		Genersoft Incorporation#
		(上海國强通用軟件有限公司)

— 13 —

GENERAL INFORMATION

APPENDIX II

			Approximate
			percentage of
			shareholding
			in the
	Types of		members of
Name of shareholders	Interest	Equity interest held	the Group
Webgroup Co.	Beneficial	US$14,504 in the registered	10.36%
	owner	capital of Langchao Gaoyou
		(Shanghai) Services Incorporation#
		高優(上海)信息科技有限公司
Zheng Jianyang	Beneficial	RMB5,000,000 in registered	14.29%
	owner	capital of Shangdong Inspur
		Financial Software Information
		Company Limited# (山東浪潮金融
		軟件信息有限公司)

# 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.

As at the Latest Practicable Date, so far as known to the Directors, none of the Directors is a director or employee of a company which has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO.

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 2011, being the date to which the latest published audited financial statements of the Company were made up.

— 14 —

GENERAL INFORMATION

APPENDIX II

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. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and there was no litigation or claims of material importance known to the Directors to be pending or threatened by or against any member of the Group.

5. 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).

6. MATERIAL ADVERSE CHANGE

During the first half year of 2012, the net margin from operations of the Group significantly decreased as compared with the corresponding period of last year. The decrease was mainly attributable to: (1) fierce competition in the market and the poor overall economic situation, and (2) increase of the Group’s investment in marketing activities and research and development. Please refer to the unaudited financial information regarding the Group as set out in the half-year results announcement for the six months ended 30 June 2012 published by the Company on 29 August 2012 for further details.

As at the Latest Practicable Date and save as disclosed in this circular, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, the date to which the latest published audited accounts of the Group have been made up.

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.

— 15 —

GENERAL INFORMATION

APPENDIX II

• (c) Ms. Chan Wing and Mr. Zou bo are joint company secretary of the Company. Ms. Chan is a member of the Hong Kong Institute of Certified Public Accountants and a member of the Chinese Institute of Certified Public Accountants, and Mr. Zou 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. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) have been entered into by members of the Group during the two years immediately preceding the Latest Practicable Date and are or may be material:

• (a) The Main Contractor Contract;

• (b) The Foundation Construction Contract;

• (c) the supplemental deed entered into between the Company and Microsoft on 31 October 2011 regarding the amendment of the terms of the Preferred Shares in relation to the following matters:

• (i) the maturity date of the Preferred Shares will be extended for 2 years commencing on 8 December 2011 (“Restructuring Date”);

• (ii) the rate of dividend payable to the holder of the Preferred Shares will be increased;

• (iii) the dividend will be payable in the form of cash only, and no scrip dividend will be payable after the Restructuring Date; and

• (iv) the Company will pay the holder of Preferred Shares the excess dividend when the dividend exceeds HK$0.013 per Ordinary Share in a financial year.

• (d) the joint venture agreement dated 25 November 2011 among Inspur Electronic Information Industry Co., Ltd., Shandong Inspur Software Co., Ltd., and Inspur (Shandong) Electronic Information Co., Ltd. in relation to the formation of a joint venture company named Shandong Inspur Cloud Computing Industry Investment Co., Limited with registered capital in the amount of RMB300,000,000;

• (e) the sale and purchase agreement dated 18 January 2012 entered into between the Inspur (Shandong) Electronic Information Limited and the Shandong Inspur Software Co., Limited in relation to disposal of the entire registered capital of Shandong Inspur E-Government Software Limited at a consideration of RMB15,000,000; and

— 16 —

GENERAL INFORMATION

APPENDIX II

• (f) the land use rights transfer agreement dated 29 August2012 between Inspur Mingda as purchaser and IPG as vendor in respect of acquisition of land use right of the Land, the principal terms of the agreement are:

• (i) Inspur Minda agreed to acquire the land use rights of the Land from IPG for a period of approximately 45 years.

• (ii) The consideration payable by Inspur Mingda to IPG in relation to acquisition of the land use rights shall be RMB32,000,000 (equivalent to approximately HK$39,035,269) with about RMB1,865 per sq.m. The consideration shall be paid in the following manner:

  • (1) RMB16,000,000 shall be paid within 7 days of the date of the land use rights agreement; and

  • (2) RMB16,000,000 shall be paid within 7 days after the certificate of the land use rights has been issued in favour of Inspur Mingda.

9. 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:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the audited consolidated financial statements of the Group for the two financial years ended 31 December 2010 and 31 December 2011;

• (c) the contracts referred to in the section headed “Material Contracts” referred in section 8 of the this appendix; and

• (d) each of the circulars issued by the Company pursuant to the requirements set out in Chapter 14 and/or Chapter 14 A of the Listing Rules which has been issued since 31 December 2011.

— 17 —

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 Thursday, 10 January 2013 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution as the ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT:

• (a) the Main Contractor Contract (“ Main Contractor Contract ”) dated 19 November 2012 entered into between Jinan Inspur Mingda Information Technology Limited (濟南浪潮銘 達信息科技有限公司) as the owner and Tianyuan Construction Group Limited (天元建設 集團有限公司) as the contractor for construction of S01 Scientific Research Activities Building (浪潮科技園S01科研樓) in Jinan City, Shandong Province, PRC at a consideration of RMB276,863,120.73 (details of the Main Contractor Contract are set out in the Company’s circular dated 20 December 2012 (the “ Circular* ”) and copies of the Main Contractor Contract and the Circular have been tabled at the meeting and marked “A” and “B” respectively signed by the Chairman of the meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

• (b) the Directors of the Company be and are hereby authorized to take such action and execute such documents as they may consider appropriate and expedient in respect of the transactions contemplated under the Main Contractor Contract, including the approval of variation orders, for the purpose of implementation or giving effect to the Main Contractor Contract and the transactions contemplated thereunder.”

By order of the Board Inspur International Limited Wang Xingshan Chairman

Hong Kong, 20 December 2012

• For identification purpose only

— 18 —

NOTICE OF THE EGM

Registered office: Head office and principal place Cricket Square of 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 annual general meeting 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. Wang Xingshan, Mr. Chen Dongfeng, Mr. Dong Hailong and Mr. Sun Chengtong as executive Directors, Mr. Samuel Y. Shen as a non-executive Director, and Mr. Zhang Tiqin, Mr. Wong Lit Chor, Alexis and Ms. Dai Ruimin as independent non-executive Directors.

— 19 —