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

Sep 28, 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)

CONTINUING CONNECTED TRANSACTIONS

CHANGE OF PRICING TERMS AND REVISION OF ANNUAL CAPS

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 Thursday, 18 October 2012 at 10:00 a.m. is set out on pages 26 to 28 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.

3 October 2012

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26

— 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 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

• “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 Supplemental Agreement and the proposed Revised Caps.

• “First Shanghai”

First Shanghai Capital Limited, 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 Supplemental Agreement and the Revised Caps and the transactions contemplated thereunder

• “Framework Agreement”

• the agreement dated 15 July 2011 between the Company and IPG in relation to the continuing connected transactions between the Group and the Inspur Group

• “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. Zhang Tiqin, Mr. Wong Lit Chor, Alexis and Ms. Dai Ruimin, all being the independent non-executive directors, to advise the Independent Shareholders as to the fairness and reasonableness of the Supplemental Agreement and the Revised Caps

• “Independent Shareholders” Shareholders other than IPG and its associates

• “Inspur Group” IPG and its subsidiaries

— 1 —

DEFINITIONS

• “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 32.19% of the existing issued ordinary share capital of the Company

• “Latest Practicable Date” 27 September 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

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

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

• “Revised Caps” the revised annual caps of the Supply Transactions to be entered into by the relevant parties for the year ending 31 December 2012 and the year ending 31 December 2013

• “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 “Supplemental Agreement” the conditional supplemental agreement dated 11 September 2012 to the Framework Agreement between the Company and IPG in relation to (1) amendment of certain terms of the Framework Agreement, and (2) setting of Revised Caps

• “Supply Transactions” transactions in relation to supply and provision of products and services by the Group to the Inspur Group under the Framework Agreement

— 2 —

DEFINITIONS

“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	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.

— 3 —

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 3 October 2012

To the Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS CHANGE OF PRICING TERMS AND REVISION OF ANNUAL CAPS

INTRODUCTION

Reference is made to the Company’s announcement dated 11 September 2012. On 11 September 2012, the Company (for itself and on behalf of the other members of the Group) entered into the Supplemental Agreement with IPG (for itself and on behalf of the other members of the Inspur Group) about (1) amendment of certain terms of the Framework Agreement, and (2) setting of the Revised Caps. As IPG is a connected person of the Company and the Supplemental Agreement constitutes a material change of the terms of Framework Agreement pursuant to Rule 14A.36(2) of the Listing Rules, the Company is required to re-comply with the reporting and announcement requirements and with the independent shareholders’ approval requirements under Rules 14A.35(3) and (4) of the Listing Rules. IPG, its ultimate beneficial owners and their respective associates will abstain from voting in the EGM to be convened for the approval of the Supplemental Agreement.

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LETTER FROM THE BOARD

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

BACKGROUND OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

Reference is made to the Framework Agreement, the Company’s announcement dated 15 July 2011 and the Company’s circular dated 29 July 2011 regarding the continuing connected transactions of five categories between the Group and the Inspur Group. Under the Framework Agreement, the Company had agreed with IPG on five categories of continuing connected transactions between the Group and Inspur Group from time to time that: (i) the Group supplies and provides various IT products and IT services to the Inspur Group (“Supply Transactions”); (ii) the Group has appointed Inspur Group as its selling agent in respect of the IT products and IT services; (iii) the Group purchases various IT products from Inspur Group; (iv) the Group procures common services in respect of the use of premises, water, electricity, heating and motor vehicles from Inspur Group; and (v) the Group procures processing services, principally being the assembling and manufacturing of tax-collection cashier machines from the Inspur Group. On 15 August 2011, the Company has obtained the approval of the Independent Shareholders for the continuing connected transactions and the annual caps assigned to the transactions for the three financial years ended 31 December 2013. As (1) the pricing policy under the Supply Transactions is no longer kept abreast with the current market situation, and (2) the transaction amounts of the Supply Transactions in the remaining part of 2012 and in the year of 2013 will be continuingly increased, the Company has entered into the Supplemental Agreement with IPG in respect of changing the pricing terms of the Supply Transactions and setting the Revised Caps for the year ending 31 December 2012 and the year ending 31 December 2013.

SUPPLY TRANSACTIONS UNDER THE FRAMEWORK AGREEMENT

Types of products and services under Supply Transactions

Under the Supply Transactions, the members of the Group supply and provide the members of the Inspur Group with various IT products and IT services from time to time including without limitation the following three types of products and services:

• (i) Computer products and components including without limitation CPU, integrated circuit, computer mainboards where the Group is acting as the sourcing agent of the Inspur Group for overseas products and components;

• (ii) IT hardware products including without limitation personal computers and computer components designed, developed or otherwise processed by the Group for the purpose of overseas export; and

• (iii) IT services without limitation the services related to the development of cards used in personal computers and electronic products, sourced software, ERP software and those software developed by the Group.

— 5 —

LETTER FROM THE BOARD

Sourcing of overseas products for Inspur Group

Under the Framework Agreement, the Inspur Group pays a premium of 1.5% above the purchase price paid by the Group, without taking into account of rebates received from the suppliers, for all computer components sourced overseas by the Group on their behalf.

Payment terms

The Group gives two-month credit period for the Inspur Group to settle the amount of the IT products after delivery and the service fees of the IT services after completion of the performance of the services.

Original annual caps in respect of the Supply Transactions

Under the Framework Agreement, the approved annual caps of the Supply Transactions are listed as follows:-

Year ended Year ending ended Year ending 31 December 2011 31 December 2012 31 December 2013 (HK$) (HK$) (HK$) Original Annual Caps 345,000,000 380,000,000 418,000,000

For the period from 1 January 2012 to 30 June 2012, the transacted amount under the Supply Transactions is HK$212,800,000. Taking into account of the transacted amounts in July and August 2012 and in view of the expected growth rate for transacted amounts in the remaining part of the year 2012 and in the year of 2013, it is expected that in the remaining part of the year 2012 and in the year of 2013, the transacted amounts for computer components will be continuously increased and therefore the existing annual caps in 2012 and 2013 for Supply Transactions are not adequate to cater for such increase for business. In the circumstances, the Company will seek Independent Shareholders’ approval for the proposed Revised Caps.

SUPPLEMENTAL AGREEMENT AND REVISED CAPS

On 11 September 2012, the Company and IPG entered into the Supplemental Agreement pursuant to which (1) certain pricing terms of the Supply Transactions have been amended, and (2) the annual caps in respect of the Supply Transactions for the year ending 31 December 2012 and 31 December 2013 will be revised to HK$425,000,000 and HK$467,000,000 respectively, representing approximately 10% increase in the annual caps.

The Supplemental Agreement is conditional upon the approval of the Independent Shareholders of the Supplemental Agreement at the EGM.

— 6 —

LETTER FROM THE BOARD

Pricing terms

The pricing terms for sourcing of overseas products for Inspur Group have been formulated and remain unchanged since 2004 when the Company has become a listed company on the Stock Exchange. In 2012, it becomes a normal practice that the third party suppliers will usually grant the Group a considerable sale discount on certain computer components purchased by the Group so as to promote the sale of the products. The rebates will usually be received by the Group after completion of the transaction, which results that the actual purchasing costs paid by the Group and the market price of such computer components are decreased. When selling the computer components to third party customers, the Group will determine the selling price with reference to the market price of the computer components. However, when selling the same to Inspur Group, the Group still has to adopt the existing pricing policy whereby it will receive a premium of 1.5% above the purchase price paid by the Group (without taking into account of rebates received from the suppliers). In view of the above, it is found that such pricing policy is no longer kept abreast with the current market situation in 2012. Adopting the existing pricing policy, the price of computer components sold to Inspur Group will be higher than the price of computer components sold to independent third party customers, resulting in unfair treatment. If the Group continues to adopt the existing pricing policy without adapting to the changing market environment, Inspur Group may shift their procurement of IT products from the Group to other suppliers who can offer competitive pricing. In the long run, changing the existing pricing policy is for the mutual benefit of the Group and the Inspur Group.

In order to have fair treatment to all the business partners and to retain the business of supply of computer components to Inspur Group, the Company entered into Supplemental Agreement with IPG whereby the pricing policy for supply of computer components to Inspur Group under the Supply Transactions is agreed to be changed as follows:

• (1) If the computer components of a specific model number has been sold to a third party customer in the same month, the selling price of these computer components of such specific number shall be adopted as the selling price of same model number computer components to be sold to Inspur Group; and

• (2) For computer components of other model numbers which are supplied to Inspur Group only, the Group continues to adopt the existing pricing policy of adding a premium of 1.5% to the purchase price actually paid by the Group.

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LETTER FROM THE BOARD

Revised annual caps

Set out below are the relevant historical/recent transacted amounts and the original and proposed annual caps of the Supply Transactions:-

	Year ended	Year ending ended	Year ending
	31 December 2011	31 December 2012	31 December 2013
	(HK$)	(HK$)	(HK$)
Historical/Recent Transacted	340,416,000 (note 2)	212,800,000 (note 1)	__
Amount
Original Annual Caps	345,000,000	380,000,000	418,000,000
Proposed Annual Caps	—	425,000,000	467,000,000

Notes:

• (1) The recent transacted amount for 2012 was unaudited figure for the 6 months ended 30 June 2012.

• (2) The historical transacted amount was audited figure for the year ended 31 December 2011.

Save for the above, there is no other change to the terms of Supply Transactions between the Group and the Inspur Group.

The factors which have been taken into account by the Company for determination of above proposed annual caps are: (a) original annual caps; (b) recent historical transacted amounts; (c) sale orders which have been fulfilled and sale orders on hand; (d) expected growth rate of the transacted amount in the remaining part of the year 2012 and in the year of 2013 (which is determined with reference to the average industry growth rate which is expected to be not less than 10%); and (e) expected sale orders to be received in the remaining part of the year 2012 and in the year of 2013.

INFORMATION ON THE GROUP AND THE INSPUR GROUP

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

IPG is an investment holding company established in the PRC. Inspur Group devotes itself to be the leading suppliers of Cloud Computer Solutions in China. Inspur Group provides IT services and products to the customers in more than 30 countries, meeting the information-based demands of governments and corporations all-around.

REASONS FOR AND BENEFITS OF ENTERING INTO THE SUPPLEMENTAL AGREEMENT AND THE REVISED CAPS

By entering into the Supplemental Agreement and adoption of the Revised Caps, the Group would have fair treatment to all the business partners and to retain the business of supply of computer components to Inspur Group and can also fulfil the expected increase in the sale volume in the remaining part of the year 2012 and in the year of 2013.

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LETTER FROM THE BOARD

The Directors consider that the Supplemental Agreement is entered into in the usual and ordinary course of business of the Group and on normal commercial terms and the terms of the Supplemental Agreement together with the revised annual caps of the Supply Transactions are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

None of the Directors are interested in the transactions contemplated under the Supplemental Agreement and none of them have abstained from voting on the board resolution approving the Supplemental Agreement.

IMPLICATION UNDER THE LISTING RULES

IPG is a company established in the PRC and is beneficially owned as to approximately 38.88% by 山東省國有資產投資控股有限公司 (Shandong State-owned Asset Investment Holdings Co., Ltd (“SSAIH”)), 25% by 山東德盛信息科技發展有限公司 (Shandong Desheng Information Technology Limited (“Shandong Desheng”)), approximately 16.13% by 濟南裕澤信息科技有限公司 (Jinan Yuze Information Technology Limited (“Jinan Yuze”)), and approximately 19.99% by 英大國際信託有限責 任公司 (Yingda International Trust Co., Ltd (“Yingda”)) which holds such shares on behalf of 濟南普特投資有限公司 (Jinan Pute Investment Limited, “Jinan Pute”), the actual contributor of those shares. Through its wholly owned subsidiaries, IPG is interested in 1,354,390,000 Ordinary Shares at the Latest Practicable Date, representing approximately 32.19% of the issued ordinary share capital of the Company. Under the Listing Rules, IPG is a connected person of the Company. Pursuant to Rule 14A.36(2) of the Listing Rules, the Supplemental Agreement constitutes a material change of terms of Framework Agreement and the Company is required to re-comply with the reporting and announcement requirements and with the independent shareholders’ approval requirements under Rule 14A.35(3) and (4) of the Listing Rules. IPG, its ultimate beneficial owners and their respective associates will abstain from voting in the EGM to be convened for the approval of the Supplemental Agreement.

EGM

Set out on pages 26 to 28 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, 18 October 2012 at which resolution will be proposed to approve (i) the Supplemental Agreement; and (ii) the Revised Caps.

Resolution approving the Supplemental Agreement and the Revised Caps

The Supplemental Agreement and the proposed Revised Caps are subject to, among other things, the approval by the Independent Shareholders at the EGM to be taken by way of a poll. IPG and its associates shall abstain from voting for the relevant resolution approving the Supplemental Agreement and the proposed Revised Caps at the EGM due to their interest in the concerned transactions. 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, IPG (including its associates) is entitled to voting rights of 1,354,390,000 Ordinary Shares (representing approximately 30.07% of the total voting rights of the holders of the Ordinary Shares and Preferred Shares). IPG (including its associates) controls or is entitled to control over the entire voting right in respect of its Ordinary Shares. There is (i) no voting trust or other agreement or arrangement or understanding entered into

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LETTER FROM THE BOARD

by or binding upon IPG (including its associates); and (ii) no obligation or entitlement of IPG (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 Ordinary 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 Supplemental Agreement and the proposed Revised Caps are fair and reasonable so far as the Independent Shareholders are concerned.

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

The text of the letters 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 terms of the Supplemental Agreement and the proposed Revised Caps are fair and reasonable and are in the interests of the Company and the Shareholders as a whole and recommends the Independent Shareholders to vote in favour of the relevant resolution to be proposed at EGM.

The Board considers that the entering into the Supplemental Agreement and the approval of the proposed Revised Caps 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 appendix to this circular.

Yours faithfully For and on behalf of the Board of Inspur International Limited Wang Xingshan Chairman

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LETTER 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)

3 October 2012

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS CHANGE OF PRICING TERMS AND REVISION OF ANNUAL CAPS

We refer to the circular dated 3 October 2012 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 Supplemental Agreement and the proposed Revised Caps 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 Supplemental Agreement and the proposed Revised Caps, as set out on pages 12 to 18 of the Circular.

Having taken into account of the advice of First Shanghai, we consider that (i) the Supplemental Agreement to be entered into upon normal commercial terms, and the continuing connected transactions contemplated thereunder to be entered into 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 (ii) the proposed Revised Caps are fair and reasonable insofar as the Company and the Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Supplemental Agreement and the proposed Revised Caps.

Yours faithfully,

the Independent Board Committee

Dai Ruimin Zhang Tiqin Wong Lit Chor, Alexis Independent non-executive Independent non-executive Independent non-executive Director Director Director

— 11 —

LETTER OF ADVICE FROM FIRST SHANGHAI

The following is the text of a letter received from First Shanghai setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Agreement (including the Revised Caps) 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

3 October 2012

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS CHANGE OF PRICING TERMS AND REVISION OF ANNUAL CAPS

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Agreement (including the Revised Caps), details of which are set out in the circular of the Company to the Shareholders dated 3 October 2012 (the “ Circular ”) of which this letter forms part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as those defined in the Circular.

IPG is a controlling shareholder of the Company, therefore IPG is a connected person of the Company and the transactions contemplated under the Framework Agreement, which include the Supply Transactions, constitute continuing connected transactions of the Company. The Framework Agreement was approved, confirmed and ratified by the then Independent Shareholders at the extraordinary general meeting of the Company held on 15 August 2011. On 11 September 2012, the Company and IPG entered into the Supplemental Agreement, pursuant to which certain terms on the pricing of Supply Transactions will be amended and the annual caps in respect of the Supply Transactions for each of the years ending 31 December 2012 and 2013 will be revised. Given the Supplemental Agreement amends the terms of the Framework Agreement and revises the annual caps of the Supply Transactions, the Supplemental Agreement is subject to, amongst others, the approval by the Independent Shareholders under the Listing Rules.

The Independent Board Committee, comprising all the independent non-executive Directors, namely Mr. Zhang Tiqin, Mr. Wong Lit Chor, Alexis and Ms. Dai Ruimin has been established to advise the Independent Shareholders in respect of the Supplemental Agreement (including the Revised Caps). We, First Shanghai Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

— 12 —

LETTER OF ADVICE FROM FIRST SHANGHAI

In putting forth our opinion and recommendation, we have relied on the accuracy of the information and representations included in the Circular and provided to us by 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 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 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 management of the Group nor have we conducted any form of investigation into the business, affairs or future prospects of the Group and the Inspur Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion on the terms of the Supplemental Agreement, we have taken into account the following principal factors and reasons:-

1. Background of and reasons for the Supplemental Agreement

Background of the Group and the Inspur Group

The Group is an integrated information technology (“ IT ”) services provider with services covering taxation, finance, ERP, telecommunication and software outsourcing services.

IPG, which is a controlling shareholder of the Company, is an investment holding company established in the PRC. The Inspur Group provides IT services and products to customers, which include governments and corporations, in more than 30 countries.

Background of and reasons for the Supply Transactions

We are advised by the management of the Group that the Group has established long term strategic business relationship with the Inspur Group, where the Group leverages on the business platform and network of the Inspur Group to facilitate the business development of the Group.

The Supply Transactions are one of the categories of the transactions under the Framework Agreement and the Group has been conducting the Supply Transactions. The Supply Transactions involve the supply and provision of, amongst others, (i) computer products and components; (ii) IT hardware products; and (iii) IT services by the members of the Group to the members of the Inspur Group. We are advised by the management of the Group that the Supply Transactions are in line with the principal business of the Group and are revenue in nature.

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LETTER OF ADVICE FROM FIRST SHANGHAI

Background of and reasons for the Supplemental Agreement

As stated in the letter from the Board in the Circular, the pricing terms for sourcing of overseas products for the Inspur Group have been formulated and remain unchanged since the Company became a listed company on the Stock Exchange in 2004. Pursuant to the Framework Agreement, for the sourcing of all computer components, being one of the product categories under the Supply Transactions, the Inspur Group pays a premium of 1.5% above the gross procurement price paid by the Group to its suppliers, without taking into account of rebates received from the suppliers (the “ Traditional Price ”). We are advised by the management of the Group that the historical transaction amounts under the Supply Transactions (excluding the sales of IT hardware products to Venezuela which were discontinued as detailed in the announcement of the Company dated 7 June 2010) represent approximately 12%, 13% and 15% of the revenue of the Group for each of the years ended 31 December 2009, 2010 and 2011, respectively.

We are advised by the management of the Group that the Traditional Price, which is determined by reference to the gross procurement price, may be higher than the price of the same product sold by the Group to the general market because the Group determines its market selling price by reference to, amongst others, the net procurement price, being the gross procurement price minus the rebates provided by suppliers. We are also advised by the management of the Group that, given the grant of considerable rebates has developed into a normal business practice and the pricing difference has become more noticeable, where the amount of rebates for the six months ended 30 June 2012 recorded year on year growth of approximately 35%, the Inspur Group has recently brought up the pricing issue and the Inspur Group may shift their procurement of IT products from the Group to other distributors who can offer competitive pricing. We have also reviewed the website of the principal overseas IT product supplier of the Group and we understand that the principal supplier has a business practice of granting rebates for some of its IT products. We are further advised by the management of the Group that the Group is not the exclusive IT product distributor of its overseas suppliers, where the Inspur Group can procure IT products from other IT product distributors in the market, and we have further reviewed the website of the principal overseas IT product supplier of the Group, where we note that the supplier has other distributors which offer the principal type of IT product recently sold by the Group to the Inspur Group, therefore we consider it is possible for other distributors to takeover such IT product business from the Group. Hence, the Company and IPG entered into the Supplemental Agreement to resolve the pricing issue for the mutual benefit of the Group and the Inspur Group. In addition, the Supplemental Agreement will also revise the existing annual caps to cope with the latest business development of the Group.

Having considered, in particular, (i) the Group has established long term strategic business relationship with the Inspur Group and the Group has been conducting the Supply Transactions; (ii) the Supply Transactions are in the ordinary and usual course of business of the Group and can enhance the revenue stream of the Group; (iii) the Traditional Price may be higher than the price of the same product sold by the Group to the general market; (iv) the Supplemental Agreement aims to resolve the existing pricing issue and to retain the business of the sales of computer components to the Inspur Group; (v) the Supplemental Agreement will also revise the existing annual caps to cope with the latest business development of the Group; and (vi) the terms of the Supplemental Agreement and the Revised Caps are fair and reasonable as discussed below, we are of the view that the entering into of the Supplemental Agreement is in the interests of the Company and the Shareholders as a whole.

— 14 —

LETTER OF ADVICE FROM FIRST SHANGHAI

1. Principal terms of the Supplemental Agreement

We are advised by the management of the Group that, pursuant to the Supplemental Agreement, the pricing policy for the supply of computer components to the Inspur Group under the Supply Transactions will be amended as follows:-

• (i) if the computer components of a specific model number to be sold to the Inspur Group has been sold to a third party customer in the same month, the selling price to the Inspur Group (the “ New Price ”) shall equal to the selling price to such third party customer; and

• (ii) under other scenarios, the Traditional Price, which is stipulated under the Framework Agreement as approved, confirmed and ratified by the then Independent Shareholders at the extraordinary general meeting of the Company held on 15 August 2011, shall continue to be adopted.

We are also advised by the management of the Group that, for illustrative purpose, the amended pricing policy would lower the gross profit margin of sales to the Inspur Group under the Supply Transactions from approximately 11% to 6% for the six months ended 30 June 2012, but such lowered gross profit margin would still be no less favourable than the overall gross profit margin of sales to independent third party customers. We are further advised by the management of the Group that, if the Group does not adapt a more competitive pricing policy as previously discussed, the Inspur Group may shift their procurement of computer components from the Group to other distributors who can offer competitive pricing, where the Group would lose the sales of computer components to the Inspur Group.

Taking into account the above factors, in particular, (i) the New Price equals the selling price to third party customer; (ii) the Traditional Price will continue to be adopted when there is no appropriate third party customer; (iii) the Traditional Price is stipulated under the Framework Agreement as previously approved, confirmed and ratified by the then Independent Shareholders; (iv) for illustrative purpose, the amended pricing policy would lower the gross profit margin of sales to the Inspur Group under the Supply Transactions for the six months ended 30 June 2012, but such lowered gross profit margin would still be no less favourable than the overall gross profit margin of sales to independent third party customers; (v) the background of and reasons for the Supply Transactions as discussed above, in particular, the Supplemental Agreement aims to resolve the existing pricing issue and to retain the business of the sales of computer components to the Inspur Group, where the Inspur Group may shift their procurement of computer components from the Group to other distributors who can offer competitive pricing and the Group would lose the sales of computer components to the Inspur Group; and (vi) measures are in place as required under the Listing Rules to govern the internal control of the Group and monitor the Supply Transactions as detailed in the section headed “Annual review requirements under the Listing Rules” below, we are of the view that the terms of the Supplemental Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

— 15 —

LETTER OF ADVICE FROM FIRST SHANGHAI

3. Revised Caps

According to the letter from the Board in the Circular, the Revised Caps were determined after taking into account, amongst others, the original annual caps, the recent historical transaction amounts and the expected sales orders. We are further advised by the management of the Group that the impact on the future transaction amount of the Supply Transactions due to the change of the pricing term as stipulated under the Supplemental Agreement is not expected to be material because the sales volume may also increase due to the adoption of a more competitive pricing policy and, for illustrative purpose, the transaction amount for the six months ended 30 June 2012 would only decrease by around 5% under the amended pricing policy. The following is a summary of the historical transaction amounts of the Supply Transactions for the year ended 31 December 2011 and the six months ended 30 June 2012 as well as the Revised Caps for each of the years ending 31 December 2012 and 2013:-

	Historical transaction amounts	Historical transaction amounts	Revised Caps	Revised Caps
	For the year	For the	For the
	ended 31	six months	year ending
	December	ended 30 June	31 December
	2011	2012	2012	2013
	(audited)	(unaudited)
Supply Transactions
(rounded to the nearest
HK$ million)	340	213	425	467

We understand that the proposed annual cap for the year ending 31 December 2012 approximately equals, on a pro rata basis, the historical transaction amount for the six months ended 30 June 2012.

We also understand that the proposed annual cap for the year ending 31 December 2013 represents a growth of approximately 10% as compared with the proposed annual cap for the year ending 31 December 2012. We have reviewed the interim results of the Company for the six months ended 30 June 2012, where we note that the historical transaction amount of the Supply Transactions for the six months ended 30 June 2012 recorded year on year growth of approximately 9%. We have also reviewed industry information published on the website of International Data Corporation (“ IDC ”), which is a global provider of market intelligence with more than 1,000 analysts in over 110 countries worldwide, and we note that the industry information published by IDC is quoted in, amongst others, the listing documents of several Hong Kong listed companies. We understand that, according to the article titled “ China IT Services 2012-2016 Forecast and Analysis ” published by IDC in July 2012, the IT services market in the PRC is expected to record a compound annual growth rate of approximately 14% from 2011 to 2016. We also understand that, according to the article titled “ IDC Lowers PC Outlook As Shipments Decline In Second Quarter Ahead of Fall Product Updates ” published by IDC in August 2012, the shipment of personal computers for emerging markets is expected to record a compound annual growth rate of approximately 8% from 2011 to 2016.

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LETTER OF ADVICE FROM FIRST SHANGHAI

Taking into account the above factors, in particular, (i) the proposed annual cap for the year ending 31 December 2012 approximately equals, on a pro rata basis, the historical transaction amount for the six months ended 30 June 2012; (ii) the proposed annual cap for the year ending 31 December 2013 is in line with the recent growth rate of the historical transaction amount of the Supply Transactions; (iii) the proposed annual cap for the year ending 31 December 2013 is also in line with the expected industry growth trend; (iv) the terms of the Supplemental Agreement are fair and reasonable as discussed above; and (v) measures are in place as required under the Listing Rules to govern the internal control of the Group and monitor the Supply Transactions as detailed in the section headed “Annual review requirements under the Listing Rules” below, we are of the view that the Revised Caps are fair and reasonable so far as the Independent Shareholders are concerned. Nonetheless, the Independent Shareholders should note that the Revised Caps should not be construed as an assurance or forecast by the Group of its future revenue.

4. Annual review requirements under the Listing Rules

The Supply Transactions are subject to a number of annual review requirements under the Listing Rules which include:-

• (i) each year the independent non-executive Directors must review the Supply Transactions and confirm in the annual report and accounts of the Company that the Supply Transactions have been entered into (a) in the ordinary and usual course of business of the Company; (b) either on normal commercial terms or, if there are not sufficient comparable transactions to judge whether they are on normal commercial terms, on terms no less favourable to the Group than terms available to or from (as appropriate) independent third parties; and (c) in accordance with the agreement governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole;

• (ii) each year the auditors of the Company must provide a letter to the Board (with a copy provided to the Stock Exchange at least 10 business days prior to the bulk printing of the annual report of the Company) confirming that the Supply Transactions (a) have received the approval of the Board; (b) are in accordance with the pricing policies of the Company if the Supply Transactions involve provision of goods or services by the Company; (c) have been entered into in accordance with the relevant agreement governing the Supply Transactions; and (d) have not exceeded the respective annual cap;

• (iii) the Company will allow, and will procure that the counterparties will allow, the auditors of the Company sufficient access to the relevant records of the Supply Transactions for the purpose of reporting on the Supply Transactions. The Board must state in the annual report whether its auditors have confirmed the matters stated in paragraph (ii) above; and

• (iv) the Company shall promptly notify the Stock Exchange and publish an announcement in accordance with the Listing Rules if it knows or has reason to believe that the independent non-executive Directors and/or the auditors of the Company will not be able to confirm the matters set out in paragraphs (i) and/or (ii) above respectively.

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LETTER OF ADVICE FROM FIRST SHANGHAI

In light of the reporting requirements attached to the Supply Transactions, in particular, (i) the restriction of the value of the Supply Transactions by way of the Revised Caps; and (ii) the ongoing review by the independent non-executive Directors and the auditors of the Company of the terms of the Supply Transactions and the Revised Caps not being exceeded, we are of the view that appropriate measures will be in place to govern the conduct of the Supply Transactions and safeguard the interests of the Independent Shareholders.

RECOMMENDATION

Having considered the above factors and reasons, in particular:-

• the Traditional Price may be higher than the price of the same product sold by the Group to the general market and, if the Group does not adapt a more competitive pricing policy, the Inspur Group may shift their procurement of computer components from the Group to other distributors who can offer competitive pricing, where the Group would lose the sales of computer components to the Inspur Group;

• the Supplemental Agreement aims to resolve the existing pricing issue to retain the business of the sales of computer components to the Inspur Group and to revise the existing annual caps to cope with the latest business development of the Group;

• the New Price equals the selling price to third party customer and the Traditional Price will continue to be adopted when there is no appropriate third party customer; and

• the proposed annual cap for the year ending 31 December 2012 approximately equals, on a pro rata basis, the historical transaction amount for the six months ended 30 June 2012 and the proposed annual cap for the year ending 31 December 2013 is in line with the recent growth rate of the historical transaction amount of the Supply Transactions and the expected industry growth trend,

we are of the opinion that (i) the entering into of the Supplemental Agreement is in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole; and (ii) the terms of the Supplemental Agreement are on normal commercial terms and, together with the Revised Caps, are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves advise, the Independent Shareholders to vote in favour of the ordinary resolution to approve the Supplemental Agreement at the EGM.

Yours faithfully, For and on behalf of First Shanghai Capital Limited Eric Lee Fanny Lee Managing Director Managing Director

— 18 —

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

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.

— 20 —

GENERAL INFORMATION

APPENDIX

• (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
		Number of	percentage of
Name of Shareholders	Type of interests	Shares	interests
Inspur Group Limited	Interest in a controlled	1,354,390,000	32.19%
	corporation (Note)
Jinan Inspur Wireless	Interest in a controlled	1,354,390,000	32.19%
Communication Limited #	corporation (Note)
(濟南浪潮無線通信有限公司)
Inspur Qilu Software	Interest in a controlled	1,354,390,000	32.19%
Industry Limited #	corporation (Note)
(浪潮齊魯軟件產業有限公司)
Inspur Cheeloo Overseas Investment	Interest in a controlled	1,354,390,000	32.19%
And Development Co., Limited	corporation (Note)
(浪潮齊魯海外投資發展有限公司)
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%

Note : Inspur Overseas Investment Limited has reported to be the beneficial owner of 1,354,390,000 Shares. 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 1,354,390,000 Shares.

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

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

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APPENDIX

GENERAL INFORMATION

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
			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	10%
Information Technology		registered capital of Wuxi
Company Limtied#		Inspur Business Technology
(無錫易捷信誠信息技術		Company Limited# (無錫浪
有限公司)		潮商服技術有限公司)
Fang Wensheng	Beneficial owner	RMB225,000 in the	37.5%
		registered capital of Inspur
		Fangzhi
Bao Jianhua	Beneficial owner	RMB90,000 in the	15%
		registered capital of Inspur
		Fangzhi
Shanghai Huili Co. Ltd.#	Beneficial owner	RMB50,000 in the	10%
(上海滙力有限公司)		registered 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 &		capital of Shangdong Inspur
Consulting Company		Financial Information
Limited#		Systems Company Limited#
(深圳量龍管理諮詢有限		(山東浪潮金融信息系統有限
公司)		公司)

— 22 —

GENERAL INFORMATION

APPENDIX

				Approximate
				percentage of
				shareholding
				in the
				members of
**Name **	of shareholders	Types of Interest	Equity interest held	the Group
Zheng	Jianyang	Beneficial owner	RMB5,000,000 in registered	14.29%
			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.

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.

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).

— 23 —

GENERAL INFORMATION

APPENDIX

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 2011, 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

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 any Shares, convertible securities, warrants, options or derivatives which carry voting rights 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 2011), 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.

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GENERAL INFORMATION

APPENDIX

• (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. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the Supplemental Agreement and the Framework Agreement 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:

— 25 —

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, 18 October 2012 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 supplemental agreement (the “Supplemental Agreement” ) dated 11 September 2012 entered into by Inspur International Limited (the “ Company ”) and Inspur Group Limited (“浪潮集團有限公司”) (“ IPG ”) as supplemental to the framework agreement entered into by the parties on 15 July 2011 (the “ Framework Agreement ”) in relation to the amendment of certain pricing terms in the Framework Agreement and setting of the revised annual caps of the Supply Transactions (as defined and more particularly described in the Company’s circular dated 3 October 2012 (the “ Circular* ”)) for the year ending 31 December 2012 and the year ending 31 December 2013 (details of the Supplemental Agreement are set out in the Circular and copies of the Supplemental Agreement 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;

• (b) the proposed Revised Caps (as defined in the Circular) in respect of the Supply Transactions be and are hereby approved and confirmed; and

— 26 —

NOTICE OF THE EGM

• (c) the directors of the Company be and are hereby authorised to do such acts and execute such other documents as they may consider necessary, desirable or expedient to carry out or give effect to or otherwise in connection with or in relation to the Supplemental Agreement, the proposed Revised Caps and all transactions contemplated thereunder.”

By order of the Board Inspur International Limited Wang Xingshan Chairman

Hong Kong, 3 October 2012

• For identification purpose only

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.

— 27 —

NOTICE OF THE EGM

1. 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.

2. 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.

— 28 —