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 DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST

IN INSPUR (HK) ELECTRONICS LIMITED

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 6 June 2013 at 10:00 a.m. is set out on pages 33 to 34 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 EGM (or any adjournment thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM (or any adjournment thereof) if you so wish.

21 May 2013

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter of Advice from First Shanghai . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix I — Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Appendix II — General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Notice of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

— 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

“Completion”

The completion of the Disposal

“connected person(s)” has the meaning ascribed to it under the Listing Rules
“controlling shareholder” has the meaning ascribed to it under the Listing Rules
“Consideration”
the sum payable by the Purchaser to the Vendor under the Sale and Purchase Agreement for the Disposal.
“Director(s)” the director(s) of the Company
“Disposal”

the disposal of the Sale Shares by the Vendor to the Purchaser pursuant to the terms and subject to the conditions set out in the Sale and Purchase Agreement

“EGM” the extraordinary general meeting of the Company to be convened and held for the approving, amongst other things, the Sale and Purchase Agreement and transactions contemplated thereunder “First Shanghai” First Shanghai Capital Limited, a licensed corporation to carry out 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 Sale and Purchase Agreement and the transactions contemplated thereunder

“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

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DEFINITIONS

“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 Sale and Purchase Agreement and the transactions contemplated thereunder

“Independent Shareholders”

Shareholders other than Inspur Group (including its ultimate beneficial owners and their respective associates)

“Inspur Electronic Information” Inspur Electronic Information Industry Co., Ltd* (浪潮電子信息產業股份有限公司), a company incorporated in the PRC whose shares are listed on Shenzhen Stock Exchange with stock code 000977

“Inspur Group” Inspur Group Limited* (浪潮集團有限公司), which is a company incorporated in the PRC and through its wholly owned subsidiaries, interested in approximately 32.11% of the issued ordinary share capital of the Company

“Latest Practicable Date” 16 May 2013, 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 Shares” ordinary shares of HK$0.002 each in the share capital of the Company, each as “Ordinary Share”

“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, each as “Preferred Share” “Purchaser” Inspur Electronic Information (Hong Kong) Co., Limited (浪潮電子信息 (香港) 有限公司), a limited company established under the laws of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “Sale and Purchase Agreement” the sale and purchase agreement dated 16 April 2013 entered into between the Vendor and the Purchaser in relation to the Disposal

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DEFINITIONS

“Sale Shares”	1,000,000 ordinary shares of HK$1.00 each in the share
	capital of the Target Company, representing 100% of the
	issued share capital of the Target Company
“SFO”	Securities and Futures Ordinance (chapter 571 of the laws of
	Hong Kong)
“Share(s)”	Ordinary Share(s) and Preferred Share(s)
“Shareholder(s)”	holder(s) of the Share(s)
“Shareholder’s Loan”	the loan advanced by the Company to the Target Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Target Company”	Inspur (HK) Electronics Limited (浪潮(香港)電子有限公司),
	a limited company established under the laws of Hong Kong
“Target Group”	the Target Company and its subsidiaries
“Vendor”	Inspur Electronics Limited, a company incorporated under the
	laws of the British Virgin Islands and is a wholly owned
	subsidiary of the Company
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“USD”	US Dollars, the lawful currency of the United State of
	America
“%”	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.

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LETTER FROM THE BOARD

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

Executive Directors:

Mr. 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 21 May 2013

To the Shareholders

Dear Sir or Madam,

MAJOR DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST IN INSPUR (HK) ELECTRONICS LIMITED

INTRODUCTION

Reference is made to the Company’s announcement dated 16 April 2013. On 16 April 2013, the Vendor, a wholly owned subsidiary of the Company, and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Vendor agreed to sell and the Purchaser agreed to acquire the Sale Shares for a total consideration of HK$294,230,000 (or USD equivalent).

As the Purchaser is an associate of Inspur Group (a controlling shareholder of the Company), the Disposal constitutes a connected transaction of the Company under the Listing Rules. In addition, since certain applicable percentage ratios for the Disposal are more than 25% but all of the same are less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the

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LETTER FROM THE BOARD

Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules. Inspur Group, its ultimate beneficial owners and their respective associates will abstain from voting in the EGM to be convened for the approval of the Sale and Purchase Agreement and the transactions contemplated thereunder.

The purpose of this circular is to provide you with further information regarding, among other things, (i) details of the Sale and Purchase Agreement; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from First Shanghai; (iv) the notice of the EGM, and (v) other information as required by the Listing Rules.

THE SALE AND PURCHASE AGREEMENT

Parties

Purchaser: Inspur Electronic Information (Hong Kong) Co., Limited

Vendor: Inspur Electronics Limited

The Purchaser is considered to be an associate of Inspur Group, a controlling shareholder of the Company (please refer to paragraph headed “Information of the Vendor, the Target Company and the Purchaser” below for further information).

Asset to be disposed of

The asset to be disposed of under the Sale and Purchase Agreement is the Sale Shares, being the entire equity interest in the Target Company.

Consideration

The Consideration payable by the Purchaser to the Vendor for the Disposal amounts to HK$294,230,000 (or USD equivalent) which will be paid by the Purchaser to the Vendor in the following manner:-

(1) within ten business days after the Effective Date (defined below), the Purchaser shall pay the Vendor HK$69,750,000 (or USD equivalent, which will be calculated based on the central parity rate quoted by Bank of China (Hong Kong) Limited at 16:00 on the prior business day of the payment of such sum) being part of the Consideration; and
(2) within three months after the Effective Date, the Purchaser shall pay the Vendor HK$224,480,000 (or USD equivalent, which will be calculated based on the central parity rate quoted by Bank of China (Hong Kong) Limited at 16:00 on the prior business day of the payment of such sum) being the balance of the Consideration.

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LETTER FROM THE BOARD

The Consideration was arrived at arm’s length negotiation between the parties to the Sale and Purchase Agreement with reference to, among other things, (i) the price earnings ratio (“ P/E Ratio ”) of approximately 5 where the audited profit after tax of the Target Company for the year ended 31 December 2012 amounts to approximately HK$58.85 million; and (ii) the price-book ratio (“ P/B Ratio ”) of approximately 4.23 where the net asset value of the Target Company as at 31 December 2012 amounts to HK$69,622,000.

For determination of the Consideration with reference to P/E Ratio and P/B Ratio, the Directors considered that the P/E Ratio and P/B Ratio are applicable to the Target Group as they reflect net profit and net assets for the latest financial year of the Target Group. In this regard, the Directors further referred to the follows:-

the P/E Ratio (6.98) and P/B Ratio (0.60) of Futong Technology Development Holdings Ltd., a comparable company listed on the Stock Exchange in the IT industry with the stock code of 465, which has similar business nature of the Target Company (i.e. distribution of IT products and provision of IT service). For selection of that comparable company, the Directors considered that the company with similar business nature in IT industry may generally have similar revenue and cost structure and hence its respective P/E Ratio and P/B Ratio are worthy of reference for the Company. The P/E Ratio represented by the Consideration of approximately 5 is approximately 28.37% lower whereas the P/B Ratio of approximately 4.23 is approximately 605% higher than the respective ratios of the comparable company.
the increasing trend of the net profit of the Target Company during the past 5 years. The net profit of the Target Company was not substantially increased in year of 2008 and 2009. However, the years from 2009 to 2011 witnessed a surge of the net profit of the Target Company from approximately HK$24 million to approximately HK$58.7 million, which was followed by a slow-down in growth in the year of 2012 (2012: HK58.8 million). For determination of a reasonable P/E ratio, the Directors considered that it would be inappropriate to refer to the peak of the net profit only, but shall also refer to the net profit during the recent few years together with its changing trend.

In the circumstances, the Directors considered that the P/E Ratio of approximately 5 is not materially lower whereas the P/B Ratio of approximately 4.23 is significantly higher than the respective ratios of of the comparable company. In this regard, and also having considered the factors described in the paragraph headed “Reasons for and benefits of the Disposal” below, the Directors (including the independent non-executive Directors) are of the view that the terms of the Sale and Purchase Agreement including the amount and payment terms of the Consideration are on normal commercial terms and are fair and reasonable and in the interests of the Group and the Shareholders as a whole.

Conditions Precedent of the Sale and Purchase Agreement

The completion of the Disposal is conditional upon:-

(i) the approval by the board of directors of the Vendor of the Sale and Purchase Agreement and the transactions contemplated thereunder having been obtained;

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LETTER FROM THE BOARD

(ii) the approval by the board of directors of the Purchaser of the Sale and Purchase Agreement and the transactions contemplated thereunder having been obtained;
(iii) the Sale and Purchase Agreement and the transactions contemplated thereunder being approved by the Independent Shareholders at the EGM;
(iv) the Sale and Purchase Agreement and the transactions contemplated thereunder being approved by the shareholders of Inspur Electronic Information at its provisional shareholders meeting;
(v) all approvals or consents in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder (including without limitation all necessary approvals or consents from relevant authorities) having been obtained and continuing to take effect.

The date when all the above conditions precedent (i) to (iv) are fulfilled is referred to herein as the “ Effective Date ”.

In event that the above conditions are not fulfilled on or before 30 August 2013 or such a later date as the parties of the Sale and Purchase Agreement may agree in writing, all the rights and obligations of the parties under the Sale and Purchase Agreement shall forthwith be of no effect and the parties shall not make any claim against the other party save for any antecedent breach of terms of the Sale and Purchase Agreement and fault committed by any party resulting in non-fulfillment of the conditions precedent.

The Completion shall take place within 7 business days after the fulfillment of all the above conditions precedent or any other date as the parties may agree in writing. As at the Latest Practicable Date, the above (i), (ii) and (iv) of the conditions precedent have been fulfilled.

Shareholder’s Loan

The Company has advanced the Shareholder’s Loan to the Target Company which amounted to approximately HK$103,904,000 as at 31 December 2012. It is expected that the amount of the Shareholder’s Loan will be no more than HK$105,000,000 as at the date of the Completion. The Purchaser has undertaken that the Shareholder’s Loan together with interest will be fully repaid within six months after the date of the Completion. The Purchaser will pay interest to the Vendor at the lending interest rate stipulated by the People’s Bank of China for the period from the date of the Completion to the repayment date of the Shareholder’s Loan.

INFORMATION OF THE VENDOR, THE TARGET COMPANY AND THE PURCHASER

The Group is an integrated IT services provider with services covering taxation, finance, ERP, telecommunication and software outsourcing services. The Vendor is a limited company incorporated under the laws of the British Virgin Islands and is a wholly owned subsidiary of the Company. The Vendor is a company principally engaged in investment holding.

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LETTER FROM THE BOARD

The Target Company is a limited liability company established in Hong Kong and is wholly owned by the Vendor. The Target Group is principally engaged in trading of IT components.

The following table shows the turnover, net profit before tax and net profit after tax of the Target Company based on its audited financial statements for the year ended 31 December 2012 and the year ended 31 December 2011 respectively.

	For	the year ended	For	the year ended
	31 December 2012		31 December 2011
		(audited)		(audited)
		HK$’000		HK$’000
Turnover		1,239,465		963,443
Net profit before tax		70,762		70,195
Net profit after tax		58,845		58,708

The total assets, total liabilities and net asset value of the Target Company as at 31 December 2012 amount to approximately HK$216 million, HK$146 million and HK$70 million respectively as shown in the audited financial statements.

The Purchaser is a company established in Hong Kong and is principally engaged in investment holding. The Purchaser is a wholly owned subsidiary of Inspur Electronic Information, a listed company whose shares are listed on Shenzhen Stock Exchange with the stock code 000977.

Inspur Group is an investment holding company established in the PRC. Inspur Group (including its subsidiaries) devotes itself to be the leading suppliers of Cloud Computer Solutions in China. Inspur Group (including its subsidiaries) provides IT services and products to the customers in more than 40 countries/regions, meeting the information-based demands of governments and corporations all-around. Inspur Group, through its wholly owned subsidiaries, is interested in approximately 32.11% of the issued ordinary share capital of the Company as at the Latest Practicable Date and is a controlling shareholder of the Company. Inspur Group is interested in approximately 47.87% of the issued share capital of Inspur Electronic Information which wholly owns the Purchaser. Therefore, the Purchaser is considered to be an associate of Inspur Group.

FINANCIAL EFFECT OF THE DISPOSAL

(i) Earnings

It is estimated that the Group will realize a gain of approximately HK$224.6 million from the Disposal (before the costs of this transaction, such as professional fees, stamp duty and other related costs). The estimated gain is based on the net sale proceeds from the Disposal less the carrying amount of the net asset value of the Target Company of approximately HK$69.6 million as at 31 December 2012. Shareholders should note that the exact amount of gain from the Disposal would be calculated

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LETTER FROM THE BOARD

on the basis of the relevant figures as at the date of the Completion and therefore would be different from the above amount. The audited net profit after tax of the Target Company for the year ended 31 December 2012 is approximately HK$58.85 million. After the Completion, the Target Company will cease to be a subsidiary of the Company and cease to contribute any profit to the Group in subsequent years.

(ii) Assets and Liabilities

As disclosed in the 2012 annual report of the Company, the Group recorded net assets attributable to owners of the Company of approximately HK$1,702 million as at 31 December 2012. Based on the audited financial statements of the Target Company as at 31 December 2012, it is estimated that the Disposal will result in an increase in total assets of the Group by approximately HK$78 million (calculated from amount of the Consideration (approximately HK$294 million) minus total assets of the Target Group (approximately HK$216 million)) and a reduction in total liabilities of the Group by approximately HK$146 million. Furthermore, the members of the Target Group will cease to be subsidiaries of the Group upon Completion.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Target Company is principally engaged in trading of IT components. For determination of the Disposal, the Directors had also considered the following reasons:-

(1) the net profit of trading of IT components was not substantially increased during the past year. Having taken into account that (i) the IT components are mainly used for hardware products; (ii) the hardware business in the IT industry is not expected to be developed as significantly as software/service business in the coming years; and (iii) the performance of IT components trading business principally depends on the orders from major clients of the Target Group, it is therefore expected that, although the IT components trading business is a primary profit-making business for the Group in the year of 2012, net profit of the Target Company will not be substantially increased in the coming years.
(2) the business nature of the IT components trading is less value-added as compared with that of other business of the Company, such as IT service business (especially in the business of cloud computing). The main reasons are that the business of trading of IT components requires less specialized skills and technology and therefore may have lower profit margin in the long run and the business of IT services (especially in the business of cloud computing) has a great potential for development in the information age nowadays. The Company is also of the view that the IT service business (especially in the field of cloud computing) is still under development and it is expected that the costs structure will be improved as the business segment evolves from the existing development stage to a more mature stage in the future.
(3) In the year of 2012, about 32.99% of the IT components of the Target Company are supplied to the members of Inspur Group under the supply transaction, which constitutes continuing connected transactions under the Listing Rules (Shareholders may refer to the circulars of the Company dated 29 July 2011 and 3 October 2012 in respect of continuing connected

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LETTER FROM THE BOARD

transactions for details). In the circumstances, the Disposal can reduce the relevant amount of the continuing connected transactions and can also reduce the human and financial resources required to comply with the continuing connected transaction requirements under the Listing Rules, where such resources can be utilised on the major business focus of the Group. For example, with the Disposal, the Company may (i) save human resources in relation to monitoring of relevant transaction amounts for avoidance of exceeding of relevant annual caps, and (ii) reduce the number of convening of the required independent shareholders meetings for setting new or revised annual caps under the continuing connected transactions).

In view of the above, the Directors (including the independent non-executive Directors) are of the view that the Disposal provides the Company a favourable chance for realization and the Sale and Purchase Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole. The Directors (including the independent non-executive Directors) also consider that the terms of the Sale and Purchase Agreement are fair and reasonable and on normal commercial terms.

None of the Directors have a material interest in the transactions contemplated under the Sale and Purchase Agreement or need to abstain from voting on the board resolution approving the Sale and Purchase Agreement and the transactions contemplated thereunder.

USE OF PROCEEDS

The Group intends that the net proceeds of the Disposal will be used as working capital of the Group and reserve for payment of construction of the S01 Scientific Research Activities Building (please refer to the Company’s circular dated 20 December 2012 for details).

IMPLICATION UNDER THE LISTING RULES

As the Purchaser is an associate of Inspur Group, a controlling shareholder of the Company, the Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. In addition, since certain applicable percentage ratios for the Disposal are more than 25% but all of the same are less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules. Inspur Group, its ultimate beneficial owners and their respective associates will abstain from voting in the EGM to be convened for the approval of the Sale and Purchase Agreement and the transactions contemplated thereunder.

EGM

Set out on pages 33 to 34 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 6 June 2013 for the purpose of considering and, if thought fit, approving the Sale and Purchase Agreement and the transactions contemplate thereunder.

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LETTER FROM THE BOARD

The Sale and Purchase Agreement and the transactions contemplate thereunder are subject to, among other things, the approval by the Independent Shareholders at the EGM to be taken by way of a poll. As mentioned above, Inspur Group and its associates shall, at the EGM, abstain from voting for the relevant resolution approving the Sale and Purchase Agreement and the transactions contemplate thereunder due to their interest in the concerned transaction. Other than the above, no other Shareholders have material interest in the above transactions and will abstain from voting at the EGM. As at the Latest Practicable Date, Inspur Group (including its associates) is entitled to voting rights of 1,357,390,000 Ordinary Shares (representing approximately 30.001% of the total voting rights of the Shareholders). Inspur Group (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 by or binding upon Inspur Group (including its associates); and (ii) no obligation or entitlement of Inspur Group (including its associates) as at the Latest Practicable Date, whereby it has or may have temporarily or permanently passed control over the exercise of the voting right in respect of its 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 EGM (or any adjournment thereof). Completion and delivery of the form of proxy will not preclude you from attending and voting at the EGM (or any adjournment thereof) if you so wish.

RECOMMENDATIONS

The Independent Board Committee has been established to advise the Independent Shareholders whether the terms of the Sale and Purchase Agreement are fair and reasonable so far as the Independent Shareholders are concerned and First Shanghai has been appointed to advise the Independent Board Committee and the Independent Shareholders in that connection.

The text of the letter from First Shanghai containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 14 to 23 of this circular and the text of the letter from the Independent Board Committee to the Independent Shareholders is set out on page 13 of this circular.

The Independent Board Committee, having taken into account of the advice of First Shanghai, is of the opinion that the terms of the Sale and Purchase Agreement are fair and reasonable and are in the interest 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 terms of the Sale and Purchase Agreement are on normal commercial terms and fair and reasonable and are in the interests of the Company and the Shareholders as a whole. The Board recommends the Independent Shareholders to vote in favour of the resolution to be proposed at EGM.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

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

By Order of the Board Inspur International Limited Wang Xingshan Chairman

— 12 —

LETTER FROM THE INDEPENDENT BOARD COMMITEE

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

21 May 2013

To the Independent Shareholders

Dear Sir or Madam,

MAJOR DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST IN INSPUR (HK) ELECTRONICS LIMITED

We refer to the circular of the Company dated 21 May 2013 (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 Sale and Purchase Agreement and the transactions contemplated thereunder and to advise the Independent Shareholders as to the fairness and reasonableness of the aforesaid matters, and to recommend how the Independent Shareholders should vote at the EGM. First Shanghai has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to the letter from the Board, as set out on pages 4 to 12 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 Sale and Purchase Agreement, as set out on pages 14 to 23 of the Circular.

Having taken into account of the advice of First Shanghai, we consider that the Sale and Purchase Agreement is entered into upon normal commercial terms following arm’s length negotiations between the parties thereto, and that the terms of the Sale and Purchase Agreement are fair and reasonable so far as the Independent Shareholders are concerned, and the Sale and Purchase Agreement is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

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

— 13 —

LETTER FROM FIRST SHANGHAI

The following is the text of the letter of advice to the Independent Board Committee and the Independent Shareholders from First Shanghai for the purpose of incorporation into this circular.

==> picture [117 x 51] intentionally omitted <==

FIRST SHANGHAI CAPITAL LIMITED

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

21 May 2013

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

MAJOR DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST IN INSPUR (HK) ELECTRONICS LIMITED

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder, details of which are set out in the circular of the Company dated 21 May 2013 (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.

On 16 April 2013, the Vendor, being a wholly owned subsidiary of the Company, and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Vendor agreed to sell and the Purchaser agreed to acquire the Sale Shares at the consideration of approximately HK$294 million (or USD equivalent) (the “ Consideration ”).

The Purchaser is an associate of Inspur Group, which is a controlling shareholder of the Company. Hence, the Purchaser is a connected person of the Company under the Listing Rules and the transaction contemplated under the Sale and Purchase Agreement constitutes a connected transaction for the Company. Accordingly, the Sale and Purchase Agreement is subject to, among other conditions, the approval by the Independent Shareholders at the EGM.

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 formed to advise the Independent Shareholders in respect of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder. We, First Shanghai Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

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

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion in respect of the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder, we have taken into account the following principal factors and reasons:

1. Background of and benefits for the entering into of the Sale and Purchase Agreement

Information on the Group

The Group is principally engaged in the trading of computer components, software development and provision of software outsourcing services. As disclosed in the annual report of the Company for the year ended 31 December 2012 (the “ 2012 Annual Report ”), approximately 52% of the revenue of the Group was derived from the trading of information technology components (“ IT Components Trading ”) and the remaining portion was derived from provision of information technology services (“ IT Services Provision ”) for the year ended 31 December 2012. The Group recorded revenue of approximately HK$2,401 million for the year ended 31 December 2012, representing an annual growth of approximately 8%, which was primarily attributable to the increase in revenue from IT Components Trading. Nonetheless, the profitability of the Group worsened from recording profit attributable to owners of the Company of approximately HK$50 million for the year ended 31 December 2011 to recording loss attributable to owners of the Company of approximately HK$93 million for the year ended 31 December 2012, which was mainly due to (i) the sharp increment of approximately HK$72 million in administrative and distribution costs primarily as a result of the increase in research and development costs and marketing and human resources expenses; (ii) the one-off impairment loss on goodwill of approximately HK$64 million during the year ended 31 December 2012; and (iii) the decrease in gross profit of approximately HK$21 million as a result of keen competition in the market.

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LETTER FROM FIRST SHANGHAI

Information on the Target Company

The Target Company is a wholly-owned subsidiary of the Company and the Target Group is responsible for the operation of IT Components Trading. The table below sets out the key financial performance of the Target Group for each of the years ended 31 December 2011 and 2012 as extracted from the audited financial statements of the Target Group prepared in accordance with the Hong Kong Financial Reporting Standards (the “ Target Accounts ”):-

	For the year ended	For the year ended
	31 December
	2011	2012
	(HK$ million)	(HK$ million)
Turnover	963	1,239
Gross profit	81	83
Net profit	59	59

Turnover of the Target Group improved from approximately HK$963 million for the year ended 31 December 2011 to approximately HK$1,239 million for the year ended 31 December 2012, representing an annual growth of approximately 29%. Nonetheless, gross profit and net profit of the Target Group amounted to approximately HK$83 million and approximately HK$59 million for each of the years ended 31 December 2011 and 2012, representing annual growth of only approximately 2% and approximately nil%, respectively. We are advised by the management of the Group that the reduction in gross profit margin from approximately 8% for the year ended 31 December 2011 to approximately 7% for the year ended 31 December 2012 was mainly attributable to keen competition in the market and the reduction in net profit margin from approximately 6% for the year ended 31 December 2011 to approximately 5% for the year ended 31 December 2012 was mainly attributable to the decline in gross profit margin.

Set out in the table below is the breakdown of the financial position of the Target Group as at 31 December 2012 as extracted from the Target Accounts:-

	As at 31 December 2012
	(HK$ million)
Non-current assets	—
Current assets	216
Total assets	216
Non-current liabilities	—
Current liabilities	146
Total liabilities	146
Net assets	70

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LETTER FROM FIRST SHANGHAI

As shown in the above table, net assets of the Target Group amounted to approximately HK$70 million as at 31 December 2012. We understand that current assets of the Target Group mainly comprised inventories of approximately HK$121 million and bank balances and cash of approximately HK$57 million as at 31 December 2012. We also note that current liabilities primarily included the Shareholder’s Loan of approximately HK$104 million and trade payables of approximately HK$30 million as at 31 December 2012.

Reasons for and the benefits of the Disposal

We are advised by the management of the Group that IT Services Provision, particularly in the field of cloud computing, is the principal business focus of the Group in the long run. As stated in the annual report of the Company for the year ended 31 December 2011, in accordance with the development of the information technology industry and cloud computing technology, the Group would develop itself into a supplier of cloud computing products and services. With reference to the 2012 Annual Report, the Group introduced innovative technology products of cloud computing in order to increase the market share. The Group further invested in product development for the optimisation of product portfolio and the enhancement of core competitiveness as well as consolidation of its position in the niche market of cloud computing. For instance, the Group launched the management software flagship product GS6.0 package to fully support cloud computing, covering 2,375 function points under 99 product modules in 13 major areas of the supervision and control.

We are also advised by the management of the Group that, despite IT Components Trading was the primary profit-making segment of the Group for the year ended 31 December 2012, IT Components Trading is not the principal business focus of the Group in the long run mainly due to (i) the business nature of IT Components Trading primarily involves the sourcing and resale of information technology components and therefore, as compared with that of IT Services Provision in cloud computing, is less value-added, which requires less specialised skills and technology and may have lower margin in the long run; and (ii) the industry growth of IT Components Trading in the field of cloud computing is expected to be lower than IT Services Provision in the long run. We are further advised by the management of the Group that IT Services Provision in the cloud computing area is still under development and the cost structure is expected to improve over time as the business segment evolves from the existing development stage to a more mature stage in the coming years.

We have reviewed the industry report titled “中國雲計算服務創新白皮書” dated September 2012 (the “ CCID Report ”), which was published by CCID Consulting Company Limited, a market consultancy firm listed on the Stock Exchange. With reference to the CCID Report, the market size of the PRC cloud computing market was estimated to surge from approximately RMB29 billion in 2011 to approximately RMB115 billion in 2014, representing a compound annual growth rate of approximately 58% during the period. We have also reviewed an article titled “IDC Lowers PC Outlook As Shipments Decline In Second Quarter Ahead Of Fall Product Updates” dated August 2012 (the “ IDC Article ”), which was published by International Data

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LETTER FROM FIRST SHANGHAI

Corporation, a global provider of market intelligence with more than 1,000 analysts in over 110 countries worldwide. With reference to the IDC Article, the shipment of personal computers for emerging markets was forecasted to record a compound annual growth rate of only approximately 8% from 2011 to 2016.

The Disposal not only allows the Group to fully focus on the development of IT Services Provision, but also allows the Group to realise its investments in the Target Group, where the Group can utilise the proceeds of the Disposal to further develop the business of IT Services Provision and to fund the construction of the S01 Scientific Research Activities Building as detailed in the circular of the Company dated 20 December 2012.

In addition, we are advised by the management of the Group that approximately 35% and 33% of the turnover of the Target Group were derived from sales to connected persons for each of the years ended 31 December 2011 and 2012, respectively. We also understand that these continuing connected transactions are subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under the Listing Rules. Accordingly, the Disposal can reduce the human and financial resources required to comply with the aforementioned requirements, where such resources can instead be utilised on the major business focus of the Group. For instance, upon Completion, the Group will, in respect of such continuing connected transactions, no longer need to (i) arrange legal advisers and independent financial advisors to prepare for the approval by independent shareholders at general meetings; (ii) review on an ongoing basis the terms of such transactions as to whether they are no less favourable as compared to those with independent third parties; and (iii) monitor the transaction amounts on an ongoing basis to avoid the annual caps being exceeded.

Despite the Disposal is not in the ordinary and usual course of business of the Group and IT Components Trading was the primary profit-making segment of the Group, having primarily considered that (i) IT Components Trading is not the principal business focus of the Group in the long run; (ii) the business nature of IT Components Trading is not as value-added as compared with IT Services Provision; (iii) the industry growth of IT Services Provision in the field of cloud computing, which is the principal business focus of the Group in the long run, is expected to be significantly higher than that of IT Components Trading; (iv) the Disposal allows the Group to fully focus on the development of IT Services Provision; (v) the Disposal allows the Group to realise its investments in the Target Group, where the Group can utilise the proceeds to further develop the business of IT Services Provision; (vi) the Disposal can reduce the human and financial resources required to comply with the continuing connected transaction requirements under the Listing Rules, where such resources can instead be utilised on the major business focus of the Group; and (vii) the terms of the Sale and Purchase Agreement are fair and reasonable as analysed below, we are of the view that the entering into of the Sale and Purchase Agreement is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM FIRST SHANGHAI

2. Principal terms of the Sale and Purchase Agreement

(i) The Consideration

Pursuant to the Sale and Purchase Agreement, the Vendor agreed to sell and the Purchaser agreed to acquire the Sale Shares, being the entire equity interest in the Target Company. The Consideration amounts to approximately HK$294 million (or USD equivalent), approximately HK$70 million (or USD equivalent) of which will be paid within ten business days after the Effective Date and the balance of approximately HK$224 million will be paid within three months after the Effective Date.

According to the letter from the Board in the Circular, the Consideration was arrived at arm’s length negotiation between the parties with reference to, among other things, the price to earnings ratio (the “ P/E Ratio ”) and the price to book value ratio (the “ P/B Ratio ”) of the Target Company as represented by the Consideration. Taking into account (i) the P/E Ratio and the P/B Ratio are common benchmarks for the assessment of consideration; (ii) the aforementioned ratios are applicable to the Target Group as it recorded net profit and net assets for the latest financial year; (iii) companies with similar business nature generally have similar revenue and cost structure and share similar industry and growth prospects, hence, for our selection of comparable companies, business nature is more relevant than other factors such as market capitalisation, which may not be able to reflect profitability and prospects; and (iv) no valuation report prepared by independent professional valuer on the Target Group is available for our reference as an alternative assessment approach to assess the Consideration, we consider the review of the P/E Ratio and the P/B Ratio to be the most appropriate approach for our assessment of the Consideration. Hence, we have exhaustively identified companies listed on the Stock Exchange that are principally engaged in the trading or distribution of information technology products (the “ Comparable Companies ”) with over 50% of the total revenue generated from the relevant business segment for the latest financial year and we have reviewed the P/E Ratio and the P/B Ratio of each of the Comparable Companies based on information extracted from the website of the Stock Exchange. Independent Shareholders should however note that the comparison with the Comparable Companies is for general reference purpose only given that the particulars of the business and financial aspects and prospects of the Comparable Companies may not be exactly identical to those of the Target Group. Details of the Comparable Companies are set out in the table below:-

		Profit	Net assets
Company name		attributable to	attributable to	Market	P/E	P/B
(Stock code)	Principal business	shareholders(1)	shareholders(2)	capitalisation(3)	Ratio(4)	Ratio(5)
		(HK$ million)	(HK$ million)	(HK$ million)	(times)	(times)
Digital China	Sale and distribution of general	1,245	6,821	10,661	8.56	1.56
Holdings Ltd.	information technology products
(861 HK)	and systems products; and
	provision of supply chain
	services and information
	technology services

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LETTER FROM FIRST SHANGHAI

		Profit	Net assets
Company name		attributable to	attributable to	Market	P/E	P/B
(Stock code)	Principal business	shareholders(1)	shareholders(2)	capitalisation(3)	Ratio(4)	Ratio(5)
		(HK$ million)	(HK$ million)	(HK$ million)	(times)	(times)
VST Holdings Ltd.	Distribution of information	444	3,001	2,418	5.45	0.81
(856 HK)	technology products and
(“VST”)	provider of enterprise systems
	and IT services
SiS International	Distribution of IT products; and	128	2,029	831	6.49	0.41
Holdings Ltd.	property investment
(529 HK)(6)
Futong Technology	Provision of IT solutions,	54	625	377	6.98	0.60
Development	distribution of enterprise IT
Holdings Ltd.	products and provision of IT
(465 HK)	technical support services in the
	PRC
				Maximum:	8.56	1.56
				Mean:	6.87	0.85
				Median:	6.74	0.70
				Minimum:	5.45	0.41
Target Group(7)	IT Components Trading	59	70	294	5.00	4.23

Notes:

(1) Profit attributable to shareholders is based on the consolidated profit attributable to shareholders for the latest full financial year as disclosed in the latest published financial statement as at the date of the Sale and Purchase Agreement.
(2) Net assets attributable to shareholders is based on the consolidated net assets attributable to shareholders as disclosed in the latest published financial statement as at the date of the Sale and Purchase Agreement.
(3) The market capitalisation is derived from multiplying the number of shares as disclosed in the latest monthly return and closing share price as at the date of the Sale and Purchase Agreement.
(4) The P/E Ratio is derived from dividing the market capitalisation by the profit attributable to shareholders.
(5) The P/B Ratio is derived from dividing the market capitalisation by the net assets attributable to shareholders.
(6) For the calculation of the P/E Ratio, gain on disposal of subsidiaries constituting discontinued operations of approximately HK$32 million was deducted from the profit attributable to shareholders of approximately HK$159 million for the year ended 31 December 2012 for prudence purpose.
(7) The P/E Ratio is derived from dividing the Consideration by the net profit of the Target Group of HK$58,844,621 for the year ended 31 December 2012. The P/B Ratio is derived from dividing the Consideration by the net assets of the Target Group of HK$69,621,988 as at 31 December 2012.
(8) The exchange rate of RMB1 to HK$1.25 has been adopted for illustrative purpose.

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LETTER FROM FIRST SHANGHAI

Independent Shareholders should also note that the Comparable Companies are listed companies, whereas the Target Group is a private company and maybe subject to a discount in valuation as a result of the illiquidity of shares. Accordingly, we have reviewed the marketability discounts adopted in valuation reports prepared by professional valuers contained in circulars published by Hong Kong listed companies since 2013, details of which are set out in the table below:-

			Marketability
Circular date	Company name (Stock code)		Discount
22 January 2013	China Gas Holdings Limited (384 HK)		20%
23 February 2013	M Dream Inworld Limited (8100 HK)		30%
28 February 2013	Tai Shing International (Holdings) Limited	(8103 HK)	12%
16 April 2013	Founder Holdings Limited (418 HK)		35%
9 May 2013	Paradise Entertainment Limited (1180 HK)		11%
		Maximum:	35%
		Mean:	22%
		Median:	20%
		Minimum:	11%

With reference to the above two tables, despite the P/E Ratio represented by the Consideration is below the range of those of the Comparable Companies and represents a discount of approximately 8% to the lowest P/E Ratio among the Comparable Companies, having primarily considered that (i) the Comparable Companies are listed companies, whereas the Target Group is a private company and the marketability discounts adopted in valuation reports prepared by professional valuers ranged from approximately 11% to 35%; (ii) the P/B Ratio represented by the Consideration is significantly higher than the range of those of the Comparable Companies; (iii) IT Components Trading is not the principal business focus of the Group in the long run; and (iv) all the benefits of the Disposal as discussed above, we are of the view that the basis of determining the Consideration is on normal commercial terms and is fair and reasonable so far as the Independent Shareholders are concerned.

(ii) The Shareholder’s Loan

The Company has advanced the Shareholder’s Loan to the Target Company, which amounted to approximately HK$104 million as at 31 December 2012. According to the letter from the Board in the Circular, the Shareholder’s Loan is expected to be no more than HK$105 million as at the date of the Completion. The Purchaser has undertaken that the Shareholder’s Loan together with interest will be fully repaid within six months after the date of the Completion. The interest of the Shareholder’s Loan will be based on the lending interest rate stipulated by the People’s Bank of China during the period from the date of the Completion to the repayment date of the Shareholder’s Loan. Having primarily considered (i) the Shareholder’s

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LETTER FROM FIRST SHANGHAI

Loan will be fully repaid within six months after the date of the Completion; and (ii) the interest of the Shareholder’s Loan will be based on the lending interest rate stipulated by the People’s Bank of China, we are of the view that the repayment arrangement of the Shareholder’s Loan is on normal commercial terms and is fair and reasonable so far as the Independent Shareholders are concerned.

3. Possible financial effects of the Disposal

(a) Earnings

As disclosed in the 2012 Annual Report, the Group incurred loss attributable to owners of the Company of approximately HK$93 million for the year ended 31 December 2012. With reference to the Target Accounts, the Target Group recorded net profit after tax of approximately HK$59 million for the year ended 31 December 2012. As detailed in the letter from the Board in the Circular, the Group will realise a non-recurring gain (before the costs of transaction) of approximately HK$225 million from the Disposal (the “ One-off Gain ”). Furthermore, the Target Group will cease to be a subsidiary of the Group and the financial performance of the Target Group will no longer be consolidated in the income statement of the Group upon Completion.

(b) Net assets

As disclosed in the 2012 Annual Report, the Group recorded net assets attributable to owners of the Company of approximately HK$1,702 million as at 31 December 2012. According to the Target Accounts, the Target Group recorded net assets of approximately HK$70 million as at 31 December 2012. We are advised by the management of the Group that the net assets of the Group will be enhanced upon Completion as a result of the One-off Gain. Furthermore, the Target Group will cease to be a subsidiary of the Group and the financial position of the Target Group will no longer be consolidated in the statement of financial position of the Group upon Completion.

(c) Working capital

As disclosed in the 2012 Annual Report, the Group had bank balances and cash of approximately HK$1,185 million as at 31 December 2012. Given that the Consideration of approximately HK$294 million (or USD equivalent) will be fully settled in cash, the working capital of the Group is expected to improve upon Completion.

RECOMMENDATION

Despite the Disposal is not in the ordinary and usual course of business of the Group and IT Components Trading was the primary profit-making segment of the Group, having primarily considered that:

IT Components Trading is not the principal business focus of the Group in the long run;

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LETTER FROM FIRST SHANGHAI

the industry growth of IT Components Trading is expected to be significantly lower than that of IT Services Provision in the field of cloud computing;
the Disposal allows the Group to fully focus on the development of IT Services Provision;
the Disposal allows the Group to realise its investments in the Target Group, where the Group can utilise the proceeds to further develop the business of IT Services Provision; and
the P/B Ratio represented by the Consideration is significantly higher than the range of those of the Comparable Companies and the P/E Ratio represented by the Consideration is not materially different from the lower end of the range of those of the Comparable Companies;

we are of the view that the entering into of the Sale and Purchase Agreement is in the interests of the Company and the Shareholders as a whole and the terms of the Sale and Purchase Agreement are on normal commercial terms and 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 relevant resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of

First Shanghai Capital Limited

Eric Lee Managing Director

Fanny Lee Managing Director

— 23 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

INDEBTEDNESS STATEMENT

Debts and Borrowings

As at 31 March 2013, the Group had outstanding borrowings of HK$5,887,830.36, 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.

Contingent Liabilities

As at 31 March 2013, the Group had no material contingent liabilities.

Disclaimer

Save as otherwise disclosed in this circular, the Group did not, as at 31 March 2013, 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.

FINANCIAL AND TRADING PROSPECT

In 2013, the Company will refine the strategy of focusing on the development of businesses with technical advantages, and continue to pursue active market expansion strategies, in order to realize rapid growth in our business. The Company will realize rapid development by focusing on strengthening the establishment in regions, consolidating the existing regions, and undertaking merger and acquisition in weak regions, as well as developing with partners and establishing more sales channel. The Company will enhance the function of business lines as sales generator, through establishing the mechanism of business planning-driven overall budget, which not only boosts our sales but also pulls the product demand. In respect of products, the Company will insist on the development model with the combination of self-innovation and external co-operation, speed up the launch of products, continue to consolidate existing products, and self-develop the products of next generation. The Company will pursue new business growth point by innovating new cloud computing service model and promoting enterprises to use cloud computing. The Company will further enhance the incentive mechanism, which improves the objectives and responsibilities system with the core of combination with responsibility, right and interest, so as to promote the enthusiasm of our staffs. It is believed that with a gradual improvement in the economic environment, the software and service business will maintain a relatively fast growth speed. The Company will continue to adjust its development strategy and persist in change and continue to transform into a supplier of cloud computing SaaS products and solution services. The Company insists on the strategy of focusing on the development of businesses with technical advantages. The Company aims to restructure its business model so as to swiftly reverse the loss position and generate better returns for our shareholders.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Regarding the remaining business of the Group, the Group will principally focus on the development of the business of IT services and software, especially in the field of cloud computing. Furthermore, the Group will further continue to invest in research and development in relation to the remaining business, stabilize its existing products, develop new products based on the requirements cloud technology, and strengthen the overall capabilities of solutions to innovate its business model and services model. By enhancing its external cooperation, merger and acquisition, the Company will proactively face various challenges and strive for the dominant position in the relevant field of cloud computing.

As at the Latest Practicable Date, the Company has not entered, proposed to enter, into any agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or implied, or negotiation (whether concluded or not) or had any intention to dispose of / downsize its remaining business.

The Company intends to pursue suitable acquisition opportunities to expand its business. However, as at the Latest Practicable Date, the Company has not entered, or proposed to enter, into any agreement, arrangement, understanding or undertaking, whether formal or informal and whether express or implied, or negotiation (whether concluded or not) to acquire any new assets and/or business. Relevant announcement(s) will be made as and when appropriate in accordance with the Listing Rules on any specific information in respect thereof.

WORKING CAPITAL STATEMENT

The Directors are of the opinion that, after taking into account of 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 the Circular.

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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 circular 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
Name	of Director	Type of interests	Number of Shares	of the Company
Dong	Hailong	Beneficial owner	5,000	0.01%

(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%

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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 persons (not being Director or chief executive of the Company) had, or were 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	1,357,390,000	32.11%
	corporation (Note)
Jinan Inspur Wireless Communication	Interest in a controlled	1,357,390,000	32.11%
Limited#	corporation (Note)
(濟南浪潮無線通信有限公司)
Inspur Qilu Software	Interest in a controlled	1,357,390,000	32.11%
Industry Limited#	corporation (Note)
(浪潮齊魯軟件產業有限公司)
Inspur Cheeloo Overseas Investment	Interest in a controlled	1,357,390,000	32.11%
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	1,357,390,000	32.11%
(浪潮海外投資有限公司)	(Note)
Wang Yukun	Beneficial owner	293,025,000	6.93%

— 27 —

APPENDIX II

GENERAL INFORMATION

Note: Inspur Overseas Investment Limited has reported to be the beneficial owner of 1,357,390,000 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 also 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	6.57%

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 6.57% 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
	Types of		the 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#		Technology Company Limited#
(無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	RMB690,000 in the registered	34.5%
	owner	capital of Inspur Fangzhi
Bao Jianhua	Beneficial	RMB300,000 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#
		(上海國強通用軟件有限公司)

— 28 —

GENERAL INFORMATION

APPENDIX II

			Approximate
			percentage of
			shareholding in
	Types of		the 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 2012, 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.

— 29 —

GENERAL INFORMATION

APPENDIX II

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

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 2012, being the date to which the latest audited financial statements of the Company were made up.

7. 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 2012), 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.

8. 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.

— 30 —

GENERAL INFORMATION

APPENDIX II

(b) The principal share registrar and transfer office of the Company is Butterfield Fulcrum Group (Cayman) Limited at Butterfield House, 68 Fort Street, P.O. Box 609, George Town, Grand Cayman KY1-1107, Cayman Islands and the Hong Kong branch share registrar and transfer office of which is Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) Ms. Chan Wing and Mr. Zou bo are joint company secretaries 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 text in case of inconsistency.

9. 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 supplemental deed entered into between the Company and Microsoft Corporation 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 bepayable 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.
(b) 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;
(c) 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;

— 31 —

GENERAL INFORMATION

APPENDIX II

(d) the land use rights transfer agreement dated 29 August 2012 between Inspur Mingda as purchaser and IPG as vendor in respect of acquisition of land use right of a parcel of land located in Jinan, the PRC, the principal terms of the agreement are:
(i) Inspur Minda agreed to acquire the land use rights of the Land from IPG for a periodof 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.
(e) the foundation construction contract dated 31 August 2012 entered into between Jinan Inspur Mingda Information Technology Limited (濟南浪潮銘達信息科技有限公司) (“ Inspur Mingda ”) as the owner and Tianyuan Construction Group Limited (天元建設集團有限公司) (“ Tianyuan ”) as the contractor for construction of the foundation of S01 Scientific Research Activities Building located in Jinan, the PRC (“ Building ”) at a consideration of RMB7,672,365.44;
(f) the main contractor contract dated 19 November 2012 entered into between Inspur Mingda as the owner and Tianyuan as the contractor for construction of the Building at a consideration of RMB276,863,120.73; and
(g) the Sale and Purchase Agreement.

10. 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 and articles of association of the Company;
(b) the audited consolidated financial statements of the Group for the two financial years ended 31 December 2011 and 31 December 2012;
(c) the contracts referred to in the section headed “Material Contracts” of this Appendix;
(d) the letter from the Independent Board Committee, as set out on page 13 of this circular;
(e) the letter from the Independent Financial Adviser, as set out on pages 14 to 23 of this circular;
(f) the written consent referred to in the section headed “Expert” of this Appendix; and
(g) this circular.

— 32 —

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 6 June 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 conditional sale and purchase agreement dated 16 April 2013 (“ Sale and Purchase Agreement ”) entered into between Inspur Electronics Limited as the vendor and Inspur Electronic Information (Hong Kong) Co., Limited (浪潮電子信息（香港）有限公司) as the purchaser in relation to disposal of the entire issued share capital of Inspur (HK) Electronics Limited (浪潮(香港)電子有限公司) for a total consideration of HK$294,230,000 (or USD equivalent) (copy of the Sale and Purchase Agreement has been tabled at the meeting, marked “A” and initiated 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 actions and execute such documents as they may consider appropriate and expedient to carry out or give effect to or otherwise in connection with or in relation to the Sale and Purchase Agreement and the transactions contemplated thereunder.”

By order of the Board Inspur International Limited Wang Xingshan Chairman

Hong Kong, 21 May 2013

— 33 —

NOTICE OF THE EGM

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

Notes:

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

— 34 —

AI assistant

Inspur Digital Enterprise Technology Limited — Proxy Solicitation & Information Statement 2013

49324_rns_2013-05-20_d89720d5-a851-4d0f-b6e1-6b48c15d6d33.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

FIRST SHANGHAI CAPITAL LIMITED

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(Stock Code: 596)

Executive Directors:

Registered office:

Non-executive Director:

Independent non-executive Directors:

To the Shareholders

MAJOR DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST IN INSPUR (HK) ELECTRONICS LIMITED

INTRODUCTION

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Parties

Asset to be disposed of

Consideration

LETTER FROM THE BOARD

Conditions Precedent of the Sale and Purchase Agreement

LETTER FROM THE BOARD

Shareholder’s Loan

INFORMATION OF THE VENDOR, THE TARGET COMPANY AND THE PURCHASER

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE DISPOSAL

(i) Earnings

LETTER FROM THE BOARD

(ii) Assets and Liabilities

REASONS FOR AND BENEFITS OF THE DISPOSAL

LETTER FROM THE BOARD

USE OF PROCEEDS

IMPLICATION UNDER THE LISTING RULES

EGM

LETTER FROM THE BOARD

RECOMMENDATIONS

ADDITIONAL INFORMATION

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

MAJOR DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST IN INSPUR (HK) ELECTRONICS LIMITED

Yours faithfully,

FIRST SHANGHAI CAPITAL LIMITED

MAJOR DISPOSAL AND CONNECTED TRANSACTION DISPOSAL OF 100% OF THE EQUITY INTEREST IN INSPUR (HK) ELECTRONICS LIMITED

INTRODUCTION

LETTER FROM FIRST SHANGHAI

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of and benefits for the entering into of the Sale and Purchase Agreement

LETTER FROM FIRST SHANGHAI

LETTER FROM FIRST SHANGHAI

Reasons for and the benefits of the Disposal

LETTER FROM FIRST SHANGHAI

LETTER FROM FIRST SHANGHAI

2. Principal terms of the Sale and Purchase Agreement

(i) The Consideration

LETTER FROM FIRST SHANGHAI

LETTER FROM FIRST SHANGHAI

(ii) The Shareholder’s Loan

LETTER FROM FIRST SHANGHAI

3. Possible financial effects of the Disposal

(a) Earnings

(b) Net assets

(c) Working capital

RECOMMENDATION

LETTER FROM FIRST SHANGHAI

First Shanghai Capital Limited

INDEBTEDNESS STATEMENT

Debts and Borrowings

Contingent Liabilities

Disclaimer

FINANCIAL AND TRADING PROSPECT

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

WORKING CAPITAL STATEMENT

1. RESPONSIBILITY STATEMENT

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

Inspur Digital Enterprise Technology Limited Proxy Solicitation & Information Statement 2013