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)

(1) CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS

AND

(2) MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS ENTRUSTMENT LOANS FRAMEWORK AGREEMENTS

Independent financial adviser to the independent board committee and the independent shareholders of the Company

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FIRST SHANGHAI CAPITAL LIMITED

A letter from the Board is set out on pages 5 to 20 of this circular. The recommendation of the Independent Board Committee to the Independent Shareholders is set out on pages 21 to 22 of this circular. A letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 23 to 35 of this circular.

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 Monday, 3 November 2014 at 10:00 a.m. is set out on pages 46 to 48 of this circular. A form of proxy for use at the EGM is enclosed with this circular.

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

16 October 2014

	*Page*
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letters from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Letter from the Independent Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Appendix I — Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . .	36
Appendix II — General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
Notice of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	46

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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 “Borrower A” Inspur Electronic Information Industry Co., Limited (浪潮電子信息產業股份有限公司), a company incorporated in PRC “Borrower B” Inspur Software Co., Limited (浪潮軟件股份有限公司), a company incorporated in PRC “Borrowers” the Borrower A and the Borrower B “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 “Concerned Transactions” the Supply Transactions, Selling Agency Transactions and Purchase Transactions “controlling shareholder” 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 approving, amongst other things, the Supplemental Agreement (including the Revised Caps) and the Framework Agreements “Entrustment Loans A” entrustment loan(s) to be advanced by the Lender to the Borrower A from time to time through Financial Institutions under the Framework Agreement A “Entrustment Loans B” entrustment loan(s) to be advanced by the Lender to the Borrower B from time to time through Financial Institutions under the Framework Agreement B “Entrustment Loans” the Entrustment Loans A and the Entrustment Loans B “Financial Institutions” the PRC financial instructions which are qualified to engage in entrustment loan business in PRC

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DEFINITIONS

“Framework Agreement A” the framework agreement dated 29 August 2014 between the Lender and the Borrower A in relation to Entrustment Loans A
“Framework Agreement B” the framework agreement dated 29 August 2014 between the Lender and the Borrower B in relation to Entrustment Loans B

the framework agreement dated 29 August 2014 between the Lender and the Borrower A in relation to Entrustment Loans A

“Framework Agreements” the Framework Agreement A and the Framework Agreement B
“IPG Agreement”
the agreement dated 29 November 2013 between the Company and the IPG in relation to five categories of continuing connected transactions (including without limitation the Concerned Transactions) for the three financial years ending 31 December 2016
“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

“Independent Board Committee”

“Independent Financial Adviser” or “First Shanghai”

an independent board committee, comprising Ms. Zhang Ruijun, Mr. Wong Lit Chor, Alexis and Ms. Dai Ruimin, all being the independent non-executive directors of the Company, to advise the Independent Shareholders as to the fairness and reasonableness of the Supplemental Agreement (including the Revised Caps) and the Framework Agreements 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 Framework Agreements and the Supplemental Agreement (including the Revised Caps)

“Independent Shareholders”

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

“Inspur Group”
IPG and its subsidiaries
“Inspur Huida”

Jinan Inspur Huida Electronics Technology Co., Ltd* (濟南浪潮匯達電子科技有限公司), a company incorporated in the PRC which is wholly owned by the Borrower B

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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 31.99%	of
	the existing issued ordinary share capital of the Company
“Jinan Orient”	Jinan Orient Cooperative Technology Development Co., Ltd.*
	(濟南東方聯合科技發展有限公司), a company incorporated
	in the PRC which is wholly owned by the Borrower A
“Latest Practicable Date”	14 October 2014, being the latest practicable date prior	to
	printing of this circular for ascertaining certain information
	contained herein
“Lender”	Inspur (Shandong) Electronics Information Limited* (浪潮(山
	東)電子信息有限公司)
“Listing Rules”	Rules Governing the Listing of Securities on the Stock
	Exchange
“PRC”	the People’s Republic of China
“Purchase Transactions”	transactions in relation to purchase of IT products by the
	Group from the Inspur Group under the IPG Agreement
“Revised Caps”	the revised annual caps of the Concerned Transactions to	be
	entered into by the Group and the Inspur Group for the three
	financial years ending 31 December 2016
“RMB”	Renminbi, the lawful currency of the PRC
“Selling Agency Transactions”	transactions in relation to sale of various IT service products
	by the Group to the Inspur Group who is acting as selling
	agent of the Group under the IPG Agreement
“Set-up Fees”	the set-up fees to be charged by the Financial Institutions	in
	relation to the Entrustment Loans
“SFO”	Securities and Futures Ordinance (chapter 571) of the laws	of
	Hong Kong
“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of the
	Company
“Shareholder(s)”	holder(s) of the Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“subsidiaries”	has the meaning ascribed to it under the Listing Rules

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DEFINITIONS

“Supplemental Agreement”	the conditional supplemental agreement dated 29 August 2014
	entered into between the Company and IPG in relation to
	setting of the Revised Caps of the Concerned Transactions for
	the three financial years ending 31 December 2016
“Supply Transactions”	transactions in relation to supply and provision of products
	and services by the Group to the Inspur Group under the IPG
	Agreement
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent

For the Purpose of this circular, unless otherwise stated, conversion of RMB into HK$ is calculated at the exchange rate of RMB1.00 to HK$1.26, which is for illustration purpose only.

All the English translation of certain Chinese names or words in this circular is included for identification 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. Sun Chengtong

Non-executive Directors:

Mr. Samuel Y. Shen Mr. Dong Hailong

Independent non-executive Directors:

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

Registered office:

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

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

16 October 2014

To the Shareholders

Dear Sir or Madam,

(1) CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS

AND

(2) MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS ENTRUSTMENT LOANS FRAMEWORK AGREEMENTS

INTRODUCTION

1. The Supplemental Agreement (including the Revised Caps)

Reference is made to the Company’s announcement dated 29 November 2013 and 24 January 2014, and the Company’s circular dated 9 January 2014 in relation to the IPG Agreement. On 24

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LETTER FROM THE BOARD

January 2014, the Company has obtained the Independent Shareholders’ approval for certain continuing connected transactions (including the Concerned Transactions) between the Group and the Inspur Group under the IPG Agreement and the related annual caps for the three financial years ending 31 December 2016.

Because of the expected increase in transaction amounts of the Concerned Transactions, on 29 August 2014 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) pursuant to which the annual caps in respect of the Concerned Transactions for the three financial years ending 31 December 2016 will be revised to the Revised Caps and will ask for the Independent Shareholders’ approval of the Supplemental Agreement and the Revised Caps.

2. Entrustment Loan Framework Agreements

Reference is made to the Company’s circular dated 5 October 2013 in relation to the framework agreement (“ 2013 Framework Agreement ”) entered between the Lender and the Borrower A on 22 August 2013, pursuant to which the Lender agreed to provide entrustment loans to the Borrower A. As the 2013 Framework Agreement was for a term of 1 year and will be expired on 23 October 2014, the Lender (a wholly owned subsidiary of the Company) and the Borrower A entered into the Framework Agreement A pursuant to which the Lender agreed to provide Entrustment Loans A to the Borrower A through Financial Institutions for a term of further 2 years.

Meanwhile, the Lender and the Borrower B also entered into the Framework Agreement B on 29 August 2014 pursuant to which the Lender agreed to provide Entrustment Loans B to the Borrower B through Financial Institutions for a term of 2 years.

The purpose of this circular is to provide you with further information regarding, among other things, (i) further details of the Supplemental Agreement and the Revised Caps; (ii) further details of the Framework Agreements and the transactions contemplated thereunder; (iii) the recommendation of the independent board committee to the Independent Shareholders; (iv) the letter from an independent financial advisor to both the independent board committee of the Company and the Independent Shareholders; and (v) the notice of EGM.

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LETTER FROM THE BOARD

BACKGROUND OF THE SUPPLEMENTAL AGREEMENT (INCLUDING THE REVISED CAPS)

The Concerned Transactions comprise Supply Transactions, Selling Agency Transactions and Purchase Transactions.

Supply Transactions

Types of products and services

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 products and services:

(i) IT products including without limitation circuit boards, electronic products, sourced software, ERP software and server products; and
(ii) IT services including without limitation the services related to the development of circuit boards used in personal computers and electronic products, sourced software, ERP software, server products and those software developed by the Group.

Pricing and other terms

The members of the Group supply the IT products and IT services to the members of the Inspur Group. The actual quantity, specification, delivery date, price of the IT products, and the amount of fees and detailed terms and conditions of the IT services to be provided by the members of the Group are subject to individual orders placed by the members of the Inspur Group with the relevant member of the Group. The parties have agreed that:

(a) the supply of products and components by the relevant member of the Group to the Inspur Group shall be on normal commercial terms;
(b) the price per unit of the IT products and the service fees of the IT services to be supplied or provided by a relevant member of the Group will be agreed between the parties by reference to, among other factors, the prices of such IT products and IT services supplied by the Group to independent third parties at the relevant time; and
(c) the Group shall not be obliged to accept any terms and conditions (including pricing terms) for the supply or provision of the IT products and IT services which are less favourable than those agreed between any member of the Group and its independent third party customers for those IT products and IT services.

For determination of the prices of the products and the service fees under the Supply Transactions, the management will select at least 2 comparable transactions at the relevant time, under which the same (or similar) products or service are offered to independent third parties, to ensure that the prices of the products and the service fees of IT services to be supplied under the Supply Transactions are not less favorable than the those of the same (or similar) products or service supplied to the independent third party at the relevant time.

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LETTER FROM THE BOARD

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.

2. Selling Agency Transactions

The Group appoints the Inspur Group as its selling agent in respect of various IT service products of the Group (such as ERP software, finance software, communication software and terminal products). Some of the business may be generated from public tenders made by the Inspur Group. The Group will be involved in participation in negotiation and finalization of the terms of supply of IT products to the ultimate third party customers and ensure that the supply of IT products is on normal commercial terms. The members of the Inspur Group will place orders with the relevant members of the Group for supply of the products from time to time. After acceptance of the orders by the Group, the Group will directly provide the products to the customers. After the delivery of the products to the customers, the relevant members of the Inspur Group will issue sale invoices to the customers and the relevant members of Group will issue sales invoice to the Inspur Group for settlement by cash of the price of the products.

The Group pays selling agency commission of not more than 1% (calculated on the price of the relevant products payable by the customers) to the Inspur Group. The Inspur Group will deduct the related commission from the price received from the customers and pay back the net proceeds to the Group within five days.

The Inspur Group is the only selling agent appointed by the Group and the Group has not entered into any comparable transactions with independent third parties. Meanwhile, the Company further understands that Inspur Group did not act as selling agent of entities other than members of the Inspur Group and the Group in 2013 and in the first six months of 2014. As such, the 1% commission is determined with reference to the Qualification Management Policy (資質管理有關規定) of the Inspur Group pursuant to which the Inspur Group will charge a selling agency commission of not more than 1% of the contract amount as general policy. The Company understands that the Qualification Management Policy is an internal control policy used by the Inspur Group for governing the transactions relevant to the Selling Agency Transactions and thus it is fair and reasonable to the Company to refer to such policy to determine the selling agent commission.

3. Purchase Transactions

Types of products

The Group purchases from the Inspur Group various IT products from time to time including without limitation the IT server under the name of “Inspur” and other accessories.

Pricing

The members of the Group purchase various products and components from members of the Inspur Group. The actual quantity, specification, delivery date and price of such products to be provided by members of the Inspur Group are subject to individual orders placed by the members of the Group with the relevant member of the Inspur Group. The parties have agreed that:

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LETTER FROM THE BOARD

(a) the supply of products and components by the relevant member of the Inspur Group to the Group shall be on normal commercial terms;
(b) the price per unit of the products and components to be supplied by a relevant member of the Inspur Group will be agreed between the parties by reference to, among other factors, the prices of such products supplied by Inspur Group to independent third parties at the relevant time; and
(c) the Group shall not be obliged to accept any terms and conditions (including pricing terms) for the purchase of the products and components which are less favourable than those agreed between any member of the Inspur Group and its independent third party purchasers for those products and components.

For determination of the price of the products and components supplied by Inspur Group and the payment terms, the management refers to at least 2 transactions under which the same (or similar) products and components are supplied with independent third parties at the relevant time. The management will ensure the price of the products and components purchased from the Inspur Group are not less favourable than the quotations or prices of the products and components with independent third parties.

Payment terms

The Inspur Group gives two-month credit period for the Group to settle the price of the products and components after delivery. The Group makes the payment out of the Group’s internal resources.

HISTORICAL AMOUNTS AND APPROVED ANNUAL CAPS OF THE CONCERNED TRANSACTIONS

Set out below are the historical amounts of the Concerned Transactions for the 9 months ended 30 September 2014, and the annual caps approved by the Independent Shareholders under the IPG Agreement for the 3 financial years ending 31 December 2016 (“ Original Caps ”):

	Historical
amounts For the		Approved annual caps
	9 months ended	Year ending	Year ending	Year ending
	30 September	31 December	31 December	31 December
(All amounts in ’000)	2014	2014	2015	2016
Supply Transactions	5,260	5,300	5,800	6,400
Selling Agency
Transactions
— (value of transactions)	153,739	231,000	254,000	280,000
— (related commission)	1,332	2,310	2,540	2,800
Purchase Transactions	72,380	73,000	80,000	88,000

Note: the above annual cap amounts do not include any tax or duty (such as VAT).

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LETTER FROM THE BOARD

The Original Caps are not exceeded as at the Latest Practicable Date. In this regard, the Company will monitor the Concerned Transactions and will take reasonable steps to ensure the Original Caps will not be exceeded.

SUPPLEMENTAL AGREEMENT AND THE REVISED CAPS

On 29 August 2014, the Company (for itself and on behalf of the other members of the Group) and IPG (for itself and on behalf of other members of the Inspur Group) entered into the Supplemental Agreement pursuant to which the annual caps in respect of the Concerned Transactions for the three years ending 31 December 2016 will be revised to the Revised Caps. The Supplemental Agreement is conditional upon the approval of the Independent Shareholders of the Supplemental Agreement and the Revised Caps at the EGM.

The Revised Caps under the Supplemental Agreement are:

	Year ending	Year ending	Year ending
(All amounts in ’000)	31 December 2014	31 December 2015	31 December 2016
Supply Transactions	9,600	10,500	11,550
Selling Agency Transactions
— (value of transactions)	370,000	407,000	447,000
— (related commission)	3,700	4,070	4,470
Purchase Transactions	183,000	200,000	220,000

Note : the above annual cap amounts do not include any tax or duty (such as VAT).

Save for the Revised Caps, there is no other change to the terms of the IPG Agreement.

BASIS OF THE REVISED CAPS

1. Supply Transactions

The following factors have been taken into account by the Company in determining the Revised Caps of the Supply Transactions: (a) the historical amounts of the Supply Transactions for the six months ended 30 June 2014; and (b) expected annual growth rates of the Supply Transactions.

2. Selling Agency Transactions

The following factors have been taken into account by the Company in determining the Revised Caps of the Selling Agency Transactions: (a) the historical amounts of the Selling Agency Transactions for the six months ended 30 June 2014; (b) the expected amounts of the Selling Agency Transactions for the remaining part of the year ending 31 December 2014; and (c) expected annual growth rates of the Selling Agency Transactions.

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LETTER FROM THE BOARD

3. Purchase Transactions

The following factors have been taken into account by the Company in determining the Revised Caps of the Purchase Transactions: (a) the historical amounts of the Purchase Transactions for the six months ended 30 June 2014; (b) the expected amounts of the Purchase Transactions for the remaining part of the year ending 31 December 2014; and (c) expected annual growth rates of the Purchase Transactions.

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

By entering into the Supplemental Agreement and adoption of the proposed Revised Caps, the Group would fulfil the expected increase in the transaction amounts of the Concerned Transactions in the remaining part of the year 2014 and in the years of 2015 and 2016.

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 Caps of the Concerned Transactions are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION OF THE PARTIES

1. The Group

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

2. IPG

IPG is an investment holding company established in the PRC. The Inspur Group devotes itself to be the leading suppliers of Cloud Computer Solutions in China and provides IT services and products to customers from more than 50 countries, meeting the information-based demands of governments and corporations all-around.

IMPLICATION UNDER THE LISTING RULES

IPG is a company established in the PRC and is interested in approximately 31.99% of the issued share capital of the Company through its subsidiaries. Under the Listing Rules, IPG is a connected person of the Company and the transactions contemplated under the Supplemental Agreement constitute continuing connected transactions of the Company.

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LETTER FROM THE BOARD

As it is expected that the annual caps of the Concerned Transactions under the IPG Agreement will be exceeded for the three financial years ending 31 December 2016, pursuant to Rule 14A.54(1) of the Listing Rules, the Company must re-comply with the announcement and Independent Shareholders’ approval requirements under Rules 14A.35 and 14A.36 of the Listing Rules before a previously announced annual cap is exceeded. Accordingly, the Company will seek the approval of the Independent Shareholders by way of a poll in the EGM of the Supplemental Agreement and the Revised Caps. 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 and the Revised Caps.

None of the Directors have a material interest in the transaction contemplated under the Supplemental Agreement or need to abstain from voting on the board resolution approving the Supplemental Agreement (including the Revised Caps) and the transactions contemplated thereunder.

BACKGROUND OF THE FRAMWORK AGREEMENTS

1. The Framework Agreement A

Date

29 August 2014

Parties

Lender: Borrower A:

Inspur (Shandong) Electronics Information Limited (浪潮（山東）電子信息有限公司) Inspur Electronic Information Industry Co., Limited (浪潮電子信息產業股份有限公司)

Provisions of Entrustment Loans A

Under the Framework Agreement A, the Lender will entrust Financial Institutions to provide Entrustment Loans A to the Borrower A during the term of the Framework Agreement A provided that the maximum amount (including the accrued interest) at any time outstanding under the Framework Agreement A shall not exceed RMB300,000,000 (equivalent to HK$378,000,000). The amount of any advance repaid during the term of the Framework Agreement A shall be eligible for re-borrowing.

As the term of each specific agreement under Entrustment Loans A (details of which are set out under the following paragraph headed “ Specific agreements under Entrustment Loans A ”) will not be longer than 6 months, the actual interest rate of each specific entrustment loan under Entrustment Loans A are therefore fixed in accordance with the half-year RMB benchmark loan interest rate to be published by the People’s Bank of China for financial institutions on the date of drawing of the specific loans under Entrustment Loan A by the Borrower A.

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LETTER FROM THE BOARD

The half-year RMB benchmark loan interest rates for the recent years as published on the website of the People’sBank of China are as follows:

2011.04.06	5.85%
2011.07.07	6.10%
2012.06.08	5.85%
2012.07.06	5.60%

Repayment of Entrustment Loans A and payment of interests

Generally the Borrower A shall make one-off repayment of the principal and interest of each of the specific loans under the Entrustment Loans A to the Lender upon the maturity thereof. Notwithstanding the foregoing, the Lender is entitled to request for early repayment of each of the loans under the Entrustment Loans A by serving at least 5 working days’ prior written notice to the Borrower A, while the Borrower A is entitled to make early repayment (subject to the approval by the Lender) by giving 5 working days’ prior written notice to the Lender.

Specific agreements under Entrustment Loans A

The Lender and Borrower A will enter into specific loan agreements under Entrustment Loan A with relevant Financial Institution in respect of specific loans under the Entrustment Loans A according to the terms and conditions set out in the Framework Agreement A. The proceeds of each loan under Entrustment Loans A shall only be used exclusively for the purpose as stipulated in the specific loan agreements under the Entrustment Loans A.

Overdue Interest

If the Borrower A fails to repay any outstanding amounts under the Entrustment Loans A on or before the due dates as set out in the specific loan agreements under Entrustment Loan A, the Lender shall be entitled to charge overdue interest against the Borrower A, the rates of which will be 50% higher than the interest rates under the Entrustment Loans A.

Set-up Fees

It’s the market practice that the PRC financial institutions will charge set-up fees or handling charges for providing entrustment loan facilities. The actual amount of the Set-up Fees will vary depending on different Financial Institutions. It is estimated that, based on the prevailing market practice in PRC, the Set-up Fees (if any) to be charged by the Financial Institutions under specific loan agreements under Entrustment Loans A will be around 0.1% of the loan amount. Having considered the benefits of the Transactions, the Directors are of the view that the amount of the Set-up Fees are insignificant.

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LETTER FROM THE BOARD

Term and effectiveness

The Framework Agreement A shall be for a term of 2 years, which is effective upon the occurrence of following:

(1) signing of the Framework Agreement A by the parties;
(2) obtaining approval from the independent shareholders (has the meaning ascribed to it under the Listing Rules) of the Company at the EGM; and
(3) obtaining approval from the independent shareholders (has the meaning ascribed to it under the applicable PRC rules and ordinances) of the Borrower A.

Security

For the purpose of providing collateral security to the Lender for repayment of any loans under the Framework Agreement A, the Borrower A shall pledge its entire shareholdings in Jinan Orient in favour of the Lender upon signing of the Framework Agreement A. Such pledge will be registered in the relevant PRC administration authorities for industry and commerce. The Directors understand that in the event of occurrence of default under any specific loan agreements under Entrustment Loans A, the Lender as the chargee shall have absolute right to dispose of the shareholding of Jinan Orient to recover the debt and sue for any shortage thereof.

Proposed Cap for Framework Agreement A

Under the Framework Agreement A, the maximum outstanding amount (including the accrued interest) at any time shall not exceed RMB300,000,000 (equivalent to approximately HK$378,000,000). Such cap was determined after arm’s length negotiation between the parties having taken into account, inter alia, the following:

(1) the current and anticipated cash surplus of the Group (please see the paragraph headed “ Financial Condition of the Group and the Lender ” below); and
(2) the net asset value of Jinan Orient to be provided by the Borrower A as security for the Entrustment Loans A (please see the paragraph headed “ Security of the Entrustment Loans ” below).

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LETTER FROM THE BOARD

2. The Framework Agreement B

Date

29 August 2014

Parties

Lender:

Lender: Inspur (Shandong) Electronics Information Limited (浪潮（山東）電子信息有限公司) Borrower B: Inspur Software Co., Limited (浪潮軟件股份有限公司)

Provisions of Entrustment Loans B

Under the Framework Agreement B, the Lender will entrust Financial Institutions to provide Entrustment Loans B to the Borrower B during the term of the Framework Agreement B provided that the maximum amount (including the accrued interest) at any time outstanding under the Framework Agreement B shall not exceed RMB200,000,000 (equivalent to HK$252,000,000). The amount of any advance repaid during the term of the Framework Agreement B shall be eligible for re-borrowing.

As the term of each specific agreement under Entrustment Loans B (details of which are set out under the following paragraph headed “ Specific agreements under Entrustment Loans B ”) will not be longer than 6 months, the actual interest rate of each specific entrustment loan under Entrustment Loans B are therefore fixed in accordance with the half-year RMB benchmark loan interest rate to be published by the People’s Bank of China for financial institutions on the date of drawing of the specific loans under Entrustment Loans B by the Borrower B.

Repayment of Entrustment Loans B and payment of interests

Generally the Borrower B shall make one-off repayment of the principal and interest of each of the specific loans under the Entrustment Loans B to the Lender upon the maturity thereof. Notwithstanding the foregoing, the Lender is entitled to request for early repayment of each of the Entrustment Loans B by serving at least 5 working days’ prior written notice to the Borrower B, while the Borrower B is entitled to make early repayment (subject to the approval by the Lender) by giving 5 working days’ prior written notice to the Lender.

Specific agreements under Entrustment Loans B

The Lender and Borrower B will enter into specific loan agreements under Entrustment Loans B with relevant Financial Institution in respect of specific loans under the Entrustment Loans B according to the terms and conditions set out in the Framework Agreement B. The proceeds of each loan under Entrustment Loans B shall only be used exclusively for the purpose as stipulated in the specific loan agreements under the Entrustment Loans B.

Overdue Interest

If the Borrower B fails to repay any outstanding amounts under the Entrustment Loans B on or before the due dates as set out in the specific loan agreements under Entrustment Loan B, the Lender shall be entitled to charge overdue interest against the Borrower B, the rates of which will be 50% higher than the interest rates under the Entrustment Loans B.

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LETTER FROM THE BOARD

Set-up Fees

Same as the Set-up Fees under the Entrustment Loans A mentioned above, it is estimated that, based on the prevailing market practice in PRC, the Set-up Fees (if any) to be charged by the Financial Institutions under specific loan agreements under Entrustment Loans B will be also around 0.1% of the loan amount.

Term and effectiveness

The Framework Agreement B shall be for a term of 2 years, which is effective upon the occurrence of following:

(1) signing of the Framework Agreement B by the parties;
(2) obtaining approval from the independent shareholders (has the meaning ascribed to it under the Listing Rules) of the Company at the EGM; and
(3) obtaining approval from the independent shareholders (has the meaning ascribed to it under the applicable PRC rules and ordinances) of the Borrower B.

Security

For the purpose of providing collateral security to the Lender for repayment of any loans under the Framework Agreement B, the Borrower B shall pledge its entire shareholdings in Inspur Huida in favour of the Lender upon signing of the Framework Agreement B. Such pledge will be registered in the relevant PRC administration authorities for industry and commerce. The Directors understand that in the event of occurrence of default under any specific loan agreements under Entrustment Loans B, the Lender as the chargee shall have absolute right to dispose of the shareholding of Inspur Huida to recover the debt and sue for any shortage thereof.

Proposed Cap for Framework Agreement B

Under the Framework Agreement B, the maximum outstanding amount (including the accrued interest) at any time shall not exceed RMB200,000,000 (equivalent to approximately HK$252,000,000). Such cap was determined after arm’s length negotiation between the parties having taken into account, inter alia, the following:

(1) the current and anticipated cash surplus of the Group (please see the paragraph headed “ Financial Condition of the Group and the Lender ” below); and
(2) the net asset value of Inspur Huida to be provided by the Borrower B as security for the Entrustment Loans B (please see the paragraph headed “ Security of the Entrustment Loans ” below).

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE ENTRUSTMENT LOANS

Financial condition of the Group and the Lender

According to the management accounts of the Lender, the cash and bank balance held by the Lender as of 30 June 2014 was approximately RMB600,000,000 (equivalent to approximately HK$756,000,000). Therefore, it is anticipated that after financing of the Entrustment Loans to the Borrowers, the Group (including the Lender) will still have adequate cash to meet its daily operation needs and capital expenses.

Security of the Entrustment Loans

The Entrustment Loans A is secured by a pledge over the Borrower A’s entire shareholding in Jinan Orient, a wholly owned subsidiary of the Borrower A. As at 31 December of 2013, the net asset value of Jinan Orient is approximately RMB477,000,000 (equivalent to approximately HK$601,020,000). The Entrustment Loans B is secured by a pledge over the Borrower B’s entire shareholding in Inspur Huida, a wholly owned subsidiary of the Borrower B. As at 31 March 2014, the net asset value of Inspur Huida is approximately RMB328,000,000 (equivalent to approximately HK$413,280,000). Meanwhile, Inspur Huida is the owner of the No. 6 office building located in Inspur Science and Technology Park (浪潮科技園).

Higher interest rates

The current practice of the Group with regard to cash surplus is to deposit any such surplus as current or fixed deposit. As disclosed in the Company’s annual report for the year ended 31 December 2013, the bank balances carried interest at market rates which range from 0.01% to 3.10% per annum. Therefore, the interest rates and the overdue interest rates under the Framework Agreements (having taken into account the payment of the Set-up Fees by the Lender) will be higher than the interest rates for 6-month fixed deposit in PRC banks.

The terms of the Framework Agreements (including the terms regarding interest rate) were agreed after arm’s length negotiation between the parties having taken into account the prevailing market interest rates and practices. The Directors consider that the Framework Agreements are entered into on normal commercial terms, and the terms of the Framework Agreements are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

INFORMATION ON THE PARTIES

1. The Group

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

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LETTER FROM THE BOARD

2. The Lender and the Borrowers

The Lender is a foreign wholly-owned enterprise established in the PRC and is a wholly-owned subsidiary of the Company. It is principally engaged in developing and manufacturing computer software and hardware products and providing related technology consulting and technical service. The Borrower A is a company established in the PRC and is listed on the Shenzhen Stock Exchange of stock code 000977. The Borrower A (including its subsidiaries) is principally engaged in developing, manufacturing and marketing of computers and software, electronic products and other communication devices. The Borrower B is a company established in the PRC and is listed on the Shanghai Stock Exchange of stock code 600756. Borrower B (including its subsidiaries) is principally engaged in communication business, business of developing, manufacturing and marketing the technology of computer software and hardware, business of communication and computer network engineering technology consulting and technical training, and import and export business (within the authorised scope).

IMPLICATION UNDER THE LISTING RULES

As the Borrowers are considered to be associates of IPG (a controlling shareholder of the Company), the provision of Entrustment Loans by the Lender to the Borrowers constitutes the provision of financial assistance by the Company to a connected person, and therefore the Transactions constitute continuing connected transaction of the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios (as defined under Rule14A.06(30) of the Listing Rules) in respect of the maximum outstanding balance of the loans to be provided by the Lender to the Borrowers exceed 5%, the transactions are subject to the reporting, announcement, annual review, and independent shareholders’ approval requirement under Chapter 14A of the Listing Rules. Meanwhile, as one or more of the applicable percentage ratios (as defined under Rule 14.04(9) of the Listing Rules) in respect of the maximum outstanding balance of the loans to be provided by the Lender to the Borrowers are more than 25% but all of the same are below 75%, the transaction also constitutes major transactions under Chapter 14 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 Framework Agreements.

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

EGM

Set out on pages 46 to 48 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 Monday, 3 November 2014 for the purpose of considering and if thought fit approving (i) the Supplemental Agreement (including the Revised Caps); and (ii) the Framework Agreements.

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LETTER FROM THE BOARD

Resolution approving Supplemental Agreement and Revised Caps

The Supplemental Agreement (including the Revised Caps) is subject to, among other things, the approval by the Independent Shareholders at the EGM to be taken by way of a poll. IPG, IPG’s ultimate beneficial owners and their respective associates will abstain from voting for the relevant resolution at the EGM due to their interest in the concerned transaction. Other than the above, no other Shareholders have material interest in the above transaction and will abstain from voting at the EGM. As at the Latest Practicable Date, IPG (including its associates) is entitled to voting rights of 288,478,000 Shares (representing approximately 31.99% of the total voting rights of the holders of the Shares). IPG (including its associates) controls or is entitled to control over the entire voting right in respect of its Shares. There is (i) no voting trust or other agreement or arrangement or understanding entered into 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 Shares to a third party, either generally or on a case-by-case basis.

Resolution approving Framework Agreements

The Framework Agreements 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, IPG, IPG’s ultimate beneficial owners and their respective associates will abstain from voting for the relevant resolution at the EGM due to their interest in the concerned transaction. Other than the above, no other Shareholders have material interest in the above transaction and will abstain from voting at the EGM. As at the Latest Practicable Date, IPG (including its associates) is entitled to voting rights of 288,478,000 Shares (representing approximately 31.99% of the total voting rights of the holders of the Shares). IPG (including its associates) controls or is entitled to control over the entire voting right in respect of its Shares. There is (i) no voting trust or other agreement or arrangement or understanding entered into 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 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 in accordance with the instructions printed thereon and return the same to 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 as soon as possible but in any event not less than 48 hours before the time appointed for the EGM (or any adjourned meeting). Completion and delivery of the form of proxy will not preclude you from attending and voting at the EGM (or any adjourned meeting) if you so wish.

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LETTER FROM THE BOARD

RECOMMENDATIONS

The Independent Board Committee has been established to advise the Independent Shareholders whether the terms of the (i) Supplemental Agreement (including the Revised Caps); and (ii) the Framework Agreements are fair and reasonable so far as the Independent Shareholders are concerned and the Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in that connection.

The text of the letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 23 to 35 of this circular and the text of the letters from the Independent Board Committee to the Independent Shareholders is set out on pages 21 to 22 of this circular.

The Independent Board Committee, having taken into account the advice of the Independent Financial Adviser, is of the opinion that the terms of the (i) Supplemental Agreement (including the Revised Caps); and (ii) the Framework Agreements 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 (i) Supplemental Agreement (including the Revised Caps); and (ii) the Framework Agreements 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.

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

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LETTERS 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)

16 October 2014

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS

We refer to the circular dated 16 October 2014 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 (including the 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 5 to 20 of the Circular, and the letter from First Shanghai to the Independent Board Committee and the Independent Shareholders which contains its advice, as set out on pages 23 to 35 of the Circular.

Having taken into account of the advice of First Shanghai, we consider that the terms of the Supplemental Agreement (including the Revised Caps) are fair and reasonable insofar as 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 Supplemental Agreement (including the Revised Caps).

Yours faithfully,

the Independent Board Committee

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

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LETTERS 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)

16 October 2014

To the Independent Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS ENTRUSTMENT LOANS FRAMEWORK AGREEMENTS

We have been appointed as members of the Independent Board Committee to consider the Framework Agreements 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.

Having taken into account of the advice of First Shanghai, we consider that the Framework Agreements 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 whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the Framework Agreements.

Yours faithfully, the Independent Board Committee

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

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

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) and the Framework Agreements 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

16 October 2014

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

(1) CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS AND

(2) MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS ENTRUSTMENT LOANS FRAMEWORK AGREEMENTS

INTRODUCTION

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) and the Framework Agreements, details of which are set out in the circular of the Company dated 16 October 2014 to the Shareholders (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 24 January 2014, the Company obtained the approval from the then Independent Shareholders for the Concerned Transactions between the Group and the Inspur Group and the related annual caps for each of the three financial years ending 31 December 2016. Due to the expected increase in transaction amounts of the Concerned Transactions, the existing annual caps may be insufficient. Accordingly, the Company and IPG entered into the Supplemental Agreement on 29 August 2014 to revise the annual caps of the Concerned Transactions for each of the three financial years ending 31 December 2016 to the Revised Caps.

On 23 October 2013, the Company obtained the approval from the then Independent Shareholders for the 2013 Framework Agreement, pursuant to which the Lender (a wholly-owned

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

subsidiary of the Company) agreed to provide entrustment loans at the maximum outstanding amount (including accrued interest) of not exceeding RMB500 million to Borrower A (together with its subsidiaries, the “ Borrower A Group ”). The 2013 Framework Agreement will expire on 23 October 2014. On 29 August 2014, the Lender entered into the Framework Agreements with the Borrowers, pursuant to which the Lender agreed to provide the Entrustment Loans to Borrower A and Borrower B (together with its subsidiaries, the “ Borrower B Group ”) through the Financial Institutions, where the maximum outstanding amount of the Entrustment Loans A and the Entrustment Loans B shall not exceed RMB300 million and RMB200 million, respectively.

IPG is a controlling shareholder of the Company and both of the Borrowers are associates of IPG. Pursuant to the Listing Rules, IPG and the Borrowers are connected persons of the Company and the transactions contemplated under the Supplemental Agreement and the Framework Agreements constitute continuing connected transactions of the Company. Accordingly, the Supplemental Agreement (including the Revised Caps) and the Framework Agreements are subject to, amongst others, the Independent Shareholders’ approval at the EGM.

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

The Independent Shareholders should note that, within the past two years from the Latest Practicable Date, we were engaged as independent financial adviser by the Company for four occasions as detailed in the circulars of the Company dated 3 October 2012, 21 May 2013, 5 October 2013 and 9 January 2014. Given (i) our independent role in the aforementioned engagements; and (ii) our fees for the aforementioned engagements represented an insignificant percentage of the revenue of our parent group, we consider the aforementioned engagements would not affect our independence to form our opinion in respect of the Supplemental Agreement (including the Revised Caps) and the Framework Agreements.

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

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion in respect of the Supplemental Agreement (including the Revised Caps) and the Framework Agreements, we have taken into account the following principal factors and reasons:

I. SUPPLEMENTAL AGREEMENT

1. Background of and reasons for the Supplemental Agreement and the Revised Caps

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

IPG, a controlling shareholder of the Company, is an investment holding company established in the PRC. The Inspur Group devotes itself to be a leading supplier of cloud computer solutions in the PRC and provides IT services and products to customers from more than 50 countries and regions to meet the information-based demands from governments and corporations. According to the website of the Inspur Group, “Inspur” is one of the earliest IT brands in the PRC with over 40 years of experience in the IT industry, where the Inspur Group has earned a number of awards which include, among others, (i) Inspur server is ranked the fifth in the world and the first in the PRC in terms of sales volume; (ii) Inspur storage has been ranked the first in terms of sales volume among national brands in the PRC for a consecutive of 10 years; and (iii) Inspur group management software has ranked first in terms of market share in the PRC for a consecutive of 11 years.

The Group has established a long-term strategic business relationship with the Inspur Group and has been conducting the Concerned Transactions with the Inspur Group. The Concerned Transactions comprise: (i) the Supply Transactions, which are related to the supply and provision of various IT products and IT services to the Inspur Group by the Group; (ii) the Selling Agency Transactions, which are related to the appointment of the Inspur Group as selling agent of the Group in respect of various IT service products; and (iii) the Purchase Transactions, which are related to the purchase of various IT products from the Inspur Group by the Group. We are advised by the management of the Group that each of the Concerned Transactions is either revenue in nature or supporting the principal business of the Group.

On 24 January 2014, the Company obtained the approval from the then Independent Shareholders for the Concerned Transactions and the related annual caps for each of the three financial years ending 31 December 2016. Due to the expected increase in transaction amounts of the Concerned Transactions, the existing annual caps may be insufficient. For instance, (i) we note that the actual transaction amounts of the Supply Transactions and the Purchase Transactions for the six months ended 30 June 2014 have utilised over 90% and 80% of the relevant existing annual caps for the year ending 31 December 2014, respectively; and (ii) we are advised by the management of the Group that the actual transaction amounts of the Supply Transactions and the Purchase Transactions for the nine months ended 30 September 2014 amounted to approximately RMB5.26 million and RMB72.38

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

million, representing approximately 99.25% and 99.15% of the relevant existing annual caps for the year ending 31 December 2014, respectively. Accordingly, the Company and IPG entered into the Supplemental Agreement on 29 August 2014 to revise the annual caps of the Concerned Transactions for each of the three financial years ending 31 December 2016 to the Revised Caps. We are advised by the management of the Group that the revision of the annual caps of the Concerned Transactions allows the Group to further leverage on the platform and network of the Inspur Group to develop its business.

Having considered, in particular, (i) the existing annual caps may be insufficient and the revision of the annual caps allows the Group to further leverage on the platform and network of the Inspur Group to develop its business; (ii) the Group has established a long-term strategic business relationship with the Inspur Group and has been conducting the Concerned Transactions with the Inspur Group; (iii) the Concerned Transactions are in the ordinary and usual course of business of the Group and are either revenue in nature or supporting the principal business of the Group; and (iv) the terms of the Supplemental Agreement and the Concerned Transactions and the basis of determining the Revised Caps are fair and reasonable as discussed below, we are of the view that the entering into of the Supplemental Agreement and the Concerned Transactions are in the ordinary and usual course of business of the Group and are in the interests of the Company and the Shareholders as a whole.

2. Principal terms of the Supplemental Agreement and the Concerned Transactions

Apart from the revision of the annual caps to the Revised Caps, the terms of the Concerned Transactions remain unchanged pursuant to the Supplemental Agreement. The principal terms of the Concerned Transactions are summarised below:

(i) Principal terms of the Supply Transactions

In respect of the Supply Transactions, prices of the IT products and service fees of the IT services shall be agreed between the parties by reference to, among other factors, prices of such IT products and IT services to be supplied by the Group to independent third parties at the relevant time. The Inspur Group shall pay for the IT products and the IT services to the Group within two months after delivery of such products and completion of such services. In addition, the IPG Agreement stipulates that the Group shall not be obliged to accept any terms and conditions which are less favourable than those between the Group and its independent third party customers. We have reviewed sales contracts recently entered into with independent third parties, where we note that the pricing terms and the payment terms with the Inspur Group were comparable with those with independent third parties.

(ii) Principal terms of the Selling Agency Transactions

In respect of the Selling Agency Transactions, the Group shall pay a selling agency commission of not more than 1% (based on prices of the relevant products payable by customers) to the Inspur Group. The Inspur Group shall then pay to the Group the net proceeds (after deduction of relevant commission from sales proceeds received from customers) within five days after receipt of the sales proceeds. We are advised by the management of the Group that the Inspur Group is the only selling

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

agent appointed by the Group, therefore the Group has not entered into any comparable transaction with independent third parties. As such, we have reviewed the Qualification Management Policy (資質管理有關規定) of the Inspur Group, the internal control policy of the Inspur Group to govern transactions relevant to the Selling Agency Transactions as advised by the management of the Group, and we note that it is the general business policy of the Inspur Group to charge a selling agency commission of not more than 1% of the contract amount. We are further advised by the management of the Group that the Inspur Group has been charging the Group selling agency commission of not more than 1% for the past few years, where the Group in return could enjoy the benefits arising from the well-established business platform and network of the Inspur Group to strengthen its revenue stream.

(iii) Principal terms of the Purchase Transactions

In respect of the Purchase Transactions, prices of the products and components shall be agreed between the parties by reference to, among other factors, prices of such products to be supplied by the Inspur Group to independent third parties at the relevant time. The Group shall pay for the products and components to the Inspur Group within two months after delivery of such products. In addition, the IPG Agreement stipulates that the Group shall not be obliged to accept any terms and conditions which are less favourable than those between the Inspur Group and its independent third party purchasers. We have reviewed purchase orders recently entered into with independent third parties, where we note that the pricing terms and the payment terms with the Group were comparable with those with independent third parties.

(iv) Internal control measures

As advised by the management of the Group, for the purpose of determining the terms of the Concerned Transactions, the Company will continue its existing internal control practice which include, amongst others, (i) review at least two other transactions with independent third parties comparable with those of the Concerned Transactions; and (ii) ensure that the principal terms of the Concerned Transactions shall be comparable with those with independent third parties.

Furthermore, for compliance with Chapter 14A of the Listing Rules, (i) the independent non-executive Directors will continue its existing practice to review the Concerned Transactions every year and confirm, among other things, the terms of the Concerned Transactions are on normal commercial terms and are fair and reasonable; and (ii) the auditors will continue its existing practice to report on the Concerned Transactions every year.

Based on the aforesaid, we consider sufficient internal control measures are in place for determining the terms of the Concerned Transactions.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(v) Conclusion

Taking into account, in particular, (i) apart from the revision of the annual caps, the terms of the Concerned Transactions remain unchanged pursuant to the Supplemental Agreement; (ii) sufficient internal control measures are in place for the Concerned Transactions to ensure the terms of the Concerned Transactions to be comparable with those with independent third parties; (iii) the background of and reasons for the Supplemental Agreement and the Revised Caps as previously discussed; and (iv) the basis of determining the Revised Caps are fair and reasonable as discussed below, we are of the view that the terms of the Supplemental Agreement and the Concerned Transactions are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. Revised Caps under the Supplemental Agreement

As extracted from the letter from the Board in the Circular, a summary of the historical amounts for the six months ended 30 June 2014 and the Revised Caps of the Concerned Transactions for the three financial years ending 31 December 2016 are set out in the table below:

	Historical
	amounts		Revised Caps
	For the six	For the year	For the year	For the year
	months ended	ending 31	ending 31	ending 31
	30 June	December	December	December
	2014	2014	2015	2016
	(RMB’000)	(RMB’000)	(RMB’000)	(RMB’000)
Supply Transactions	4,800	9,600	10,500	11,550
Selling Agency Transactions
- value of transactions	65,270	370,000	407,000	447,000
- commission	613	3,700	4,070	4,470
Purchase Transactions	59,129	183,000	200,000	220,000

We have reviewed the calculations of the Revised Caps. We note that the Revised Caps are derived from (i) estimating the transaction amount for the year ending 31 December 2014 (except for the commission under the Selling Agency Transactions where its Revised Caps equal 1% of the value of transactions, being the maximum percentage charge pursuant to the transaction terms) to arrive at the Revised Caps for the year ending 31 December 2014; and (ii) applying the expected annual growth rate of approximately 10% (the “ General Growth Rate ”) to arrive at the Revised Caps for each of the two years ending 31 December 2016.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In respect of the estimation of transaction amounts for the year ending 31 December 2014, we are advised by the management of the Group that, (i) for the Supply Transactions, the estimated transaction amount is calculated on a pro-rata basis with reference to the historical amounts for the six months ended 30 June 2014; (ii) for the Selling Agency Transactions, the estimated transaction amount is based on the sum of the historical amounts for the six months ended 30 June 2014 and the expected sales contracts for the six months ending 31 December 2014; and (iii) for the Purchase Transactions, the estimated transaction amount is based on around 50% of the estimated transaction amount for the Selling Agency Transactions (the “ Proportion ”). For our assessment of the estimated transaction amount of the Selling Agency Transactions for the year ending 31 December 2014, we have reviewed the expected schedule of sales contracts for the second half of 2014 together with relevant calculations prepared by the Group and we consider the estimation to be acceptable. For our assessment of the estimated transaction amount of the Purchase Transactions for the year ending 31 December 2014, we have reviewed the historical percentage of the Purchase Transactions over the Selling Agency Transactions for the year ended 31 December 2013, where we note that such historical percentage was around 50%, which is comparable with the Proportion.

For our assessment on the General Growth Rate, we have reviewed the annual report of the Company for the year ended 31 December 2013 (the “ 2013 Annual Report ”), where we note that (i) the operation of the Group is primarily carried out in the PRC with software business being the principal source of income for the year ended 31 December 2013; and (ii) revenue of the Group for the year ended 31 December 2013 amounted to approximately HK$1,301 million, representing an annual growth rate of approximately 12%. We have also reviewed the website of International Data Corporation (the “ IDC Website ”), a global provider of market intelligence, advisory services and events for the IT, telecommunications and consumer technology markets with more than 1,100 analysts in over 110 countries worldwide. According to the article titled “ China Software Market to reach US$13.1B by 2017; Third Platform Technologies Integration Boost Innovation ” dated 8 July 2013 published on the IDC Website, the PRC software market is expected to grow at a compound annual growth rate of approximately 11% from 2012 to 2017. We have further reviewed the World Economic Outlook Database managed by the International Monetary Fund (the “ IMF Database ”), an organisation of 188 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade and promote sustainable economic growth around the world. According to the IMF Database (April 2014 Edition), the nominal gross domestic product of the PRC is estimated to grow at the rate of approximately 10% for each of the two years ending 31 December 2016. Given the General Growth Rate is in line with the recent growth of the revenue of the Group and also the expected growth of the industry and the PRC economy, we consider the adoption of the General Growth Rate for the calculation of the Revised Caps to be acceptable.

Taking into account, in particular, (i) our review of the calculations and our assessment of the principal assumptions of the Revised Caps as detailed above; and (ii) the Concerned Transactions are on terms that are fair and reasonable as previously discussed, we are of the view that the bases of determining the Revised Caps are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

II. FRAMEWORK AGREEMENTS

1. Background of and reasons for the Framework Agreements

The Lender, a wholly-owned subsidiary of the Company, is a foreign wholly-owned enterprise established in the PRC and is principally engaged in developing and manufacture computer software and hardware products and providing related technology consulting and technical service.

Borrower A, an associate of IPG, is a company established in the PRC and is listed on the Shenzhen Stock Exchange (stock code: 000977). The Borrower A Group is principally engaged in the development, manufacture and marketing of computers and software, electronic products and other communication devices.

Borrower B, an associate of IPG, is a company established in the PRC and is listed on Shanghai Stock Exchange (stock code 600756). The Borrower B Group is principally engaged in communication business, business of developing, manufacture and marketing the technology of computer software and hardware, business of communication and computer network engineering technology consulting and technical training, and import and export business.

The Borrower A Group and the Borrower B Group are profit-making listed companies in the PRC. We have reviewed the latest published annual report and interim report of Borrower A, where we note that the Borrower A Group recorded (i) net profit attributable to shareholders of approximately RMB145 million for the year ended 31 December 2013; and (ii) net assets attributable to shareholders of approximately RMB2,112 million as at 30 June 2014. We have also reviewed the latest published annual report and interim report of Borrower B, where we note that the Borrower B Group recorded (i) net profit attributable to shareholders of approximately RMB4 million for the year ended 31 December 2013; and (ii) net assets attributable to shareholders of approximately RMB777 million as at 30 June 2014.

On 23 October 2013, the Company obtained the approval from the then Independent Shareholders for the 2013 Framework Agreement, pursuant to which the Lender (a wholly-owned subsidiary of the Company) agreed to provide entrustment loans at the maximum outstanding amount (including the accrued interest) of not exceeding RMB500 million to Borrower A. The 2013 Framework Agreement will expire on 23 October 2014.

On 29 August 2014, the Lender entered into the Framework Agreements with the Borrowers, pursuant to which the Lender agreed to provide the Entrustment Loans to Borrower A and Borrower B through the Financial Institutions, where the maximum outstanding amount of the Entrustment Loans A and the Entrustment Loans B shall not exceed RMB300 million and RMB200 million, respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As stated in the letter from the Board in the Circular, the current practice of the Group with regard to cash surplus is to deposit any such amount as current or fixed deposit. We are advised by the management of the Group that, after the satisfactory experience with Borrower A from the 2013 Framework Agreement, the Group wishes to continue to enhance the return of its cash surplus by way of the provision of the Entrustment Loans under the Framework Agreements.

The interest rates of the Entrustment Loans shall be fixed in accordance with the half-year RMB benchmark loan interest rate (“ PBOC Rate ”) published by the People’s Bank of China (“ PBOC ”). The prevailing PBOC Rate of 5.60% per annum is significantly higher than the interest rates carried by the bank deposits of the Group of approximately 0.01% to 3.10% per annum as disclosed in the 2013 Annual Report. In addition, the Entrustment Loans shall be secured by pledges.

As the Group does not possess the required licence to carry out money lending activities in the PRC, the Entrustment Loans will be provided to the Borrowers through the Financial Institutions, which are qualified to engage in entrustment loans business in the PRC. We are also advised by the management of the Group that, based on its consultation with its PRC legal adviser, the Group would not violate the PRC laws for the provision of the Entrustment Loans through the Financial Institutions.

Despite the entering into of the Framework Agreements are not in the ordinary and usual course of the business of the Group, having considered, in particular, (i) the provision of the Entrustment Loans is expected to enhance the return of the cash surplus of the Group; (ii) the Borrowers are profit-making listed companies in the PRC; and (iii) the terms of the Framework Agreements are fair and reasonable as discussed below, we are of the view that the entering into of the Framework Agreements are in the interests of the Company and the Shareholders as a whole.

2. Principal terms of the Framework Agreements

The table below summarises the principal terms of Framework Agreements as extracted from the letter from the Board in the Circular:

Interest rate Fixed in accordance with the PBOC Rate on the date of drawing of the specific loans.

If the Borrowers fail to repay any outstanding amounts on or before the due dates, the overdue interest rates shall be 50% higher than the original interest rates.

Term Two years. The term of each specific loan agreement under Entrustment Loans A and Entrustment Loans B shall be no longer than six months.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Repayment	The Borrowers shall make one-off repayment of the principal
	and interest of each of the specific loans upon maturity.
	The Lender is entitled to request for early repayment of each
	of the Entrustment Loans by serving at least five working
	days’ prior written notice to the Borrowers. The Borrowers
	are entitled to make early repayment (subject to approval by
	the Lender) by giving five working days’ prior written notice
	to the Lender.
Security	Borrower A shall pledge its entire shareholdings in Jinan
	Orient in favour of the Lender.
	Borrower B shall pledge its entire shareholdings in Inspur
	Huida in favour of the Lender.
Set-up Fees	The Set-up Fees to be charged by the Financial Institutions
	under specific loan agreements under the Entrustment Loans
	shall be paid by the Lender.

The parties to the Framework Agreements shall enter into specific loan agreements under the Entrustment Loans, where the term of each specific loan agreement under Entrustment Loans A and Entrustment Loans B shall be no longer than six months. Accordingly, the interest rates of the Entrustment Loans shall be fixed in accordance with the PBOC Rate, being the relevant half-year RMB benchmark loan interest rate published by the PBOC. The table below sets out the PBOC Rates since 2010:

	PBOC Rate since
	the adjustment
Adjustment date	date
20 October 2010	5.10%
26 December 2010	5.35%
9 February 2011	5.60%
6 April 2011	5.85%
7 July 2011	6.10%
8 June 2012	5.85%
6 July 2012	5.60%

Source: the website of the PBOC

We note that the prevailing PBOC Rate of 5.60% per annum is substantially higher than the depository interest rate carried by the bank balances and cash of the Group of approximately 0.01% to 3.10% per annum as disclosed in the 2013 Annual Report.

Loan overdue implies a lengthened lending duration and we note that the overdue interest rates of the Entrustment Loans shall be 50% higher than the original interest rates. Accordingly, we have

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

reviewed the website of the PBOC, where we note that the prevailing over 5-year RMB benchmark loan interest rate (the “ PBOC Long Term Lending Rate ”), being the rate with the longest duration available on the website of the PBOC, is 6.55% per annum. Given the overdue interest rate of 8.40% per annum of the Entrustment Loans (derived from the prevailing PBOC Rate) is even higher than the PBOC Long Term Lending Rate, we consider the overdue interest rate of the Entrustment Loans to be acceptable.

Pursuant to the Framework Agreements, in the event of default, Borrower A and Borrower B shall compensate all relevant losses incurred to the Group (including but not limited to legal costs) in addition to the repayment of all outstanding principal and interest. Furthermore, Borrower A and Borrower B shall pledge their entire shareholdings in Jinan Orient and Inspur Huida in favour of the Lender, respectively. As stated in the letter from the Board in the Circular, in the event of default under any specific loan agreements under the Entrustment Loans, the Lender shall have absolute right to dispose of the shareholding of Jinan Orient or Inspur Huida (as the case maybe) to recover the debt and sue for any shortage of the corresponding Entrustment Loans.

The Independent Shareholders should note that, in case the Group wishes to utilise its cash surplus on activities which are more favourable than the provision of the Entrustment Loans, the Lender is entitled to request for early repayment of each of the Entrustment Loans by serving at least five working days’ prior written notice to the Borrowers. Accordingly, the Group has the flexibility to utilise its cash surplus anytime on either the Entrustment Loans or any other activities, whichever is more favourable to the Group.

As advised by the management of the Group, the Directors and the senior management of the Group will review the financial performance and position of the Group, the Borrower A Group and the Borrower B Group on at least a quarterly basis, where the Group would limit further provision of or demand early repayment for the Entrustment Loans if (i) the Borrower A Group or the Borrower B Group poses a risk to the timely collection of the Entrustment Loans by the Group; (ii) the Group is expected to be in need of further working capital; or (iii) the Group identifies and wishes to reinvest in better opportunities.

As the Group does not possess the licence required to carry out money lending activities in the PRC, the Entrustment Loans will be arranged through the Financial Institutions. We are advised by the management of the Group that the Group will select the most favourable Financial Institutions, which are independent third parties, for the arrangement of the Entrustment Loans. We have reviewed quotations obtained by the Group from the Financial Institutions, where we note that the Set-up Fees could be lower than 0.1% of the loan amount, which is insignificant as compared with the prevailing PBOC Rate.

Taking into account, in particular, (i) the interest rates of the Entrustment Loans shall be based on the PBOC Rate, which is substantially higher than the depository interest rate carried by the bank balances and cash of the Group; (ii) the Group has the flexibility to utilise its cash surplus anytime on either the Entrustment Loans or any other activities, whichever is more favourable to the Group; (iii) the Entrustment Loans are protected by equity pledges; (iv) the Set-up Fees are insignificant as

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

compared with the prevailing PBOC Rate; and (v) the reasons for the entering into of the Framework Agreements as previously discussed, we are of the view that the terms of Framework Agreements are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. Proposed caps of the Framework Agreements

The proposed caps, being the maximum outstanding amounts (including accrued interest), of the Framework Agreements shall be RMB300 million for the Entrustment Loans A and RMB200 million for the Entrustment Loans B (together, the “ Loan Caps ”).

According to the 2013 Framework Agreement, which will expire on 23 October 2014, the maximum outstanding amount (including accrued interest) of entrustment loans to Borrower A is RMB500 million, which is in line with the aggregate amount of the Loan Caps.

We have reviewed the half-year results announcement of the Company for the six months ended 30 June 2014 (the “ 2014 Interim Results ”), where we note that the Group had (i) bank balances and cash of approximately HK$895 million, which is substantially higher than the aggregate amount of the Loan Caps of RMB500 million; (ii) entrusted loans receivable of approximately HK$315 million, which is the entrustment loan under the 2013 Framework Agreement as advised by the management of the Group; (iii) no bank borrowings; and (iv) net assets attributable to owners of the Company of approximately HK$1,846 million as at 30 June 2014. As stated in the letter from the Board in the Circular, the Group is anticipated to have adequate cash to meet its daily operation needs and capital expenses after the provision of the Entrustment Loans.

In addition, the Entrustment Loans A and the Entrustment Loans B shall be protected by the pledges of Jinan Orient and Inspur Huida, respectively. We have reviewed the financial statements of Jinan Orient, where we note that, as at 31 July 2014, Jinan Orient had (i) net assets of approximately RMB473 million; (ii) total assets of approximately RMB478 million, which primarily comprised bank balances and cash of approximately RMB167 million and investment properties of approximately RMB153 million; and (iii) total liabilities of approximately RMB5 million. We have also reviewed the financial statements of Inspur Huida, where we note that, as at 31 March 2014, Inspur Huida had (i) net assets of approximately RMB328 million; (ii) total assets of approximately RMB328 million, which primarily comprised fixed assets of approximately RMB298 million related to the ownership of an office tower and its site located in Jinan City, Shandong Province, the PRC as advised by the management of the Group; and (iii) total liabilities of less than RMB1 million. Despite Jinan Orient and Inspur Huida are not listed companies, based on our understanding that (i) the interest rates of the Entrustment Loans shall make reference to the PBOC Rate and the pledges of Jinan Orient and Inspur Huida provide additional protection to the recovery of the Entrustment Loans of the Group; (ii) the net assets of Jinan Orient and Inspur Huida well cover the corresponding Loan Caps; (iii) the assets of Jinan Orient and Inspur Huida primarily comprised bank balances and cash and/or property related assets; and (iv) the debts of Jinan Orient and Inspur Huida were insignificant, we consider the pledges of Jinan Orient and Inspur Huida for the Entrustment Loans to be appropriate.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Independent Shareholders are reminded that the Lender is entitled to request for early repayment of each of the Entrustment Loans, where the Loan Caps provide the Group with the flexibility but not the obligation to provide the Entrustment Loans to the Borrowers.

Taking into account, in particular, (i) the Group has the flexibility but not the obligation to provide the Entrustment Loans; (ii) the bank balances and cash of the Group is substantially higher than the aggregate amount of the Loan Caps; (iii) the Group is anticipated to have adequate cash to meet its daily operation needs and capital expenses after the provision of the Entrustment Loans; (iv) the reasons for the entering into of the Framework Agreements as previously discussed, particularly the Group can continue to generate interest income significantly higher than those arising from bank deposits; and (v) the terms of the Framework Agreements are fair and reasonable as previously discussed, we are of the view that the bases of determining the Loan Caps are fair and reasonable so far as the Independent Shareholders are concerned.

RECOMMENDATION

Despite the entering into of the Framework Agreements are not in the ordinary and usual course of the business of the Group, having taken into account the above principal factors, we are of the view that (i) the entering into of the Supplemental Agreement and the Concerned Transactions is in the ordinary and usual course of business of the Group and, together with the entering into of the Framework Agreements, are in the interests of the Company and the Shareholders as a whole; and (ii) the terms of the Supplemental Agreement, the Concerned Transactions and the Framework Agreements are on normal commercial terms and, together with the bases of determining the Revised Caps and the Loan 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 resolutions to approve the Supplemental Agreement (including the Revised Caps) and the Framework Agreements at the EGM.

Yours faithfully, For and on behalf of

First Shanghai Capital Limited

Eric Lee Fanny Lee Managing Director Managing Director

Note: Mr. Eric Lee and Ms. Fanny Lee have been responsible officers of Type 6 (advising on corporate finance) regulated activity under the SFO since 2006. Both of them have participated in the provision of independent financial advisory services for various connected transactions involving companies listed in Hong Kong.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

AUDITED CONSOLIDATED FINANCIAL STATEMENT OF THE GROUP

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

The audited consolidated financial statements of the Group for the year ended 31 December 2013 have been set out in the Annual Report 2013 of the Company which was posted on 25 April 2014 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2013:

http://www.hkexnews.hk/listedco/listconews/SEHK/2014/0425/LTN20140425406.pdf

The audited consolidated financial statements of the Group for the year ended 31 December 2012 have been set out in the Annual Report 2012 of the Company which was posted on 18 April 2013 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2012:

http://www.hkexnews.hk/listedco/listconews/SEHK/2013/0418/LTN20130418717.pdf

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

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

The three auditors’ reports for the consolidated financial statements of the Group for the years ended 31 December 2013, 2012 and 2011 are unqualified reports.

INDEBTEDNESS STATEMENT

Debts and Borrowings

At the close of business on 30 September 2014, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group did not have any outstanding mortgages, charges, debenture, loan capital issued and outstanding or agreed to be issued, bank loan and overdraft or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptances or acceptance credits or any guarantee or other material contingent liabilities.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent liabilities

As at 30 September 2014, being the latest practicable date prior to the printing of this circular for the purpose of this indebtedness statement, the Group had no material contingent liabilities.

FINANCIAL AND TRADING PROSPECT

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.

WORKING CAPITAL STATEMENT

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

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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 of the
Name	of Director	Type of interests	Number of shares	Company
Dong	Hailong	Beneficial owner	4,000	0.00%

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GENERAL INFORMATION

APPENDIX II

(ii) Long positions in underlying shares of the Company

				Percentage
				of the issued
			Number of	share capital
		Description of	underlying	of the
Name of Director	Type of interests	equity derivatives	shares	Company
Wang Xingshan	Beneficial owner	share option	1,000,000	0.12%
		(Note 1)
Chen Dongfeng	Beneficial owner	share option	800,000	0.09%
		(Note 1)
Dong Hailong	Beneficial owner	share option	400,000	0.05%
		(Note 1)
Wong Lit Chor,	Beneficial owner	share option	40,000	0.01%
Alexis		(Note 1)
Sun Chengtong	Beneficial owner	share option	800,000	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$3.410 per Share (as adjusted as a result of share consolidation effective on 18 November 2013, details are set out in the Company’s announcement dated 15 November 2013). 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.

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GENERAL INFORMATION

APPENDIX II

(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	percentage of
Name of Shareholders	Type of interests	of Shares	interests
Inspur Group Limited	Interest in a controlled	288,478,000	31.99%
	corporation (Note)
Jinan Inspur Wireless	Interest in a controlled	288,478,000	31.99%
Communication Limited#	corporation (Note)
(濟南浪潮無線通信有限公司)
Inspur Software Group Limited#	Interest in a controlled	288,478,000	31.99%
(浪潮軟件集團有限公司)	corporation (Note)
Inspur Cheeloo Overseas	Interest in a controlled	288,478,000	31.99%
Investment And Development	corporation and
Co., Limited (浪潮齊魯海外投資	Beneficial owner (Note)
發展有限公司)
Inspur Overseas Investment	Beneficial owner (Note)	288,478,000	31.99%
Limited (浪潮海外投資有限公
司)

Note: Inspur Overseas Investment has reported to be the beneficial owner of 288,478,000 Shares. Inspur Group Limited, Jinan Inspur Wireless Communication Limited, Inspur Software Group 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 288,478,000 Shares.

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GENERAL INFORMATION

APPENDIX II

Long positions in members of the Group

			Approximate
			percentage of
			shareholding
			in the
Name of			members of
shareholders	Types of Interest	Equity interest held	the Group
Wu Xi Yi Jie Xin	Beneficial owner	RMB200,000 in the registered	10%
Cheng Information		capital of Wuxi Inspur Business
Technology		Technology Company Limited#
Company Limited#		(無錫浪潮商服技術有限公司)
(無錫易捷信誠資
訊技術有限公司)
Fang Wensheng	Beneficial owner	RMB690,000 in the registered	34.5%
		capital of Inspur Fangzhi
Bao Jianhua	Beneficial owner	RMB300,000 in the registered	15%
		capital of Inspur Fangzhi
Shanghai Huili Co.	Beneficial owner	RMB50,000 in the registered	10%
Ltd# (上海滙力有		capital of Shanghai Guoqiang
限公司)		Genersoft Incorporation#
		(上海國強通用軟件有限公司)
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
Zheng Jianyang	Beneficial owner	RMB3,868,500 in registered	11.05%
		capital of Shangdong Inspur
		Financial Software Information
		Company Limited#
		(山東浪潮金融軟件信息有限公司)
Lu Qiang	Beneficial Owner	RMB2,450,000 in registered	49%
		capital of Yunnan Inspur General
		Soft Information Technology
		Limited#
		(雲南浪潮通軟信息科技有限公司)

# English names are for identification purpose only

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

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GENERAL INFORMATION

APPENDIX II

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 2013, 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. 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 2013, 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.

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APPENDIX II

GENERAL INFORMATION

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 2013), 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. 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 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 period of approximately 45 years;
(ii) The consideration payable by Inspur Mingda to IPG in relation to acquisition of the land use rights shall be RMB32,000,000 (equivalent to approximately HK$39,035,269) with about RMB1,865 per sq.m. The consideration shall be paid in the following manner:
- (1) RMB16,000,000 shall be paid within 7 days of the date of the land use rights agreement; and
- (2) RMB16,000,000 shall be paid within 7 days after the certificate of the land use rights has been issued in favour of Inspur Mingda.
(b) 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;

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GENERAL INFORMATION

APPENDIX II

(c) 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;
(d) the sale and purchase agreement dated 16 April 2013 entered into between Inspur Electronics Limited as vendor and Inspur Electronic Information (Hong Kong) Co., Limited (浪潮電子信息 (香港)有限公司) in relation to the disposal of the entire issued share capital of Inspur (HK) Electronics Limited (浪潮(香港)電子有限公司);
(e) the disposal agreement dated 22 August 2013 entered into between Inspur (Shandong) Electronics Information Limited and Inspur Cheeloo Software Industry Company Limited* (浪潮齊魯軟件產業有限公司) in relation to the disposal of the entire assets of the digital media business;
(f) the new framework agreement dated 29 November 2013 between the Company and Inspur Group Limited relating to the renewal of the Continuing Connected Transactions with Inspur Group for the term of three financial years ending 31 December 2016;
(g) the disposal agreement dated 28 August 2014 between Inspur (Shandong) Electronics Information Limited (浪潮(山東)電子信息有限公司) and Inspur Software Group Company Limited (浪潮軟件集團有限公司) in relation to the disposal of entire share equity of the Shandong Inspur Commercial System Company Limited* (山東浪潮商用系統有限公司);
(h) the capital increase agreement dated 29 August 2014 between Inspur Electronic Information Industry Co., Ltd. (浪潮電子信息產業股份有限公司), Inspur Software Co., Ltd. (浪潮軟件股份有限公司), Inspur (Shandong) Electronics Information Limited* (浪潮
（山東）電子信息有限公司), and Shandong Inspur Cloud Computing Investment Co., Ltd.* (山東浪潮雲海雲計算產業投資有限公司) relating to the increase in the registered capital of Shandong Inspur Cloud Computing Investment Co., Ltd;
(i) the Framework Agreement A and the Framework Agreement B; and
(j) the IPG Agreement.

9. 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 II

(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 texts in case of inconsistency.

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 Framework Agreements;
(b) the IPG Agreement;
(c) the Supplemental Agreement;
(d) memorandum, articles of association and bye-laws of the Company;
(e) the audited consolidated financial statements of the Group for the two financial years ended 31 December 2012 and 31 December 2013;
(f) the contracts referred to in the section headed “Material Contracts” referred in section 9 of this appendix;
(g) the letters from the Independent Board Committee, as set out on pages 21 to 22 of this circular;
(h) the letter from the Independent Financial Adviser, as set out on pages 23 to 35 of this circular;
(i) the written consent referred to in the section headed “Expert” of this Appendix;
(j) circulars of the Company dated 9 January 2014; and
(k) this circular.

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NOTICE OF THE EGM

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Inspur International Limited (the “ Company ”) will be held at Flats B& C , 30/F., Tower A, Billion Center, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong, on Monday, 3 November 2014 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions as the ordinary resolutions of the Company :

ORDINARY RESOLUTIONS

“ THAT :
(a) the supplemental agreement (the “ Supplemental Agreement ”) dated 29 August 2014 entered into by the Company (for itself and on behalf of its subsidiaries) and Inspur Group Limited (浪潮集團有限公司) (for itself and on behalf of its subsidiaries) as supplemental to the framework agreement entered into by the parties on 29 November 2013 in relation to setting of the revised annual caps of the Concerned Transactions (as defined and more particularly described in the Company’s circular dated 16 October 2014 (the “ Circular* ”)) for the 3 years ending 31 December 2016 (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 and more particularly described in the Circular) in respect of the Concerned Transactions be and are hereby approved and confirmed; and
(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.”

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NOTICE OF THE EGM

“ THAT :
(a) The framework agreement dated 29 August 2014 (“ Framework Agreement A ”) entered into between Inspur (Shandong) Electronics Information Co., Limited (浪潮(山東)電子信息有限公司) as the lender and Inspur Electronic Information Industry Co., Limited (浪潮電子信息產業股份有限公司) as the borrower in relation to provision of entrustment loans (details of the Framework Agreement A are set out in the Circular and copies of the Framework Agreement A has been tabled at the meeting and marked “C” signed by the Chairman of the meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and
(b) the directors of the Company be and are hereby authorized to take such 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 Framework Agreement A and the transactions contemplated thereunder.”
“ THAT :
(a) The framework agreement dated 29 August 2014 (“ Framework Agreement B ”) entered into between Inspur (Shandong) Electronics Information Co., Limited (浪潮(山東)電子信息有限公司) as the lender and Inspur Software Co., Limited (浪潮軟件股份有限公司) as the borrower in relation to provision of entrustment loans (details of the Framework Agreement B are set out in the Circular and copies of the Framework Agreement B has been tabled at the meeting and marked “D” signed by the Chairman of the meeting for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and
(b) the directors of the Company be and are hereby authorized to take such 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 Framework Agreement B and the transactions contemplated thereunder.”

By order of the Board Inspur International Limited Wang Xingshan Chairman

Hong Kong, 16 October 2014

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NOTICE OF THE EGM

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

Notes:

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 annual general meeting to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of Shares in respect of which each such proxy is so appointed.
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 and Mr. Sun Chengtong as executive Directors, Mr. Samuel Y. Shen and Mr. Dong Hailong as non-executive Directors, and Ms. Zhang Ruijun, Mr. Wong Lit Chor, Alexis and Ms. Dai Ruimin as independent non-executive Directors.

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AI assistant

Inspur Digital Enterprise Technology Limited — Proxy Solicitation & Information Statement 2014

49324_rns_2014-10-15_ed614064-7252-46b7-8c1d-f185ead52f4b.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(1) CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS

AND

(2) MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS ENTRUSTMENT LOANS FRAMEWORK AGREEMENTS

FIRST SHANGHAI CAPITAL LIMITED

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

Executive Directors:

Non-executive Directors:

Independent non-executive Directors:

Registered office:

Head office and principal place of business in Hong Kong:

To the Shareholders

(1) CONTINUING CONNECTED TRANSACTIONS REVISION OF ANNUAL CAPS

AND

(2) MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS ENTRUSTMENT LOANS FRAMEWORK AGREEMENTS

INTRODUCTION

1. The Supplemental Agreement (including the Revised Caps)

LETTER FROM THE BOARD

2. Entrustment Loan Framework Agreements

LETTER FROM THE BOARD

BACKGROUND OF THE SUPPLEMENTAL AGREEMENT (INCLUDING THE REVISED CAPS)

Types of products and services

Pricing and other terms

LETTER FROM THE BOARD

Payment terms

2. Selling Agency Transactions

3. Purchase Transactions

Types of products

Pricing

LETTER FROM THE BOARD

Payment terms

HISTORICAL AMOUNTS AND APPROVED ANNUAL CAPS OF THE CONCERNED TRANSACTIONS

LETTER FROM THE BOARD

SUPPLEMENTAL AGREEMENT AND THE REVISED CAPS

BASIS OF THE REVISED CAPS

1. Supply Transactions

2. Selling Agency Transactions

LETTER FROM THE BOARD

3. Purchase Transactions

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

INFORMATION OF THE PARTIES

1. The Group

2. IPG

IMPLICATION UNDER THE LISTING RULES

LETTER FROM THE BOARD

BACKGROUND OF THE FRAMWORK AGREEMENTS

1. The Framework Agreement A

Date

Parties

Provisions of Entrustment Loans A

LETTER FROM THE BOARD

Repayment of Entrustment Loans A and payment of interests

Specific agreements under Entrustment Loans A

Overdue Interest

Set-up Fees

LETTER FROM THE BOARD

Term and effectiveness

Security

Proposed Cap for Framework Agreement A

2. The Framework Agreement B

Date

Parties

Provisions of Entrustment Loans B

Repayment of Entrustment Loans B and payment of interests

Specific agreements under Entrustment Loans B

Overdue Interest

LETTER FROM THE BOARD

Term and effectiveness

Security

Proposed Cap for Framework Agreement B

LETTER FROM THE BOARD

Inspur Digital Enterprise Technology Limited Proxy Solicitation & Information Statement 2014