THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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

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

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS — RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

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 4 to 14 of this circular. The recommendation of the Independent Board Committee to the Independent Shareholders is set out on page 15 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 16 to 25 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 Thursday, 17 November 2016 at 10:00 a.m. is set out on pages 36 to 37 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.

27 October 2016

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Letter from the Independent Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16
Appendix I — Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . .	26
Appendix II — General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28
Notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36

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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 “Common Services Transactions” the transactions in relation to the provision of services in respect of use of premises and estate management by the Inspur Group to the Group under the Framework Agreement and the New Framework Agreement

“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

“Comparable Transactions” transactions trading same or similar objects under the similar commercial terms to third independent parties compared to the Transactions defined below

“connected person(s)” has the meaning ascribed to it under the Listing Rules

“Continuing Connected the continuing connected transactions of the Company under Transactions” the Framework Agreement and New Framework Agreement, including the Supply Transactions, Selling Agency Transactions, Purchase Transactions, and Common Services 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 New Framework Agreement and the proposed New Caps
“Finance Department”

the finance Department of the Company

“Framework Agreement” the agreement dated 29 November 2013 between the Company and the IPG in relation to the Continuing Connected Transactions for the three financial years ending 31 December 2016 (as supplemented by the Supplemental Agreement)

“Group” the Company and its subsidiaries

“HK$” Hong Kong dollars, the lawful currency of Hong Kong

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DEFINITIONS

“Hong Kong”
“Independent Board Committee”
“Independent Financial Adviser” or “First Shanghai”
“Independent Shareholders”
“Inspur Group”
“IPG”
“Latest Practicable Date”
“Listing Rules”
“New Caps”
“New Framework Agreement”

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

an independent board committee, comprising Mr. Wong Lit Chor, Alexis, Ms. Zhang Ruijun and Mr. Ding Xiangqian, all being the independent non-executive directors of the Company, to advise the Independent Shareholders as to the fairness and reasonableness of the New Framework Agreement and the proposed New Caps

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 New Framework Agreement, the Transactions and the New Caps
Shareholders other than IPG (including its ultimate beneficial owners and their respective associates)
IPG and its subsidiaries
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
25 October 2016, being the latest practicable date prior to printing of this circular for ascertaining certain information contained herein
Rules Governing the Listing of Securities on the Stock Exchange
the new annual caps of the Continuing Connected Transactions to be entered into by the relevant parties for the three financial years ending 31 December 2019 under the following categories: Supply Transactions, Selling Agency Transactions (value of transactions), Selling Agency Transactions (related commission), Purchase Transactions and Common Services Transactions

the conditional agreement dated 12 September 2016 between the Company and the IPG in relation to the Continuing Connected Transactions for the three financial years ending 31 December 2019

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DEFINITIONS

“Operation Department” the operation department of the Company “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 Framework Agreement and the New Framework Agreement “RMB” Renminbi, the lawful currency of the PRC “SFO” Securities and Futures Ordinance (chapter 571) of the laws of Hong Kong “Sales Department” the sales department of the Company “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 Framework Agreement and the New Framework Agreement “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 “Supplemental Agreement” the supplemental agreement dated 29 August 2014 between the Company and IPG in relation to setting of the revised annual caps of the Supply Transactions, Selling Agency Transactions and Purchase 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 Framework Agreement and the New Framework Agreement “Transactions” the transactions contemplated under the New Framework Agreement “%” per cent

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. Jin Xiaozhou

Non-executive Directors:

Mr. Samuel Y. Shen Mr. Dong Hailong

Independent non-executive Directors:

Mr. Wong Lit Chor, Alexis Ms. Zhang Rujiun Mr. Ding Xiangqian

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 27 October 2016

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS — RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

INTRODUCTION

Reference is made to the Company’s announcement dated 12 September 2016. On 12 September 2016, the Company (for itself and on behalf of the other members of the Group) entered into the New Framework Agreement with IPG (for itself and on behalf of the other members of the Inspur Group) relating to the Continuing Connected Transactions for the term of three financial years ending 31 December 2019. The New Framework Agreement is conditional upon the obtaining of the approval of the Independent Shareholders of the New Framework Agreement, the New Caps, and the Transactions on or before 31 December 2016 (or any other later date as agreed by the parties).

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LETTER FROM THE BOARD

As IPG is a connected person of the Company, the Transactions constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. Meanwhile, as the aggregate of the annual amounts of the Continuing Connected Transactions under the New Framework Agreement are expected to exceed the thresholds set out in Rule 14A.76 of the Listing Rules, the Company will seek the approval of the Independent Shareholders by way of a poll in the EGM of the New Framework Agreement and the proposed New Caps for the three financial years ending 31 December 2019. IPG, IPG’s ultimate beneficial owners and their respective associates will abstain from voting in the EGM to be convened for the approval of the New Framework Agreement, the proposed New Caps and the Transactions.

The purpose of this circular is to provide you with further information regarding, among other things, (i) details of the New Framework Agreement and the New Caps; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, and (iv) the notice of the EGM.

INTRODUCTION OF THE NEW FRAMEWORK AGREEMENT

Reference is made to the Company’s announcements dated 29 November 2013 and 29 August 2014 and the Company’s circulars dated 9 January 2014 and 15 October 2014 regarding the Continuing Connected Transactions between the Group and the Inspur Group. On 24 January 2014, the Company has obtained the Independent Shareholders’ approval for the Continuing Connected Transactions and the annual caps assigned to the transactions contemplated thereunder for the three financial years ending 31 December 2016. In order to fulfil the expected increase in the Transactions and to response to the change in market, on 3 November 2014 the Company has obtained the Independent Shareholders’ approval of the Supplemental Agreement in relation to certain pricing terms in the Framework Agreement and the revised caps for the Transactions for the three financial years ending 31 December 2016.

As the Framework Agreement will expire after 31 December 2016, on 12 September 2016 the Company (for itself and on behalf of the other members of the Group) has entered into the New Framework Agreement with IPG (for itself and on behalf of the other members of the Inspur Group) in respect of the Continuing Connected Transactions and the New Caps for the three financial years ending 31 December 2019. The New Framework Agreement is conditional upon the obtaining of the approval of the Independent Shareholders of the New Framework Agreement, the New Caps , and the Transactions on or before 31 December 2016 (or any other later date as agreed by the parties), failing which the New Framework Agreement will be terminated after 31 December 2016.

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LETTER FROM THE BOARD

BACKGROUND OF THE CONTINUING CONNECTED TRANSACTIONS

The Continuing Connected Transactions comprises: Supply Transactions, Selling Agency Transactions, Purchase Transactions, and Common Services Transactions.

1. 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 of electronic products, sourced software, ERP software and various software developed by the Group; 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 and 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 services 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 member of the Group will be agreed between the parties by reference to, among other factors, the price per unit of such IT products and IT services supplied by the Group to independent third parties at the relevant time when determining the prices of such IT products and IT services; 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.

As the Group has other customers sufficient for comparable purposes on the prices of the products and the service fees under the Supply Transactions, the management will select at least 2

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LETTER FROM THE BOARD

Comparable Transactions when determining the prices to ensure that the prices of the products and the service fees of the services to be supplied under the Supply Transactions are not less favorable than those of the same (or similar) products or service supplied to the independent third party at the relevant time.

Payment terms

The Group gives two-month credit period similar to the credit period granting to other customers for the Inspur Group to settle the payment of the IT products after delivery and the service fees of the IT services after 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 and other software products) as the Inspur Group owns the First-Class Certificate of the Computer Information System Integration Qualification (the “Qualification”) granted by the Ministry of Industry and Information Technology of the PRC (the “Ministry”). And the Ministry only grants around 200 enterprises the same Qualification as Inspur Group throughout the PRC. This Qualification is certified by a third-party institution, i.e the China Information Technology Industry Federation, which confirmed that all aspects of the company’s capacity have achieved the required levels, especially the Company’s capacity on the computer science engineering and network system engineering.

Since the Group only owns the fourth-class certificate of the qualification granted by the Ministry and certain business of the Group is generated from public tenders that require the Qualification held by the Inspur Group, the Group needs to cooperate with Inspur Group to participate in the public tenders requiring first-class qualification. 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 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 for it to maintain its Qualification. 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. The Group may lose some business generated from the public tenders that require the Inspur Group’s Qualification when terminating the appointment of Inspur Group as its selling agent.

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 2016. As such, the 1% commission

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LETTER FROM THE BOARD

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 is well known of 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. However, it is highly unlikely for the Group to find an independent third party who owns the first-class qualification as Inspur Group charging the commission fee less than 1%. Moreover, other entities with the first-class qualification are limited in numbers and as business competitors of the Group, they would not offer selling agency services to the Group. As such, the Board is of the view that the 1% commission fee is lower than the average market rate and is fair and reasonable.

The annual cap of this transaction in the year of 2015 only represents about 40% of the Company’s total revenue for the year ended 31 December 2015. For the six months ended 30 June 2016, this percentage is around 24% and for the whole year of 2016 this percentage is predicted to be lower than 40% pursuant to the amount of completed and ongoing transactions. For the following three years from 2017, as the group will not have material changes or adopt other strategies in relation to this transaction, it is predictable that this percentage will be around 40% as the previous years. Moreover, with its own fourth-class certificate of the qualification, the Group is able to participate in public tenders and find third party customers, of which the scale of the transaction may be smaller than those requiring the first-class qualification. Therefore, the Board takes the view that the new cap for Selling Agency Transactions are appropriate and will not cause over-reliance on Inspur Group.

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”, storage products and other accessories.

Pricing and other terms

The members of the Group purchase the abovementioned IT products and accessories 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:

(a) the supply of products and comporents 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 price per unit of such products supplied by Inspur Group to independent third parties; 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 the same or similar products and components.

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LETTER FROM THE BOARD

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 Comparable Transactions. The management will ensure the prices 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. As the Group has other suppliers for similar IT products and IT services, the management will refer to the commercial terms offered by other suppliers when determining the same with Inspur Group.

Payment terms

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

4. Common Services Transactions

The Inspur Group provides services in respect of use of premises and estate management to various members of the Group at fees determined with reference to the prevailing market rates and by arm’s length negotiation. In general, the above fees are billed on a monthly basis and will be satisfied by cash out of the internal resources of the Group.

Particularly, for determination of the fees for using of premises and estate management, the management refers to at least 2 Comparable Transactions and those fees charged by independent third parties for providing comparable premise renting and management services on market at the relevant time. The management will ensure that the fees to be charged by Inspur Group under the Common Services Transaction are not less favourable than the fees charged by those independent third parties.

Internal Control Measures for the Transactions

The market strategies, including the pricing mechanisms, are determined by the Operation Department. There is a segregation of duties between the Sales Department and Operation Department. The Sales Department is responsible for contacting customers, setting quotation and entering into the contracts. And the Operation Department is in charge of setting the price and other terms, through which it will control and monitor the fee quotation. The Operation Department will periodically review and adjust the pricing and commercial terms with reference to the market situation and the same or similar transactions entered into by the Inspur Group with independent third parties (if applicable).

Also for the above Transactions, the Directors (including independent non-executive directors of the Company) will review the pricing terms and the payment terms of transactions between the Group and independent third parties (if applicable) each year so as to confirm that the pricing terms and payment terms under the Transactions are comparable with those of the independent third parties (if applicable).

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LETTER FROM THE BOARD

ANNUAL CAPS

THE FRAMEWORK AGREEMENT AND ANNUAL CAPS

Set out below are the historical amounts of the Continuing Connected Transactions for the two years ended 31 December 2015 and the 6 months ended 30 June 2016 (with the relevant annual caps approved by the Independent Shareholders set out in brackets):

		Year ended	Year ended	6 months
		31 December	31 December	ended 30 June
(All	amounts in RMB’000)	2014	2015	2016
Supply Transactions		9,488	9,463	5,600
		(9,600)	(10,500)	(11,550)
Selling Agency Transactions
−	(value of transactions)	369,734	323,192	107,029
		(370,000)	(407,000)	(447,000)
−	(related commission)	3,625	3,174	1,059
		(3,700)	(4,070)	(4,470)
Purchase Transactions		139,087	50,131	4,546
		(183,000)	(200,000)	(220,000)
Common Services Transactions		8,924	9,542	5,074
		(9,800)	(10,800)	(12,000)

NEW FRAMEWORK AGREEMENT AND NEW CAPS

The New Caps under the New Framework Agreement are:

	Year ending	Year ending	Year ending
	31 December	31 December	31 December
(All amounts in RMB’000)	2017	2018	2019
Supply Transactions	13,860	16,600	20,000
Selling Agency Transactions
− (value of transactions)	396,000	475,200	570,240
− (related commission)	3,960	4,752	5,702.4
Purchase Transactions	60,000	72,000	86,400
Common Services Transactions	12,100	13,310	14,640

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

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LETTER FROM THE BOARD

BASIS OF THE NEW CAPS

1. Supply Transactions

The following factors have also been taken into account by the Company in determining the New Caps for the Supply Transactions for the year ending 31 December 2019: (a) the recent historical amounts and the expected amounts of the Supply Transactions for the year ending 31 December 2016; (b) the expected annual growth rates of the Company’s revenue and the amounts of the Supply Transaction; and (c) the industry growth rate (especially the growth rate of IT software and IT service industry) and the PRC annual enconomic growth rate.

2. Selling Agency Transactions

The following factors have been taken into account by the Company in determining the New Caps for the Selling Agency Transactions: (a) the recent historical amounts and the expected amounts of the Selling Agency Transactions for the year ending 31 December 2016; (b) the expected annual growth rates of the Company’s revenue and the amounts of the Selling Agency Transactions; and (c) the industry growth rate and the PRC annual economic growth rate.

3. Purchase Transactions

The following factors have been taken into account by the Company in determining the New Caps for the Purchase Transactions: (a) the recent historical amounts and the expected amounts of the Purchase Transactions for the year ending 31 December 2016; (b) the expected annual growth rates of the Company’s revenue and the amounts of the Purchase Transactions; and (c) the industry growth rate and the PRC annual economic growth rate.

4. Commons Services Transactions

The following factors have been taken into account by the Company in determining the New Caps for the Common Services Transactions: (a) the recent historical amounts and the expected amounts of the Common Services Transactions for the year ending 31 December 2016; and (b) the expected annual growth rates of the expected usage of the common services.

The Board has estimated the transaction amount for the year ending 31 December 2016 based on the unfinished contracts (the “2016 Estimated Amount”) for each of the Transactions and the compound growth rate based on the actual achieved revenue of the Group for the six months ended 30 June 2016. The New Caps for the Supply Transactions, the Selling Agency Transactions and the Purchase Transactions are based on the 2016 Estimated Amount and the compound annual growth rate of 20%. The New Caps for the Common Services Transactions are based on the 2016 Estimated Amount and the compound annual growth rate of 10% that has taken into account the relatively stable demand of common services (primarily being property leasing and management services) and general inflation.

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LETTER FROM THE BOARD

The Finance Department provides guidance and advice to the Operation Department on the annual caps of the transactions each year. By taking the regular management of the Transactions, the Finance Department will periodically analyse the implementation of the Transactions and monitor the compliance of the New Caps.

INFORMATION ON THE GROUP AND THE INSPUR GROUP

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

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 100 countries and regions, meeting the information-based demands of governments and corporations all-around the world.

REASONS FOR AND BENEFITS OF ENTERING INTO THE NEW FRAMEWORK AGREEMENT

The Group has established a long-term strategic business relationship with the Inspur Group and has been conducting the Continuing Connected Transactions with the Inspur Group for several years. By entering into the New Framework Agreement, the Group can continue to derive benefits from the Continuing Connected Transactions which can capture the synergic advantages of both the Group and the Inspur Group (including the established worldwide client network of the Inspur Group).

For Supply Transactions, provision of the IT products and IT services to the Inspur Group can generate more revenue and profits to the Group. Inspur Group has become the Group’s famous and typical client after several years’ cooperation, which brings apparent advantages to the Group’s reputation and promotion. Moreover, our Group is well known of the types of IT products and IT services that are appropriate to Inspur Group. By using our Group’s products and services, Inspur Group can enjoy a better company management and a higher working efficiency.

Dealing the Selling Agency Transactions with the Group is a support from Inspur Group as the Group’s shareholder. As Inspur Group owns the Qualification required by certain transactions, the Group could further develop software business requiring such Qualification by cooperating with Inspur Group and generate more profits which can also benefit Inspur Group, the Group’s Shareholder.

For Purchase Transactions, the software business revenue of the Inspur Group for the year ended 31 December 2015 ranked fourth in the 中國軟件業務收入前百家企業名單(PRC Software Business Revenue Top 100 Corporation List) published by the Ministry. With good reputation in the IT area, the IT products supplied by Inspur Group represent a guarantee of high quality and reliable after-sales service. Cooperation in the Purchase Transactions can bring more sales channels and customers to Inspur Group and bring more revenue and profits to the Group as well.

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LETTER FROM THE BOARD

Common Services Transactions is mainly for the Group’s need in official premises and the relevant estate management. As Inspur Group owns vacant premises with good estate management and the Group has such need, it is a win-win situation for both sides to conduct this transaction.

The Directors consider that the transactions contemplated under the New Framework Agreement are on normal commercial terms and entered into in the ordinary and usual course of business of the Group. In view of the above, the Directors are of the view that the Continuing Connected Transactions are in the interests of the Company and the Shareholders as a whole.

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 therefore constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. As the aggregate of the annual amounts of the Continuing Connected Transactions under the New Framework Agreement are expected to exceed the thresholds set out in Rule 14A.76 of the Listing Rules, the Continuing Connected Transactions will be subject to the reporting, announcement and Independent Shareholders’ approval requirements pursuant to Chapter 14A 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 above Continuing Connected Transactions.

EGM

Set out on pages 36 to 37 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 17 November 2016 for the purpose of considering and if thought fit approving the New Framework Agreement and the Transactions.

The New Framework Agreement and the Transactions 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.

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LETTER FROM THE BOARD

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.

RECOMMENDATIONS

The Independent Board Committee has been established to advise the Independent Shareholders whether the terms of the New Framework Agreement, the New Caps and the Transactions 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 letters from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 16 to 25 of this circular and the text of the letters from the Independent Board Committee to the Independent Shareholders is set out on page 15 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 New Framework Agreement and the proposed New Caps 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 New Framework Agreement and the proposed New Caps 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 appendix to this circular.

By Order of the Board Inspur International Limited Wang Xingshan Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

27 October 2016

To the Independent Shareholders

Dear Sir or Madam,

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

We refer to the circular dated 27 October 2016 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 New Framework Agreement, the New Caps and the Transactions 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 Capital Limited (“ First Shanghai ”)has been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

We wish to draw your attention to the letter from the Board, as set out on pages 4 to 14 of the Circular, and the letter from First Shanghai to the Independent Board Committee and the Independent Shareholders which contains its advice to us in respect of the Framework Agreement, as set out on pages 16 to 25 of the Circular.

Having taken into account of the advice of First Shanghai, we consider that (i) the New Framework Agreement to be entered into upon normal commercial terms, and the continuing connected transactions contemplated thereunder to be entered into in the ordinary and usual course of business of the Group and they are fair and reasonable and in the interests of the Company and the Shareholders as whole, and (ii) the proposed New 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 New Framework Agreement and the proposed New Caps.

Yours faithfully,

the Independent Board Committee

Zhang Ruijun Ding Xiangqian Independent non-executive Independent non-executive Director Director

Wong Lit Chor, Alexis Independent non-executive 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 New Framework Agreement, the Transactions and the New Caps for inclusion in this circular.

==> picture [117 x 50] intentionally omitted <==

FIRST SHANGHAI CAPITAL LIMITED

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

27 October 2016

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the New Framework Agreement, the Transactions and the New Caps, details of which are set out in the circular of the Company dated 27 October 2016 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.

The Framework Agreement will expire on 31 December 2016. On 12 September 2016, the Company (for itself and on behalf of the other members of the Group) entered into the New Framework Agreement with IPG (for itself and on behalf of the other members of the Inspur Group) relating to the Continuing Connected Transactions for the three years ending 31 December 2019.

IPG is a controlling shareholder of the Company and the Transactions constitute continuing connected transactions of the Company under the Listing Rules. Accordingly, the New Framework Agreement, the Transactions and the New Caps are subject to, among other things, the approval of the Independent Shareholders at the EGM.

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

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

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 several connected transactions as detailed in the circulars of the Company dated 16 October 2014, 14 May 2015 and 5 August 2015. 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 New Framework Agreement, the Transactions and the New Caps.

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 and the Inspur Group.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion in respect of the New Framework Agreement, the Transactions and the New Caps, we have taken into account the following principal factors and reasons:

1. Background of and reasons for the New Framework Agreement

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

IPG, a controlling shareholder of the Company, is an investment holding company established in the PRC. According to the website of the Inspur Group and relevant public information, we understand:

IPG is also (i) a controlling shareholder of Inspur Electronic Information Industry Company Limited (浪潮電子信息產業股份有限公司) (listed in Shenzhen, stock code: 000977 CH); and (ii) a substantial shareholder of Inspur Software Company Limited (浪潮軟件股份有限公司) (listed in Shanghai, stock code: 600756 CH);
the software business revenue of the Inspur Group for the year ended 31 December 2015 ranked fourth in the 中國軟件業務收入前百家企業名單 (PRC Software Business Revenue Top 100 Corporation List) published by 中華人民共和國工業和信息化部 (Ministry of Industry and Information Technology of the PRC); and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

the Inspur Group has businesses in more than 100 countries and regions worldwide and has set up research and development centers and plants in regions such as the United States, Japan and Latin America.

Continuing Connected Transactions

Nature

Supply Transactions
The Group supplies and provides various IT products and IT services to the Inspur Group.
Revenue in nature to the Group.
Selling Agency Transactions
The Inspur Group acts as selling agent of the Group in respect of various IT service products.
Expense in nature to the Group.
Purchase Transactions
The Group purchases various IT products from the Inspur Group.
Expense in nature to the Group.
Common Services Transactions
The Inspur Group provides services in respect of use of premises and property management to the Group.
Expense in nature to the Group.

We are advised by the management of the Group that each of the Continuing Connected Transactions is either revenue in nature (such as the sales of principal products) or supporting the principal business (such as the procurement of selling agency services, IT products and property related services) of the Group.

Having considered, in particular, (i) the principal business of the Group; (ii) the background of the Inspur Group, where the Group can leverage on the Inspur Group to expand the business of the Group; (iii) the nature of the Continuing Connected Transactions, where each of the Continuing Connected Transactions is either revenue in nature or supporting the principal business of the Group; (iv) the Group has established a long-term strategic business relationship with the Inspur Group and has been conducting the Continuing Connected Transactions with the Inspur Group; and (v) the terms of the New Framework Agreement and the Transactions are fair and reasonable as discussed below, we are of the view that the entering into of the New Framework Agreement and the 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.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Principal terms of the New Framework Agreement

The principal terms of the Continuing Connected Transactions under the New Framework Agrement are summarised below:

(i) Principal terms of the Supply Transactions

In respect of the Supply Transactions, price per unit of the IT products and service fees of the IT services shall 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 when determining the prices of such IT products and IT services. If computer components of a specific model number have been sold to a third party customer, and, during the same month of such sale, the computer components of the same model number are to be sold to the Inspur Group, then the selling price of such computer components to the Inspur Group shall be no less favourable to the Group than the selling price of such computer components to the aforementioned third party customer. The Group gives two-month credit period for the Inspur Group to settle the payment amount of the IT products after delivery and the service fees of the IT services after completion of the performance of the services.

(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 (i) 中國電子信息行業聯合會 (China Information Technology Industry Federation) has approved the Inspur Group with a higher grading of 壹級 (Grade I) (the “ Grade I Qualification ”) and the Group with a lower grading of 肆級 (Grade IV) in respect of 信息系統集成及服務資質 (Information System Integration and Service Quality); (ii) the Grade I Qualification allows the Inspur Group to access, bargain and secure transactions with customers which the Group has no access because of the lack of the Grade I Qualification; (iii) the Inspur Group acts as the selling agent of the Group under the Selling Agency Transactions when the customer requires a supplier with the Grade I Qualifaction, whereas, for other customers in general, the Group has its own sales team to develop business with them; (iv) other entities with the Grade I Qualification are limited in number and they are business competitors of the Group in the IT industry, which would not offer selling agency services to the Group, therefore the Group has not entered into any comparable transaction with independent third parties; and (v) the Inspur Group does not provide selling agency services to independent third parties because the Inspur Group introduces transactions to the Group and other member companies rather than to business competitors in the IT industry. As such, we have reviewed the資質管理有關規定 (Qualification Management Policy) of the Inspur Group, which is the internal control policy of the Inspur Group to govern its 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 selling agency commission of not more than 1% from the Group 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.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Taking into account (i) the industry circumstances where the Grade I Qualification allows the Inspur Group to access, bargain and secure transactions with customers which the Group cannot access because of the lack of the Grade I Qualification; (ii) other entities with the Grade I Qualification are limited in number and they are business competitors of the Group, which would not offer selling agency services to the Group; (iii) around 40% of the revenue of the Group for the year ended 31 December 2015 had the Inspur Group acting as selling agent, where the revenue of the Group might substantially reduce without the Inspur Group acting as selling agent; (iv) the Group recorded gross profit margin of around 30% for the year ended 31 December 2015, whereas the commission rate under the Selling Agency Transactions is not more than 1%, which is not very material as compared with the aforesaid gross profit margin; (v) the enhancement of revenue by the Inspur Group acting as selling agent may generate synergy and improve the profitability of the Group; (vi) the commission rate under the Selling Agency Transactions is in accordance with the general business policy of the Inspur Group; (vii) the Group can have the flexibility to leverage on the industry position of the Inspur Group to strengthen the revenue of the Group; and (viii) the Inspur Group shall settle payment with the Group soon after its receipt of the sales proceeds, we consider the appointment of the Inspur Group as selling agent, the commission rate and the settlement arrangement under the Selling Agency Transactions to be fair and reasonable.

(iii) Principal terms of the Purchase Transactions

In respect of the Purchase Transactions, price per unit of the products and components shall be agreed between the parties by reference to, among other factors, the prices of such products 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.

(iv) Principal terms of the Common Services Transactions

In respect of the Common Services Transactions, the fees shall be determined with reference to the prevailing market rates and are billed on a monthly basis.

(v) Internal control measures

As advised by the management of the Group, the key internal control measures for the Continuing Connected Transactions include:

for the Supply Transactions, the Group reviews the selling price of IT products and services to independent third parties at the relevant time when determining the prices of such IT products and services, such as computer components sold to independent third party customer within a month (if applicable), and ensure the selling price of such IT products and services to the Inspur Group is no less favourable to the Group as compared with that to the independent third parties;
for the Selling Agency Transactions, the Group ensures the selling agency commission payable to the Inspur Group is not more than 1% of the selling price;
for the Purchase Transactions, the Group reviews the prices of products and components supplied by the Inspur Group to independent third party purchasers and ensure the procurement price of such products and components to the Inspur Group is no less favourable to the Group as compared with that to the independent third parties;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

for the Common Services Transactions, the Group reviews the unit price of the common services with independent third parties and ensure the procurement price of such common services to the Inspur Group is no less favourable to the Group as compared with that to the independent third parties; and
in accordance with Chapter 14A of the Listing Rules, on an annual basis, (i) the independent non-executive Directors reviews the Continuing Connected Transactions and confirm, among other things, the terms of the Continuing Connected Transactions are on terms no less favourable to the Group than with independent third parties; and (ii) the auditors will also report on the Continuing Connected Transactions.

In respect of our work done on the terms and the internal control measures for the Continuing Connected Transactions:

for the Supply Transactions, we have reviewed recent sample transactions with the Inspur Group and also the relevant transactions with independent third parties. Based on our review and advices by the management of the Group, we understand that the unit selling prices to the Inspur Group were no less favourable to the Group as compared with that to the independent third parties;
for the Selling Agency Transactions, we have reviewed sample transactions with the Inspur Group. Based on our review and advices by the management of the Group, we understand that the selling agency commissions payable to the Inspur Group were not more than 1% of the selling price;
for the Purchase Transactions, we have reviewed sample transactions with the Inspur Group and also the relevant transactions with independent third parties. Based on our review and advices by the management of the Group, we understand that the unit price of products and components payable to the Inspur Group were no less favourable to the Group as compared with that to the independent third parties;
for the Common Services Transactions, we have reviewed sample transactions with the Inspur Group and also the relevant information with independent third parties. Based on our review and advices by the management of the Group, we understand that the unit prices of common services payable to the Inspur Group were no less favourable to the Group as compared with that to the independent third parties;
in respect of our review for the Supply Transactions, the Purchase Transactions and the Common Services Transactions mentioned above, we have reviewed at least two sets of samples for each of the aforesaid transaction categories, where (i) the criteria included the sample transactions with the Inspur Group were recently conducted within around one year of the date of the New Framework Agreement and the transaction nature belong to the relevant subject categories, so that we can assess the recent implementation of the internal control measures for each of the aforesaid transaction categories; and (ii) each set of reviewed sample transaction with connected party involved two pricing terms of transaction and/or quotation of independent third parties for comparison purpose, therefore we consider the Company has sufficient pricing terms of independent third parties for comparison purpose;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

in respect of credit periods for sales and procurements, we have reviewed the annual report of the Company for the year ended 31 December 2015 (the “ 2015 Annual Report ”) and noted that the Group generally allows a credit period of 30 to 210 days for its receivables and 30 to 120 days for its payables, where we note that the credit periods of one to two months under the Continuing Connected Transactions are within the aforesaid ranges; and
in respect of the annual review in accordance with the Listing Rules, we have reviewed the 2015 Annual Report and noted that, for the year ended 31 December 2015, (i) the independent non-executive Directors reviewed the Continuing Connected Transactions and confirmed, among other things, the terms of the Continuing Connected Transactions are on terms no less favourable to the Group than with independent third parties; and (ii) the auditors had also reported on the Continuing Connected Transactions.

(vi) Conclusion

Based on the aforesaid, particularly (i) our review of the pricing terms and internal control measures; and (ii) the background of and reasons for the New Framework Agreement as previously discussed, we consider sufficient internal control measures are in place for determining the terms of the Continuing Connected Transactions and the terms of the New Framework Agreement and the Transactions are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. New Caps under the New Framework Agreement

A summary of (i) the historical amounts for the year ended 31 December 2015 and for the six months ended 30 June 2016; (ii) the estimated transaction amount for the year ending 31 December 2016; and (iii) the New Caps of the Continuing Connected Transactions for each of the years ending 31 December 2017, 2018 and 2019 are set out in the table below:

Supply Transactions Selling Agency Transactions - value of transactions - commission Purchase Transactions Common Services Transactions	Historical actual transaction amount For the year ended 31 December 2015 For the six months ended 30 June 2016 (RMB‘000) (RMB‘000) 9,463 5,600 323,192 107,029 3,174 1,059 50,131 4,546 9,542 5,074	Estimated transaction amount For the year ending 31 December 2016 (RMB‘000) 11,550 330,000 3,300 50,000 11,000	New Caps
			For the year ending 31 December 2017 2018 2019 (RMB‘000) (RMB‘000) (RMB‘000) 13,860 16,600 20,000 396,000 475,200 570,240 3,960 4,752 5,702 60,000 72,000 86,400 12,100 13,310 14,640

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have reviewed the calculation of the New Caps and we understand:

the management of the Group had estimated the transaction amount for the year ending 31 December 2016 (the “ 2016 Estimated Amount ”) for each of the Continuing Connected Transactions;
the New Caps for the Supply Transactions, the Selling Agency Transactions and the Purchase Transactions are based on the 2016 Estimated Amount and the compound annual growth rate of 20% (the “ Business Growth Rate ”), where the Business Growth Rate is based on the actual achieved growth of revenue of the Group for the six months ended 30 June 2016; and
the New Caps for the Common Services Transactions are based on the 2016 Estimated Amount and the compound annual growth rate of 10% (the “ General Growth Rate ”), where the General Growth Rate has taken into account the relatively stable demand of common services (primarily being property leasing and management services) and general inflation.

In respect of the 2016 Estimated Amounts, we note that such amounts are not materially different from the actual transaction amount for the year ended 31 December 2015 and/or, on a pro rata basis, the actual transaction amount for the six months ended 30 June 2016. We are advised by the management of the Group that, for the Selling Agency Transactions and the Purchase Transactions, (i) the lower actual transaction amounts for the six months ended 30 June 2016 as compared with those for the year ended 31 December 2015 on a pro rata basis were mainly because the business volume of these transactions fluctuate given the demand of IT products and services are not stable or strictly seasonal, for instance the business of the Group is primarily on a project base where the demand of IT products and services (such as the delivery of customised software system for corporations) is not necessarily higher for any particular calendar season; and (ii) the 2016 Estimated Amounts are potentially achievable based on current business plan, particularly taking into account the actual transaction amount achieved for the year ended 31 December 2015. Based on our review of, among other materials, the interim report of the Company for the six months ended 30 June 2016 (the “ 2016 Interim Report ”), we understand the business of the Group is on a project base, for instance the 2016 Interim Report states that the Group wants to ensure the successful delivery of major projects such as Qilu Pharmaceutical (齊魯製藥), CCCC Fourth Harbor Bureau (中交第四航局) and China Railway 11th Bureau (中鐵十一局). Given (i) the project-based nature of the business of the Group, which is not stable or strictly seasonal; (ii) the actual transaction amount for the year ended 31 December 2015 provides indication of the transaction amount possibly achieved by the Group for a full year; and (iii) the 2016 Estimated Amounts are not materially different from the actual transaction amount achieved for the year ended 31 December 2015 and/or the actual transaction amount achieved for the six months ended 30 June 2016 on a pro rata basis, we consider the adoption of the 2016 Estimated Amounts (which are in turn utilised to calculate the New Caps for each of the years ending 31 December 2017, 2018 and 2019) to be acceptable for the purpose of determining annual caps.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In respect of the Business Growth Rate of 20%, we have reviewed the 2016 Interim Report of the Company and we note that (i) the revenue of the Group for the six months ended 30 June 2016 achieved a year on year growth rate of approximately 21%, where the two segments of the Group, namely software development and solution and software outsourcing business, both recorded growth of around 20%; (ii) for software and related services, the Group had signed contracts with clients including but not limited to China Railway (中國中鐵), Tsinghua Holdings (清華控股) and Huiyuan Juice (匯源果汁); (iii) for software outsourcing, the Group has developed close cooperation relationship with, among other clients, Microsoft (微軟) and China Telecom (中國聯通); and (iv) through the use of cloud computing, big data, networking, mobile internet and other technologies and through inheritance and innovation, the Group continues to focus on transition to the cloud operation and aims to become a leader of industry of enterprise management software and cloud service provider in the PRC. Given (i) the Supply Transactions, the Selling Agency Transactions and the Purchase Transactions involve IT products and services, which are related to the principal businesses of the Group; (ii) the Business Growth Rate reflects the latest business growth trend of the Group; and (iii) the Group aims to continue to develop its principal businesses, we consider the adoption of the Business Growth Rate to be acceptable for the purpose of determining annual caps for the Supply Transactions, the Selling Agency Transactions and the Purchase Transactions.

In respect of the General Growth Rate of 10%, we note that the historical actual transaction amount of the Common Services Transactions for the six months ended 30 June 2016 represented a growth of approximately 6.4% as compared with that for the year ended 31 December 2015 on a pro rata basis. Moreover, we have reviewed the projections stated in the World Economic Outlook (April 2016 edition) published on the website of the International Monetary Fund, where we understand that inflation rate (average consumer prices) of the PRC is expected to be approximately 2.0%, 2.2% and 2.6% for each of the years ending 31 December 2017, 2018 and 2019, respectively. Having considered (i) the Common Services Transactions primarily relate to property leasing and management services, which are expected to have a stable demand; (ii) the recent growth of actual transaction amount of the Common Services Transactions; and (iii) the expected general inflation rate of the PRC, we consider the adoption of the General Growth Rate to be acceptable for the purpose of determining annual caps for the Common Services Transactions.

Taking into account, in particular, (i) our review of the calculations of the New Caps; (ii) our assessment of the principal calculation factors, including the 2016 Estimated Amounts, the Business Growth Rate and the General Growth Rate; and (iii) the Continuing Connected Transactions are on terms that are fair and reasonable as previously discussed, we are of the view that the New Caps are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Taking into account the above principal factors, we are of the view that (i) the entering into of the New Framework Agreement and the 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; and (ii) the terms of the New Framework Agreement and the Transactions are on normal commercial terms and, together with the New 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 recommend, the Independent Shareholders to vote in favour of the resolution to approve the New Framework Agreement, the Transactions and the New Caps at the EGM.

Yours faithfully, For and on behalf of

First Shanghai Capital Limited Fanny Lee Allen Wang Managing Director Director

Note: Ms. Fanny Lee and Mr. Allen Wang have been responsible officers of Type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) since 2006 and 2014, respectively. 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

Company sets 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 2015 have been set out in the Annual Report 2015 of the Company which was posted on 21 April 2016 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2015:

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0421/LTN201604211204.pdf

The audited consolidated financial statements of the Group for the year ended 31 December 2014 have been set out in the Annual Report 2014 of the Company which was posted on 24 April 2015 on the Stock Exchange’s website (http://www.hkexnews.hk). Please also see below quick link to the Annual Report 2014:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0424/LTN20150424847.pdf

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 three auditors’ reports for the consolidated financial statements of the Group for the years ended 31 December 2015, 2014 and 2013 are unqualified reports.

INDEBTEDNESS STATEMENT

Debts and Borrowings

As at the close of business on 30 September 2016, 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.

Contingent liabilities

As at 30 September 2016, 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.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Disclaimer

Save as otherwise disclosed in this circular, the Group did not, as at 30 September 2016 (being the latest practicable date prior to the printing of this circular), have any outstanding loan capital issued and outstanding or agreed to be issued, bank overdrafts, charges or debentures, mortgages, loans, or other similar indebtedness or any finance lease commitments, hire purchase commitments, liabilities under acceptance (other than normal trade bills), acceptance credits or any guarantees or other material contingent liabilities.

FINANCIAL AND TRADING PROSPECT

The company will continue to implement aggressive market expansion strategy, further increase the right to independent operation player and decentralization of right decision-making to independent market players, and grasp market opportunities of Internet + and SOE reform. The company will focus on current core products improve and upgrade, increase platform and new product development, continue introduction of key technology leaders, fully implement the “data-centric” strategy, grasp the R&D and implementation of cloud service products and major projects, realize the target of the new “traditional software business” and “Cloud Services business innovation” and steady growth.

WORKING CAPITAL STATEMENT

Taking into account of the renewal of Continuing Connected Transactions with Inspur Group for the three financial years ending 31 December 2019, our cash and cash equivalents and anticipated cash flow from our operating activities, the Directors are satisfied, after due and careful inquiry, that the Group will have sufficient working capital available to satisfy the working capital 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
Name	of Director	Type of interests	Number of shares	of the 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

			Number of
		Description of	underlying	Subscription
Name of Directors	Type of interests	equity derivates	shares	price per share
		(note)		HK$
Wang Xingshan	Beneficial owner	Share option (note 1)	1,000,000	3.41
		Share option (note 2)	3,000,000	1.71
		Share option (note 3)	1,200,000	1.34
Jin Xiaozhou, Joe	Beneficial owner	Share option (note 2)	1,800,000	1.71
Dong Hailong	Beneficial owner	Share option (note 1)	400,000	3.41
		Share option (note 2)	200,000	1.71
		Share option (note 3)	100,000	1.34
Shen Yuanqin, Samuel	Beneficial owner	Share option (note 2)	200,000	1.71
		Share option (note 3)	100,000	1.34
Wong Lit Chor, Alexis	Beneficial owner	Share option (note 1)	40,000	3.41
		Share option (note 2)	400,000	1.71
		Share option (note 3)	100,000	1.34
Zhang Ruijun	Beneficial owner	Share option (note 2)	200,000	1.71
		Share option (note 3)	100,000	1.34

Note 1: On 10 December 2010, the share option were grant to the director under the option scheme.

Note 2: On 16 July 2015, the share option were grant to the director under the option scheme.

Note 3: On 13 May 2016, the share option were grant to the director under the option scheme.

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

Note: Inspur Overseas Investment Limited 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
			members of
Name of shareholders	Types of Interest	Equity interest held	the Group
Wu Xi Yi Jie Xin Cheng	Beneficial owner	RMB200,000 in the registered	10%
Information Technology		capital of Wuxi Inspur Business
Company Limtied*		Technology Company Limited*
(無錫易捷信誠信息技術有限公司)		(無錫浪潮商服技術有限公司)
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. Ltd*	Beneficial owner	RMB50,000 in the registered	10%
(上海滙力有限公司)		capital of Shanghai Guoqiang
		Genersoft Incorporation* (上海
		國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)
Inspur (Dezhou) International	Beneficial owner	RMB2,450,000 in registered	49%
Technology Limited		capital of Yunnan Inspur
(浪潮(德州)信息科技有限公司)		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

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GENERAL INFORMATION

APPENDIX II

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

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

3. DIRECTORS’ OTHER INTERESTS

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

As at the Latest Practicable Date, none of the Directors has any interest, either direct or indirect, in any assets which have been acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2015, 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).

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GENERAL INFORMATION

APPENDIX II

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 2015, being the date to which the latest audited financial statements of the Company were made up.

7. EXPERT

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

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

Name

Qualification

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

As at the Latest Practicable Date, First Shanghai was not beneficially interested in the share capital of any member of the Group nor did it have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any shares, convertible securities, warrants, options or derivatives which carry voting rights in any member of the Group nor did it have any interest, either direct or indirect, in any assets which have been, since the date to which the latest published audited financial statements of the Company were made up (i.e. 31 December 2015), 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 share transfer agreement dated 10 April 2015 between entered into between the Vendor and Ambition Lead Limited (致優有限公司) in relation to the disposal of 49% share equity interest in Inspur Communication Information System Limited* (浪潮通信信息系統有限公司);
(b) the share transfer agreement dated 10 April 2015 between entered into between Shine Victory International Limited (耀凱國際有限公司) and the Purchaser in relation to the disposal of 51% share equity interest in Inspur Communication Information System Limited* (浪潮通信信息系統有限公司);

−33 −

GENERAL INFORMATION

APPENDIX II

(c) the framework leasing agreement dated 29 May 2015 between Jinan Inspur Minda Information Technology Limited* (濟南浪潮銘達信息科技有限公司) and IPG (for and on behalf of other members of IPG and its subsidiaries) in relation to the continuing connected transaction to lease a building to IPG and its subsidiaries as office premises for a term of three years ending 31 December 2017;
(d) the disposal agreement dated 9 July 2015 in relation to disposal of finance business; and
(e) the New Framework 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.
(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 New Framework Agreement;
(b) the Framework Agreement;
(c) the Supplemental Agreement;
(d) the memorandum and articles of assoication of the Company;

−34 −

GENERAL INFORMATION

APPENDIX II

(e) the audited consolidated financial statements of the Group for the two financial years ended 31 December 2014 and 31 December 2015;
(f) the contracts referred to in the section headed “Material Contracts” of this Appendix;
(g) the letter from the Independent Board Committee;
(h) the letter from the Independent Financial Adviser;
(i) the written consent referred to in the section headed “Expert” of this Appendix; and
(j) this circular.

−35 −

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 17 November 2016 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution as the ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

(a) the new framework agreement dated 12 September 2016 (the “ New Framework Agreement ”) 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) in relation to the continuing connected transactions (the “ Continuing Connected Transactions ”) between the Company and its subsidiaries of one part and Inspur Group Limited and its subsidiaries of another part for the three years ending 31 December 2019 (details of the New Framework Agreement are set out in the Company’s circular dated 27 October 2016 (the “ Circular ”) and copies of the New Framework 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 New Caps (as defined and more particularly described in the Circular) in respect of the Continuing Connected Transactions be and are hereby approved and confirmed; and
(c) the directors of the Company be and are hereby authorized 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 New Framework Agreement, the proposed New Caps and all transactions contemplated thereunder.”

By order of the Board Inspur International Limited Wang Xingshan Chairman

Hong Kong, 27 October 2016

−36 −

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 and Mr. Jin Xiaozhou as executive Directors, Mr. Samuel Y. Shen and Mr. Dong Hailong as non-executive Directors, and Mr. Wong Lit Chor, Alexis, Ms. Zhang Ruijun and Mr. Ding Xiangqian as independent non-executive Directors.

−37 −

AI assistant

Inspur Digital Enterprise Technology Limited — Proxy Solicitation & Information Statement 2016

49324_rns_2016-10-26_05214e62-60bd-4511-89c6-a27a6f7aad67.pdf

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS — RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

FIRST SHANGHAI CAPITAL LIMITED

DEFINITIONS

DEFINITIONS

DEFINITIONS

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

(Stock Code: 596)

Executive Directors:

Non-executive Directors:

Independent non-executive Directors:

Registered office:

MAJOR TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS — RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

INTRODUCTION

INTRODUCTION OF THE NEW FRAMEWORK AGREEMENT

BACKGROUND OF THE CONTINUING CONNECTED TRANSACTIONS

1. Supply Transactions

Types of products and services

Pricing and other terms

Payment terms

2. Selling Agency Transactions

LETTER FROM THE BOARD

3. Purchase Transactions

Types of products

Pricing and other terms

Payment terms

4. Common Services Transactions

Internal Control Measures for the Transactions

ANNUAL CAPS

THE FRAMEWORK AGREEMENT AND ANNUAL CAPS

NEW FRAMEWORK AGREEMENT AND NEW CAPS

BASIS OF THE NEW CAPS

1. Supply Transactions

2. Selling Agency Transactions

3. Purchase Transactions

4. Commons Services Transactions

INFORMATION ON THE GROUP AND THE INSPUR GROUP

REASONS FOR AND BENEFITS OF ENTERING INTO THE NEW FRAMEWORK AGREEMENT

IMPLICATION UNDER THE LISTING RULES

EGM

RECOMMENDATIONS

ADDITIONAL INFORMATION

INSPUR INTERNATIONAL LIMITED 浪潮國際有限公司

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

Yours faithfully,

FIRST SHANGHAI CAPITAL LIMITED

RENEWAL OF CONTINUING CONNECTED TRANSACTIONS WITH INSPUR GROUP

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of and reasons for the New Framework Agreement

Continuing Connected Transactions

Nature

2. Principal terms of the New Framework Agreement

(i) Principal terms of the Supply Transactions

(ii) Principal terms of the Selling Agency Transactions

(iii) Principal terms of the Purchase Transactions

(iv) Principal terms of the Common Services Transactions

(v) Internal control measures

(vi) Conclusion

3. New Caps under the New Framework Agreement

RECOMMENDATION

Yours faithfully, For and on behalf of

AUDITED CONSOLIDATED FINANCIAL STATEMENT OF THE GROUP

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0421/LTN201604211204.pdf

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0424/LTN20150424847.pdf

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

INDEBTEDNESS STATEMENT

Debts and Borrowings

Contingent liabilities

Disclaimer

FINANCIAL AND TRADING PROSPECT

WORKING CAPITAL STATEMENT

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

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

(i) Long positions in shares

(ii) Long positions in underlying Shares of the Company

Inspur Digital Enterprise Technology Limited Proxy Solicitation & Information Statement 2016