Nanjing Panda Electronics Company Limited — Proxy Solicitation & Information Statement 2014

Dec 11, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, 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 Nanjing Panda Electronics Company Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or other transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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.

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REVISION OF 2014 AND 2015 ANNUAL CAPS FOR A CONTINUING CONNECTED TRANSACTION

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders of Nanjing Panda Electronics Company Limited

Capitalised terms used in this cover page shall have the same meanings as those defined in this circular.

A letter from the Board is set out on pages 1 to 10 of this circular. A letter from the Independent Board Committee is set out on page 11 of this circular. A letter from Gram Capital containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 12 to 21 of this circular. A supplemental notice of the EGM to be held on Monday, 29 December 2014 at 2:00 p.m. at the Company’s Conference Room, 301 Zhongshan Road East, Nanjing, the People’s Republic of China is set out on pages 30 to 32 of this circular, which was despatched to Shareholders on 10 December 2014. The Proxy Form for used at the EGM is enclosed. Whether or not you are able to attend and vote at the EGM, please complete and return the Proxy Form in accordance with the instructions printed thereon to the office of the Company as soon as possible and in any event not less than 24 hours before the time of the EGM or any adjournment thereof. Completion and return of the Proxy Form will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

12 December 2014

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . .	11
LETTER FROM GRAM CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
APPENDIX — GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
SUPPLEMENTAL NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30

— i —

DEFINITIONS

In this circular, the following expressions shall have the following meanings unless the context otherwise requires:

“associate(s)” has the meaning ascribed to it under the Listing Rules; “Board” the board of Directors;

“CEC” China Electronics Corporation ( 中國電子信息產業集團有限公司 ), the ultimate controller of the Company;

“CEC Group”

a group comprising CEC, its subsidiaries (for the purpose of this announcement excluding the Group), its holding companies and their respective associates;

“CES”

China Electronics Shenzhen Company Limited ( 深圳中電投資股 份有限公司 ), a company incorporated in the PRC with limited liability and a subsidiary indirectly held by CEC;

“Company”

Nanjing Panda Electronics Company Limited ( 南京熊猫電子股份 有限公司 ), a joint stock company incorporated in the PRC with limited liability, whose H Shares are listed on the main board of the Stock Exchange and A Shares are listed on the Shanghai Stock Exchange;

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

• “Director(s)” the directors of the Company;

“EGM”

the extraordinary general meeting of the Company to be convened and held on Monday, 29 December 2014 for the purposes of considering and, if thought fit, approving, among other things, the Supplemental Sale Agreements and the Revised Annual Caps;

• “Existing Annual Cap(s)”

the maximum aggregate annual value of the continuing connected transactions under the Sale Agreement;

— ii —

DEFINITIONS

• “Gram Capital” or Gram Capital Limited, a licensed corporation to carry out Type “Independent Financial 6 (advising on corporate finance) regulated activity under SFO Adviser” and the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Sale Agreements and the proposed Revised Annual Caps;

“Group” the Company and its subsidiaries; “HK$” Hong Kong dollars, the lawful currency of Hong Kong; ‘’Hong Kong’’ Hong Kong Special Administration Region of the PRC; “Independent Board an independent committee of the Board comprising all independent Committee” non-executive Directors, namely Ms. Zhang Xiuhua, Ms. Liu Danping and Mr. Chu Wai Tsun, Vincent;

• “Independent Shareholders” Shareholders other than CEC and its associates;

• “Independent Third Part(ies)” third part(ies) independent of the Company and its connected persons as defined under the Listing Rules;

• “Latest Practicable Date” 9 December 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to time);

• “Mr. Deng” Mr. Deng Weiming, a non-executive Director; “Mr. Hsuan” Mr. Jason Hsuan, a non-executive Director; “Mr. Lai” Mr. Lai Weide, an executive Director;

• “Mr. Lu” Mr. Lu Qing, a non-executive Director; “Mr. Xu” Mr. Xu Guofei, an executive Director;

— iii —

DEFINITIONS

“NEIIC”

Nanjing Electronics Information Industrial Corporation ( 南京中電 熊猫信息產業集團有限公司 ), the controlling shareholder of PEGL and directly holding 4.29% equity interest in the Company;

“PEGL” Panda Electronics Group Limited ( 熊猫電子集團有限公司 ), the controlling Shareholder of the Company holding approximately 36.63% of the total issued share capital of the Company as at the Latest Practicable Date;

“PRC”

the People’s Republic of China (for the purpose of this circular, excluding Hong Kong, Macau and Taiwan);

• “Proxy Form” the form of proxy for use at the EGM;

• “Revised Annual Cap(s)” the annual caps of RMB1,057,000,000 and RMB1,600,000,000 for the continuing connected transactions under the Sale Agreement (as supplemented by the Supplemental Sale Agreements) for the years ending 31 December 2014 and 31 December 2015 respectively as adjusted by the Board on 8 December 2014, which is subject to the approval of the Independent Shareholders at the EGM;

“RMB” Renminbi, the lawful currency of the PRC;

“Sale Agreement” the sale agreement dated 26 October 2012 entered into between the Company and CEC for the sale of materials by the Group to CEC Group;

“Shareholder(s)” holder(s) of the share(s) of the Company;

• “Shenzhen Jingwah” Shenzhen Jingwah Electronics Co., Ltd. ( 深圳市京華電子股份有 限公司 ), a company incorporated in the PRC with limited liability;

• “Shenzhen Jingwah Group” Shenzhen Jingwah and its subsidiaries;

— iv —

DEFINITIONS

“Significant Asset Purchase”

the purchase of the 5.07% equity interest in Shenzhen Jingwah by the Company from PEGL, the acquisition of the control of Shenzhen Jingwah and the consolidation of its financial statements into the accounts of the Group as approved by the Shareholders at the extraordinary general meeting of the Company held on 24 November 2014;

“Supplemental Sale the supplemental agreements both dated 8 December 2014 in Agreements” respect of the Sale Agreement, entered into between the Company and CEC; “Stock Exchange” The Stock Exchange of Hong Kong Limited; and “%” per cent.

The English names of the PRC established companies/entities in this circular are only translations of their official Chinese names. In case of inconsistency, the Chinese names prevail.

In this circular, for the purposes of illustration only, amounts quoted in RMB have been converted into HK$ at the rate of RMB1.00 to HK$1.26. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amount were or may have been exchanged at this or another rates or at all.

— v —

LETTER FROM THE BOARD

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Executive Directors

Mr. Lai Weide (Chairman) Mr. Xu Guofei

Non-executive Directors

Mr. Deng Weiming

Mr. Lu Qing Mr. Xia Dechuan Mr. Jason Hsuan

Independent non-executive Directors

Registered Address:

Level 1-2, Block 5, North Wing, Nanjing High and New Technology Development Zone, Nanjing, the PRC

Office Address: 301 Zhongshan Road East, Nanjing, the PRC Postal Code: 210002

Ms. Zhang Xiuhua Ms. Liu Danping

Mr. Chu Wai Tsun, Vincent

12 December 2014

To the Shareholders

Dear Sir or Madam,

REVISION OF 2014 AND 2015 ANNUAL CAPS FOR A CONTINUING CONNECTED TRANSACTION

1. INTRODUCTION

Reference is made to the announcements of the Company dated 26 October 2012 and 8 December 2014 respectively and the circular of the Company dated 6 December 2012.

— 1 —

LETTER FROM THE BOARD

On 26 October 2012, the Sale Agreement was entered into between the Company and CEC pursuant to which the Group agreed to supply and the CEC Group agreed to purchase raw materials, metal and plastic parts necessary for the manufacture of television sets, shortwave communication products and trading business, office information products such as calculators and software. The Sale Agreement and its Existing Annual Caps were approved by the then Independent Shareholders at the extraordinary general meeting held on 21 December 2012.

On 8 December 2014, the Company announced that the Existing Annual Caps for the Sale Agreement for the years ending 31 December 2014 and 31 December 2015 will be insufficient to satisfy the Group’s current and future need and proposed to revise the Existing Annual Caps to RMB1,057,000,000 and RMB1,600,000,000 for years ending 31 December 2014 and 31 December 2015 respectively. Save and except for the revision of the Existing Annual Caps, all other terms and conditions under the Sale Agreement shall remain effective and unchanged.

The purpose of this circular is to provide you with details of (i) the Revised Annual Caps; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders; (iii) a letter of advice from Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Supplemental Sale Agreement and the Revised Annual Caps; and (iv) a supplemental notice of the EGM at which ordinary resolution(s) will be proposed, among other things, for the Independent Shareholders to consider and, if thought fit, approve the Revised Annual Caps.

2. PROVISION OF GUARANTEE IN FAVOUR OF SUBSIDIARIES

Reference is made to the announcement of the Company dated 8 October 2014 and the notice of the third extraordinary general meeting in 2014 of the Company dated 13 November 2014 in relation to the provision of guarantee by the Company to its subsidiaries, namely Nanjing Panda Information Industry Co., Ltd. (“ Information Industry Company ”) and Nanjing Panda Electronics Equipment Co., Ltd. (“ Electronics Equipment Company ”).

In order to support Information Industry Company and Electronics Equipment Company to further expand business and undertake various engineering projects, the Board proposes to provide a guarantee for the new comprehensive credit line of RMB100,000,000 and RMB200,000,000 to Information Industry Company and Electronics Equipment Company respectively with a term expiring on 30 June 2016. The proposed provisions of guarantee are subject to the approval of the Shareholders by way of passing ordinary resolutions at the EGM.

— 2 —

LETTER FROM THE BOARD

3. SUMMARY OF THE SALE AGREEMENT

The principal terms of the Sale Agreement were disclosed in the announcement of the Company dated 26 October 2012 and the circular of the Company dated 6 December 2012 and are set out below:

Date of agreement:

26 October 2012

Term:

Parties:

From 1 January 2013 to 31 December 2015 (1) The Company (2) CEC

Nature of Transaction:

Provision of materials, components and parts by the Group to the CEC Group including raw materials, metal and plastic parts necessary for the manufacture of television sets, shortwave communication products and trading business, office information products such as calculators and software.

Payment Terms:

The payment shall be settled within 20 days after the delivery of goods.

Pricing Basis:

Pricing basis is determined after arm’s length negotiation by parties and according to comparable market price of independent third parties, and in accordance with normal commercial terms and with reference to the prevailing market prices, being prices no less favourable than those offered by an independent third party for similar materials, components and parts. References were and will be made to prices of similar and related products publicly quoted in journals including China Electronic Market (《中國電子商情（基礎電子）》), Global Electronics China (《世界電子元器件》) and websites including HC360.com (慧聰網) (http://b2b.hc360.com), Alibaba (阿里巴巴) (http://china.alibaba.com/chanpin/--57.html), ec-line.cn ( 中電易採 ) (http://www.ec-line.cn), hcs-index.org (華強北 • 中國電子市場價格指數) (http://www.hcsindex.org/price/) and the prices stated in contracts for similar and related products between the Company and the independent third parties.

— 3 —

LETTER FROM THE BOARD

If there are no market prices of independent third parties, nor independent non-connected transactions for reference, reasonably constituted prices may be used as the pricing basis, and such reasonably constituted prices shall be the sum of costs and an average percentage mark-up of approximately 13.4%.

Internal Control Mechanism

To ensure the selling prices for the goods are in accordance with the pricing basis as stated above, the Company has adopted internal control mechanism for its daily operation, including:

• The selling price of the goods is determined based on a price list compiled by the sales department of the Company, which is then reviewed by the supervisor of the sales department. The said price list is mark-to-market, updated twice every three months and applicable to transactions with both connected persons and independent third parties.

— Legal department of the Company shall conduct review on compliance for each of the transactions under the Sale Agreement every three months, where the Company’s financial department shall also conduct regular examinations on the pricing and amounts of these transactions under the Sale Agreement every three months.

— 4 —

LETTER FROM THE BOARD

• The audit committee of the Company is responsible for the control and daily management (including monitoring the pricing terms) of the connected transactions of the Company. Members in the audit committee would conduct independent review on the connected transactions every six months, compare with the transactions with the independent third parties, have the Company’s accountants reporting on the conditions of the connected transactions, review the manuscripts of relevant orders, and review the letters issued by the accountants in respect of the connected transactions.

Given having review on the connected transactions independently from time to time as stated above, the Directors consider that the above internal control mechanism is effective to ensure that the transactions under the Sale Agreement have been and will be conducted on normal commercial terms and not prejudicial to the interests of the Company and the Shareholders as a whole including the minority Shareholders.

4. HISTORICAL TRANSACTION AMOUNTS UNDER THE SALE AGREEMENT

The historical amounts of materials, components and parts sold by the Group to the CEC Group are as follow:

	For the	For the	For the
	ten months	year ended	year ended
	ended 31	31 December	31 December
	October 2014	2013	2012
	(unaudited)	(audited)	(audited)
Amount_(RMB’000)_	537,080	598,396	211,901

— 5 —

LETTER FROM THE BOARD

5. THE EXISTING AND REVISED ANNUAL CAPS

The table below sets forth a summary of the existing and proposed revision of annual caps under the Sale Agreement:

Annual caps Existing Revised for the year 2014 Revised for the year 2015 (RMB’000) (RMB’000) (RMB’000) 612,600 1,057,000 1,600,000

The Revised Annual Caps were determined based on the amounts of the Existing Annual Caps and the estimated increase in transaction volume under the Sale Agreement. In particular, the transaction amounts under the Sale Agreement for the ten months ended 31 October 2014 was RMB537,080,400 and it is expected that in 2014 there will be further sale orders from the CEC Group amounting to approximately RMB508,299,500. Having considered these further sale orders, the Existing Annual Cap is not sufficient to meet the Group’s current need and therefore the Board proposed revising the Existing Annual Cap for the year ending 31 December 2014 to RMB1,057,000,000 to accommodate these further sale orders. The Group’s financial department has been and will be closely monitoring the transaction amounts under the Sale Agreement to ensure that the Existing Annual Cap is not exceeded and the Company shall cease accepting any further sale orders from CEC Group upon reaching the Existing Annual Caps before obtaining the approval from the Independent Shareholders. The Supplemental Sale Agreements are conditional upon the approval from the Independent Shareholders. The transaction amounts under the Sale Agreement will not exceed the Existing Annual Caps prior to the Independent Shareholders’ approval.

— 6 —

LETTER FROM THE BOARD

6. DETAILS AND REASONS OF THE REVISED ANNUAL CAPS

Having considered (i) the Existing Annual Caps and historical transaction amounts under the Sale Agreement; (ii) CEC has been vigorously developing the new displays industry recently, commencing the production lines for the production of advanced-generation LCD panel and related auxiliary industry with the investment amount exceeding RMB50 billion and it is expected that the CEC Group will continue to purchase the required materials including raw materials, components and parts and so forth in respect of this development and investment from the Group; (iii) Upon completion of the Significant Asset Purchase, the sales business between Shenzhen Jingwah Group and CES (深圳中電投資股份有限公司) (being an indirect subsidiary of CEC) is expected to continue to operate, and therefore the scale of continuing connected transactions between the Group and the CEC Group will increase; and (iv) in view of the continuous expansion of business scale of the Group, the advanced technology of the Group in electronic production, the adoption of scientific management approach and the future development of export business of Shenzhen Jingwah, the Group can provide quality materials, components and parts to satisfy to satisfy the development needs of CEC Group and meet the requirements on product quality of CEC and its subsidiaries, the Directors believe that the Existing Annual Caps under the Sale Agreement for the year ending 31 December 2014 and 31 December 2015 will not meet the Group’s current and future need. Accordingly, on 8 December 2014, the Board recommended the Company to enter into the two Supplemental Sale Agreements with CEC in relation to revising the Existing Annual Caps for the year ending 31 December 2014 and 31 December 2015 to RMB1,057,000,000 and RMB1,600,000,000 respectively.

7. REASONS FOR AND BENEFITS OF ENTERING INTO THE CONTINUING CONNECTED TRANSACTIONS

The Group and the CEC Group have established long-term relationship, which is beneficial for the stable operation of the Company. In addition, the terms of the Sale Agreement are fair and reasonable with fair pricing, and implemented the approval procedures in accordance with the related regulations. It is expected that the Sale Agreement will provide stable source of income for the Group.

Taking into account of the above, the Directors (the independent non-executive Directors will express their opinions to the Independent Shareholders on the revised continuing connected transactions after considering the advice from the Independent Financial Advisor) consider that the Sale Agreement (as supplemented by the Supplemental Sale Agreements) and the Revised Annual Caps are fair and reasonable and on normal commercial terms in the ordinary course of business of the Company, and are in the interests of the Company and the Shareholders as a whole.

— 7 —

LETTER FROM THE BOARD

8. INFORMATION ON THE GROUP AND CEC

The Group is principally engaged in the research and development, manufacture and sale of electronic equipment and consumer electronics as well as electronics manufacturing services.

CEC is the ultimate controller of the Company. The CEC Group is engaged in operations including research and development, manufacture, trade, logistics and services of electronic information technologies and products, and provision of self-innovated electronic information technologies, products and services, making great contributions to the construction of national economic informationisation and guaranteeing the security of national information.

9. LISTING RULES IMPLICATION

CEC is the ultimate controller of the Company. Pursuant to the Listing Rules, CEC and its associates constitute connected persons of the Company. Therefore, the transactions contemplated under the Supplemental Sale Agreements constitute continuing connected transactions of the Company.

Pursuant to Rule 14A.54 of the Listing Rules, the Company shall re-comply with the announcement and shareholders’ approval requirements in relation to the Revised Annual Caps. As the applicable percentage ratios exceed 5%, the Supplemental Sale Agreements and the transactions contemplated thereunder shall be subject to the reporting, annual review, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will seek for Independent Shareholders’ approval for the Revised Annual Caps at the EGM. CEC and its associates will abstain from voting on the resolutions in respect of the relevant Supplemental Sale Agreements and/or Revised Annual Caps at the EGM.

10. GENERAL INFORMATION

The Directors do not have any substantial benefits in the transactions mentioned above. The Directors including Mr. Lai Weide, Mr. Xu Guofei, Mr. Deng Weiming, Mr. Lu Qing and Mr. Jason Hsuan are connected Directors, and will abstain from voting on the Board meeting. The transactions contemplated under the Supplemental Sale Agreements are the transactions carried out on normal commercial terms in the ordinary course of business and are in the interests of the Company and Shareholders as a whole.

The Company has already established the Independent Board Committee, and will give advice to the Independent Shareholders in respect of the Supplemental Sale Agreements and the relevant proposed Revised Annual Caps. Gram Capital has been appointed as an independent financial adviser to give advice to the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Sale Agreements and the relevant proposed Revised Annual Caps.

— 8 —

LETTER FROM THE BOARD

11. THE EGM

The EGM will be held on Monday, 29 December 2014 at 2:00 p.m. at the Company’s Conference Room, 301 Zhongshan Road East, Nanjing, the People’s Republic of China.

The supplemental notice of EGM is set out on pages 30 to 32 of this circular.

The register of members relating to H-shares of the Company will be closed from 29 November 2014 to 29 December 2014, both days inclusive, during which period no transfer of H-shares of the Company will be registered. In order to attend the EGM, all transfers accompanied by the relevant share certificates must be lodged with the share registrar of the Company in Hong Kong, Hong Kong Registrars Limited, at 46th Floor, Hopewell Center, 183 Queen’s Road East, Hong Kong, no later than 4:00 p.m. on Friday, 28 November 2014.

Pursuant to Chapter 14A of the Listing Rules, any Shareholder with a material interest in the Supplemental Sale Agreements and the Revised Annual Caps will not vote on such transaction.

As at the Latest Practicable Date, PEGL is a shareholder of the Company, holding approximately 36.63% of the total issued share capital of the Company, while NEIIC holds 56.85% equity interest in PEGL, the controlling shareholder of the Company, and is therefore the controlling shareholder of PEGL. In addition, NEIIC holds approximately 4.29% of the total issued share capital of the Company. CEC is the ultimate controlling shareholder of the Company and holds 70% of the issued share capital of NEIIC.

As disclosed in Appendix to this circular, Mr. Lai holds offices in CEC, NEIIC and PEGL, Mr. Xu holds offices in CEC, NEIIC and PEGL, Mr. Deng and Mr. Lu hold offices in PEGL, and Mr. Hsuan holds an office in TPV Technology, and are all therefore connected persons of the Company and had abstained from voting on the relevant resolutions of the Board approving the Supplemental Sale Agreements and the Revised Annual Caps.

Mr. Xu, who holds approximately 0.00028% of the total issued share capital of the Company, is a connected person of the Company. Mr. Xu holds offices in CEC, NEIIC and PEGL as disclosed in Appendix to this circular. Therefore, CEC, NEIIC, PEGL and its associates and Mr. Xu will be required to abstain from voting in respect of the resolutions approving the Supplemental Sale Agreements and the Revised Annual Caps.

Save as disclosed above, no other associates of CEC holds any shares in the Company and will be required to abstain from voting in respect of the resolutions approving the Supplemental Sale Agreements and the Revised Annual Caps.

— 9 —

LETTER FROM THE BOARD

12. PROXY ARRANGEMENT

The Proxy Form for use at the EGM is enclosed. Whether or not you intend to attend the EGM, you are requested to complete the Proxy Form in accordance with the instructions printed thereon and return the same to the office of the Company as soon as possible but in any event not less than 24 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the Proxy Form will not preclude you from attending and voting at the EGM or any adjourned meeting should you so wish.

13. VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by way of poll. The results of the poll will be published on the HKExnews website at www.hkexnews.hk and the Company’s website at www.panda.cn after the EGM as soon as possible.

14. RECOMMENDATION

The Directors (including the independent non-executive Directors) are of the opinion that the Sale Agreement (as supplemented by the Supplemental Sale Agreements) and the Revised Annual Caps are fair and reasonable, on normal commercial terms, in the ordinary course of business of the Company and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend the Independent Shareholders to vote in favour of the relevant resolutions to be proposed at the EGM.

The text of the letter from the Independent Board Committee is set out on page 11 of this circular. The text of the letter from Gram Capital containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 12 to 21 of this circular. Independent Shareholders are strongly recommended to read carefully these two letters for details of the advice.

15. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendix to this circular and the supplemental notice of EGM.

By order of the Board Nanjing Panda Electronics Company Limited Lai Weide Chairman

— 10 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter of recommendation from the Independent Board Committee to the Independent Shareholders which has been prepared for the purpose of inclusion in this circular.

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12 December 2014

To the Independent Shareholders

Dear Sir or Madam,

REVISION OF 2014 AND 2015 ANNUAL CAPS FOR A CONTINUING CONNECTED TRANSACTION

We have been appointed as members of the Independent Board Committee to advise you in connection with the revision of the annual caps for the Sale Agreement, details of which are set out in the Letter from the Board contained in the circular dated 12 December 2014 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Unless specified otherwise, capitalized terms used herein shall have the same meanings as those defined in the Circular.

Having considered the Revised Annual Caps and the advice of Gram Capital and the principal factors and reasons taken into consideration by it in arriving at its advice as set out on pages 12 to 21 of the Circular, we are of the opinion that the terms of the Sale Agreement and the Revised Annual Caps are fair and reasonable, on normal commercial terms and in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the EGM.

Yours faithfully,

For and on behalf of the

Independent Board Committee

Ms. Zhang Xiuhua Ms. Liu Danping Mr. Chu Wai Tsun, Vincent

Independent Non-executive Directors

— 11 —

LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Sale Agreements and the Annual Caps Revision for the purpose of inclusion in this circular.

Room 1209, 12/F. Nan Fung Tower 173 Des Voeux Road Central Hong Kong

12 December 2014

• To: The independent board committee and the independent shareholders of Nanjing Panda Electronics Company Limited

Dear Sirs,

REVISION OF 2014 AND 2015 ANNUAL CAPS FOR A CONTINUING CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Supplemental Sale Agreements, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular dated 12 December 2014 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 26 October 2012, the Sale Agreement was entered into between the Company and CEC pursuant to which the Group agreed to supply and the CEC Group agreed to purchase raw materials, metal and plastic parts necessary for the manufacture of television sets, shortwave communication products and trading business, office information products such as calculators and software (the “ CCT Products ”) (the “ Continuing Connected Transaction ”).

On 8 December 2014, the Company announced that the Existing Annual Caps for the Sale Agreement for the two years ending 31 December 2015 will not meet the Group’s current and future need and proposed to revise the Existing Annual Caps for the two years ending 31 December 2015 (the “ Annual Caps Revision ”). Save and except for the Annual Caps Revision, all other terms and conditions under the Sale Agreement shall remain effective and unchanged.

— 12 —

LETTER FROM GRAM CAPITAL

The Independent Board Committee comprising Ms. Zhang Xiuhua, Ms. Liu Danping and Mr. Chu Wai Tsun, Vincent (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Supplemental Sale Agreements are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the Annual Caps Revision is in the interests of the Company and the Shareholders as a whole and is conducted in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the Supplemental Sale Agreements and the Annual Caps Revision at the EGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors’ representation and confirmation that there are no undisclosed private agreements/arrangements or implied understanding with anyone concerning the Supplemental Sale Agreements and the Annual Caps Revision. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries, which to the best of their knowledge and belief, that the information contained in the 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 in the Circular or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

— 13 —

LETTER FROM GRAM CAPITAL

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent indepth investigation into the business and affairs of the Company, the CEC Group or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Annual Caps Revision. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Supplemental Sale Agreements and the Annual Caps Revision, we have taken into consideration the following principal factors and reasons:

(1) Background of and reasons for the Annual Caps Revision

Business overview of the Group

As referred to in the Board Letter, the Group is principally engaged in the research and development, manufacture and sale of electronic equipment and consumer electronics as well as electronics manufacturing services.

— 14 —

LETTER FROM GRAM CAPITAL

Set out below is the consolidated financial information of the Group for the six months ended 30 June 2014 and the year ended 31 December 2013 as extracted from the interim report of the Company for the six months ended 30 June 2014 and the annual report of the Company for the year ended 31 December 2013 (the “ 2013 Annual Report ”):

	For the
	six months	For the	For the
	ended	year ended	year ended
	30 June	31 December	31 December	Change from
	2014	2013	2012	2012 to 2013
	RMB’000	RMB’000	RMB’000	%
Turnover	1,151,055	2,447,754	2,396,126	2.15
Profit and total comprehensive
income for the year	86,011	188,375	136,023	38.49

As depicted by the above table, the Group recorded a slight increase in turnover of approximately 2.15% from approximately RMB2,396.13 million for the year ended 31 December 2012 to approximately RMB2,447.75 million for the year ended 31 December 2013. Profit and total comprehensive income of the Group for the year substantially increased by approximately 38.49% from 2012 to 2013.

With reference to the 2013 Annual Report and as confirmed by the Directors, in 2014, the Company will continue to push forward the electronic equipment industrialization project. At the same time, the Company will further enhance its capability in electronic manufacturing services and actively expand the line of consumer electronics and digital home products.

Information on CEC Group

The CEC Group is engaged in the operations including research and development, manufacture, trade, logistics and services of electronic information technologies and products, and provision of self-innovated electronic information technologies, products and services, making great contributions to the construction of national economic informationisation and guaranteeing the security of national information.

— 15 —

LETTER FROM GRAM CAPITAL

Reasons for the Annual Caps Revision

With reference to the Board Letter, the Group and CEC Group have established long-term relationship, which is beneficial for the stable operation of the Company. In addition, the terms of the Sale Agreement are fair and reasonable with fair pricing, and approval procedures are implemented in accordance with the related regulations. It is expected that the Sale Agreement will provide stable source of income for the Group.

Having considered (i) the Existing Annual Caps and historical transaction amounts under the Sale Agreement; (ii) CEC has been vigorously developing the new displays industry recently, commencing the production lines for the production of advanced-generation LCD panel and related auxiliary industry with the investment amount exceeding RMB50 billion and it is expected that the CEC Group will continue to purchase the required materials including raw materials, components and parts and so forth in respect of this development and investment from the Group; (iii) upon completion of the Significant Asset Purchase, the sales business between Shenzhen Jingwah Group and CES is expected to continue to operate, and therefore the scale of continuing connected transactions between the Group and the CEC Group will increase; and (iv) in view of the continuous expansion of business scale of the Group, the advanced technology of the Group in electronic production, the adoption of scientific management approach and the future development of export business of Shenzhen Jingwah, the Group can provide quality materials, components and parts to satisfy to satisfy the development needs of CEC Group and meet the requirements on product quality of CEC and its subsidiaries, the Directors believe that the Existing Annual Caps under the Sale Agreement for the year ending 31 December 2014 and 31 December 2015 will not meet the Group’s current and future need. Accordingly, on 8 December 2014, the Board recommended the Company to enter into the two Supplemental Sale Agreements with CEC in relation to revising the Existing Annual Caps for the year ending 31 December 2014 and 31 December 2015 to RMB1,057,000,000 and RMB1,600,000,000 respectively.

Having considered the above reasons for the Annual Caps Revision, we concur with the Directors that the Annual Caps Revision is in the interests of the Company and the Shareholders as a whole.

(2) The Supplemental Sale Agreements and the Annual Caps Revision

On 8 December 2014, the Board recommended the Company to enter into the two Supplemental Sale Agreements with CEC in relation to revising the Existing Annual Caps for the years ending 31 December 2014 and 31 December 2015 to RMB1,057,000,000 and RMB1,600,000,000 respectively. Save and except for the revision of the Existing Annual Caps, all other terms and conditions under the Sale Agreement shall remain effective and unchanged.

— 16 —

LETTER FROM GRAM CAPITAL

With reference to the Board Letter, the terms of the Sale Agreement are fair and reasonable with fair pricing. Details of the pricing basis (the “ Pricing Basis ”) and internal control mechanism (the “ Internal Control Mechanism ”) are set out in the section headed “Summary of the Sale Agreement” in the Board Letter. Taking into account that (i) selling price of the goods is determined based on a price list compiled by the sales department of the Company, which is then reviewed by the supervisor of the sales department; (ii) the price list is mark-tomarket, updated twice every three months and applicable to transactions with both connected persons and independent third parties; (iii) separate authorities of the Company, including the legal department, financial department and audit committee are involved in respective review under the Internal Control Mechanism; and (iv) the frequency of the price list updates and the respective review conducted by separate authorities of the Company, we consider that the effective implementation of the Internal Control Mechanism would help to ensure fair pricing of the Continuing Connected Transaction according to the Pricing Basis.

With reference to the 2013 Annual Report and as confirmed by the Directors, the independent non-executive Directors have, within their scope of duties, reviewed, among other things, the Continuing Connected Transaction for the year ended 31 December 2013 and confirmed that the Continuing Connected Transaction: (i) was entered into by the Company in the ordinary and usual course of business; (ii) was on normal commercial terms or on terms no less favourable than those offered by or to independent third parties as far as the Company was concerned, if there were no applicable comparables; (iii) was carried out in accordance with the agreement governing such transaction, and the terms of such transaction were fair and reasonable and in the interests of the Shareholders as a whole; and (iv) did not exceed the relevant cap disclosed previously.

With reference to the 2013 Annual Report and as confirmed by the Directors, the Company’s auditors were engaged to report on the Group’s continuing connected transactions in accordance with “Hong Kong Standard on Assurance Engagements 3000” “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants. Based on the work performed, the auditors of the Company confirmed to the Board that, among other things, nothing has come to their attention that causes them to believe that the Continuing Connected Transaction for the year ended 31 December 2013 (i) has not been approved by the Board; (ii) was not, in all material respects, in accordance with the pricing policies of the Group; (iii) was not entered into, in all material respects, in accordance with the relevant agreement governing the Continuing Connected Transaction; and (iv) has exceeded the relevant cap disclosed previously.

— 17 —

LETTER FROM GRAM CAPITAL

For our due diligence purpose, we have obtained and reviewed the calculation of the Revised Annual Caps which is based on (i) the historical amounts of the Continuing Connected Transactions for the ten months ended 31 October 2014 (which forms approximately 51% of the Revised Annual Cap for the year ending 31 December 2014); (ii) the outstanding orders placed (which form approximately 34% and 24% of the Revised Annual Caps for each of the two years ending 31 December 2015 respectively); (iii) the expected demand from the CEC Group (the “ Expected Demand ”) on the CCT Products to be supplied by the Group (which forms approximately 14% and 75% of the Revised Annual Caps for each of the two years ending 31 December 2015 respectively); and (iv) additional buffer for unforeseeable circumstances (which forms approximately 1% of the Revised Annual Caps for each of the two years ending 31 December 2015). Upon our further enquiry, the Directors advised us that the Expected Demand was estimated based on the figures reported by relevant members of the Group (after their discussion with respective members of the CEC Group).

To further assess the fairness and reasonableness of the Revised Annual Caps for the two years ending 31 December 2015, we have discussed with the management of the Company regarding the following factors considered in determining the Revised Annual Caps:

High utilisation rate of the Existing Annual Caps

Set out below are the utilization rates of the Existing Annual Caps for the year ended 31 December 2013 and the year ending 31 December 2014:

Historical amounts_(RMB’000) Existing Annual Caps(RMB’000) Utilisation rate(approximate %)_	For the year ended 31 December 2013 For the ten months ended 31 October 2014 598,396 537,080 For the year ended 31 December 2013 For the year ending 31 December 2014 612,600 612,600 97.68 87.67	For the year ended 31 December 2013 For the ten months ended 31 October 2014 598,396 537,080 For the year ended 31 December 2013 For the year ending 31 December 2014 612,600 612,600 97.68 87.67
		For the year ending 31 December 2014 612,600 87.67

With reference to the above table, the ultilisation rate of Existing Annual Cap for the year ended 31 December 2013 is approximately 97.68%. As for the ten months ended 31 October 2014, the ultilisation rate of the Existing Annual Cap had reached approximately 87.67% already.

— 18 —

LETTER FROM GRAM CAPITAL

Development of CEC Group

With reference to the Board Letter, CEC has been vigorously developing the new displays industry recently, commencing the production lines for the production of advanced-generation LCD panel and related auxiliary industry with the investment amount exceeding RMB50 billion and it is expected that the CEC Group will continue to purchase the required materials including raw materials, components and parts and so forth in respect of this development and investment from the Group.

In addition, we noted from an announcement of Nanjing Huadong Electronics Information & Technology Company Limited (stock code on Shenzhen Stock Exchange: 000727) (“ Nanjing Huadong ”) (which is controlled by CEC) dated 22 January 2014 that Nanjing Huadong proposed to issue no more than 2,465 million shares to raise up to RMB10,500 million. Approximately RMB10,088 million of the proceeds will be used for the capital injection of its subsidiary for the development of 第8.5代薄膜晶體管液晶顯示器件(TFT-LCD)項目 (8.5 generation LCD panel parts) (the “ Project* ”) while the total capital requirement of the Project is estimated to approximately RMB29,150 million. As confirmed by the Directors, the said subsidiary of Nanjing Huadong will demand certain CCT Products to facilitate the development of the Project.

Completion of acquisition of Significant Asset Purchase

With reference to the circular of the Company dated 5 November 2014 regarding the Significant Asset Purchase, Shenzhen Jingwah will be controlled by the Company upon the completion of the equity transfer agreement regarding the Significant Asset Purchase, thus the accounts of Shenzhen Jingwah will be consolidated in the accounts of the Group. With reference to the Board Letter, upon completion of the Significant Asset Purchase, the sales business between Shenzhen Jingwah and CES (being an indirect subsidiary of CEC) (as advised by the Directors, the sales made by Shenzhen Jingwah to CES was amounted to approximately RMB1,160 million for the year ended 31 December 2013) is expected to continue to operate, and therefore the scale of continuing connected transactions between the Group and the CEC Group will increase.

— 19 —

LETTER FROM GRAM CAPITAL

We noted that the sales amount to CEC Group under the Continuing Connected Transaction will be allowed to increase significantly after the Annual Caps Revision. Upon our enquiry, the Directors advised us that (i) the production capacity of the Group will be enhanced by the Significant Asset Purchase (Shenzhen Jingwah recorded turnover of approximately RMB1,648 million for the year ended 31 December 2013); (ii) the production capacity of the Group can be further enhanced by expansion and its utilisation rate can be improved, when necessary; and (iii) the Revised Annual Caps represent the limit allowed for the Continuing Connected Transaction but not the obligation of the Group to supply the CCT Products to CEC Group. Accordingly, the possible increase of the amount of the Continuing Connected Transaction can generate additional turnover of the Group and the Directors do not consider that the Annual Caps Revision would affect the relationship among the Group and its independent customers.

Having taken into account the above factors, we are of the view that although the Revised Annual Caps represent substantial increase as compared to the Existing Annual Caps, the Revised Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned.

Shareholders should note that as the Revised Annual Caps are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2015, and they do not represent forecasts of revenue or income to be generated from the Continuing Connected Transaction. Consequently, we express no opinion as to how closely the actual revenue or income to be generated under the Continuing Connected Transaction will correspond with the Revised Annual Caps.

(3) Listing Rules implication

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant to which (i) the values of the Continuing Connected Transaction must be restricted by the Revised Annual Caps for the two years ending 31 December 2015; (ii) the terms of the Supplemental Sale Agreements (including the Revised Annual Caps) must be reviewed by the independent non-executive Directors annually; and (iii) details of the independent non-executive Directors’ annual review on the terms of the Supplemental Sale Agreements must be included in the Company’s subsequent published annual reports and financial accounts. Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, among other things, whether anything has come to their attention that causes them to believe that the Continuing Connected Transaction are not, in all material respects, in accordance with the pricing policies of the Company, and the Revised Annual Caps are being exceeded. In the event that the total amounts of the Continuing Connected Transaction exceed the Revised Annual Caps, or that there is any material amendment to the terms of the Supplemental Sale Agreements, the Company, as confirmed by the Directors, shall re-comply with the applicable provisions of the Listing Rules governing continuing connected transactions.

— 20 —

LETTER FROM GRAM CAPITAL

Given the above stipulated requirements for continuing connected transactions pursuant to the Listing Rules by the Company, we are of the view that there are adequate measures in place to monitor the Continuing Connected Transaction (together with the Revised Annual Caps) and hence the interest of the Independent Shareholders would be safeguarded.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Supplemental Sale Agreements are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Annual Caps Revision is in the interests of the Company and the Shareholders as a whole and is conducted in the ordinary and usual course of business of the Group. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the Supplemental Sale Agreements and the Annual Caps Revision and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of

Gram Capital Limited Graham Lam Managing Director

• for identification purpose only

— 21 —

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(A) Interests of Directors

As at the Latest Practicable Date, the interests and short positions of the Directors, supervisors and the chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required pursuant to Section 352 of the SFO to be entered in the register maintained by the Company referred therein, or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code were as follows:

Interests in domestic shares of the Company:

				No. of	Percentage of
			Nature of	shares held	share capital
Name of Director	Position	Capacity	interests	(Long position)	in issue
					(%)
Xu Guofei	Executive Director	Beneficial owner	Personal	2,546	0.00028

(B) Interests of Substantial Shareholders

As at the Latest Practicable Date, so far as is known to the Directors, Supervisors and chief executive of the Company, the interests or short positions of the persons (not being a Director or Supervisor or chief executive of the Company) in the shares and underlying shares of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO, or as otherwise notified to the Company and the Stock Exchange:

— 22 —

GENERAL INFORMATION

APPENDIX

(i) Interests in the shares of the Company

			Approximate	Approximate
		Class/no. of	percentage in the	percentage
		shares interested	relevant class of	in the total
Name of Shareholder	Capacity/nature of interests	(long position)	shares in issue	shares in issue
PEGL	Corporate interests held in the	334,715,000	49.82%	36.63%
	capacity of beneficial owner	domestic shares
Lewis Joseph	Personal interests held in the	20,260,000	8.37%	2.22%
	capacity of beneficial owner	H shares
Tuesday Thirteen Inc.	Corporate interests held in the	16,920,000	7.00%	1.85%
	capacity of controlled corporation	H shares
Tang Hanbo	Personal interests held in the	22,586,000	9.33%	2. 47%
	capacity of beneficial owner	H shares

As at the Latest Practicable Date, so far as is known to the Directors, the following Directors and supervisors hold offices as Directors or employees in CEC, the ultimate controller of the Company as shown above:

Name of Director/Supervisor	Position held in CEC
Lai Weide	Deputy General Manager
Xu Guofei	Assistant to General Manager

As at the Latest Practicable Date, so far as is known to the Directors, the following Directors and supervisors hold offices as Directors or employees in NEIIC, the controlling shareholder of PEGL as shown above:

Name of Director/Supervisor

Position held in NEIIC

Lai Weide	Chairman
Xu Guofei	General Manager
Zhang Yinqian	Secretary of the Party Committee

— 23 —

GENERAL INFORMATION

APPENDIX

As at the Latest Practicable Date, so far as is known to the Directors, the following Directors and supervisors hold offices as Directors or employees in PEGL, the controlling Shareholder of the Company as shown above:

Name of Director/Supervisor

Position held in PEGL

Lai Weide Chairman Xu Guofei General Manager Zhang Yinqian Secretary of the Party Committee Deng Weiming Deputy General Manager Lu Qing Deputy General Manager

As at the Latest Practicable Date, so far as is known to the Directors, the following Directors and supervisors hold offices as Directors or employees in TPV Technology, whose ultimate controlling shareholder is CEC, the ultimate controller of the Company as shown above and therefore an associate of the Company:

Name of Director/Supervisor Position held in TPV Technology

Jason Hsuan Chairman

(ii) Interests in non-wholly owned subsidiaries of the Company

		Approximate
		percentage of
	Name of shareholders interested	interest held by
Name of non-wholly owned	in 10% or more of the	that shareholder
subsidiaries of the Company	subsidiaries of the Company	(long position)
Nanjing Panda Information	GALANT (HK) LIMITED	25%
Industry Co., Ltd
Nanjing Panda International	Hong Kong Shun Sing	28%
Telecommunication	Development Co., Ltd
System Co., Ltd
Nanjing Panda Electronics	GALANT (HK) LIMITED	25%
Manufacturing Co., Ltd
Nanjing Panda System	Liu Changhua	10.90%
Integration Co., Ltd
Nanjing Panda Power Supply	Shi Qingrong	11.46%
Technology Manufacture Co., Ltd

— 24 —

GENERAL INFORMATION

APPENDIX

Save as disclosed above, the Directors, supervisors and chief executive of the Company are not aware that there is any person (other than a Director, supervisor or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the shares and underlying shares of the Company 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 is, 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 members of the Group or any options in respect of such capital.

3. LITIGATION

As at the Latest Practicable Date, there was no litigation or claim of material importance known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or supervisors of the Company had entered, or proposed to enter, into a service contract with any member of the Group which is not determinable by the Group within one year without payment of compensation, other than statutory compensation.

5. COMPETING INTERESTS

As at the Latest Practicable Date, so far was known to the Directors, none of the Directors or their respective associates was considered to have an interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group (other than those businesses to which the Directors and his/her associates were appointed to represent the interests of the Company and/or the Group) or have any other conflicts of interest with the Group pursuant to the Listing Rules.

6. DIRECTORS’ INTERESTS IN CONTRACTS AND ASSETS

As disclosed above, Mr. Lai holds offices in CEC, NEIIC and PEGL, Mr. Xu holds offices in CEC, NEIIC and PEGL and holds approximately 0.00028% of the total issued share capital of the Company and Mr. Deng and Mr. Lu hold offices in PEGL, and are all therefore considered to be interested in the transactions contemplated under the Sale Agreement (as supplemented by the Supplemental Sale Agreements) and Revised Annual Caps and had abstained from voting on the relevant resolutions of the Board approving the Supplemental Sale Agreements and the Revised Annual Caps.

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GENERAL INFORMATION

APPENDIX

Save as aforesaid, the Board confirms that as at the Latest Practicable Date, none of the other Directors had any direct or indirect interests in any assets which had been acquired or disposed of by, or leased to, any member of the Group or were proposed to be acquired or disposed of by, or leased to, any member of the Group since 31 December 2013 (being the date to which the latest published audited accounts of the Group were made up), none of the other Directors was materially interested in any contract or arrangement subsisting as at the Latest Practicable Date which was significant in relation to the business of the Group.

Mr. Hsuan, by virtue of his office held TPV Technology as disclosed above, is also a connected person of the Company and had abstained from voting on the relevant resolutions of the Board approving the Supplemental Sale Agreements and the Revised Annual Caps.

Save as aforesaid, the Board confirms that none of the other Directors abstained from voting on the relevant resolutions of the Board approving the Supplemental Sale Agreements and the Revised Annual Caps.

7. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2013 (being the date to which the latest published audited accounts of the Group were made up).

8. MATERIAL CONTRACTS

Within the two years immediately preceding the date of announcement of the Company dated 26 October 2012 and up to the Latest Practicable Date, the following contracts (not being contracts entered into in the ordinary course of business) have been entered into by members of the Group and are or may be material:

• (A) The subscription agreements entered into by the Company in respect to the non-public issuance of A shares were as follows:

• (i) On 7 November 2012, the Company entered into the non-public share issue and subscription agreement with Nanjing Electronics Information Industrial Corporation, pursuant to which, the agreement was effective upon obtaining approval of the CSRC for the non-public share issue on 12 April 2013.

• (ii) In June 2013, the Company entered into the non-public share issue and subscription agreements with eight investors (including Jiangsu GTIG Huading Investment Co., Ltd.（江蘇國泰華鼎投資有限公司）).

— 26 —

GENERAL INFORMATION

APPENDIX

The names of subscribers, number of shares subscribed for and subscription amount are set out in the following table:

No. Name of Subscriber Number of Shares subscribed for (share) 1 Jiangsu GTIG Huading Investment Co., Ltd. 35,000,000 2 South Industry Assets Management Co., Ltd. 25,200,000 3 Tibet Autonomous Region Investment Co., Ltd. 25,000,000 4 Beijing Infrastructure Investment Co., Ltd. 26,000,000 5 Caitong Fund Management Co., Ltd. 30,000,000 6 Nanjing Ruisen Investment Management Partnership Enterprise (Limited Partnership) 51,000,000 7 Aegon-Industrial Fund Management Co., Ltd. 17,603,922 8 Tibet Shan Nan Zhong He Investment Management Centre (Limited Partnership) 9,803,921 9 Nanjing Electronics Information Industrial Corporation 39,215,686 Total 258,823,529

Subscription Amount (RMB) 178,500,000.00 128,520,000.00 127,500,000.00 132,600,000.00 153,000,000.00 260,100,000.00 89,780,002.20 49,999,997.10 199,999,998.60 1,319,999,997.90

• (B) On 21 January 2014, the Company entered into the supplemental agreement to the Financial Services Agreement with China Electronics Financial Co., Ltd. (“ CEC ”), which was considered and approved at the 2014 First Extraordinary General Meeting of the Company held on 12 March 2014. Pursuant to the Financial Services Agreement, CEC Finance agreed to provide deposit and loan interest rate concessions and preferential charge of various financial services to its maximum capacity subject to relevant policies, laws and regulations. For main contents please refer to the relevant announcements published on China Securities Journal, Shanghai Securities News and the website of the Shanghai Stock Exchange on 22 January 2014 and the circular despatched on 25 February 2014.

— 27 —

GENERAL INFORMATION

APPENDIX

• (C) On 14 July 2014, the Company entered into the equity transfer agreement with PEGL in relation to the Significant Asset Purchase (“ Equity Transfer Agreement ”), which was considered and approved at the 2014 Second Extraordinary General Meeting of the Company held on 24 November 2014. Pursuant to the Equity Transfer Agreement, PEGL agreed to transfer its 5.07% equity interest in Shenzhen Jingwah to the Company and the Company will obtain control of the board of Shenzhen Jingwah and that the accounts of Shenzhen Jingwah will be consolidated in the accounts of the Group upon completion of the Equity Transfer Agreement.

9. EXPERT AND CONSENT

The following is the qualification of the expert (“ the Expert ”) who has been named in this circular or have given opinion or advice in this circular:

Name

Qualifications

Gram Capital Limited

A licensed corporation to carry out Type 6 (advising on corporate finance) regulated activities as defined under the SFO

As at the Latest Practicable Date, the Expert did not have any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for securities in any member of the Group nor did it have any direct or indirect interests in any assets which had been, since 31 December 2013 (being the date to which the latest published audited consolidated financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or which were proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, the Expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they respectively appear herein.

— 28 —

GENERAL INFORMATION

APPENDIX

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the offices of the Company at 301 Zhongshan Road East, Nanjing, Jiangsu Province, the PRC and the Company’s solicitors at 23rd Floor, Admiralty Centre, Tower II, 18 Harcourt Road, Hong Kong, during normal business hours on any weekday (except public holidays) from the date of this circular up to and including the date of the EGM:

• (a) the Sale Agreement;

• (b) the Supplemental Sale Agreements;

• (c) the letter from the Independent Board Committee, the text of which is set out in this circular;

• (d) the letter from Gram Capital, the text of which is set out in this circular;

• (e) the written consents referred to in the section headed “Expert and Consent” in this Appendix; and

• (f) the material contracts referred to in the section headed “Material Contracts” in this Appendix.

11. GENERAL

• (a) The registered office of the Company is situated at Level 1-2, Block 5, North Wing, Nanjing High and New Technology Development Zone, Nanjing, Jiangsu Province, the PRC.

• (b) The principal place of business of the Company is at 301 Zhongshan Road East, Nanjing, Jiangsu Province, the PRC.

• (c) The company secretary of the Company is Mr. Shen Jianlong, who is the Chief Accountant and Secretary to the Board.

— 29 —

SUPPLEMENTAL NOTICE OF EGM

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, 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 notice.

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SUPPLEMENTAL NOTICE OF THE THIRD EXTRAORDINARY GENERAL MEETING IN 2014

This notice is supplemental to the notice dated 13 November 2014 (the “ Notice ”) of the third extraordinary general meeting (the “ EGM ”) of Nanjing Panda Electronics Company Limited (the “ Company ”) to be held Monday, 29 December 2014 at 2:00 p.m. at the Conference Room of the Company, 301 Zhongshan Road East, Nanjing, the People’s Republic of China, to consider and if thought fit, pass the following resolutions (with or without modification).

Unless otherwise indicated, capitalized terms used herein shall have the same meanings as those defined in the announcement of the Company dated 8 December 2014 in relation to the revision of the annual caps for a continuing connected transaction.

ORDINARY RESOLUTIONS

1. “ THAT

2. (1) the supplemental agreement dated 8 December 2014 in relation to the revision of the annual cap for the year ending 2014 under the Sale Agreement (“ Supplemental Sale Agreement for 2014 ”), a copy of which was marked “A” and has been produced at the meeting and signed by the chairman of the meeting for identification purpose be and is hereby approved;

3. (2) the revised annual cap for the Supplemental Sale Agreement for 2014 for the period from the date of the EGM to 31 December 2014 be and is hereby approved; and

4. (3) the Board be and is hereby authorized to take all steps necessary or expedient in its opinion to implement and/or give effect to the Supplemental Sale Agreement for 2014.”

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SUPPLEMENTAL NOTICE OF EGM

1. “ THAT

2. (1) the supplemental agreement dated 8 December 2014 in relation to the revision of the annual cap for the year ending 2015 under the Sale Agreement (“ Supplemental Sale Agreement for 2015 ”), a copy of which was marked “B” and has been produced at the meeting and signed by the chairman of the meeting for identification purpose be and is hereby approved;

3. (2) the revised annual cap for the Supplemental Sale Agreement for 2015 for the period from 1 December 2015 to 31 December 2015 be and is hereby approved; and

4. (3) the Board be and is hereby authorized to take all steps necessary or expedient in its opinion to implement and/or give effect to the Supplemental Sale Agreement for 2015.”

By Order of the Board Nanjing Panda Electronics Company Limited Lai Weide Chairman

Nanjing, the People’s Republic of China 9 December 2014

As at the date of this notice, the Board comprises Executive Directors: Mr. Lai Weide and Mr. Xu Guofei; Non-executive Directors: Mr. Deng Weiming, Mr. Lu Qing, Mr. Xia Dechuan and Mr. Jason Hsuan; and Independent Non-executive Directors: Ms. Zhang Xiuhua, Ms. Liu Danping and Mr. Chu Wai Tsun, Vincent.

Notes:

1. Please refer to the Notice for details in respect of other resolutions to be proposed at the EGM.

2. All shareholders of the Company whose names appear in the Company’s register of members at the close of business on Friday, 28 November 2014 are entitled to attend the EGM. Holders of A Shares of the Company whose names appear in the register of members in the Shanghai branch of China Securities Depository and Clearing Corporation Limited at the close of business on 28 November 2014 can bring along their identity cards or shareholder account cards to attend the EGM. Holders of A Shares or their proxies (if any) shall bring their identity cards, shareholder account cards and the proxy forms (if any) to complete the procedures for attending the EGM at the secretariat office of the Board of the Company at 301 Zhongshan Road East, Nanjing. Overseas shareholders can register by post or by fax.

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SUPPLEMENTAL NOTICE OF EGM

1. Holders of H Shares who intend to attend the EGM must deposit the share certificates together with the transfer documents at the H-Share registrar of the Company, Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong, on or before 4:00 p.m. on Friday, 28 November 2014. Holders of H Shares whose names appear in the Company’s register of members at the close of business on 28 November 2014, or their representatives or proxies are entitled to attend the EGM with their identity certificates or passports. If a shareholder appoints a proxy to attend the EGM on his behalf, his proxy must bring along the proxy form.

2. All holders of H Shares of the Company should pay attention that the register of members of the Company will be closed from 29 November 2014 to 29 December 2014, both days inclusive, during which period no transfer of H Shares can be registered. Holders of H Shares whose names appear in the Company’s register of member at the close of business on 28 November 2014, or their representatives or proxies are entitled to attend the EGM with their identity certificates or passports.

3. If a shareholder appoints a proxy to attend the EGM on his behalf, his proxy must bring along with the proxy form.

4. A shareholder who has the right to attend and vote at the EGM is entitled to appoint one proxy or several proxies, whether a member of the Company or not, to attend and vote at the EGM.

5. If more than one proxy is appointed by a shareholder, the proxies can exercise their voting rights only in the case of a poll.

6. The instrument appointing a proxy must be in writing under the hand of the appointer or his attorney duly authorized in writing. In the case of a corporation, the proxy form must be under its common seal or under the hand of its director or duly authorized attorney. If the proxy form is signed by an agent on behalf of an appointer, the proxy form or other authority must be notarially certified.

7. The proxy form together with the notarially certified power of attorney or other authority must be delivered to the office of the Company (in respect of A Shares) or to the H-Share registrar of the Company, Hong Kong Registrars Limited at 46th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong (in respect of H Shares) 24 hours before the time appointed for the holding of the EGM.

8. Shareholders who intend to attend the EGM should send a reply in writing to the office of the Company in person or by post or by fax on or before 8 December 2014. Completion and return of the written reply shall not preclude the shareholders from attending the EGM.

9. The EGM is expected to last for a half day. Shareholders and their proxies attending the EGM are responsible for their own transportation and accommodation expenses.

10. The Company’s office and correspondence address:

301 Zhongshan Road East, Nanjing, The People’s Republic of China Postal code: 210002 Telephone: (8625)8480 1144 Fax: (8625)8482 0729

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