INSPUR DIGITAL ENTERPRISE TECHNOLOGY LIMITED

Inspur Digital Enterprise Technology Limited

596 KYG4820C1309

IT Services & Consulting

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Inspur International : PROPOSAL FOR REVISED ANNUAL CAPS AND EXTENSION OF SELLING AGENCY TRANSACTIONS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

November 27, 2019 at 07:38 am EST

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)

PROPOSAL FOR REVISED ANNUAL CAPS AND

EXTENSION OF SELLING AGENCY TRANSACTIONS

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser

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 pages 15 to 16 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 17 to 29 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 Centre, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong on Friday, 13 December 2019 at 10:00 a.m. is set out on pages 37 to 38 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Such form of proxy is also published on the website of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk.

Whether or not you intend to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the office of the Company's branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible but 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.

28 November 2019

		CONTENTS
			Page
Definitions . .	. . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter From the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter From the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Letter From the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix	-	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Notice of EGM . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	37

− i −

DEFINITIONS

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

"associate(s)"	has the meaning ascribed thereto under the Listing Rules
"Board"	the board of Directors
"Company"	Inspur International Limited (浪潮國際有限公司), a company
	incorporated in the Cayman Islands with limited liability,
	whose Shares are listed and traded on the Main Board of the
	Stock Exchange (Stock Code: 596)
"connected person(s)"	has the meaning ascribed thereto under the Listing Rules
"controlling shareholder"	has the meaning ascribed thereto under the Listing Rules
"Director(s)"	the director(s) of the Company
"EGM"	the extraordinary general meeting of the Company to be
	convened and held for the Independent Shareholders to
	consider and approve the Second Supplemental Agreement,
	the revised annual caps in relation to the Selling Agency
	Transactions for the two years ending 31 December 2020 and
	the extension of the Selling Agency Transactions to the year
	ending 31 December 2021
"First Supplemental Agreement"	the agreement dated 23 August 2019 between the Company
	and Inspur Group to amend the Framework Agreement and as
	disclosed in the Company's announcement dated 23 August
	2019
"Framework Agreement"	the agreement dated 9 May 2018 between the Company and
	Inspur Group in relation to the continuing connected
	transactions (including the Selling Agency Transactions) for
	the three financial years ending 31 December 2020, as
	amended by the First Supplemental Agreement
"Group"	the Company and its subsidiaries
"HK$"	Hong Kong dollars, the lawful currency of Hong Kong
"Hong Kong"	the Hong Kong Special Administrative Region of the PRC
"Independent Board Committee"	an independent committee of the Board, comprising all of the
	independent non-executive Directors, established by the
	Company to advise the Independent Shareholders on the
	Second Supplemental Agreement

− 1 −

	DEFINITIONS
"Independent Financial Adviser"	Amasse Capital Limited, a corporation licensed to carry on
	Type 1 (dealing in securities) and Type 6 (advising on
	corporate finance) regulated activity under the SFO
"Independent Shareholders"	Shareholders other than Inspur Group and its associates, who
	are required under the Listing Rules to abstain from voting at
	the EGM
"Independent Third Party"	a third party who is independent of the Company and its
	connected persons
"Inspur Group"	Inspur Group Co., Ltd.* (浪潮集團有限公司), a company
	established in the PRC with limited liability, a controlling
	shareholder of the Company
"Inspur Group Companies"	Inspur Group and its subsidiaries (other than the Group),
	unless otherwise specified
"Latest Practicable Date"	27 November 2019, being the latest practicable date prior to
	printing of this circular for ascertaining certain information
	contained herein
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"PRC" or "China"	the People's Republic of China
"RMB"	Renminbi, the lawful currency of PRC
"Second Supplemental	the conditional supplemental agreement to the Framework
Agreement"	Agreement entered into by the Company and Inspur Group
	dated 5 November 2019
"Selling Agency Transactions"	transactions in relation to sale of various IT service products
	by the Group to the Inspur Group Companies who are acting
	as selling agent of the Group; and sale of various IT products
	by the Group to the Inspur Group Companies under
	subcontracting arrangement of software development and
	maintenance business under the Framework Agreement
"SFO"	the Securities and Futures Ordinance (Chapter 571 of the
	Laws of Hong Kong)
"Share(s)"	ordinary shares 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

− 2 −

	DEFINITIONS
"subsidiary(ies)"	has the meaning ascribed to it under the Listing Rules
"US$"	United States Dollars, the lawful currency of the
	United States
"%"	per cent

The English translation of certain Chinese names or words in this circular is included for information purpose only, and should not be regarded as the official English translation of such Chinese names or words.

− 3 −

LETTER FROM THE BOARD

INSPUR INTERNATIONAL LIMITED

浪潮國際有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 596)

Executive Directors:	Registered office:
Mr. Wang Xingshan (Chairman)	Cricket Square
Mr. Lee Eric Kong (Chief Executive Officer)	Hutchins Drive
Mr. Jin Xiaozhou, Joe	P.O. Box 2681
	Grand Cayman KY1-1111
Non-executive Director:	Cayman Islands
Mr. Dong Hailong
	Head office and principal place of
Independent non-executive Directors:	business in Hong Kong:
Ms. Zhang Ruijun	Flat B & C, 30/F.
Mr. Wong Lit Chor, Alexis	Tower A, Billion Centre
Mr. Ding Xiangqian	1 Wang Kwong Road
	Kowloon Bay
	Kowloon
	Hong Kong
	28 November 2019
To the Shareholders
Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS:

REVISED ANNUAL CAPS AND

EXTENSION OF SELLING AGENCY TRANSACTIONS

INTRODUCTION

Reference is made to the Company's announcements dated 9 May 2018 and 5 November 2019 and circular dated 25 June 2018.

On 12 July 2018, the Company obtained the approval of the Independent Shareholders for five categories of continuing connected transactions (including the Selling Agency Transactions) between the Group and the Inspur Group Companies under the Framework Agreement and the related annual caps for the three financial years ending 31 December 2020.

− 4 −

LETTER FROM THE BOARD

As it is expected that the transaction amounts of the Selling Agency Transactions will increase and the parties will continue to conduct the Selling Agency Transactions beyond 31 December 2020, the Company and Inspur Group entered into the Second Supplemental Agreement on 5 November 2019 to: (i) revise the annual caps of the Selling Agency Transactions for: (a) the year ending 31 December 2019 to RMB1,080,000,000 (value of transactions) and RMB10,800,000 (related commission); and (b) the year ending 31 December 2020 to RMB1,180,000,000 (value of transactions) and RMB11,800,000 (related commission); and (ii) continue to conduct the Selling Agency Transactions for the year ending 31 December 2021 with the annual caps of RMB1,306,800,000 (value of transactions) and RMB13,068,000 (related commission). The Second Supplemental Agreement is conditional on the approval of the Independent Shareholders at the EGM. The Second Supplemental Agreement does not change the terms and annual caps of the other categories of continuing connected transactions (other than the Selling Agency Transactions).

Inspur Group is a company established in the PRC and, as at the Latest Practicable Date, is interested in approximately 54.58% of the issued share capital of the Company through its subsidiaries. Under the Listing Rules, Inspur Group is a connected person of the Company and the transactions contemplated under the Second Supplemental Agreement will constitute continuing connected transactions of the Company.

As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the revised and new annual caps of the Selling Agency Transactions is expected to continue to exceed 5%, the transactions contemplated under the Second Supplemental Agreement are subject to the announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

The purpose of this circular is to provide you with further information regarding, among others,

further details of the transactions contemplated under the Second Supplemental Agreement, (ii) the recommendation from the Independent Board Committee in respect of the Second Supplemental Agreement and the transactions contemplated thereunder, (iii) the advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the Second Supplemental Agreement and the transactions contemplated thereunder, (iv) the notice convening the EGM, and (v) other information as required by the Listing Rules.

SECOND SUPPLEMENTAL AGREEMENT

Date

5 November 2019

Parties

The Company (for itself and on behalf of the Group)
Inspur Group (for itself and on behalf of the Inspur Group Companies)

− 5 −

LETTER FROM THE BOARD

Subject of the Second Supplemental Agreement

Pursuant to the Second Supplemental Agreement, the Company and Inspur Group conditionally agreed to: (i) revise the annual caps of the Selling Agency Transactions for: (a) the year ending 31 December 2019 to RMB1,080,000,000 (value of transactions) and RMB10,800,000 (related commission); and (b) the year ending 31 December 2020 to RMB1,180,000,000 (value of transactions) and RMB11,800,000 (related commission); and (ii) continue to conduct the Selling Agency Transactions for the year ending 31 December 2021 with the annual caps of RMB1,306,800,000 (value of transactions) and RMB13,068,000 (related commission).

Condition precedent

The revision of the annual caps and the extension of the Selling Agency Transactions pursuant to the Second Supplemental Agreement are conditional upon the approval of the Independent Shareholders at the EGM.

Selling Agency Transactions

The Group appoints the Inspur Group Companies 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"). The Ministry only grants around 200 enterprises the same Qualification as Inspur Group Companies 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 Companies, the Group co-operates with Inspur Group Companies to participate in the public tenders requiring first-class qualification. The Group will participate in the 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 Companies 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 Companies will issue sale invoices to the customers and the relevant members of Group will issue sales invoice to the Inspur Group Companies 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 Companies for using the Qualification. The Inspur Group Companies will deduct the related commission from the payment

− 6 −

LETTER FROM THE BOARD

received from the customers and pay the net proceeds to the Group within five days. In other words, the commission is the only fee received by the Inspur Group Companies from the Group. The balance of the fees is paid to the Inspur Group Companies only on a pass-through basis. The Inspur Group Companies are not end-customers in those transactions.

The Inspur Group Companies are the only selling agents 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 if it terminates the appointment of Inspur Group Companies as its selling agent.

Meanwhile, the Company further understands that the Inspur Group Companies did not act as selling agent of entities other than members of the Inspur Group Companies and the Group in or prior to 2019. As such, the 1% commission is determined with reference to the Qualification Management Policy (資質管理有關規定) of the Inspur Group Companies pursuant to which the Inspur Group Companies will charge a selling agency commission of not more than 1% of the contract amount as general policy. The Qualification Management Policy is an internal control policy used by the Inspur Group Companies for governing the transactions relevant to the Selling Agency Transactions taking into account the cost of maintaining the Qualification by the Inspur Group Companies. All Inspur Group Companies including the Company are subject to the same commission rate and payment terms (i.e. the relevant Inspur Group Companies will receive the net proceeds (after deduction of the related commission) within five days after the payment has been received from the third party customers). However, it is highly unlikely for the Group to find an Independent Third Party who owns the first-class qualification as Inspur Group Companies are charging a commission fee of less than 1%. Moreover, other entities with the first-class qualification are limited in number and as business competitors of the Group, they would not offer selling agency services to the Group. Therefore, it would not be possible for the Company to seek quotes from Independent Third Parties which own a first-class qualification. Due to the unique nature of the Qualification and industry practice, and that all Inspur Group Companies are subject to the same commission rate and payment terms, the Board is of the view that the 1% commission fee and the payment terms of the selling agency commission are fair and reasonable and on normal commercial terms or better.

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. Based on its understanding of the industry and application requirements of higher class qualification, the Company believes that using the Qualification to participate in the relevant public tenders is unrelated to and has no influence on a future process of obtaining a higher class qualification. The Company may apply for a higher class qualification (for example, a second-class or third-class qualification) and is currently assessing the Group's position against the requirements of such application. According to preliminary research, the requirements focus on the applicant's experience in the industry, scale and operations. The Selling Agency Transactions thus will not impact the Company's plan to obtain a higher class qualification in the future. The Company however does not currently plan to obtain the first-class qualification as one of the conditions of such application is that the applicant must have held the second-class qualification for at least three years. There are also specific requirements on the applicant's scale and operations such as its capital, assets, revenue, office space and research and development centres.

− 7 −

LETTER FROM THE BOARD

The Board takes the view that the new annual caps for Selling Agency Transactions are appropriate and will not cause over-reliance on Inspur Group Companies as: (i) the Selling Agency Transactions contributed during the last three years from 2016 to 2018 (the Selling Agency Transactions contributed to 27.14%, 27.20% and 28.27% of the Group's revenue in 2016, 2017 and 2018 respectively) and is expected during the three years ending 31 December 2021 to contribute to less than half of the Company's revenue; (ii) the Group will deal directly with its existing customers without using the Qualification; (iii) the Group will still be able to participate in certain public tenders without the Qualification; (iv) the Group will only use the Qualification in public tenders that either require first-class qualification or the Company reasonably believes that using the Qualification will significantly increase its chances of winning; and (v) the Group will participate in the negotiation and finalization of the terms of contracts with and provide the products directly to the ultimate third party customers in the Selling Agency Transactions. By using the first-class qualification however, the Group will be able to participate in larger-scale public tenders and enjoy a higher overall rating in public tenders to increase its chance of winning. As discussed under the paragraph headed "Internal Control Measures for the Transactions" below, the Company monitors the monthly transacted amounts of the Selling Agency Transactions. If the monthly transacted amounts exceed half of the Group's total revenue of the respective month, the potential over-reliance issue will be reported to the senior management, who will then decide whether to continue conducting the Selling Agency Transactions or consult the Stock Exchange as appropriate.

EXISTING ANNUAL CAPS

According to the Framework Agreement, the annual cap amounts in relation to the Selling Agency Transactions are:

	Year ended	Year ending	Year ending
	31 December	31 December	31 December
(All amounts in RMB'000)	2018	2019	2020
Selling Agency Transactions
- (value of transactions)	600,000	720,000	864,000
- (related commission)	6,000	7,200	8,640

HISTORICAL FIGURES

Set out below are the historical amounts of the Selling Agency Transactions between the Group and the Inspur Group Companies for the three years ended 31 December 2018:

	Year ended	Year ended	Year ended
	31 December	31 December	31 December
(All amounts in RMB'000)	2016	2017	2018
Selling Agency Transactions
- (value of transactions)	270,258	310,868	582,930
- (related commission)	2,678	2,929	5,823

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LETTER FROM THE BOARD

The transaction amounts of the Selling Agency Transactions provided under the Framework Agreement for the ten months ended 31 October 2019 were approximately RMB678,327,556 (value of transactions) and RMB6,780,677 (related commission). As at the Latest Practicable Date, the existing annual caps for the Selling Agency Transactions for the year ending 31 December 2019 have not been exceeded.

REVISED AND NEW ANNUAL CAPS

Pursuant to the Second Supplemental Agreement, the annual caps of the Selling Agency Transactions are: (i) for the year ending 31 December 2019, revised to RMB1,080,000,000 (value of transactions) and RMB10,800,000 (related commission); (ii) for the year ending 31 December 2020, revised to RMB1,180,000,000 (value of transactions) and RMB11,800,000 (related commission); and

for the year ending 31 December 2021, set at RMB1,306,800,000 (value of transactions) and RMB13,068,000 (related commission). The foregoing annual cap amounts do not include any tax or duty (such as Value Added Tax).

BASIS OF THE REVISED AND NEW ANNUAL CAPS

The following factors have been taken into account by the Company in determining the revised annual caps of the Selling Agency Transactions provided for the two years ending 31 December 2020 and the new annual caps of the Selling Agency Transactions provided for the year ending 31 December 2021: (i) recent historical transacted amount of Selling Agency Transactions; (ii) orders which have been fulfilled and sale orders on hand; and (iii) an expected annual growth rate of 10% assuming continued growth in demand for Selling Agency Transactions and general inflation.

The revised and new annual caps for the Selling Agency Transactions for the three years ending 31 December 2021 are based on the estimated transaction amount for the year ending 31 December 2019 and an estimated annual growth rate of 10%.

The annual caps of the Selling Agency Transactions for the year ending 31 December 2019 are estimated primarily based on the recent historical transacted amount of Selling Agency Transactions and orders which have been fulfilled and sale orders on hand. During the period commencing from 1 January 2019 to 31 October 2019, the transaction amounts of the Selling Agency Transactions provided under the Framework Agreement have reached approximately RMB678,327,556 (value of transactions) and RMB6,780,677 (related commission), representing a utilization rate of the original 2019 annual caps of approximately 94.21% and 94.18%, respectively. There are at least 30 sale orders on hand and most of such sale orders are expected to be completed by the end of 2019 with a total estimated transaction amount of approximately RMB287,000,000.

The Board has also taken into account the latest business growth trend of the Group and the industry. The Company's revenue grew approximately 24.73% from the six months ended 30 June 2018 to the six months ended 30 June 2019 and approximately 24.30% from the year ended 31 December 2017 to the year ended 31 December 2018. According to the Software Industry Report of the First Three Quarters of 2019 (2019年前三季度軟件業經濟運行情況) published by the Ministry, the software industry in the PRC has recorded a year-on-year growth of 15.2% in total revenue for the nine months ended 30 September 2019.

− 9 −

LETTER FROM THE BOARD

Based on the public tenders made and sale orders on hand under negotiation, the Board expects the growth in demand for the Company's various IT service products selling through the Inspur Group Companies as its selling agent to continue for the rest of 2019, 2020 and 2021. The Board however also expects the Company to diversify its business as a result of its acquisition of Inspur Tianyuan Communications System Co., Ltd.* (浪潮天元通信信息系統有限公司), which was completed earlier this year, and focus on other business areas such as the provision of application software and big-data services for industries such as telecommunications, energy and transportation and the development of Internet of Things and data analysis products and industrial internet platform. The Board believes that the growth in the volume of the Selling Agency Transactions will be slightly slower than that of the industry.

As such, the Directors are of the view that the estimated 10% annual growth rate is conservative but fair and reasonable.

INTERNAL CONTROL MEASURES FOR THE TRANSACTIONS

The market strategies, including the pricing mechanisms, are determined by the Company's operations department. There is a segregation of duties between the Company's sales department and operations department. The sales department is responsible for contacting customers, setting quotation and entering into the contracts. The operations department is in charge of setting the price and other terms, through which it will control and monitor the fee quotation. For public tenders, the operations department will assess the suggested range of the contract price before the Company decides whether to participate in such public tender. The operations department will periodically review and conduct internal audit and, if necessary, adjust the pricing and commercial terms with reference to the market situation and the same or similar transactions entered into by the Inspur Group Companies with Independent Third Parties.

In the beginning of each year, the finance department will allocate a rough amount to the relevant entities in the Group and provide guidance and advice to the Company's operation department on the amount incurred under the Selling Agency Transactions each year. By monitoring the monthly transacted amounts and the future sales orders in the next two months forecasted by the operation department of the Selling Agency Transactions and checking the net proceeds received by the Group (after deducting the selling agency commission) against the payment the Inspur Group Companies received from the ultimate third party customers each month, the finance department will analyse the implementation of the Selling Agency Transactions monthly to ensure that the selling agency commission payable to the Inspur Group Companies is not more than 1% of the selling price pursuant to the Second Supplemental Agreement and the annual caps have not been exceeded. When the value of the Selling Agency Transactions transacted reaches around 80% of the annual caps on an aggregated basis, it will be reported to the senior management. If the senior management decides to increase the annual caps for the relevant year, the Company will commence the process to increase the annual caps (including to obtain shareholders' approval) and allow about 1.5 to 2 months to complete such process. In any case, the Group will stop taking on sales orders or entering into public tenders that will have the effect of exceeding the annual caps before the process has been completed.

− 10 −

LETTER FROM THE BOARD

The Directors (including independent non-executive directors of the Company) will review the pricing terms and the payment terms of the Selling Agency Transactions each year so as to confirm that the terms are fair and reasonable, on normal commercial terms or better than those offered to or by Independent Third Parties and in the interests of the Company and the Shareholders as a whole. As discussed under the paragraph headed "Selling Agency Transactions" above, the Directors are currently not aware of any other company in the industry that would allow an independent third party to use its first-class qualification. It is therefore not possible to seek quotes from third parties. However, if this is no longer the case, the Directors will ensure that that the terms of appointing Inspur Group as the Company's selling agent and using the Qualification in the Selling Agency Transactions are fair and reasonable, and on normal commercial terms or better than those offered by Independent Third Parties. The auditors of the Company will also report on the Selling Agency Transactions in accordance with Rule 14A.56 of the Listing Rules on an annual basis.

INFORMATION ON THE GROUP

The Company is a company incorporated in the Cayman Islands with limited liability, whose Shares are listed and traded on the Main Board of the Stock Exchange (Stock Code: 596).

The principal activities of the Group are software development and provision of cloud service and Internet of Things solution. The Group caught up with the growth trend of enterprises' demand for digital transformation, focused on "cloud + data + AI" and made full use of new technologies such as cloud computing, big data, Internet of Things, artificial intelligence and block chain to accelerate the upgrading of management software products and cloud services over the past few years. Inspur Enterprise Cloud enterprise resource planning was taken as the new momentum of enterprise transformation and upgrading, aiming to help customers build intelligent enterprises.

INFORMATION ON THE INSPUR GROUP COMPANIES

Inspur Group is a controlling shareholder and the ultimate beneficial owner of the Company. Inspur Group is an investment holding company established in the PRC. The Inspur Group Companies are committed to be the leading suppliers of cloud computer solutions in China and provides IT services and products to customers from more than 50 countries, meeting the information-based demands of governments and corporations all-around.

REASONS FOR AND BENEFITS OF THE SECOND SUPPLEMENTAL AGREEMENT

As a result of the increase in demand for the Company's various IT service products selling through the Inspur Group Companies as its selling agent, the transaction amounts of the Selling Agency Transactions provided under the Framework Agreement for the nine months ended 30 September 2019 have reached approximately RMB600,526,338 (value of transactions) and RMB6,002,665 (related commission). Based on the public tenders made and sale orders on hand under negotiation, the Company expects that the growth in demand for its IT service products will continue for the rest of 2019, 2020 and 2021. As such, the existing annual caps of the Selling Agency Transactions for 2019 and 2020 would not be sufficient for the expected transaction volume. The Company would like to revise the annual caps in respect of the Selling Agency Transactions for the two years ending 31 December 2020. The Company would also like to continue to conduct the Selling Agency Transaction with the Inspur Group Companies for the year ending 31 December 2021.

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LETTER FROM THE BOARD

The Inspur Group Companies are 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 Inspur Group's Qualification if it terminates the appointment of Inspur Group Companies as its selling agent. By entering into the Second Supplemental Agreement, the Group can continue to derive benefits from the Selling Agency Transactions which can capture the synergic advantages of both the Group and the Inspur Group Companies.

The Directors (including the independent non-executive Directors) consider that the Second Supplemental Agreement was on normal commercial terms and entered into in the ordinary and usual course of business of the Group, and the terms of the Second Supplemental Agreement together with the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS OF THE SECOND SUPPLEMENTAL AGREEMENT

Inspur Group is a company established in the PRC and, as at the Latest Practicable Date, holds 621,679,686 Shares and is interested in approximately 54.58% of the issued share capital of the Company through its subsidiaries. Under the Listing Rules, Inspur Group is a connected person of the Company and the transactions contemplated under the Second Supplemental Agreement will constitute continuing connected transactions of the Company. As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the revised and new annual caps of the Selling Agency Transactions is expected to continue to exceed 5%, the transactions contemplated under the Second Supplemental Agreement are subject to the announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, no Director has a material interest in the transactions contemplated under the Second Supplemental Agreement and there are no common directors between the Company and Inspur Group,. No Director was required to abstain from voting on the Board resolutions of the Company approving the Second Supplemental Agreement and the transactions contemplated thereunder.

EGM

Set out on pages 37 to 38 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 Friday, 13 December 2019 for the purpose of considering and, if thought fit, approving the Second Supplemental Agreement.

The EGM will be convened and held for the Independent Shareholders to consider and, if thought fit, approve the Second Supplemental Agreement, including the revised annual caps for the two years ending 31 December 2020 and the extension of the Selling Agency Transactions to the year ending 31 December 2021.

Since the Second Supplemental Agreement and the transactions contemplated thereunder are subject to the Independent Shareholders' approval as required under Chapter 14A of the Listing Rules, Inspur Group and its associates shall abstain from voting on the relevant resolutions.

− 12 −

LETTER FROM THE BOARD

For the purpose of determining the Shareholders who are entitled to attend and vote at the EGM, the register of members of the Company will be closed from Thursday, 12 December 2019 to Friday, 13 December 2019, both days inclusive. In order to qualify for attending and voting at the EGM, all transfer documents together with the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:30 p.m. (Hong Kong time) on Wednesday, 11 December 2019.

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 not less than 48 hours before the time appointed for 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.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules and article 66 of the Company's articles of association, a resolution put to the vote of a general meeting of the Company shall be decided by way of a poll. After the EGM, the poll results will be published on the respective websites of the Stock Exchange and the Company.

RECOMMENDATIONS

Amasse Capital Limited has been appointed as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders to advise them on the terms of the Second Supplemental Agreement. The Independent Board Committee, comprising all the independent non-executive Directors, has been established by the Company to advise the Independent Shareholders as to whether the terms of the Second Supplemental Agreement and the transactions contemplated thereunder in relation to the Selling Agency Transactions are fair and reasonable and whether the transactions are in the interests of the Company and the Shareholders as a whole and to advise the Independent Shareholders on how to vote.

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 17 to 29 of this circular and the text of the letters from the Independent Board Committee to the Independent Shareholders is set out on pages 15 to 16 of this circular.

The Independent Board Committee, having taken into account the advice of Amasse Capital Limited, is of the opinion that the Second Supplemental Agreement was entered into upon normal commercial terms following arm's length negotiations between the parties thereto, and that the terms of the Second Supplemental Agreement (including the revised annual caps for the two years ending 31 December 2020 and the extension of the Selling Agency Transactions to the year ending 31

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LETTER FROM THE BOARD

December 2021) were agreed on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and the Shareholders as a whole. The Independent Board Committee recommends the Independent Shareholders to vote in favour of the relevant resolution to be proposed at EGM.

The Directors (including the independent non-executive Directors whose view is expressed in the letter from the Independent Board Committee set out on pages 15 to 16 of this circular) are of the view that the Second Supplemental Agreement was entered into on normal commercial terms and in the ordinary and usual course of business of the Group, and the terms of the Second Supplemental Agreement (including the revised annual caps for the two years ending 31 December 2020 and the extension of the Selling Agency Transactions to the year ending 31 December 2021) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The Directors recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at EGM.

ADDITIONAL INFORMATION

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

Yours faithfully

For and on behalf of the Board of

Inspur International Limited

Mr. Wang Xingshan

Chairman

− 14 −

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)

28 November 2019

To the Independent Shareholders

Dear Sir or Madam,

PROPOSAL FOR REVISED ANNUAL CAPS AND

EXTENSION OF SELLING AGENCY TRANSACTIONS

We refer to the circular dated 28 November 2019 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 whether the terms of the Second Supplemental Agreement (including the revised annual caps for the two years ending 31 December 2020 and the extension of the Selling Agency Transactions to the year ending 31 December 2021) are fair and reasonable and whether the transactions are in the interests of the Company and the Shareholders as a whole and to advise the Independent Shareholders on how to vote. Amasse Capital Limited 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 Amasse Capital Limited to the Independent Board Committee and the Independent Shareholders which contains its advice to us in respect of the Second Supplemental Agreement, as set out on pages 17 to 29 of the Circular.

Having taken into account of the advice of Amasse Capital Limited, we consider that the Second Supplemental Agreement was entered into upon normal commercial terms following arm's length negotiations between the parties thereto, and that the terms of the Second Supplemental Agreement (including the revised annual caps for the two years ending 31 December 2020 and the extension of the Selling Agency Transactions to the year ending 31 December 2021) were agreed on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. We consider that the entering into the Second Supplemental Agreement is in the ordinary and usual

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

course of business of the Company and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Second Supplemental Agreement, the transactions contemplated thereunder and the annual caps.

Yours faithfully,

the Independent Board Committee

Zhang Ruijun	Wong Lit Chor, Alexis	Ding Xiangqian
Independent	Independent	Independent
non-executive Director	non-executive Director	non-executive Director

− 16 −

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter of advice to the Independent Board Committee and the Independent Shareholders from the Independent Financial Adviser prepared for the purpose of incorporation in this circular.

28 November 2019

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONTINUING CONNECTED TRANSACTIONS: REVISED ANNUAL CAPS AND

EXTENSION OF SELLING AGENCY TRANSACTIONS

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 terms of the Second Supplemental Agreement, details of which are set out in the letter from the Board (the "Letter from the Board") contained in the circular of the Company dated 28 November 2019 (the "Circular"), of which this letter forms a part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

Inspur Group is a company established in the PRC and, as at the Latest Practicable Date, holds 621,679,686 Shares and is interested in approximately 54.58% of the issued share capital of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Company through its subsidiaries. Under the Listing Rules, Inspur Group is a connected person of the Company and the transactions contemplated under the Second Supplemental Agreement will constitute continuing connected transactions of the Company. As the highest applicable percentage ratio under Rule 14.07 of the Listing Rules in respect of the revised and new annual caps of the Selling Agency Transactions is expected to continue to exceed 5%, the transactions contemplated under the Second Supplemental Agreement are subject to the announcement and independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

To the best of the Directors' knowledge, information and belief and having made all reasonable enquiries, no Director has a material interest in the transactions contemplated under the Second Supplemental Agreement and there are no common directors between the Company and Inspur Group. No Director was required to abstain from voting on the Board resolutions of the Company approving the Second Supplemental Agreement and the transactions contemplated thereunder.

The Independent Board Committee, comprising all the independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the terms of the Second Supplemental Agreement are on normal commercial terms, are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole. We have been appointed by the Company as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect, and such appointment has been approved by the Independent Board Committee.

OUR INDEPENDENCE

As at the Latest Practicable Date, we did not have any relationships or interests with the Company or any other parties that could reasonably be regarded as relevant to our independence. In the last two years, we have acted as the independent financial adviser to the independent board committee and the independent shareholders of the Company for the following transaction (the "Previous Appointment"):

Date of the relevant circular and
our letter of advice	Nature of the transaction
25 June 2018	(i)	Major and connected transaction; and
	(ii)	continuing connected transactions

With regard to our independence from the Company, it is noted that (i) apart from normal professional fees paid or payable to us in connection with the Previous Appointment as well as the current appointment as the Independent Financial Adviser, no arrangements exist whereby we had received or will receive any fees or benefits from the Company or any other parties that could reasonably be regarded as relevant to our independence; (ii) we have maintained our independence from the Company during the Previous Appointment; (iii) the service fees received separately or aggregately from the Previous Appointment and the current appointment do not constitute a significant portion of our total revenue, and (iv) our independence from the Company has not been compromised because of the Previous Appointment. Accordingly, we consider that the aforementioned previous appointment would not affect our independence, and that we are independent pursuant to Rule 13.84 of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

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 and the management of the Company (the "Management"). We have reviewed information on the Company, including but not limited to, (i) the announcement of the Company dated 5 November 2019, (ii) the Second Supplemental Agreement, (iii) annual reports of the Company for each of the years ended 31 December 2017 (the "2017 Annual Report") and 31 December 2018 (the "2018 Annual Report"), (iv) other information contained in the Circular. We have assumed that all information and representations that have been provided by the Management, for which the Directors 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 representation and confirmation of the Management that there are no undisclosed private agreements/arrangements or implied understanding with anyone concerning the Selling Agency Transactions. 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 as a whole 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.

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, carried out any independent verification of the information provided by the Management, nor have we conducted any independent in-depth investigation into the business and affairs of any members of the Group, the counter party(ies) to the Selling Agency Transactions or their respective subsidiaries or associates. We also have not considered any taxation implication on the Group or the Shareholders as a result of the Selling Agency Transactions. We have not carried out any feasibility study on the past, and forthcoming investment decision, opportunity or project undertaken or to be undertaken by the Group. Our opinion has been formed on the assumption that any analysis, estimation, anticipation, condition and assumption provided by the Group are feasible and sustainable. Our opinion shall not be construed as to give any indication to the validity, sustainability and feasibility of any past, existing and forthcoming investment decision, opportunity or project undertaken or to be undertaken by the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

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. We expressly disclaims any liability and/or any loss arising from or in reliance upon the whole or any part of the contents of this letter.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

PRINCIPAL FACTORS TAKEN INTO CONSIDERATION

In formulating our opinion, we have taken into consideration the following principal factors and reasons:

1. BACKGROUP INFORMATION OF THE GROUP

As stated in the Letter from the Board, the Company is a company incorporated in the Cayman Islands with limited liability, whose Shares are listed and traded on the Main Board of the Stock Exchange (Stock Code: 596). The principal activities of the Group are software development and provision of cloud service and Internet of Things solution. The Group caught up with the growth trend of enterprises' demand for digital transformation, focused on "cloud + data + AI" and made full use of new technologies such as cloud computing, big data, Internet of Things, artificial intelligence and block chain to accelerate the upgrading of management software products and cloud services over the past few years. Inspur Enterprise Cloud enterprise resource planning was taken as the new momentum of enterprise transformation and upgrading, aiming to help customers build intelligent enterprises.

Set out below is a summary of the financial information of the Group as extracted from the 2018 Annual Report, and the interim reports of the Company for the six months ended 30 June 2018 (the "2018 Interim Report") and the six months ended 30 June 2019 (the "2019 Interim Report"), details of which are as follows:

	For the year ended	For the six months
	31 December	ended 30 June
	2018	2017	2019	2018
	HK$'000	HK$'000	HK$'000	HK$'000
		(restated)		(restated)
	(audited)	(audited)	(unaudited)	(unaudited)
Revenue	2,442,616	1,965,150	1,391,174	1,115,311
Gross Profit	938,764	697,070	513,160	408,356
Profit before taxation	363,119	184,164	113,321	153,496
Profit for the year/the period
attributable to owners of the
Company	324,030	139,201	113,236	135,491

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

	As at 31 December	As at 30 June
	2018	2017	2019	2018
	HK$'000	HK$'000	HK$'000	HK$'000
		(restated)
	(audited)	(audited)	(unaudited)	(unaudited)
Bank balances and cash	865,181	1,391,022	758,172	1,239,273
Total assets	3,681,696	3,861,005	3,771,019	3,116,825
Total equity	2,053,097	1,803,026	2,204,997	2,152,125

For the year ended 31 December 2018

Revenue for the year ended 31 December 2018 was approximately HK$2,442.6 million when compared to a revenue of approximately HK$1,965.2 million for the corresponding period in 2017, representing an increase of approximately 24.3%. The revenue of management software and cloud services for the year was approximately HK$2,107.5 million (2017: approximately HK$1,723.4 million), representing an increase of approximately 22.3% and the revenue from the Internet of things was approximately HK$335.1 million (2017: approximately HK$241.7 million), representing an increase of approximately 38.6% as compared with last year. During the year ended 31 December 2018, cloud business got rapid growth in revenue and quickly expansion in business scale.

Profit attributable to owners of the Company for the year ended 31 December 2018 was approximately HK$324.0 million when compared to a profit attributable to owners of the Company for the corresponding period in 2017 of approximately HK$139.2 million, representing an increase of approximately 132.8%. The main reasons were that (i) the company's main management software business continued to grow steadily and achieved a good economic scale; (ii) the profits from new-acquired Inspur Tianyuan Communications System Co., Ltd.* (浪潮天元通信信息系統有限公司) during the year ended 31 December 2018 were beyond the profit target and got steady growth compared with the corresponding period; (iii) share from the profits of investment associates got a substantial growth.

Bank balances and cash as at 31 December 2018 amounted to approximately HK$865.2 million, which represented a decrease of approximately 37.8% as compared to approximately HK$1,391.0 million as at 31 December 2017, and represented approximately 23.5% of the total assets of the Group at the same date.

The total equity of the Group as at 31 December 2018 amounted to approximately HK$2,053.1 million, which represented an increase of approximately 13.9% as compared to approximately HK$1,803.0 million as at 31 December 2017.

For the six months ended 30 June 2019

Revenue for the six months ended 30 June 2019 was approximately HK$1,391.2 million when compared to a revenue of approximately HK$1,115.3 million for the corresponding period in 2018 representing an increase of approximately 24.7%. The revenue from Cloud Services for the period was approximately HK$160.6 million (2018 restated: approximately HK$78.6 million), representing an

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

increase of approximately 104.4% comparatively. The revenue from Enterprise Resource Management for the period was approximately HK$1,043.5 million (2018 restated: approximately HK$900.3 million), representing an increase of approximately 15.9% as compared with last same period. The revenue from the Internet of things was approximately HK$187.1 million (2018 restated: approximately HK$136.4 million), representing an increase of approximately 37.2% as compared year-on-year. Revenue from cloud services weighted approximately 11.5% of total revenue and was the new growth driven.

Profit attributable to owners of the Company for six months ended 30 June 2019 was approximately HK$113.2 million when compared to a profit attributable to owners of the Company for the corresponding period in 2018 of HK$135.5 million, representing a decrease of approximately 16.4%. The main reasons were that (i) during the six months ended 30 June 2019, the share of profit from an associate was approximately HK$23.2 million (2018: approximately HK$61.4 million) and represented a decrease of approximately 62% compared with last same period and (ii) segment profit from operation business was increased which set-off part of the reduction.

Bank balances and cash as at 30 June 2019 amounted to approximately HK$758.2 million, which represented a decrease of approximately 38.8% as compared to approximately HK$1,239.3 million as at 30 June 2018, and represented approximately 20.1% of the total assets of the Group at the same date.

The total equity of the Group as at 30 June 2019 amounted to approximately HK$2,205.0 million, which represented an increase of approximately 2.5% as compared to approximately HK$ 2,152.1 million as at 30 June 2018.

2. BACKGROUP INFORMATION OF THE INSPUR GROUP COMPANIES

3. SECOND SUPPLEMENTAL AGREEMENT

Date

5 November 2019

Parties

The Company (for itself and on behalf of the Group)
Inspur Group (for itself and on behalf of the Inspur Group Companies)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Subject of the Second Supplemental Agreement

Condition precedent

Selling Agency Transactions

The Group appoints the Inspur Group Companies 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"). The Ministry only grants around 200 enterprises the same Qualification as Inspur Group Companies 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.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have reviewed the Qualification Management Policy of the Inspur Group Companies, which is the internal control policy used by the Inspur Group Companies to govern the transactions relevant to the Selling Agency Transactions taking into account the cost of maintaining the Qualification by the Inspur Group Companies and is therefore one of the references of the Group to assess the fairness and reasonableness of the terms of the Selling Agency Transactions. We note that it is the general business policy of the Inspur Group Companies 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 Companies has been charging the Group selling agency commission of not more than 1% for the past few years, where the Group in return could enjoy the benefits arising from the well-established business platform and network of the Inspur Group to strengthen its revenue stream. Based on the aforementioned factors, particularly (i) the potential enhancement of the sales of the Group through the arrangements; (ii) the commission rate under the Selling Agency Transactions is accordance with the general business policy of the Inspur Group Companies; (iii) the Group can have the flexibility to leverage on the industry position of the Inspur Group Companies to strengthen the revenue of the Groups, we consider the Selling Agency Transactions to be on normal commercial terms and fair and reasonable to the Company and its shareholders as a whole.

Furthermore, the relevant Inspur Group Companies will receive the net proceeds (after deduction of the related commission) within five days after the payment has been received from the third party customers) and all Inspur Group Companies including the Company are subject to the same commission rate and payment terms and thus we consider that the payment arrangement under the Selling Agency Transactions to be fair and reasonable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

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. As advised by the Company, based on its understanding of the industry and application requirements of higher class qualification, the Company believes that using the Qualification to participate in the relevant public tenders is unrelated to and has no influence on a future process of obtaining a higher class qualification. The Company may apply for a higher class qualification (for example, a second-class or third-class qualification) and is currently assessing the Group's position against the requirements of such application. According to preliminary research, the requirements focus on the applicant's experience in the industry, scale and operations. The Selling Agency Transactions thus will not impact the Company's plan to obtain a higher class qualification in the future. The Company however does not currently plan to obtain the first-class qualification as one of the conditions of such application is that the applicant must have held the second-class qualification for at least three years. There are also specific requirements on the applicant's scale and operations such as its capital, assets, revenue, office space and research and development centres.

We concur with the Director's view that the new annual caps for Selling Agency Transactions are appropriate and will not cause over-reliance on Inspur Group Companies as (i) the Selling Agency Transactions contributed during the last three years from 2016 to 2018 (the Selling Agency Transactions contributed to 27.14%, 27.20% and 28.27% of the Group's revenue in 2016, 2017 and 2018 respectively) and is expected during the three years ending 31 December 2021 to contribute to less than half of the Company's revenue; (ii) the Group will deal directly with its existing customers without using the Qualification; (iii) the Group will still be able to participate in certain public tenders without the Qualification; (iv) the Group will only use the Qualification in public tenders that either require first-class qualification or the Company reasonably believes that using the Qualification will significantly increase its chances of winning; and (v) the Group will participate in the negotiation and finalization of the terms of contracts with and provide the products directly to the ultimate third party customers in the Selling Agency Transactions. By using the first-class qualification however, the Group will be able to participate in larger-scale public tenders and enjoy a higher overall rating in public tenders to increase its chance of winning. As mentioned under the paragraph headed "Internal Control Measures" below, the Company monitors the monthly transacted amounts of the Selling Agency Transactions. If the monthly transacted amounts exceed half of the Group's total revenue of the respective month, the potential over-reliance issue will be reported to the senior management, who will then decide whether to continue conducting the Selling Agency Transactions or consult the Stock Exchange as appropriate.

4. EXISTING ANNUAL CAPS

According to the Framework Agreement, the annual cap amounts in relation to the Selling Agency Transactions are:

		Year ended	Year ending	Year ending
(All amounts in RMB'000)	31 December 2018	31 December 2019	31 December 2020
Selling Agency Transactions
-	(value of transactions)	600,000	720,000	864,000
-	(related commission)	6,000	7,200	8,640

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have reviewed the 2018 Annual Report and noted that the aggregate transactions under Selling Agency Transactions for the year ended 31 December 2018 amounted to RMB582,930,000 and the related commission amounted to RMB5,823,000, which did not exceed the annual caps of the Selling Agency Transactions for that year.

Furthermore, we obtained the information from the Company and noted that (i) the transaction amounts of the Selling Agency Transactions provided under the Framework Agreement during the period commencing from 1 January 2019 to 31 October 2019 have reached approximately RMB678,327,556 (value of transactions) and RMB6,780,677 (related commission), representing a utilization rate of the original 2019 annual caps of approximately 94.21% and 94.18%, respectively; and (ii) the annual caps of the Selling Agency Transactions provided under the Framework Agreement for the year ending 31 December 2019 have not been exceeded as at the Latest Practicable Date.

5. REVISED AND NEW ANNUAL CAPS

for the year ending 31 December 2021, set at RMB1,306,800,000 (value of transactions) and RMB13,068,000 (related commission). The foregoing annual cap amounts do not include any tax or duty (such as Value Added Tax).

As set out in the Letter from the Board, the revised annual caps of the Selling Agency Transactions provided for the two years ending 31 December 2020 and the new annual caps of the Selling Agency Transactions provided for the year ending 31 December 2021 are determined after taking into account the factors and assumption, including (i) recent historical transacted amount of Selling Agency Transactions; (ii) orders which have been fulfilled and sale orders on hand; and (iii) an expected annual growth rate of 10% assuming continued growth in demand for Selling Agency Transactions and general inflation.

In respect of the revised annual caps of the Selling Agency Transactions provided for the two years ending 31 December 2020 and the new annual caps of the Selling Agency Transactions provided for the year ending 31 December 2021, we have discussed with the Management and are given to understand that the revised annual caps of the Selling Agency Transactions for the year ending 31 December 2019 are estimated primarily based on the recent historical transacted amount of Selling Agency Transactions and orders which have been fulfilled and sale orders on hand. Based on the information provided by the Company, we note that (i) during the period commencing from 1 January 2019 to 31 October 2019, the transaction amounts of the Selling Agency Transactions provided under the Framework Agreement have reached approximately RMB678,327,556 (value of transactions) and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RMB6,780,677 (related commission), representing a utilization rate of approximately 94.21% and 94.18%, respectively and (ii) as at the Latest Practicable Date, there are at least 30 sale orders on hand and the estimated transaction amounts of the sale orders for the two months ending 31 December 2019 are approximately RMB287 million.

We have also reviewed the financial statements of the Company and noted that the Company's revenue grew approximately 24.73% from the six months ended 30 June 2018 to the six months ended 30 June 2019 and approximately 24.30% from the year ended 31 December 2017 to the year ended 31 December 2018, which also reflects the latest business growth trend of the Group. According to the Software Industry Report of the First Three Quarters of 2019 (2019年前三季度軟件業經濟運行情

況) published by the Ministry, the software industry in the PRC has recorded a year-on-year growth of 15.2% in total revenue for the nine months ended 30 September 2019. Furthermore, we have enquired with the Management and are given to understand that based on the public tenders made and sale orders on hand under negotiation, the Board expects the growth in demand for the Company's various IT service products selling through the Inspur Group Companies as its selling agent to continue for the rest of 2019, 2020 and 2021. The Board however also expects the Company to diversify its business as a result of its acquisition of Inspur Tianyuan Communications System Co., Ltd.* (浪潮天元通信信息系統有限公司) , which was completed earlier this year, and focus on other business areas such as the provision of application software and big-data services for industries such as telecommunications, energy and transportation and the development of Internet of Things and data analysis products and industrial internet platform. The Board believes that the growth in the volume of the Selling Agency Transactions will be slightly slower than that of the industry. As such, we concur with the Director's views that the estimated 10% annual growth rate is conservative but fair and reasonable. The Inspur Group Companies are 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 Inspur Group's Qualification if it terminates the appointment of Inspur Group Companies as its selling agent. By entering into the Second Supplemental Agreement, the Group can continue to derive benefits from the Selling Agency Transactions which can capture the synergic advantages of both the Group and the Inspur Group Companies.

Taking into account the above, we are of the view that the revised and new annual caps for the Selling Agency Transactions are fair and reasonable so far as the Independent Shareholders are concerned.

6. INTERNAL CONTROL MEASURES

As mentioned in the Letter from the Board, the market strategies, including the pricing mechanisms, are determined by the Company's operations department. There is a segregation of duties between the Company's sales department and operations department. The sales department is responsible for contacting customers, setting quotation and entering into the contracts. The operations department is in charge of setting the price and other terms, through which it will control and monitor the fee quotation. For public tenders, the operations department will assess the suggested range of the contract price before the Company decides whether to participate in such public tender. The operations department will periodically review and conduct internal audit and, if necessary, adjust the pricing and commercial terms with reference to the market situation and the same or similar transactions entered into by the Inspur Group Companies with Independent Third Parties.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In the beginning of each year, the finance department will allocate a rough amount to the relevant entities in the Group and provides guidance and advice to the Company's operation department on the amount incurred under the Selling Agency Transactions each year. By monitoring the monthly transacted amounts and the future sales orders in the next two months forecasted by the operation department of the Selling Agency Transactions and checking the net proceeds received by the Group (after deducting the selling agency commission) against the payment the Inspur Group Companies received from the ultimate third party customers each month, the finance department will analyse the implementation of the Selling Agency Transactions monthly to ensure that the selling agency commission payable to the Inspur Group Companies is not more than 1% of the selling price pursuant to the Second Supplemental Agreement and the annual caps have not been exceeded. When the value of the Selling Agency Transactions transacted reaches around 80% of the annual caps on an aggregated basis, it will be reported to the senior management. If the senior management decides to increase the annual caps for the relevant year, the Company will commence the process to increase the annual caps (including to obtain shareholders' approval) and allow about 1.5 to 2 months to complete such process. In any case, the Group will stop taking on sales orders or entering into public tenders that will have the effect of exceeding the annual caps before the process has been completed.

The Directors (including independent non-executive directors of the Company) will review the pricing terms and the payment terms of the Selling Agency Transactions each year so as to confirm that the terms are fair and reasonable, on normal commercial terms or better than those offered to or by Independent Third Parties and in the interests of the Company and the Shareholders as a whole. As mentioned under the paragraph headed "Selling Agency Transactions" above, the Directors are currently not aware of any other company in the industry that would allow an independent third party to use the first-class qualification. It is therefore not possible to seek quotes from third parties. However, if this is no longer the case, the Directors will ensure that that the terms of appointing Inspur Group as the Company's selling agent and using the Qualification in the Selling Agency Transactions are fair and reasonable, and on normal commercial terms or better than those offered by Independent Third Parties. The auditors of the Company will also report on the Selling Agency Transactions in accordance with Rule 14A.56 of the Listing Rules on an annual basis.

In light of the reporting requirements attached to the Selling Agency Transactions, in particular,

the restriction of the value of the Selling Agency Transactions by way of the revised and new annual caps; and (ii) the ongoing review by the independent non-executive Directors and the auditors of the Company of the terms of the Selling Agency Transactions and the revised and new annual caps not being exceeded, we are of the view that appropriate measures will be in place to govern the conduct of the Transactions and safeguard the interests of the Independent Shareholders.

− 28 −

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Having considered the principal factors and reasons above, we consider that the terms of the Second Supplemental Agreement are on normal commercial terms and entered into in the ordinary and usual cause of business of the Company, together with the revised and new annual caps, are fair and reasonable so far as the Independent Shareholders are concerned. We therefore recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution to the Second Supplemental Agreement and the transactions contemplated thereunder at the EGM.

Yours faithfully,

For and on behalf of

Amasse Capital Limited

Michael Lam

Managing Director

Mr. Michael Lam is a licensed person registered with the Securities and Future Commission of Hong Kong and regards as a responsible officer of Amasse Capital Limited to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activity under the SFO and has over 20 years of experience in corporate finance industry.

− 29 −

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

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:

Long positions in Shares

			Percentage of
			issued share
			capital of the
Name of Director	Type of interests	Number of Shares	Company
Dong Hailong	Beneficial owner	4,000	0.00%

− 30 −

APPENDIX

GENERAL INFORMATION

Long positions in underlying Shares of the Company

					Percentage
					of the issued
		Description			share capital
		of equity	Number of	of the
Name of Director	Type of interests	derivatives	underlying Shares	Company
Wang Xingshan	Beneficial owner	Share option	3,600,000	(note 2)	0.32%
Lee Eric Kong	Beneficial owner	Share option	3,000,000	(note 1)	0.26%
			2,800,000	(note 2)	0.25%
Jin Xiaozhou, Joe	Beneficial owner	Share option	825,000	(note 2)	0.07%
Wong Lit Chor,	Beneficial owner	Share option	200,000	(note 2)	0.02%
Alexis
Zhang Ruijun	Beneficial owner	Share option	200,000	(note 2)	0.02%
Ding Xiangqian	Beneficial owner	Share option	200,000	(note 2)	0.02%

Note 1: The share options were granted on 1 December 2017.

Note 2: The share options were granted on 16 October 2018.

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.

− 31 −

APPENDIX

GENERAL INFORMATION

Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO

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:

(i) Long positions in Shares
			Approximate
		Number of	percentage
Name of Shareholders	Type of interests	Shares	of interests
Inspur Group Co., Ltd.*	Interest in a controlled	621,679,686	54.58%
(浪潮集團有限公司)	corporation (Note)
Inspur Overseas Investment	Beneficial owner (Note)	428,278,400	37.60%
Limited
Inspur Cloud Computing	Beneficial owner (Note)	193,401,286	16.98%
Investment Limited
Wang Yu Kun	Beneficial owner	64,896,000	5.69%

Note: Inspur Group is taken to be interested in 621,679,686 shares due to its indirect 100% shareholdings in the issued share capital of Inspur Overseas Investment Limited and Inspur Cloud Computing Investment Limited.

− 32 −

APPENDIX

GENERAL INFORMATION

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 capital	10%
Information Technology		of Wuxi Inspur Business
Company Limtied* (無錫		Technology Company Limited*
易捷信誠信息技術有限公		(無錫浪潮商服信息技術有限公司)
司)
Fang Wensheng	Beneficial owner	RMB345,000 in the registered capital	34.5%
		of Ji'nan Inspur Fangzhi
		Information Technology Company
		Limited*
		(濟南浪潮方智信息技術有限公司)
Bao Jianhua	Beneficial owner	RMB150,000 in the registered capital	15%
		of Ji'nan Inspur Fangzhi
		Information Technology Company
		Limited*
		(濟南浪潮方智信息技術有限公司)
Shanghai Huili Co. Ltd.*	Beneficial owner	RMB50,000 in the registered capital of	10%
(上海滙力有限公司)		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 capital of	10.36%
		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 capital of	11.05%
		Shangdong Inspur Financial
		Software Information Company
		Limited* (山東浪潮金融軟件信息有
		限公司)
Ji'nan Shaoting Cloud	Beneficial owner	RMB5,680,000 in registered capital of	19.14%
Network Information		Shangdong Inspur Yiyun Online
Technology Company		Technology Company Limited*
Limited* (濟南紹廷雲網信		(山東浪潮易雲在線科技有限公司)
息技術有限公司)
Ji'nan Ronghui Yixiang	Beneficial owner	RMB5,320,000 in registered capital of	17.92%
Corporate Management		Shandong Inspur Yiyun Online
and Consultancy		Technology Company Limited*
Company Limited* (濟南		(山東浪潮易雲線上科技有限公司)
融匯易享企業管理諮詢有
限公司)
Odoo S.A	Beneficial owner	USD1,000,000 in registered capital of	20%
		Inspur Odoo (HK) Limited

English names are for identification purpose only

− 33 −

APPENDIX

GENERAL INFORMATION

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 2018, being the date to which the latest published audited financial statements of the Company were made up.

There is no contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date in which any Director is materially interested and which is significant to the business of the Group.

4. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or arbitration of material importance and there was no litigation or claims of material importance known to the Directors to be pending or threatened by or against any member of the Group.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Group (excluding contracts expiring or terminable by the employer within one year without payment of compensation other than statutory compensation).

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2018, being the date to which the latest audited financial statements of the Company were made up.

− 34 −

APPENDIX

GENERAL INFORMATION

7. EXPERT

Amasse Capital Limited 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 is contained in this circular:

NameQualification

Amasse Capital Limited	a licensed corporation to carry
	securities) and Type 6 (advising
	regulated activity under the SFO

on Type 1 (dealing in on corporate finance)

As at the Latest Practicable Date, Amasse Capital Limited 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 2018), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

8. MISCELLANEOUS

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.
The principal share registrar and transfer office of the Company is Royal Bank of Canada Trust Company (Cayman) Limited at 4th Floor, Royal Bank House, 24 Shedden Road, George Town, Grand Cayman KY1-1110, 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.
Ms. Chan Wing and Mr. Zou Bo are joint company secretaries of the Company. Ms. Chan is a fellow 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.
The English text of this circular and the accompanying form of proxy shall prevail over their respective Chinese texts in case of inconsistency.

− 35 −

APPENDIX

GENERAL INFORMATION

9. 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:

the Framework Agreement;
the First Supplemental Agreement;
the Second Supplemental Agreement;
the letter from the Independent Board Committee, as set out on pages 15 to 16 of this circular;
the letter from the Independent Financial Adviser, as set out on pages 17 to 29 of this circular;
the written consent referred to in the section headed "Expert" of this Appendix; and
this circular.

− 36 −

NOTICE OF 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 Centre, 1 Wang Kwong Road, Kowloon Bay, Kowloon, Hong Kong, on Friday, 13 December 2019 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolutions as the ordinary resolution of the Company:

ORDINARY RESOLUTION

"THAT:

the Second Supplemental Agreement (as defined in the circular of the Company dated 28 November 2019 (the "Circular")) (copy of the Second Supplemental Agreement has been tabled at the meeting and marked "A" signed by the Chairman of the meeting for the purpose of identification) be and are hereby approved confirmed and ratified;
the proposed revised annual caps of the Selling Agency Transactions (as defined and more particularly described in the Circular) for the two years ending 31 December 2020 and the proposed extension of the Selling Agency Transactions to the year ending 31 December 2021 under new annual caps be and are hereby approved and confirmed; and
the Directors of the Company be and are hereby authorized to take such actions and execute such documents as they may consider appropriate and expedient to carry out or give effect to or otherwise in connection with or in relation to the Second Supplemental Agreement (including the revised annual caps for the two years ending 31 December 2020 and the extension of the Selling Agency Transactions to the year ending 31 December 2021 under new annual caps)."

By Order of the Board

Inspur International Limited

Mr. Wang Xingshan

Chairman

Hong Kong, 28 November 2019

− 37 −

	NOTICE OF EGM
Registered office:	Head office and principal place of
Cricket Square	business in Hong Kong:
Hutchins Drive	Flat 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.
For the purpose of determining the Shareholders who are entitled to attend and vote at the EGM, the register of members of the Company will be closed from Thursday, 12 December 2019 to Friday, 13 December 2019, both days inclusive. In order to qualify for attending and voting at the EGM, all transfer documents together with the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen's Road East, Hong Kong not later than 4:30 p.m. (Hong Kong time) on Wednesday, 11 December 2019.
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 comprises Mr. Wang Xingshan, Mr. Lee Eric Kong and Mr. Jin Xiaozhou, Joe as executive Directors, Mr. Dong Hailong as non-executive Director, and Ms. Zhang Ruijun, Mr. Wong Lit Chor, Alexis and Mr. Ding Xiangqian as independent non-executive Directors.

− 38 −

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Disclaimer

Inspur International Limited published this content on 27 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 November 2019 12:37:04 UTC

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INSPUR INTERNATIONAL LIMITED is an investment holding company principally engaged in information technology (IT) businesses. The Company operates through three segments. The Management Software segment is engaged in the provision of software development as well as provides shared service solutions for enterprises of different sizes and types. The Internet of Things (IoT) Solution segment engages in the provision of sale of IT peripherals and softwares. The business was mainly provided to the grain industry and the communications industry. The Cloud Services segment provides cloud services including financial cloud, human resource cloud, procurement cloud, collaborative cloud, travel cloud, tax management cloud, marketing cloud and others.

Sector

IT Services & Consulting

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