長城科技股份有限公司 Great Wall Technology Company Limited

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Great Wall Technology Company Limited, you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. GWT 長城科技股份有限公司 Great Wall Technology Company Limited (A joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 0074) (1) VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED ACQUISITION OF PHILIPS TV BUSINESS IN EUROPE AND CERTAIN SOUTH AMERICAN COUNTRIES THROUGH A JOINT VENTURE WITH PHILIPS (2) POSSIBLE VERY SUBSTANTIAL ACQUISITION IN RELATION TO THE PROPOSED GRANTING OF THE PHILIPS PUT OPTIONS (3) CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE PROPOSED LICENSING OF THE PHILIPS TRADEMARKS AND THE PHILIPS SECONDARY TRADEMARKS (4) CONTINUING CONNECTED TRANSACTIONS IN RELATION TO THE PROPOSED ENTERING INTO THE INTELLECTUAL PROPERTY AGREEMENT, THE AUXILIARY AGREEMENTS AND THE REVERSED AUXILIARY AGREEMENTS REGARDING THE JOINT VENTURE WITH PHILIPS Independent financial adviser to the Independent Board Committee and the independent Shareholders SOMERLEY LIMITED A letter from the Board is set out on pages 14 to 76 of this circular and a letter from the Independent Board Committee is set out on pages 77 to 78 of this circular. A letter from Somerley, containing its advice to the Independent Board Committee and the independent Shareholders is set out on pages 79 to 129 of this circular. A notice convening an extraordinary general meeting of the Company to be held at 16th Floor, Great Wall Technology Building, No. 2 Keyuan Road, Technology and Industry Park, Nanshan District, Shenzhen, PRC on 21 February 2012 at 9:30 a.m. is set out on pages 356 to 357 of this circular. Whether or not you are able to attend the meeting, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon as soon as possible and in any event not less than 24 hours before the time of meeting to the office of the Company’s H shares registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong (in the case of holders of H shares) or to the Company’s legal address at No. 2 Keyuan Road, Technology and Industry Park, Nanshan District, Shenzhen, PRC (in the case of holders of domestic shares). Completion of the form of proxy will not preclude you from attending and voting at the meeting should you so wish. 23 December 2011 CONTENTS Page DEFINITIONS ................................................................ 1 LETTER FROM THE BOARD ................................................... 14 LETTER FROM INDEPENDENT BOARD COMMITTEE . 77 LETTER FROM SOMERLEY . 79 APPENDIX I – FINANCIAL INFORMATION OF THE GROUP . 130 APPENDIX II – ACCOUNTANT’S REPORT ON THE PHILIPS BUSINESS . 240 APPENDIX III – UNAUDITED PRO FORMA FINANCIAL STATEMENT OF THE ENLARGED GROUP ............................... 291 APPENDIX IV – MANAGEMENT DISCUSSION AND ANALYSIS OF THE ENLARGED GROUP ............................... 308 APPENDIX V – GENERAL INFORMATION ................................... 343 NOTICE OF EXTRAORDINARY GENERAL MEETING ............................. 357 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions have the following meaning: “2010 Trademark License an agreement dated 29 September 2010 entered into between Agreement” Philips, AOC and TPV for granting to AOC and its affiliates an exclusive right and license to use the certain Philips trademarks on certain TVs and related promotional materials in the PRC “3D Patents” patents that enable an auto-stereoscopic three-dimensional viewing experience (glasses-free three-dimensional) “Acquisition” the proposed acquisition by MMD of a 70% equity interest in JVCo from Philips pursuant to the terms and conditions of the Sale and Purchase Agreement “acting in concert” has the meaning ascribed to it under the Takeovers Code “Announcement” the announcement dated 9 November 2011 issued by the Company in respect of, among other things, the Sale and Purchase Agreement and Proposed Transactions “Annual Cap(s)” the maximum annual aggregate value(s) for the transaction contemplated under the Trademark License Agreement (including the consumer care service for the Scope Products sold prior to Completion), the Secondary Trademark License Agreement, the Intellectual Property Agreement, the Transitional Services Agreement, the IT Transitional Service Level Agreement, the Remote Control Sale Agreement, the NET TV License and Services Agreement, the Online Shop and My Shop Agreement, the Brazil Lease Agreement, the Dixtal Lease Agreement, the Hungary Lease and Service Agreement and the Tax Audit Service Agreement for the period from the date of Completion to 31 December of various years as set out in this announcement “AOC” AOC Holdings Limited, a wholly-owned subsidiary of TPV “Argentina JV” Fabrica Austral de Productos Eléctricos S.A., a company incorporated in Argentina, which will be owned as to 63.4% by JVCo and 36.6% by Philips Argentina immediately upon Completion (subject to adjustment) “Argentina JV Shareholders the agreement to be entered into at Completion among JVCo, Agreement” Philips Argentina S.A., the Argentina JV and Philips in respect of, among other things, the relationship of the shareholders of the Argentina JV 1 DEFINITIONS “Argentina Non-TV Transactions” continuing transactions between Argentina JV and Philips relating to the non-TV business unit of Argentina JV, the details of which are set out in sub-paragraph headed “Argentina Non-TV Transactions” under the section headed “(III) The entering into of the Argentina JV Shareholders Agreement” “associate(s)” has the meaning ascribed to it under the Listing Rules “Assumed Employees” those persons proposed to be employed by the JV Group at Completion pursuant to the Disentanglement “Auxiliary Agreements” collectively, the Transitional Services Agreement, the IT Transitional Service Level Agreement and the Remote Control Sale Agreement “Board” the board of Directors “Brazil Lease Agreement” an agreement to be entered into at Completion between TP Vision Indústria Eletrônica Ltda., a wholly-owned of JVCo, and Philips Do Brasil Ltda., which is ultimately owned by Philips, in respect of the lease by TP Vision Indústria Eletrônica Ltda.to Philips Do Brasil Ltda. of a property in Brazil. “Bridge Facility” the revolving facility in the amount of EUR100 million (equivalent to approximately US$140 million) to be provided by Philips (or its nominee) to JVCo at Completion “CEC” China Electronic Corporation, a state-owned company incorporated in the PRC, being the ultimate parent of the Company “CKD” complete knock down assembly kit “CEC Group” CEC and its subsidiaries from time to time “Company” Great Wall Technology Company Limited (長城科技股份有限公司), a joint stock limited company incorporated in the PRC with limited liability, whose H shares are listed on the Hong Kong Stock Exchange “Completion” completion of the Acquisition “Completion Date” date of Completion “Continuing Connected the Trademark License Agreement, the Secondary Trademark Transactions” License Agreement, the Intellectual Property Agreement, the Auxiliary Agreement, the Reversed Auxiliary Agreement and the transactions contemplated thereunder 2 DEFINITIONS “connected person(s)” has the meaning ascribed to it under the Listing Rules “Consumer Care” the after sales service and support as set out in the Trademark License Agreement “CRT” cathode ray tube “Deferred Purchase Price” an amount equal to 70% of JV Group’s average audited consolidated EBIT in each financial year commencing from (and including) the year ending 31 December 2012 to (and including) the Last Year multiplied by four, provided that, if the above calculation results in a negative number, then the Deferred Purchase Price is deemed to be zero “Director(s)” the directors of the Company from time to time “Disentanglement” all the steps which are necessary to be carried out by Philips or a relevant member of the Philips Group in order to transfer the Philips Contributed Business to the JV Group (including, for the avoidance of doubt, the joint venture arrangement with respect to the Argentina JV and related “spin off” as contemplated under the Argentina JV Shareholders Agreement) “Dixtal” Dixtal Biomedica Industria e Comércio Ltda., a wholly-owned subsidiary of Philips “Dixtal Lease Agreement” an agreement dated 22 September 2009 entered into between Philips Brazil, and Dixtal, which is ultimately owned by Philips “EBIT” earnings before interest and taxes and adjusted pursuant to the terms of the Sale and Purchase Agreement “EGM” the extraordinary general meeting of the Company to be convened on

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