F-1/A

As filed with the Securities and Exchange Commission on January 27, 2010

Registration No. 333-164216

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 2

TO

Form F-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

IFM Investments Limited

(Exact Name of Registrant as Specified in its Charter)

Cayman Islands	6531	Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

26/A, East Wing, Hanwei Plaza

No.7 Guanghua Road, Chaoyang District

Beijing 100004, People’s Republic of China

(86-10) 6561-7788

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

CT Corporation System

111 Eighth Avenue

New York, New York 10011

(212) 664-1666

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Edmund C. Duffy, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, NY 10036 (212) 735-3000 Jon L Christianson, Esq. Peter X. Huang, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 30^th Floor, Tower 2, China World Trade Center No. 1 Jianguomenwai Avenue Beijing, China 100004 (8610) 6535-5500 David T. Zhang, Esq. Allen C. Wang, Esq. Latham & Watkins 41^st Floor, One Exchange Square 8 Connaught Place, Central Hong Kong (852) 2522-7886

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ¨

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be registered	Amount to be registered(1)(2)	Proposed maximum offering price         per share(1)	Proposed maximum aggregate offering price(1)	Amount of registration fee
Class A ordinary shares, par value US$0.001 per share(3)	215,409,375	US$0.5333	US$114,885,000	US$8,192	(4)

(1) Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act.

(2) Includes (a) Class A ordinary shares represented by American depositary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the share are first bona fide offered to the public, and (b) Class A ordinary shares represented by American depositary shares to be sold upon the exercise of the underwriters’ option to purchase additional Class A ordinary shares. These Class A ordinary shares are not being registered for the purposes of sales outside the United States.

(3) American depositary shares evidenced by American depositary receipts issuable upon deposit of the Class A ordinary shares registered hereby will be registered pursuant to a separate registration statement on Form F-6 (Registration No.333-164239). Each American depositary share represents fifteen (15) Class A ordinary shares.

(4) Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

Subject to completion

Preliminary prospectus dated January 27, 2010

12,487,500 American Depositary Shares

IFM Investments Limited

Representing 187,312,500 Class A Ordinary Shares

This is our initial public offering. We are offering 12,487,500 American depositary shares, or ADSs, each representing fifteen (15) of our Class A ordinary shares, par value US$0.001 per share. No public market currently exists for our Class A ordinary shares or ADSs.

We currently anticipate the initial public offering price of our ADSs to be between US$7.00 and US$8.00 per ADS. We have received an approval for listing our ADSs on the New York Stock Exchange under the symbol “CTC.”

Investing in our ADSs involves a high degree of risk. See “Risk Factors” beginning on page 13.

	Per ADS	Total
Public Offering Price	US$	US$
Underwriting Discount	US$	US$
Proceeds, before expenses, to Us	US$	US$

We have granted the underwriters a 30-day option to purchase up to 1,873,125 additional ADSs at the initial public offering price less the underwriting discount and commission.

Delivery of our ADSs will be made on or about                     , 2010.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

Goldman Sachs Morgan Stanley

William Blair & Company Oppenheimer & Co.

The date of this prospectus is                     , 2010.

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	13
FORWARD-LOOKING STATEMENTS	31
USE OF PROCEEDS	32
DIVIDEND POLICY	33
CAPITALIZATION	34
DILUTION	36
EXCHANGE RATE INFORMATION	38
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA	39
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	42
OUR INDUSTRY	65
OUR BUSINESS	74
OUR CORPORATE HISTORY AND STRUCTURE	89
MANAGEMENT	92
PRINCIPAL SHAREHOLDERS	98
OUR RELATIONSHIP WITH REALOGY AND RELATED PARTY TRANSACTIONS	100
REGULATIONS	104
DESCRIPTION OF SHARE CAPITAL	110
SHARES ELIGIBLE FOR FUTURE SALE	122
DESCRIPTION OF AMERICAN DEPOSITARY SHARES	124
TAXATION	134
ENFORCEABILITY OF CIVIL LIABILITIES	140
UNDERWRITING	142
CONFLICTS OF INTEREST	148
EXPENSES RELATING TO THIS OFFERING	148
LEGAL MATTERS	149
EXPERTS	149
WHERE YOU CAN FIND MORE INFORMATION	150
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1

You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with information that is different. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus may only be used where it is legal to offer and sell these securities. Unless otherwise indicated, the information in this document may only be accurate as of the date of this document.

Until                     , 2010, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

PROSPECTUS SUMMARY

You should read the following summary together with the entire prospectus, including the more detailed information regarding us, the ADSs being sold in this offering, and our consolidated financial statements and related notes appearing elsewhere in this prospectus. You should consider carefully, among other things, the matters discussed in the section entitled “Risk Factors.” Unless the context indicates otherwise, all share and per share data in this prospectus give effect to a 10-for-1 share split that became effective on January 4, 2010.

Our Company

We are a leading comprehensive real estate services provider with the largest network of real estate sales offices in China. We are the exclusive franchisor in China for the CENTURY 21^® brand, one of the world’s most recognized brands in the real estate industry. As of September 30, 2009, our CENTURY 21^® China network covered 34 major cities with more than 1,000 sales offices, employed approximately 14,900 sales professionals and staff and maintained approximately 4.7 million property listings. In the first half of 2009, based on transaction volume, we ranked among the top three market leaders in over 90% of the cities in which we operate and were the market leader in more than 30% of those cities. We primarily focus on China’s fast-growing and highly fragmented secondary real estate market, which we expect to outgrow the primary market, especially in more economically prosperous cities.

We operate under three different but closely related business lines: company-owned brokerage services, mortgage management services and franchise services. We have deployed a unique business model that has allowed us to rapidly scale our company-owned operations by leveraging the in-depth market knowledge and human capital developed from our franchise network.

We started our franchise services business in 2000 and have rapidly expanded our franchise network and our brand. Our franchise services business grants regional franchise rights for the CENTURY 21^® brand to regional sub-franchisors in China who, in turn, open their own sales offices or grant third parties the right to open sales offices within their region. We generate revenue from our franchise services by collecting initial franchise fees and ongoing service fees from these regional sub-franchisors. Our franchise network has provided us with valuable information to gauge market maturity and identify potential opportunities to establish and grow our company-owned brokerage services business. Until we launched our company-owned brokerage services business in 2006, we generated our net revenues solely from our franchise services business. We started our company-owned brokerage services business in Beijing and Shanghai in 2006 and in Shenzhen in 2008, and have quickly expanded our company-owned sales office network in these cities through organic growth and acquisitions of sales offices owned by third parties. As of September 30, 2009, we had approximately 280 company-owned sales offices, representing approximately 26.1% of our CENTURY 21^® China network. Our company-owned brokerage services business owns and operates regional sub-franchisors and sales offices in the CENTURY 21^® China network. We generate revenue from our company-owned brokerage services primarily through commissions earned from home buyers, sellers, lessors and lessees. In 2008 and the nine months ended September 30, 2009, our company-owned sales offices contributed approximately 75.4% and 91.9% respectively, of our total net revenues.

In 2008, we launched our independent mortgage management services in Beijing and Shanghai, providing services to customers both inside and outside our CENTURY 21^® China network. Our mortgage management services business provides mortgage advisory services to home buyers and home owners and interim guarantee services to commercial banks. We generate revenue from our mortgage management services primarily through commissions earned from commercial banks in consideration of our advisory services and

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interim guarantee services. Our mortgage management services business is well positioned to take advantage of referrals from our extensive network of company-owned sales offices. In the first nine months of 2009, a substantial majority of the transactions handled by our company-owned brokerage services in which mortgages were utilized made use of our mortgage management services. We have provided services for home mortgages with an aggregate loan amount of approximately RMB6.1 billion since we launched our mortgage management service business through September 30, 2009. Our contingent guarantee obligations associated with our interim guarantees as of September 30, 2009 was RMB829.3 million.

Our rapid growth is supported by our information systems and training programs. Our information systems provide real-time and in-depth management and sales information, support our network of sales offices, and drive our marketing efforts. We strongly believe in training members of our management team, who are generally required to complete quarterly training courses. Additionally, all of our sales professionals are required when they join us to complete training courses that we conduct in-house, and are also required to complete monthly refresher or new skills courses.

We have experienced substantial growth since we commenced operations in 2000. Our total net revenues increased from RMB38.4 million in 2006 to RMB273.4 million in 2008, representing a compound annual growth rate of 166.8%, and from RMB208.9 million in the nine months ended September 30, 2008 to RMB443.7 million in the same period in 2009, representing an increase of 112.4%. After incurring net losses of RMB72.8 million and RMB131.9 million for the years ended December 31, 2007 and 2008, respectively, we became profitable during the nine month period ended September 30, 2009 with a net income of RMB88.3 million (US$12.9 million). We have received numerous awards and recognitions for our service quality and business achievements, including the “Highly Appraised Franchisor Award” by the China Chain Store and Franchise Association in 2008 and 2009, “Prominent Real Estate Services Provider” by Sina.com in 2008, and “Most Reputable Real Estate Services Provider” by Sohu.com in 2009.

Industry Background

The PRC economy has grown significantly since the PRC government introduced economic reforms in the late 1970s. This growth has accelerated since China entered the World Trade Organization in 2001. China’s economic growth, together with an increase in disposable incomes, a rise in urbanization levels, the emergence of a mortgage lending market and government housing reforms, have driven the expansion of China’s real estate market. The secondary residential property market in China has grown significantly as home inventory increases and the turnover rate for existing homes rises. However, the secondary residential property market in China is still at a relatively early stage of development. The ratio between secondary and primary residential property transaction volumes in the first half of 2009 in Beijing and Shanghai was only 1.30 times and 1.94 times, respectively, compared to 13.15 times in the U.S. and 5.16 times in Hong Kong.

The real estate services industry in China, which includes primary brokerage services, secondary brokerage services, mortgage management services and leasing services, has become increasingly specialized as it has grown in size and complexity. Secondary residential property brokerage services include brokerage services for existing home sales, leases and related services. An important aspect of China’s secondary residential property brokerage industry is the predominance of open listings, under which property listings can be marketed simultaneously by multiple agents. As a result, brokerage firms in China rarely share listing information with their competitors and large-scale players in the industry generally have a competitive advantage over their smaller counterparts. The secondary residential property brokerage industry in China is highly fragmented. We believe that industry consolidation will become an increasingly prevalent trend. As the residential mortgage market increases in size and sophistication, specialized mortgage management agents are becoming important channels for commercial banks to distribute their real estate financing products. Amounts of

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outstanding residential mortgages in China grew from RMB825 billion as of December 31, 2002 to RMB2.98 trillion as of December 31, 2008, representing a compound annual growth rate of 23.9%.

Our Strengths and Strategies

We believe that the following strengths differentiate us from our competitors and have enabled us to capture a leading position in the rapidly growing real estate services industry in China:

• We leverage one of the world’s most recognized real estate service brands to drive our leadership in China;

• We have a unique business model that allows us to rapidly scale our distribution network and expand our product and service offerings;

• We are the leader in the faster growing and more sustainable secondary real estate brokerage market;

• We utilize our nationwide network to maintain a growing database of property listings that draws new customers and provides opportunities for future growth;

• We have developed world class, standardized information systems and training systems to support the scalability of our business model; and

• We have an experienced and stable management team.

Our aim is to further widen our leadership as China’s largest real estate service provider, through the following strategies:

• Strengthen our distribution network;

• Expand existing product lines;

• Enhance brand awareness; and

• Invest in human capital management.

Our Challenges and Risks

The successful execution of our strategies is subject to certain challenges and risks that may materially affect us, including:

• Fluctuations in China’s real estate market;

• Uncertainty in the further development and expansion of the real estate services industry in China;

• Governmental regulations of the real estate industry in China;

• Our ability to receive dividends from, and to make loans to and direct investment in, our operations in China as an offshore holding company;

• Our aggregate net losses of RMB204.7 million for the two years ended December 31, 2008, which were partially offset by net income of RMB88.3 million for the nine months ended September 30, 2009; and

• Adverse developments in general business, economic and political conditions globally and in China.

In addition to the foregoing, under Rule 2720 of the Conduct Rules of the Financial Industry Regulatory Authority, Inc., Goldman Sachs (Asia) L.L.C. is technically deemed to have a conflict of interest in connection

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with this offering because one of its affiliates will beneficially own approximately 28.4% of our outstanding ordinary shares immediately prior to the completion of this offering. Accordingly, Morgan Stanley & Co. International plc is acting as the qualified independent underwriter, as defined under such rule, and has participated in the preparation of this prospectus and exercised the usual standards of due diligence in respect of this offering.

Please see “Risk Factors” and other information included in this prospectus for a detailed discussion of these challenges and risks.

Corporate History and Structure

We became the exclusive franchisor of the CENTURY 21^® brand in China on March 22, 2000 through IFM Company Limited, or IFM Co., a Cayman Islands company controlled by one of our founders, Donald Zhang. We incorporated our company, IFM Investments Limited, in the Cayman Islands on November 30, 2005. We underwent a reorganization in 2006. Upon the effectiveness of our reorganization on August 24, 2006, we became the holding company of our various subsidiaries, including IFM Co. From 2006 to 2008, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued a total of 311,367,270 preferred shares to a number of private equity investors and Realogy Corporation, or Realogy, the owner of the CENTURY 21^® brand.

Our principal subsidiaries include:

• IFM Co., which holds the exclusive franchise rights for the CENTURY 21^® brand in China;

• Beijing Anxinruide Real Estate Brokerage Co. Limited, or Beijing Anxin, which owns our company-owned sales offices in Beijing;

• Shanghai Ruifeng Real Estate Investments Consulting Co. Limited, or Shanghai Ruifeng, which owns our company-owned sales offices in Shanghai; and

• CIR Real Estate Consultant (Shenzhen) Co. Limited, or Shenzhen CIR, which owns our company-owned sales offices in Shenzhen.

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The following diagram illustrates our anticipated shareholding and corporate structure with our principal subsidiaries immediately following this offering⁽¹⁾:

(1) Represents economic ownership of our Class A and Class B ordinary shares. Immediately prior to this offering, IFM Overseas Partners, Goldman Sachs Strategic Investments, GL Asia Mauritius II and Realogy each owned 52.1%, 28.4%, 18.4% and 1.1%, respectively, of our ordinary shares.

(2) Consists of 61,108,179 Class A ordinary shares and 80,502,938 Class B ordinary shares, which have substantially the same rights as Class A ordinary shares except that they are not entitled to vote as further described in “Description of Share Capital — Classes of shares.”

Corporate Information

Our principal executive office is located at 26/A, East Wing, Hanwei Plaza, No.7 Guanghua Road, Chaoyang District, Beijing 100004, People’s Republic of China. Our telephone number at this address is (86-10) 6561-7788 and our fax number is (86-10) 6561-3321. Our registered office in the Cayman Islands is located at the offices of Trident Trust Company (Cayman) Limited, Fourth Floor, One Capital Place, P.O. Box 847GT Grand Cayman, Cayman Islands. Our agent for service of process in the United States is CT Corporation System, located at 111 Eighth Avenue, New York, New York 10011.

Investor inquiries should be directed to us at the address and telephone number of our principal executive offices set forth above. Our website is http://www.century21cn.com. The information contained on our website is not part of this prospectus.

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Conventions That Apply to This Prospectus

Unless otherwise indicated, references in this prospectus to:

• “we,” “us,” “our” and “our company” refer to IFM Investments Limited, a Cayman Islands company, and its predecessor entities and its subsidiaries;

• “ADSs” are to our American depositary shares, each of which represents fifteen (15) Class A ordinary shares;

• “ADRs” are to the American depositary receipts, which, if issued, evidence our ADSs;

• “China” and the “PRC” are to the People’s Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau;

• “Shares” or “ordinary shares” are to our ordinary shares, par value US$0.001 per share which include both Class A ordinary shares and Class B ordinary shares;

• “RMB” and “Renminbi” are to the legal currency of China; and

• “US$” and “U.S. dollars” are to the legal currency of the United States.

Unless otherwise indicated, references to our principal subsidiaries in this prospectus are specified as follows:

• “Beijing Anxin” is to Beijing Anxinruide Real Estate Brokerage Co. Limited, a company incorporated in the PRC;

• “IFM Beijing” is to Beijing Aifeite International Franchise Consultant Co. Limited, a company incorporated in the PRC;

• “IFM BJ Broker” is to Beijing IFM International Real Estate Brokerage Co. Limited, a company incorporated in the PRC;

• “IFM Co.” is to IFM Company Limited, a company incorporated in the Cayman Islands;

• “IFM SH” is to Shanghai Yaye Real Estate Brokerage Co. Limited, a company incorporated in the PRC;

• “MMC BJ” is to Beijing Kaishengjinglue Guarantee Co. Limited, a company incorporated in the PRC;

• “MMC SH” is to Shanghai Kaiyi Investment Consultant Management Co. Limited, a company incorporated in the PRC;

• “Shanghai Ruifeng” is to Shanghai Ruifeng Real Estate Investments Consulting Co. Limited, a company incorporated in the PRC; and

• “Shenzhen CIR” is to CIR Real Estate Consultant (Shenzhen) Co. Limited, a company incorporated in the PRC.

Unless otherwise indicated, information in this prospectus assumes that:

• the underwriters do not exercise their option to purchase additional ADSs; and

• all outstanding preferred shares are converted into 158,339,339 of our Class A ordinary shares and 80,502,938 of our Class B ordinary shares upon the closing of this offering.

This prospectus contains translations of certain Renminbi amounts into U.S. dollars at specified rates. All translations from Renminbi to U.S. dollars were made at the noon buying rate in New York City for cable

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transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. Unless otherwise stated, the translation of Renminbi into U.S. dollars has been made at the noon buying rate in effect on September 30, 2009, which was RMB6.8262 to US$1.00. We make no representation that the Renminbi or dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. On January 22, 2010, the noon buying rate was RMB6.8270 to US$1.00.

This prospectus contains references to compound annual growth rate, which represents the rate of return on an annualized basis over the relevant time period.

CENTURY 21^® is a registered trademark owned by a subsidiary of Realogy Corporation.

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The Offering

ADSs offered by us 12,487,500 ADSs.

Offering price We estimate that the initial public offering price will be between US$7.00 and US$8.00 per ADS.

ADSs outstanding immediately after this offering 12,487,500 ADSs (or 14,360,625 ADSs if the underwriters exercise their option to purchase additional ADSs in full).

Ordinary shares outstanding immediately after this offering 605,651,839 Class A ordinary shares and 80,502,938 Class B ordinary shares (or 633,748,714 Class A ordinary shares and 80,502,938 Class B ordinary shares if the underwriters exercise their option to purchase additional ADSs in full).

ADSs Each ADS represents fifteen (15) Class A ordinary shares, par value US$0.001 per ordinary share. The ADSs will be evidenced by American depositary receipts, or ADRs.

The depositary will be the holder of the ordinary shares underlying the ADSs and you will have the rights of an ADR holder as provided in the deposit agreement among us, the depositary and owners and beneficial owners of ADSs from time to time.

You may surrender your ADSs to the depositary to withdraw the ordinary shares underlying your ADSs. The depositary will charge you a fee for such an exchange.

We may amend or terminate the deposit agreement for any reason without your consent. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs.

To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled “Description of American Depositary Shares.” You should also read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus.

Option to purchase additional ADSs We have granted to the underwriters an option, which is exercisable within 30 days from the date of this prospectus, to purchase up to an aggregate of 1,873,125 additional ADSs at the initial public offering price, less underwriting discounts and commissions.

Use of proceeds We estimate that we will receive net proceeds of approximately US$83.6 million from this offering (or US$96.7 if the underwriters exercise their option to purchase additional ADSs in full), after deducting the underwriting discounts, commissions and estimated offering expenses payable by us and assuming an initial public offering price of US$7.50 per ADS, being the mid-point of the estimated range of the initial public offering price shown on the front

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cover of this prospectus. We intend to use the net proceeds from this offering to fund the development of our company-owned brokerage services business through selected strategic acquisitions, by opening additional company-owned sales offices and investing and upgrading our information and operations systems and to fund general corporate purposes.

See “Use of Proceeds.”

Listing We have received an approval for listing our ADSs on the New York Stock Exchange under the symbol “CTC.” Our ordinary shares will not be listed on any exchange or quoted for trading on any automated quotation system or any over-the-counter trading system.

Lock-up We have agreed with the underwriters to a lock-up of our shares for a period ending 180 days after the date of this prospectus. In addition, each of our existing shareholders has also agreed with the underwriters to a lock-up of their shares for a period of 180 days after the date of this prospectus. See “Shares Eligible For Future Sale” and “Underwriting.”

Risk factors See “Risk Factors” in this prospectus beginning on page 13 and other information included in this prospectus for a discussion of the risks you should carefully consider before deciding to invest in our ADSs.

Depositary JPMorgan Chase Bank N.A.

Payment and settlement We expect our ADSs to be delivered against payment on or about             , 2010.

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SUMMARY CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA

You should read the summary consolidated financial information and operating data in conjunction with our financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

The following summary consolidated financial information and operating data for the periods and as of the dates indicated should be read in conjunction with our audited consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. Our summary consolidated statement of operations data for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2009 and summary consolidated balance sheet data as of December 31, 2007 and 2008 and September 30, 2009 have been derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. Our summary consolidated statement of operations data for the nine months ended September 30, 2008 have been derived from our unaudited consolidated financial statements, which are included elsewhere in this prospectus and have been prepared on the same basis as our audited consolidated financial data. The unaudited selected financial data include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary for a fair presentation of the financial position and the results of operations for the interim unaudited period. Our summary consolidated statement of operations data for the year ended December 31, 2006 and summary consolidated balance sheet data as of December 31, 2006 have been derived from our financial statements not included in this prospectus. Our audited and unaudited consolidated financial statements have been prepared and presented in accordance with accounting principles generally accepted in the United States of America, or US GAAP. The historical results are not necessarily indicative of results to be expected in any future period.

	For the Year Ended December 31,						For the Nine Months Ended September 30,
	2006		2007		2008		2008		2009
	(RMB)		(RMB)		(RMB)		(RMB)		(RMB)		(US$)(1)
	(in thousands, except for share and per share data)
							(unaudited)
Statement of Operations Data:
Revenue
Net revenues	38,425		189,029		273,359		208,877		443,691		64,998
Costs and Expenses
Commissions and other agent related costs	(4,620	)	(82,866	)	(151,550	)	(116,250	)	(197,978	)	(29,003	)
Operating costs	(9,914	)	(79,886	)	(146,457	)	(110,889	)	(85,183	)	(12,479	)
Selling, general and administrative expenses	(40,285	)	(94,471	)	(102,952	)	(76,456	)	(70,278	)	(10,295	)
Total costs and expenses	(54,819	)	(257,223	)	(400,959	)	(303,595	)	(353,439	)	(51,777	)
(Loss) / income from operations	(16,394	)	(68,194	)	(127,600	)	(94,718	)	90,252		13,221
Interest income	848		1,708		4,441		2,708		1,575		231
Interest expense	(1,299	)	—		—		—		—		—
Foreign currency exchange loss	(1,537	)	(5,485	)	(5,526	)	(4,458	)	(480	)	(70	)
(Loss) / income before income tax and share of associates’ losses	(18,382	)	(71,971	)	(128,685	)	(96,468	)	91,347		13,382
Income tax	(799	)	(394	)	(2,076	)	(1,780	)	(2,821	)	(414	)
Share of associates’ losses	(373	)	(409	)	(1,126	)	(1,050	)	(193	)	(28	)
Net (loss) / income	(19,554	)	(72,774	)	(131,887	)	(99,298	)	88,333		12,940
Non-controlling interest	1,524		(1,347	)	(431	)	(431	)	—		—
Net (loss) / income attributable to IFM Investments Limited	(18,030	)	(74,121	)	(132,318	)	(99,729	)	88,333		12,940
Net (loss) / income per Share
Basic	(0.07	)	(0.31	)	(0.57	)	(0.43	)	0.13		0.02
Diluted	(0.07	)	(0.31	)	(0.57	)	(0.43	)	0.13		0.02
Net (loss) / income per ADS
Basic	(1.12	)	(4.69	)	(8.54	)	(6.43	)	2.00		0.29
Diluted	(1.12	)	(4.69	)	(8.54	)	(6.43	)	1.96		0.29
Weighted average number of ordinary shares used in per share calculations(2):
Basic	260,000,000		260,000,000		260,000,000		260,000,000		260,000,000		260,000,000
Diluted	260,000,000		260,000,000		260,000,000		260,000,000		264,262,500		264,262,500

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(1) Translations of RMB amounts into U.S. dollars were made at a rate of RMB6.8262 to US$1.00, the noon buying rate for U.S. dollars in effect on September 30, 2009 in New York City for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York.

(2) On January 4, 2010, we effected a share split whereby all of our issued and outstanding 26,000,000 ordinary shares of par value US$0.01 each, 20,000,000 Series A preferred shares of par value US$0.01 each and 11,136,727 Series B preferred shares of par value US$0.01 each were divided into 260,000,000 ordinary shares of US$0.001 par value each, 200,000,000 Series A preferred shares of par value US$0.001 each and 111,367,270 Series B preferred shares of par value US$0.001 each, respectively, and the number of our authorized shares was increased from 101,374,676 to 1,013,746,760. The share split has been retroactively reflected for all periods presented herein.

	As of December 31,						As of September 30,
	Actual						Actual				Pro Forma As Adjusted(2)
	2006		2007		2008		2009				2009
	(RMB)		(RMB)		(RMB)		(RMB)		(US$)(1)		(RMB)	(US$)(1)
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	110,505		331,216		176,977		263,176		38,554		834,102	122,178
Restricted cash	6,793		14,497		17,213		21,565		3,159		21,565	3,159
Accounts receivable, net	6,437		9,965		13,633		60,030		8,794		60,030	8,794
Amount due from related parties	80,789		44,068		38,110		6,210		910		6,210	910
Property and equipment, net	5,822		42,467		42,954		41,076		6,017		41,076	6,017
Intangible assets, net	27,943		26,317		29,796		28,318		4,148		28,318	4,148
Total assets	255,750		513,187		360,895		462,792		67,796		1,033,628	151,420
Accrued expenses and other current liabilities	38,535		52,234		53,597		97,450		14,276		97,450	14,276
Total liabilities	106,073		145,647		111,356		123,660		18,115		123,660	18,115
Convertible redeemable preferred shares	172,131		469,971		501,892		514,162		75,322		—	—
Total shareholders’ (deficit)/equity	(22,454	)	(102,431	)	(252,353	)	(175,030	)	(25,641	)	914,883	134,025

(1) Translations of RMB amounts into U.S. dollars were made at a rate of RMB6.8262 to US$1.00, the noon buying rate for U.S. dollars in effect on September 30, 2009 in New York City for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York.

(2) Our consolidated balance sheet data as of September 30, 2009 is adjusted to give effect to the automatic conversion of all our ordinary and preferred shares into 418,339,339 Class A and 80,502,938 Class B ordinary shares immediately prior to the closing of this offering, and the issuance and sale of ADSs by us in this offering, assuming an initial public offering price of US$7.50 per ADS (the mid-point of the estimated initial public offering price range) after deducting underwriting discounts and commissions and estimated offering expenses payable by us. A US$0.50 increase (decrease) in the assumed initial public offering price of US$7.50 per ADS would increase (decrease) the amounts representing cash and cash equivalents, total assets and total shareholders’ deficit by US$5.8 million.

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	For the year ended or as of December 31,		For the nine months ended or as of September 30,
	2007	2008	2008	2009
			(unaudited)
Other Financial and Operating Data:
Company-owned brokerage services
Net revenues (in thousands of RMB)	151,692	206,076	153,703	407,937
Average number of operating sales offices(1)	143	279	296	233
Average monthly net revenues per operating sales office (in thousands of RMB)	88.4	61.6	57.7	194.5
Mortgage management services
Net revenues (in thousands of RMB)	—	10,650	7,903	22,467
Loan amount of referred mortgages (in thousands of RMB)	—	1,879,500	1,369,000	4,171,000
Franchise services
Net revenues (in thousands of RMB)	37,337	56,633	47,271	13,287
Number of regional sub-franchisors as of the period end	23	28	27	28

(1) Equals the sum of the number of operating sales offices that existed at the end of each month in the applicable period, divided by the number of months in such period.

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RISK FACTORS

You should consider carefully all of the information in this prospectus, including the risks and uncertainties described below, before you decide to buy our ADSs. Any of the following risks could have a material and adverse effect on our business, prospects, financial condition and results of operations. In any such case, the trading price of our ADSs could decline, and you could lose all or part of your investment.

Risks Related to Our Business

Our business is susceptible to fluctuations in the real estate market in China, and the property market in China is volatile and at an early stage of development, which could have a material and adverse effect on our business, financial condition and results of operations.

We conduct our real estate services business primarily in China, and our business depends substantially on the conditions of the real estate market in China. The real estate market in China remains at an early stage of development, and social, political, economic, legal and other factors may affect its development. For example, the lack of a mature and active secondary market for private properties and the limited amount of mortgage loans available to individuals in China may result in fluctuations in residential real estate markets. Although demand for private residential property in China has grown rapidly in recent years, this growth has often been coupled with volatile market conditions and fluctuations in property prices. For example, the rapid expansion of the property market in major provinces and cities, such as Beijing, Shanghai and Shenzhen, in the early 1990s, led to an oversupply in the mid-1990s and a corresponding fall in property values and rentals in the second half of the decade. We believe our business has been affected by fluctuations in the real estate market in China. For instance, our average monthly net revenues per operating sales office decreased by 36% and 23% in Beijing and Shanghai respectively, from 2007 to 2008. We believe this decrease was partially due to the weakness of the real estate market in China in 2008. On the other hand, our average monthly net revenues per operating sales office increased by 416.6% and 167.4% in these cities during the nine months ended September 30, 2009 compared to the same period in 2008. We believe such increase was partially due to the recovery of real estate market in China during 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations.” The PRC property market may experience, and transaction volume may be impacted by, undersupply or oversupply and property price fluctuations caused by economic, social, political and other factors. Any future overdevelopment in the property sector or other adverse changes in the economic, political or social environment in China may result in an oversupply of properties and a decrease in property prices and overall transaction activities, which could materially and adversely affect our business, financial condition and results of operations.

In addition, as all of our company-owned sales offices are strategically located in large metropolitan areas in Beijing, Shanghai and Shenzhen, any decrease in demand or any other adverse developments in these regions may materially and adversely affect our business, financial condition and results of operations.

Adverse developments in general business and economic conditions could have a material and adverse effect on our business, financial condition and results of operations.

Our business and operations are sensitive to general business and economic conditions globally and in China. These include short-term and long-term interest rates, inflation or deflation, fluctuations in debt and equity capital markets, consumer confidence and the general condition of the PRC and world economies. Certain recent adverse developments in the global financial markets have impacted the global economy. These developments include, among others, a general slowdown of economic growth in China, the U.S. and elsewhere globally, and substantial volatility and tightening of liquidity in financial and real estate markets. Numerous general business and economic factors could contribute to a real estate market downturn and adversely affect our business, including: (1) any systemic weakness in the banking and financial sectors; (2) any substantial declines in the stock markets or continued stock market volatility; (3) any increase in levels of unemployment; (4) a lack

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of available credit and lack of confidence in the financial sector; and (5) any general economic downturn in China or the global economy. Adverse developments in these general business and economic conditions could have a material and adverse effect on our business, financial condition and results of operations.

Our business could be materially and adversely affected by any government measures influencing China’s real estate industry.

The real estate market in China is typically affected by changes in government policies affecting the financial markets and related areas. In the past, the PRC government has adopted various administrative measures to restrain what it perceived as unsustainable growth in the real estate market, particularly when the real estate market in China has experienced rapid and significant growth. In 2007, home sales and prices in China rose rapidly to unprecedented levels, culminating in a housing downturn beginning in late 2007 due to the PRC government’s intervention in the real estate market to stabilize market prices and reduce market speculation. Although home sales and prices in China recovered in 2009, the PRC real estate market could experience a prolonged downturn in the future, which could have a material and adverse impact on our business, financial condition and results of operations. Any of the following could cause a decline in home sales and prices or the related revenue we generate from our business:

• any contractionary monetary policy adopted by the PRC government, including any significant rise in interest rates;

• any adverse development in the credit markets and/or mortgage financing markets resulting from PRC government policies;

• any significant increase in transaction costs as a result of changes in PRC government policies regarding real estate transaction taxes, such as the recent announcement regarding the reinstatement of a sales tax on residential property sales by individuals within five years of purchase;

• any adverse change in PRC government policies regarding the acquisition and/or ownership of real estate property;

• any adverse change in PRC national or local government policies or practices regarding brokerage, referral or franchise business or related fees and commissions; or

• any other PRC government policies or regulations that burden real estate transactions or ownership.

We experienced net losses for the years ended December 31, 2007 and 2008, and there is no assurance that we will be profitable in the future.

During the years ended December 31, 2007 and 2008, we experienced net losses of RMB72.8 million and RMB131.9 million, respectively, primarily due to expenses arising from the addition of a significant number of company-owned sales offices and, to a lesser extent, in 2008, the effects of the global economic downturn on the real estate industry in China. Consequently, our accumulated deficit was RMB268.0 million and RMB179.7 million as of December 31, 2008 and September 30, 2009, respectively. We expect to continue to increase costs and operating expenses as we implement initiatives to continue to grow our business, particularly our company-owned brokerage services business. If our net revenues do not increase to offset any expected increases in costs and operating expenses, we will not be profitable. You should not consider our revenue growth in recent periods as indicative of our future performance. Net revenues in future periods could decline or grow more slowly than we expect. Although we had net income of RMB88.3 million for the nine months ended September 30, 2009, we cannot assure you that we will be profitable in the current year, or that we will be able to maintain profitability in the future.

We do not own the CENTURY 21^® brand and our right to use the CENTURY 21^® brand is subject to risks and limitations.

Realogy owns the CENTURY 21^® brand and system. Through our wholly owned subsidiary IFM Company Limited, or IFM Co, we hold the exclusive right to franchise, manage and operate the CENTURY 21^®

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franchise network in China. Our interests and business strategies could be different from those of Realogy. See “Our Relationship with Realogy and Related Party Transactions.” Any adverse development in our relationship with Realogy could have a material and adverse effect on our business, financial condition and results of operations.

Our rights to use the CENTURY 21^® brand are set forth in our master sub-franchise agreement with Realogy. The master sub-franchise agreement has a term of 25 years starting on March 2000, extendable at our election for additional terms of 25 years upon payment of renewal fees. As contractual rights, our rights to use the CENTURY 21^® brand remain subject to the risks and limitations customarily associated with contractual relationships, including but not limited to, a party’s right to terminate the agreement in the event the other party materially breaches the agreement, a party’s right to terminate in certain specified circumstances, and the risk that the contract may be voided if either party were to enter bankruptcy or a similar restructuring process. An agreement could be rejected in connection with a bankruptcy of another party thereto if, in the business judgment of a trustee of a party, as debtor-in-possession, rejection of the contract would benefit a party’s estate. A bankruptcy by our licensor or any owner of the CENTURY 21^® trademarks or system know-how could impede our right to use the CENTURY 21^® brand and system. Any such adverse development could result in, among other things, an inability to use the CENTURY 21^® brand and system, incurrence of material expenses in connection with building our brand or acquiring another brand to support our company-owned brokerage business and franchise services business, payment of fees or compensation relating to settlements with the regional sub-franchisors or franchisees that terminate their franchise relationships with us, or diminished market recognition, any or all of which could have a material and adverse effect on our business, financial condition and results of operations.

If the value of the CENTURY 21^® brand or image diminishes, it could have a material and adverse effect on our business, financial condition and results of operations.

We believe the CENTURY 21^® brand is associated with leadership in integrated and high quality real estate services among real estate market participants in China. The CENTURY 21^® brand is important to our operations. Our continued success in maintaining and enhancing the CENTURY 21^® brand and our image depends on our ability to satisfy customer needs by further developing and maintaining the quality of our services across our operations, as well as our ability to respond to competitive pressures. If we were unable to satisfy customer needs or if our public image or reputation were otherwise diminished, our business transactions with our customers or the commission or franchise fees that we charge could decline, and we could face difficulties in attracting and retaining regional sub-franchisors, franchisees or sales professionals. If the value of the CENTURY 21^® brand diminishes globally or in China, our business, financial condition and results of operations may be materially and adversely affected.

Any failure to protect our brand, trademarks and other intellectual property rights could have a negative impact on our business.

We believe the CENTURY 21^® brand owned by Realogy and the trade secrets, copyrights and other intellectual property rights owned by us are important to our success. Any unauthorized use of these intellectual properties could harm our competitive advantages and business. Historically, China has not protected intellectual property rights to the same extent as the United States and infringement of intellectual property rights continues to pose a serious risk of doing business in China. Monitoring and preventing unauthorized use is difficult. The measures we take to protect our intellectual property rights may not be adequate. Furthermore, the application and enforcement of laws governing intellectual property rights in China and abroad is uncertain and evolving, and could involve substantial risks. If we are unable to adequately protect the intellectual property rights that we own or use, we may lose these rights and our business, financial condition and results of operations may be materially and adversely affected.

Our continuing reliance on our information systems, which include our proprietary Sales Information System, or SIS, and our Human Resource and Commission Information System, or HCIS, each of which is

15

copyright protected, depends in large part on retaining our proprietary rights to these information systems. We have also imposed contractual obligations on employees and consultants and taken other precautionary measures to maintain the confidentiality of our proprietary information, and have restricted the use of that proprietary information other than for our company’s benefit. If the copyrights for our information system are infringed, or our sales professionals, staff and consultants otherwise do not honor their contractual obligations and misappropriate our information systems, databases or other proprietary information, our business, financial condition and results of operations may be materially and adversely affected.

Competition in the real estate brokerage business in China is intense and may adversely affect our business, financial condition and results of operations.

Competition in the real estate brokerage business in China is intense, especially in the densely populated areas. We primarily compete with Centaline (China) Property Consultants Limited in the Beijing, Shanghai and Shenzhen markets for secondary real estate brokerage business, and to a lesser extent, with E-house (China) Holdings Limited in these cities for primary real estate brokerage business. We also compete with regional competitors in each of the regions where we own and operate sales offices. Some of these companies may have greater financial resources than we do, including greater marketing budgets and technological advantages. In addition, the secondary real estate brokerage industry has low capital commitment requirements for small operations, lowering the barriers to entry for new participants, especially participants pursuing alternative methods of marketing real estate, such as internet-based listing services. Real estate brokers compete for sales and marketing business primarily on the basis of the services offered, reputation, brand recognition, personal contacts, local expertise and brokerage commission rates. Any decrease in the market average brokerage commission rate may adversely affect our net revenues and profits. We also compete for the services of qualified sales professionals. Such competition could reduce commissions retained by our company after giving effect to the split with sales professionals and could increase the amounts that we spend on recruiting and retaining sales professionals.

We face competition in the franchise services business.

For our franchise services business, our products consist of our brand name and the support services we provide to our regional sub-franchisors and franchisees. We compete with regional and local real estate brokerage brand franchisors. In addition, other international real estate services brand franchisors, such as Coldwell Banker, have entered or plan to enter into the China market. Upon the expiration of a franchise agreement, a franchisee may choose to obtain a franchise from one of our competitors or operate as an independent broker. Competitors may offer our regional sub-franchisors and franchisees whose franchise agreements are expiring similar or better products and services at rates lower than what we or our regional sub-franchisors charge. To remain competitive in the sale of franchises and to retain our existing regional sub-franchisors and franchisees, we may have to reduce the fees we charge our regional sub-franchisors or franchisees.

We face competition in the mortgage management services business.

We face competition in the mortgage management services business from in-house mortgage management teams of our competitors in the brokerage business, commercial banks and specialized mortgage management services providers. Additionally, there may be adverse changes in national or local mortgage and banking practices, such as a recent agreement among certain commercial banks in Shanghai to collectively cease to pay mortgage referral commissions in connection with secondary real estate transactions. Any increase in the level of competition or any negative development described above could materially and adversely affect our business, financial condition and results of operations.

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If our company-owned or franchised sales offices fail to obtain or maintain licenses or permits necessary to engage in the real estate brokerage business, our business, financial condition and results of operations could be materially and adversely affected.

Our company-owned sales offices and franchised sales offices are required to obtain and maintain certain licenses and permits to engage in the real estate brokerage business. We and our regional sub-franchisors also need licenses and permits to operate our CENTURY 21^® franchise network in China. These licenses and permits are typically required to be renewed every one or two years. We are also subject to numerous national, provincial and local laws and regulations specific to the services we provide. If we or our regional sub-franchisors or franchisees fail to obtain or maintain the licenses and permits for conducting our company-owned brokerage or franchise services businesses required by law, the relevant governmental authorities may order us to suspend relevant operations or impose fines or other penalties. There is no assurance that we, our company-owned sales offices or our franchised sales offices will be able to obtain or renew these licenses in a timely manner, or at all.

Regional sub-franchisors and franchisees could take actions that could harm our business.

We do not own or control certain of our regional sub-franchisors and franchisees. These regional sub-franchisors and franchisees may not operate their business in a manner consistent with our standards, or may not hire and train qualified sales professionals and other employees. If these regional sub-franchisors or franchisees were to provide a diminished quality of service to their customers, our brand, reputation and goodwill may suffer. Additionally, our regional sub-franchisors and franchisees may engage in or be accused of engaging in unlawful or tortious conduct. Such conduct, or the accusation of such conduct, could harm our brand image, reputation or goodwill. Any of these incidents could in turn materially and adversely affect our business, financial condition and results of operations.

Our regional sub-franchisors and franchisees owned by independent business operators may from time to time disagree with our interpretation of our respective rights and obligations under the franchise agreements or fail to make timely service fees payments thereunder. This has led to disputes among the regional sub-franchisors, the franchisees and us in the past. We expect such disputes to occur from time to time in the future as we continue to offer franchise rights to third parties. To the extent we have such disputes, the attention of our management and our regional sub-franchisors or the franchisees will be diverted and our reputation may suffer as a result. Any of the aforementioned situations could have a material and adverse effect on our business, financial condition and results of operations.

The loss of any members of our senior management or other key sales professionals and staff could adversely affect our financial performance.

Our success depends on the continued service of our key executive officers, particularly Mr. Donald Zhang and Mr. Harry Lu. We do not carry key man life insurance on any of our personnel. The loss of the services of one or more members of our senior management team could hinder our ability to effectively manage our business and implement our growth strategies. If we lose the services of any of our key executive officers, we cannot assure you that we will be able to appoint or integrate adequate replacement personnel into our operations in a timely manner. Our failure to do so could in turn disrupt our operations and the growth of our business.

Our success largely depends on the efforts and abilities of our senior management team and the management teams of regional sub-franchisors and sales offices owned and operated by us. Our ability to retain our management teams is generally subject to numerous factors, including the compensation packages we offer and our ability to maintain a cohesive company culture and other factors. Any prolonged downturn in the real estate market and any cost cutting measures we implement could result in significant attrition among our current managers. If any member of our senior management team or other key sales professionals and staff joins a competitor or forms a competing company, we may lose customers, key sales professionals and staff, and we

17

may not be able to promptly fill their positions with comparably qualified individuals without a significant increase in costs. Any of the foregoing adverse developments could materially and adversely affect our business, financial condition and results of operations.

We are subject to risks related to litigation filed by or against us, and adverse litigation results may harm our business and financial condition.

We have been, and may in the future be, a party to litigation and other proceedings filed by or against us, including actions relating to intellectual property, franchise or sub-franchise arrangements with our regional franchisors or franchisees, or vicarious liability based upon the conduct of our individual sales professionals and staff or agents. For example, we have occasionally resorted to litigation against certain of our regional sub-franchisors with whom we have terminated our relevant sub-franchise relationship for the sub-franchisor’s material breach of the regional sub-franchise agreement. In addition, we have litigated against third parties who have infringed the CENTURY 21^® trademark. Although we have historically been successful in such litigation, we cannot predict the cost of such proceedings or their ultimate outcome, including any remedies or damages that may be awarded, and adverse results in such litigation and other proceedings may harm our business, financial condition and results of operations.

We are subject to risks related to the interim guarantees that we provide to our mortgage management services customers in Beijing.

As is customary in the mortgage management industry in Beijing, we provide interim guarantees to commercial banks in respect of the mortgage loans they extend to property buyers prior to the time when the mortgage registration certificate is issued to the bank by the applicable property registry. See “Our Business – Our Services – Mortgage Management Services.” If a bank fails to obtain the mortgage registration certificate or the property buyer defaults on his payment obligations during the term of an interim guarantee, we may be required to pay the amount of the delinquent mortgage payments or any measurable loss suffered by the bank. If multiple home buyers default on their payment obligations at around the same time, we will be required to make significant payments to the banks to satisfy our guarantee obligations. If we are unable to recover the amounts paid with respect to our guarantees, we will suffer financial losses. As of December 31, 2008 and September 30, 2009, the contingent guarantee obligation in connection with our provision of interim guarantees amounted to RMB227.8 million and RMB829.3 million, respectively. Although we have not experienced any losses associated with our interim guarantees for the years ended December 31, 2007 and 2008, we have accrued RMB0.5 million for the nine months ended September 30, 2009 for the estimated loss associated with our interim guarantees. If substantial and widespread defaults by our customers occur at the time when the real estate market deteriorates rapidly and for a sustained period and we are called upon to honor our guarantees, our financial condition and results of operations will be materially and adversely affected.

We rely on our information systems to operate our business and maintain our competitiveness, and any disruption to it could harm our business.

Our business depends upon the use of information systems, including systems providing real-time and in-depth management and sales information and support to our network of sales offices and marketing efforts. We rely significantly on our in-house information technology team with support from third-party outsourcing firms, to develop, maintain and regularly upgrade our information systems. In addition, some operations of these information systems depend upon third party technologies, systems and services. We cannot assure you that we will continue to have access to the products or services provided by our third party providers on commercially reasonable terms, or at all. We also cannot assure you that we will be able to continue to effectively operate and maintain our information systems, or to effectively retain our key personnel for the maintenance and management of our information systems.

In addition, we expect to refine and enhance our information systems on an ongoing basis, and we expect that advanced new technologies and systems will continue to be introduced. We may not be able to

18

replace our existing information systems or introduce new information systems as quickly as our competitors or in a cost-effective manner.

In addition, our information systems are vulnerable to damage or interruption from various causes, including (1) natural disasters, war and acts of terrorism, (2) power losses, computer system failures, internet and telecommunications or data network failures, operator error, losses and corruption of data, and similar events and (3) computer viruses, penetration by individuals seeking to disrupt operations or misappropriate information and other physical or electronic breaches of security. While we maintain certain disaster recovery capabilities for critical functions in most of our businesses, these capabilities may not successfully prevent a disruption to or material and adverse effect on our businesses or operations in the event of a disaster or other business interruption. Any extended interruption in our information systems could significantly reduce our ability to conduct our business and generate revenue. Additionally, we do not carry business interruption insurance for any losses that may occur.

If we cannot manage our growth, our operating results or profitability could be materially and adversely affected.

We have experienced substantial growth since we began operations in 2000. Our net revenues amounted to RMB38.4 million in 2006, RMB189.0 million in 2007, RMB273.4 million in 2008, and RMB443.7 million in the nine months ended September 30, 2009. We intend to continue to expand our operations, which will continue to place substantial demands on our managerial, operational, financial, technological and other resources. Our planned expansion will also place significant demands on us to ensure that our brand does not suffer as a result of any decreases, whether actual or perceived, in the quality of our services. In order to manage and support our growth, we must continue to improve our existing operational, administrative and technological systems and our financial and management controls, and recruit, train and retain additional qualified sales professionals as well as other administrative and sales and marketing personnel, particularly as we expand into new markets. We may not be able to effectively and efficiently manage the growth of our operations, recruit and retain qualified personnel and integrate new expansion into our operations. During our expansion, we may also face other difficulties as a result of a number of factors, many of which are beyond our control, such as any general unfavorable conditions in the real estate market, cost overruns due to price increases by third party vendors or delays or denials of required approvals by relevant government authorities. As a result, our operating results or profitability could be materially and adversely affected.

We may not be successful in our business expansions through future acquisitions.

We have established our company-owned brokerage services business in Shanghai and Shenzhen through acquisitions. In territories where we do not have company-owned sales offices, one of our expansion strategies is to establish our own brokerage services business by acquiring existing chains of sales stores or regional sub-franchisors when their operations become mature and profitable. However, our experience in Shanghai and Shenzhen may not be replicable in other areas of China. The success of our acquisition strategy will also depend upon our ability to negotiate with acquisition targets on favorable terms, and to finance and complete these transactions.

We also need to effectively integrate newly-acquired brokerage businesses into our existing operations, which may involve complex operational and personnel-related challenges, including rectifying possible inconsistencies in standards, controls, procedures and policies, maintaining important business relationships, overcoming local cultural differences, and controlling unanticipated expenses related to such integration. We may also incur material costs relating to such integration. A prolonged diversion of management’s attention and any delays or difficulties we encounter in connection with the integration of any business that we have acquired or may acquire in the future could prevent us from realizing the anticipated cost savings and revenue growth from our acquisitions.

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We may be unable to obtain adequate financing to fund our capital requirements.

We expect that over the next several years, a substantial portion of our cash flow will be used to finance the expansion of our company-owned brokerage services business to increase our market share in existing markets and to expand our geographical presence. Although we anticipate that our available funds and expected cash flows from operations will be sufficient to meet our cash needs for at least the next twelve months, this assumption is based on management’s ability to successfully execute its business plan, which includes increasing sales, generating positive operating cash flows and obtaining additional funding to support longer term capital requirements. We cannot assure you that we will obtain such financing at a reasonable cost or at all. Our inability to finance our planned capital expenditures or future acquisitions could materially and adversely affect our business, financial condition and results of operations.

We may not be able to successfully execute our business development strategy, which could have a material and adverse effect on our business, financial condition and results of operations.

We plan to continue to expand our business into new geographical areas in China and to enter into new businesses to diversify our portfolio of products and services. Because China is a large and diverse market, home buying trends and demands may vary significantly by region, and our experience in the markets in which we currently operate may not be applicable in other parts of China. As a result, we may not be able to leverage our experience to expand into other parts of China or to enter into businesses with respect to new products or services. When we enter new markets, we may face intense competition from companies with greater experience or an established presence in the targeted areas or from other companies with similar expansion targets. In addition, our business model may not be successful in new and untested markets. Therefore, we may not be able to successfully execute our business development strategy, which could have a material and adverse effect on our business, financial condition and results of operations.

We may not maintain sufficient insurance coverage for the risks associated with our business operations.

Risks associated with our businesses and operations include but are not limited to claims for wrongful acts committed by our sales professionals, disputes with our regional sub-franchisors or franchisees that we do not own, the loss of intellectual property rights or the failure of information technology systems crucial to our operations, the loss of key personnel and risks posed by natural disasters. Any of these risks may result in significant losses. We maintain insurance coverage we consider customary in China for the industry in which we operate and in compliance with the insurance requirements imposed on us by our master sub-franchise agreement with Realogy. However, we cannot assure you that our insurance coverage is sufficient to cover any losses that we may sustain, or that we will be able to successfully claim our losses under our existing insurance policy on a timely basis or at all. If we incur any loss not covered by our insurance policies, or the compensated amount is significantly less than our actual loss or is not timely paid, our business, financial condition and results of operations could be materially and adversely affected.

When preparing our consolidated financial statements for the years ended December 31, 2007 and 2008, we noted one material weakness in our internal control over financial reporting. If we fail to implement and maintain effective internal control over financial reporting, our ability to accurately report our financial results may be impaired, which could adversely impact investor confidence and the market price of our ADSs.

Prior to this offering, we have been a private company with limited accounting and other resources with which to adequately address our internal controls and procedures. When preparing our consolidated financial statements for the years ended December 31, 2007 and 2008, we noted one material weakness in our internal control over financial reporting relating to a lack of sufficient resources to perform period-end financial reporting procedures, address complex accounting issues under US GAAP and prepare and review financial statements and related disclosures under US GAAP. This material weakness resulted in adjustments to the company’s

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consolidated financial statements for the years ended December 31, 2007 and 2008. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Internal Control Over Financial Reporting” for a detailed discussion.

If the material weakness is not remedied or recurs, or if we identify additional weaknesses or fail to timely and successfully implement new or improved controls, our ability to assure timely and accurate financial reporting may be adversely affected, we may be required to restate our financial statements, and we could suffer a loss of investor confidence in the reliability of our financial statements, which in turn could negatively impact the trading price of our ADSs, result in lawsuits being filed against us by our shareholders, or otherwise harm our reputation.

Seasonality in the real estate market could adversely affect our business.

The real estate brokerage business is subject to seasonal fluctuations. Historically, real estate brokerage revenues and transaction volumes have generally been low during January and February as well as the late summer months in China. However, many of our expenses, such as those relating to leasing, administrative or sales and marketing efforts, are fixed and cannot be reduced during a seasonal slowdown. As a result, our operating results have fluctuated from quarter to quarter. These fluctuations are likely to continue and operating results for any period may not be indicative of our performance in any future period. If our operating results for any quarterly period fall below investor expectations or estimates by securities research analysts, the trading price of our ADSs may decline.

Our corporate actions are substantially controlled by Mr. Donald Zhang and Mr. Harry Lu.

Immediately following this offering, Mr. Donald Zhang, our chairman and chief executive officer, and Mr. Harry Lu, our vice chairman and president, will beneficially own approximately 37.9% of our outstanding shares or 36.4% if the underwriters exercise their option to purchase additional ADSs in full. Accordingly, Messrs. Zhang and Lu will have significant influence in determining the outcome of any corporate transaction or other matters submitted to our shareholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets, the election of directors and other significant corporate actions. This concentration of ownership may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and might reduce the price of our ADSs. These actions may be taken even if they are opposed by our other shareholders, including those who purchase ADSs in this offering.

As a foreign private issuer, we are permitted to, and we will, rely on exemptions from certain New York Stock Exchange corporate governance standards applicable to U.S. issuers, including the requirements that a majority of an issuer’s directors consist of independent directors. This may afford less protection to our holders of ordinary shares and ADSs.

Section 303A of the Corporate Governance Rules of the New York Stock Exchange requires listed companies to have, among other things, a majority of its board members be independent and a nominating and corporate governance committee consisting solely of independent directors. As a foreign private issuer, however, we are permitted to, and we will, follow home country practice in lieu of the above requirements. The corporate governance practice in our home country, the Cayman Islands, does not require a majority of our board to consist of independent directors or the implementation of a nominating and corporate governance committee. Since a majority of our board of directors will not consist of independent directors as long as we rely on the foreign private issuer exemption, fewer board members will be exercising independent judgment and the level of board oversight on the management of our company may decrease as a result.

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An occurrence of a widespread health epidemic or other outbreaks could have a material and adverse effect on our business, financial condition and results of operations.

Our business could be adversely affected by the effects of Influenza A virus subtype H1N1, or A (H1N1), Severe Acute Respiratory Syndrome, or SARS, avian influenza or other epidemics or outbreaks on the economic and business climate. A prolonged outbreak of A (H1N1), any recurrence of SARS, avian influenza or other adverse public health developments in China or elsewhere in the world could have a material and adverse effect on our business operations. Such outbreaks could significantly impact the real estate market and cause a temporary closure of our facilities. Such impact or closures would severely disrupt our operations and adversely affect our business, financial condition and results of operations. Our operations could be disrupted if any of our sales professionals, staff or customers were suspected of having A (H1N1), SARS or avian influenza, since this could require us to quarantine some or all of our sale professional and staff or disinfect our facilities and may deter our customers or potential customers from visiting our sales offices. In addition, our business, financial condition and results of operations could be adversely affected to the extent that A (H1N1), SARS, avian influenza or other outbreak harms the global or Chinese economy in general.

Risks Related to Doing Business in China

Adverse changes in economic and political policies of the PRC government could have a material and adverse effect on overall economic growth in China, which could materially and adversely affect our business.

We conduct substantially all of our business operations in China. As the real estate sector is highly sensitive to business and personal discretionary spending levels, it tends to decline during general economic downturns. Accordingly, our business, financial condition, results of operations and prospects depend to a significant degree on economic developments in China. China’s economy differs from the economies of most other countries in many respects, including with respect to the amount of government involvement in the economy, the general level of economic development, growth rates and government control of foreign exchange and the allocation of resources. While the PRC economy has experienced significant growth in the past 30 years, this growth has remained uneven across different periods, regions and among various economic sectors. The PRC government has implemented various measures to encourage economic development and guide the allocation of resources. The PRC government also exercises significant control over China’s economic growth through the allocation of resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Since late 2003, the PRC government has implemented a number of measures, such as increasing the People’s Bank of China’s statutory deposit reserve ratio and imposing commercial bank lending guidelines, which had the effect of slowing the growth of credit availability. In 2008 and 2009, however, in response to the global financial crisis, the PRC government has loosened such requirements. Any future actions and policies adopted by the PRC government could materially affect the Chinese economy and slow the growth of the real estate market in China, which could materially and adversely affect our business.

We rely principally on dividends and other distributions on equity paid by our subsidiaries in China to fund our cash and financing requirements, and any limitation on the ability of our subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business.

We are an offshore holding company, and we rely principally on dividends from our subsidiaries in China for our cash requirements, including for the service of any debt we may incur. Current PRC regulations permit our subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside a certain amount of its after-tax profits each year, if any, to fund certain statutory reserves. These reserves are not distributable as cash dividends. Furthermore, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our subsidiaries to distribute dividends or other

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payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or otherwise fund and conduct our business.

PRC regulation of loans to and direct investments in PRC entities by offshore holding companies may delay or prevent us from using the proceeds of this offering to make loans or additional capital contributions to our PRC operating subsidiaries.

We may make loans to our PRC subsidiaries. Any loans to or investments in our PRC subsidiaries are subject to approval by or registration with relevant governmental authorities in China. We may also decide to finance our subsidiaries by means of capital contributions. According to the relevant PRC regulations on foreign-invested enterprises in China, depending on the total amount of investment, capital contributions to our PRC operating subsidiaries may be subject to the approval of the PRC Ministry of Commerce or its local branches. We may not obtain these government approvals on a timely basis, if at all, with respect to future capital contributions by us to our subsidiaries. If we fail to receive such approvals, our ability to use the proceeds of this offering and to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

Fluctuations in the value of the RMB may have a material and adverse effect on your investment.

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. On July 21, 2005, the PRC government changed its policy of pegging the value of the Renminbi to the U.S. dollar. Under the new policy, the Renminbi is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. Following the removal of the U.S. dollar peg, the Renminbi appreciated more than 20% against the U.S. dollar over the following three years. Since July 2008, however, the Renminbi has traded stably within a narrow range against the U.S. dollar.

There remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant appreciation of the Renminbi against foreign currencies. Our revenues and costs are mostly denominated in the Renminbi, and a significant portion of our financial assets are also denominated in the Renminbi. Any significant fluctuations in the exchange rate between the Renminbi and the U.S. dollar may materially and adversely affect our cash flows, revenues, earnings and financial position, and the amount of and any dividends we may pay on our ADSs in U.S. dollars. Any fluctuations in the exchange rate between the RMB and the U.S. dollar could also result in foreign currency translation losses for financial reporting purposes.

Governmental control of currency conversion may limit our ability to utilize our revenues effectively and affect the value of your investment.

The PRC government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. We receive substantially all of our revenues in RMB. Under our current corporate structure, our Cayman Islands holding company may rely on dividend payments from our PRC subsidiaries to fund any cash and financing requirements we may have. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from State Administration of Foreign Exchange by complying with certain procedural requirements. Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from State Administration of Foreign Exchange by complying with certain procedural requirements. But approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. This could affect the ability of our PRC subsidiaries to obtain foreign exchange through debt or equity financing, including by means of loans or capital contributions from us. The PRC government may

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also at its discretion restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends in foreign currencies to our shareholders, including holders of our ADSs.

Recent PRC regulations relating to the establishment of offshore special purpose companies by PRC domestic residents may subject our PRC resident beneficial owners to personal liability, limit our ability to inject capital into our PRC subsidiaries, limit our subsidiaries’ ability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

China has regulations that subject our PRC subsidiaries to additional restrictions if we have beneficial owners of our company who are PRC residents that have not properly filed with authorities in China. See “Regulations—Regulations on Foreign Exchange Registration of Offshore Investment by PRC Residents.” Currently, we do not have beneficial owners whom we know to be PRC residents. However, we cannot provide any assurances that any PRC resident who becomes our beneficial owner in the future will be able to comply with relevant State Administration of Foreign Exchange of the PRC, or SAFE regulations in a timely manner, or at all. Any failure or inability of our PRC resident beneficial owners to comply with the registration procedures may subject such PRC resident beneficial owners to certain fines and legal sanctions, restrict our cross-border investment and financing activities, or limit our PRC subsidiaries’ ability to distribute dividends or obtain foreign exchange-denominated loans.

As it remains uncertain how the SAFE regulations will be interpreted or implemented, we cannot predict how these regulations will affect our business operations or future strategy. For example, we may be subject to more stringent review and approval processes with respect to our foreign exchange activities, such as remittance of dividends and foreign-currency-denominated borrowings, which may adversely affect our business, financial condition and results of operations. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the SAFE regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

Failure to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject our PRC stock incentive plan participants or us to fines and other legal or administrative sanctions.

In December 2006, the People’s Bank of China promulgated Administrative Measures for Individual Foreign Exchange, or the Individual Foreign Exchange Rules, setting forth the requirements for foreign exchange transactions by PRC individuals under either the current account or the capital account. In January 2007, SAFE issued Implementing Rules for the Individual Foreign Exchange Rules, which, among other things, specified approval requirements for certain capital account transactions such as a PRC citizen’s participation in the employee stock ownership plans or stock option plans of an overseas publicly-listed company. On March 28, 2007, SAFE promulgated the Application Procedure of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Holding Plan or Stock Option Plan of Overseas-Listed Company, or the Stock Option Rule. Under the Stock Option Rule, PRC citizens who are granted stock options by an overseas publicly-listed company are required, through a PRC agent or PRC subsidiary of such overseas publicly-listed company, to register with SAFE and complete certain other procedures. We and our PRC sales professionals and staff who have been granted stock options are subject to the Stock Option Rule. If we or our PRC optionees fail to comply with these regulations, we or our PRC optionees may be subject to fines and legal sanctions.

Any change in the preferential tax treatment we currently enjoy in the PRC may have an adverse impact on our business, financial condition and results of operations.

Our PRC subsidiaries are subject to the corporate income tax with the tax rate of 25% except for Shanghai Ruifeng, Shanghai Anshijie Real Estate Consultant Co., Ltd. and Shenzhen CIR which enjoy a

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preferential tax rate of 20% in 2009, and Beijing Huachuangxunjie Technology Co., Ltd, or Huachuang, which enjoys a corporate income tax exemption in 2009. We expect that our tax payments will increase in 2010 and will further increase following the expiry of the above preferential tax treatment in 2013. See “Management’s Discussions and Analysis of Financial Condition and Results of Operations—Factors Affecting Our Results of Operations—Taxation.”

Various local governments in China have provided discretionary preferential tax treatments to us. However, these local governments may decide to reduce or eliminate these preferential tax treatments at any time. Furthermore, these local implementations of tax laws may be found to violate national laws or regulations and we may be subject to retroactive imposition of higher taxes as a result. Starting from the year 2007, we are required to accrue taxes for these contingencies and other uncertain tax positions taken by us. The change in accounting requirement for reporting tax contingencies, any reduction or elimination of these preferential tax treatments and any retroactive imposition of higher taxes could have an adverse effect on our business, financial condition and results of operations.

Dividends payable to us by our PRC subsidiaries and gain on sale of our shares may be subject to PRC withholding taxes, or we may be subject to PRC taxation on our worldwide income and dividends distributed to our investors may be subject to PRC withholding taxes under the new CIT Law.

Under the new Corporate Income Tax Law, or CIT Law and its implementation rules, all domestic and foreign invested companies are subject to a uniform enterprise income tax at the rate of 25% and dividends from PRC subsidiaries to their foreign shareholders that are “non-resident enterprises” and any gain realized on the transfer of ADSs or shares by such shareholders will be subject to a withholding tax at the rate of 10% unless a treaty otherwise provides.

It is unclear whether dividends we pay with respect to our ordinary shares or ADSs, or the gain you may realize from the transfer of our ordinary shares or ADSs, would be treated as income derived from sources within the PRC and be subject to PRC tax. If we are required under the CIT Law to withhold PRC income tax on dividends payable to our non-PRC investors that are “non-resident enterprises” or individuals, or if you are required to pay PRC income tax on the transfer of our ordinary shares or ADSs, the value of your investment in our ordinary shares or ADSs may be materially and adversely affected. With the newly imposed 5% or 10% PRC dividend withholding tax, depending on the tax jurisdiction of the receiver, we will incur incremental PRC tax liabilities when PRC profits are distributed to ultimate shareholders.

In addition, under the CIT Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” located within China may be considered PRC resident enterprises and therefore may be subject to PRC enterprise income tax at the rate of 25% on their worldwide income. See “Taxation—People’s Republic of China Taxation.” If we become a PRC resident enterprise under the new PRC tax system and receive income other than dividends, our profitability and cash flow would be adversely impacted due to our worldwide income being taxed in China under the new CIT Law.

Foreign ownership of real estate agency and brokerage businesses in China is restricted under recent PRC regulations. This may limit our ability to establish our new PRC operating entities or to increase the registered capital of existing entities in the future.

On October 31, 2007, the PRC National Development and Reform Committee of China and the Ministry of Commerce of China jointly promulgated the amended Foreign Investment Industrial Guidance Catalogue, or the Catalogue, which came into effect on December 1, 2007. According to the Catalogue, real estate agency companies and real estate brokerage companies are classified to be in the restricted category of foreign investment industries.

Our PRC legal counsel, Jun He Law Offices, is of the opinion that only new real estate agency and brokerage businesses established after December 1, 2007, or any existing real estate agency and brokerage

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businesses that require new approvals from the Ministry of Commerce or its local branch in order to increase their registered capital or conduct an equity transfer, would be effected by the Catalogue. It may be difficult or take a long time for us to obtain any approvals from the Ministry of Commerce or its local branch in order to establish our new PRC operating entities or to increase the registered capital of existing entities in the future. We cannot assure you that, if we are required to seek such approvals in the future, we will be able to obtain them from the Ministry of Commerce or its local branch on a timely basis, or at all.

Uncertainties with respect to the Chinese legal system could have a material and adverse effect on us.

The PRC legal system is based on written statutes. Unlike under common law systems, decided legal cases have little value as precedents in subsequent legal proceedings. In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general, and forms of foreign investment (including wholly foreign-owned enterprises and joint ventures) in particular. These laws, regulations and legal requirements are relatively new and are often changing, and their interpretation and enforcement involve significant uncertainties that could limit the reliability of the legal protections available to us. We cannot predict the effects of future developments in the PRC legal system. We may be required in the future to procure additional permits, authorizations and approvals for our existing and future operations, which may not be obtainable in a timely fashion or at all. An inability to obtain such permits or authorizations may have a material and adverse affect on our business, financial condition and results of operations.

The implementation of the PRC Labor Contract Law and the Implementation Regulation for the PRC Labor Contract Law may increase our operating expenses and may materially and adversely affect our business, financial condition and results of operations.

As the PRC Labor Contract Law, or Labor Contract Law, and its Implementation Regulation for the PRC Labor Contract Law, or Implementation Regulation, have been enforced for only a very short time, substantial uncertainty remains as to its potential impact on our business, financial condition and results of operations. See “Regulations — Regulations of Labor Contracts”. The implementation of the Labor Contract Law and the Implementation Regulation may increase our operating expenses, in particular our human resources costs and our administrative expenses. In the event that we decide to significantly modify our employment or labor policy or practice, or reduce the number of our sales professionals and staff, the Labor Contract Law may limit our ability to effectuate the modifications or changes in the manner that we believe to be most cost-efficient or otherwise desirable, which could materially and adversely affect our business, financial condition and results of operations.

If we fail to satisfy the regulatory requirements for provision of interim guarantees, our business, financial condition and results of operations could be materially and adversely affected.

On February 3, 2009, the State Council issued the Notice on Further Specifying the Supervisory Functions for Financing Guarantee Business, which authorized several PRC governmental bodies, led by the China Banking Regulatory Commission, to study and adopt regulatory policies and rules for the development of financing guarantee businesses in China. The provincial governmental bodies in China are authorized to adopt local regulatory rules for financing guarantee businesses within their respective jurisdictions. As of September 30, 2009, no specific rules regulating guarantee businesses have been adopted. However, we cannot assure you that we will be able to satisfy or comply with any new regulatory requirements adopted by the PRC government or provincial governmental bodies in the future. Our business, financial condition and results of operations could be materially and adversely affected by our failure to do so.

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Risks Related to Our ADSs and This Offering

There has been no public market for our ordinary shares or ADSs prior to this offering, and you may not be able to resell our ADSs at or above the price you paid, or at all.

Prior to this initial public offering, there has been no public market for our ordinary shares or ADSs. We have been approved to list our ADSs on the New York Stock Exchange. Our ordinary shares will not be listed or quoted for trading on any exchange. If an active trading market for our ADSs does not develop after this offering, the market price and liquidity of our ADSs will be materially and adversely affected. The initial public offering price for our ADSs will be determined by negotiations between us and the underwriters and may bear no relationship to the market price for our ADSs after the initial public offering. We cannot assure you that an active trading market for our ADSs will develop or that the market price of our ADSs will not decline below the initial public offering price.

We may be classified as a passive foreign investment company for United States federal income tax purposes, which could subject United States investors in the ADSs or ordinary shares to significant adverse tax consequences.

Based on our current income and assets and taking into consideration this offering, we presently do not believe that we should be classified as a passive foreign investment company, or PFIC, for the current taxable year. While we do not anticipate becoming a PFIC in future taxable years, the composition of our income and our assets will be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. If we were to be classified as a PFIC in any taxable year, a U.S. Holder (as defined in “Taxation – United States Federal Income Taxation”) would be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of United States federal income tax that a U.S. Holder could derive from investing in a non-United States corporation that does not distribute all of its earnings on a current basis. Further, if we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares. For more information see the section titled “Taxation – United States Federal Income Taxation – Passive Foreign Investment Company Considerations.”

The market price for our ADSs may be volatile.

In addition to the volatility in the price of our ADSs which could be caused by the materialization of any of the risks described in this section, the securities markets in the United States, China and elsewhere have from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our ADSs.

Goldman Sachs (Asia) L.L.C. may have a conflict of interest with respect to this offering.

Immediately prior to the completion of this offering, Goldman Sachs Strategic Investments (Asia) L.L.C., or Goldman Sachs Strategic Investments, an affiliate of Goldman Sachs (Asia) L.L.C., or Goldman Sachs Asia, will beneficially own approximately 28.4% of our outstanding ordinary shares. Therefore, Goldman Sachs Asia, a representative of the underwriters in this offering, will be deemed to have a “conflict of interest” with us under Rule 2720 of the Conduct Rules of the Financial Industry Regulatory Authority, Inc.

Rule 2720 requires that a “qualified independent underwriter” (as such term is defined by Rule 2720) participate in the preparation of the registration statement and prospectus and exercise the usual standards of due diligence. Accordingly, Morgan Stanley & Co. International plc is assuming the responsibilities of acting as the qualified independent underwriter in this offering. Although the qualified independent underwriter has participated in the preparation of the registration statement and prospectus and exercised the usual standards of

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due diligence, we cannot assure you that this will adequately address any potential conflicts of interest related to Goldman Sachs Asia and Goldman Sachs Strategic Investments. Immediately at the completion of this offering, Goldman Sachs Strategic Investments will beneficially own approximately 20.6% of our outstanding ordinary shares or 19.8% if the underwriters’ option to purchase additional ADSs is exercised in full. See “Our Relationship with Realogy and Related Party Transactions – Related Party Transactions – Private Placements” and “Underwriting.”

You will experience immediate dilution in the net tangible book value of ADSs purchased.

When you purchase ADSs in the offering, you will incur immediate dilution of approximately US$4.71 per ADS, representing the difference between the purchase price per ADS in this offering of US$7.50, being the mid-point of the estimated range of the initial public offering price shown on the front cover of this prospectus, and our net tangible book value per ADS as of September 30, 2009 after giving effect to the automatic conversion of all our ordinary and preferred shares into Class A and Class B ordinary shares and this offering. See “Dilution.” In addition, you may experience further dilution in the net tangible book value of the ADSs purchased to the extent that additional ordinary shares are issued upon exercise of outstanding options and options we may grant from time to time.

We may need additional capital, and the sale of additional ADSs or other equity securities or incurrence of additional indebtedness could result in additional dilution to our shareholders or increase our debt service obligations.

Historically, we have relied principally on our operational sources of cash, as well as external sources of financing to fund our operations and capital expansion needs. We may require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may pursue. If our resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity, equity-linked or debt securities or enter into a credit facility. The sale of additional equity securities could result in additional dilution to our shareholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. It is uncertain whether financing will be available in amounts or on terms acceptable to us, if at all.

Substantial future sales of our ADSs in the public market, or the perception that these sales could occur, could cause the price of our ADSs to decline.

Additional sales of our ordinary shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our ADSs to decline. Immediately upon completion of this offering, we will have 686,154,777 ordinary shares outstanding or 714,251,652 ordinary shares if the underwriters exercise their option to purchase additional ADSs in full. All shares sold in this offering will be freely transferable without restriction or additional registration under the Securities Act of 1933, as amended, or the Securities Act. 498,842,277 ordinary shares outstanding after this offering will be available for sale, upon the expiration of the applicable lock-up period, subject to volume and other restrictions as applicable under Rule 144 under the Securities Act. The lock-up restrictions on each of our existing shareholders in this offering will expire 180 days from the date of this prospectus. Any or all of these shares can be released prior to expiration of the lock-up period at the discretion of the representatives of the underwriters for this offering. To the extent shares are released before the expiration of the lock-up period and these shares are sold into the market, the market price of our ADSs could decline.

In addition, certain holders of our ordinary shares after the completion of this offering will have the right to cause us to register the sale of those shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration. Sales of these registered shares in the public market could cause the price of our ADSs to decline.

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Our articles of association contain anti-takeover provisions that could have a material and adverse effect on the rights of holders of our ordinary shares and ADSs.

Our amended and restated articles of association limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could deprive our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges and relative participating, optional or special rights and their qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADS or otherwise. Preferred shares could be issued quickly with terms which may delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of our ADSs may fall and the voting and other rights of the holders of our ordinary shares and ADSs may be materially and adversely affected.

You may not have the same voting rights as the holders of our ordinary shares and may not receive voting materials in time to be able to exercise your right to vote.

Except as described in this prospectus and in the deposit agreement, holders of our ADSs will not be able to exercise voting rights attaching to the shares represented by our ADSs on an individual basis. Holders of our ADSs will appoint the depositary or its nominee as their representative to exercise the voting rights attaching to the shares represented by the ADSs. You may not receive voting materials in time to instruct the depositary to vote, and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

You may not be able to participate in rights offerings and may experience dilution of your holdings as a result.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. Under the deposit agreement for the ADSs, the depositary will not offer those rights to ADS holders unless both the rights and the underlying securities to be distributed to ADS holders are either registered under the Securities Act or exempt from registration under the Securities Act with respect to all holders of ADSs. We are under no obligation to file a registration statement with respect to any such rights or underlying securities or to endeavor to cause such a registration statement to be declared effective. In addition, we may not be able to take advantage of any exemptions from registration under the Securities Act. Accordingly, holders of our ADSs may be unable to participate in our rights offerings and may experience dilution in their holdings as a result.

You may be subject to limitations on transfer of your ADSs.

Your ADSs evidenced by the ADRs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems doing so expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

You may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. federal courts may be limited, because we are incorporated under Cayman Islands law, conduct substantially all of our operations in China and all of our officers reside outside the United States.

We are incorporated in the Cayman Islands. We conduct substantially all of our operations in China through the subsidiaries in China directly or indirectly owned by us. All of our officers reside outside the United

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States and some or all of the assets of those persons are located outside of the United States. As a result, it may be difficult or impossible for you to bring an original action against us or against these individuals in a Cayman Islands or PRC court if you believe that we or our officers have infringed your rights under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of China may render you unable to enforce a judgment against our assets or the assets of our directors and officers. There is no statutory recognition in the Cayman Islands of judgments obtained in the United States, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. For more information regarding the relevant laws of the Cayman Islands and China, see “Enforceability of Civil Liabilities.”

Our corporate affairs are governed by our amended and restated memorandum and articles of association and by the Companies Law (2009 Revision) and common law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands have a less developed body of securities laws as compared to the United States, and provide significantly less protection to investors. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the federal courts of the United States.

As a result of all of the above, our public shareholders may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

Our management will have considerable discretion as to the use of the net proceeds from this offering.

We intend to use a significant portion of the net proceeds of this offering for general corporate purposes. However, we have not allocated the net proceeds we will receive from this offering to any specific purpose. As such, our management will have considerable discretion in the application of the net proceeds received by us. You will not have the opportunity, as part of your investment decision, to assess whether proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate purposes that do not improve our profitability or increase our share price. The net proceeds from this offering may be placed in investments that do not produce income or that lose value.

We will incur additional costs as a result of becoming a public company.

As a public company, we will incur significant legal, accounting and other expenses that we did not have as a private company prior to this offering. In addition, new rules and regulations relating to information disclosure, financial reporting and control and corporate governance, which could be adopted by the SEC, the New York Stock Exchange and other regulatory bodies and exchange entities from time to time, could result in a significant increase in legal, accounting and other compliance costs and to make certain corporate activities more time-consuming and costly, which could materially affect our business, financial condition and results of operations.

30

FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that relate to future events, including our future operating results and conditions, our prospects and our future financial performance and condition. The forward-looking statements are contained principally in the sections entitled “Prospectus Summary,” “Risk Factors,” “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements involve known and unknown risks, uncertainties and other factors, including those listed under “Risk Factors,” which may cause our actual results, performance or achievements to be materially different from any future results, performances or achievements expressed or implied by the forward-looking statements.

Forward-looking statements typically are identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions or the negative of these words or expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. These forward-looking statements include, among other things, statements relating to:

• our anticipated growth strategies;

• our future business development, results of operations and financial condition;

• expected changes in our net revenues and certain cost or expense items;

• our ability to attract clients and further enhance our brand recognition; and

• trends and competition in the real estate services industry.

The forward-looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect.

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USE OF PROCEEDS

We estimate that we will receive net proceeds of approximately US$83.6 million from this offering, or US$96.7 million if the underwriters exercise their option to purchase additional ADSs in full, after deducting the estimated underwriting discount and offering expenses payable by us. For the purpose of estimating net proceeds, we are assuming an initial public offering price of US$7.50 per ADS, the mid-point of the estimated range of the initial public offering price. A US$0.50 increase (decrease) in the assumed public offering price would increase (decrease) the net proceeds to us from this offering by US$5.8 million.

We intend to use the net proceeds of this offering for the following purposes:

• approximately US$40 million to fund the development of our company-owned brokerage services business to enter new cities through selected strategic acquisitions to enter new cities;

• approximately US$20 million to fund the development of our company-owned brokerage services business in existing cities by opening additional company-owned sales offices;

• approximately US$10 million to invest and upgrade our information and operations systems;

• the balance to fund general corporate purposes, including our working capital needs.

As of the date of this prospectus, we cannot specify with certainty the particular uses for all of the net proceeds we will receive upon the completion of this offering. The foregoing represents our current intentions with respect to the use and allocation of the net proceeds of this offering based upon our present plans and business conditions. Accordingly, our management will have significant discretion in applying the net proceeds we will receive from the offering. The occurrence of unforeseen events or changed business conditions could result in application of the net proceeds of this offering in a manner other than as described in this prospectus.

As of the date of this prospectus, we believe that the estimated net proceeds of this offering, along with existing cash balances and ongoing operating cash flows, will provide necessary capital for our contemplated expansion plans. Pending use of the net proceeds, we intend to invest our net proceeds in short-term, interest bearing, investment-grade obligations.

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DIVIDEND POLICY

We have never declared or paid any dividends on our ordinary shares. We do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain future earnings, if any, to finance operations and expand our business.

As we are a holding company, we rely, in part, on dividends paid to us by our subsidiaries in China for our cash requirements, including funds to pay dividends and other cash distributions to our shareholders, service any debt we may incur and pay our operating expenses. In China, the payment of dividends is subject to limitations. PRC regulations currently permit payment of dividends only out of accumulated profits as determined in accordance with PRC accounting standards and regulations. Under current PRC laws and regulations, our subsidiaries in China are required to set aside a certain amount of their accumulated after-tax profits each year, if any, to fund certain statutory reserves. These reserves may not be distributed as cash dividends. Further, if our subsidiaries in China incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.

Our board of directors has sole discretion on whether to pay dividends, subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that they may deem relevant. If we pay any dividends, we will pay our ADS holders to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. Cash dividends on our ADSs, if any, will be paid in U.S. dollars.

33

CAPITALIZATION

The following table shows our capitalization as of September 30, 2009:

• on an actual basis; and

• on a pro forma basis to give effect to the automatic conversion of all our ordinary and preferred shares into 418,339,339 Class A and 80,502,938 Class B ordinary shares immediately prior to the closing of this offering; and

• on a pro forma as adjusted basis to reflect the automatic conversion of all our ordinary and preferred shares into 418,339,339 Class A and 80,502,938 Class B ordinary shares immediately prior to the closing of this offering, and the issuance and sale of 12,487,500 ADSs by us in this offering, assuming an initial public offering price of US$7.50 per ADS (which is the mid-point of the estimated initial public offering price range) after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

You should read this table in conjunction with our consolidated financial statements and related notes included in this prospectus and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

	As of September 30, 2009(1)
	Actual	Pro Forma	Pro Forma As Adjusted(2)
	(in thousands of RMB, except share numbers)
Preferred shares:
Series A preferred shares, US$0.001 par value, 200,000,000 shares authorized, issued and outstanding on an actual basis and Series B preferred shares, US$0.001 par value, 111,367,270 shares authorized, issued and outstanding on an actual basis (None outstanding on a pro-forma or pro-forma as adjusted basis as of September 30, 2009)	514,162	—	—
Shareholders’ deficit:
Class A ordinary shares, US$0.001 par value, 1,013,746,760 shares authorized, 260,000,000 shares issued and outstanding on an actual basis, 3,133,000,000 shares authorized, 418,339,339 shares issued and outstanding on a pro-forma basis, and 605,651,839 shares issued and outstanding on a pro-forma as adjusted basis as of September 30, 2009	2,152	3,233	4,512
Class B ordinary shares, US$0.001 par value, 100,000,000 shares authorized, 80,502,938 shares issued and outstanding on a pro-forma basis, and on a pro-forma as adjusted basis (None authorized, issued and outstanding on an actual basis as of September 30, 2009)	—	550	550
Additional paid-in capital	2,496	519,942	1,089,499
Accumulated deficit	(179,680)	(184,595)	(184,595)
Non-controlling interest	2	2	2
Total shareholders’ (deficit) / equity	(175,030)	344,047	914,883
Total capitalization	339,132	344,047	914,883

34

(1) On January 4, 2010, we effected a share split whereby all of our issued and outstanding 26,000,000 ordinary shares of par value US$0.01 per share, 20,000,000 Series A preferred shares of par value US$0.01 per share and 11,136,727 Series B preferred shares of par value US$0.01 per share were divided into 260,000,000 ordinary shares of US$0.001 par value per share, 200,000,000 Series A preferred shares of par value US$0.001 per share and 111,367,270 Series B preferred shares of par value US$0.001 per share, respectively, and the number of our authorized shares was increased from 101,374,676 to 1,013,746,760. The share split has been retroactively reflected for all periods presented herein.

(2) A US$0.50 increase (decrease) in the assumed initial public offering price of US$7.50 per ADS would increase (decrease) each of pro forma as adjusted additional paid-in capital, total shareholders’ equity and total capitalization by RMB39.7 million, after deducting the estimated underwriting discounts and commissions and estimated aggregate offering expenses payable by us and assuming no exercise of the underwriters’ option to purchase additional ADSs.

35

DILUTION

If you invest in our ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after the offering. Dilution results from the fact that the per ordinary share offering price of our ADSs is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our presently outstanding ordinary shares.

Our net tangible book value at September 30, 2009 was US$44.2 million, or US$0.17 per ordinary share and US$2.55 per ADS. Net tangible book value represents total consolidated tangible assets less total consolidated liabilities. Our pro forma net tangible book value at September 30, 2009 was US$44.2 million, or US$0.09 per ordinary share and US$1.33 per ADS. Pro forma net tangible book value adjusts net tangible book value to give effect to the automatic conversion of all our ordinary and preferred shares into 418,339,339 Class A and 80,502,938 Class B ordinary shares immediately prior to the closing of this offering.

Without taking into account any other changes in such net tangible book value after September 30, 2009, other than to give effect to (i) the automatic conversion of all our ordinary and preferred shares into 418,339,339 Class A and 80,502,938 Class B ordinary shares immediately prior to the closing of this offering, and (ii) our sale of 12,487,500 ADSs in this offering at the initial public offering price of US$7.50 per ADS (which is the mid-point of the estimated initial public offering price range) and after deducting the underwriting discounts and commissions and estimated offering expenses, our pro forma as adjusted net tangible book value as of September 30, 2009 would have been US$127.8 million, or US$0.19 per share and US$2.79 per ADS. This represents an immediate increase in pro forma net tangible book value of US$0.10 per ordinary share, or US$1.47 per ADS, to existing shareholders and an immediate dilution of US$0.31 per ordinary share, or US$4.71 per ADS, to investors purchasing ADSs in this offering. Dilution is determined by subtracting pro forma as adjusted net tangible book value per ADS after this offering from the amount of cash paid by a new investor for one ADS. The following table illustrates this per share dilution:

Assumed initial public offering price per ordinary share	US$0.50
Net tangible book value per ordinary share as of September 30, 2009	US$0.17
Pro forma net tangible book value per ordinary share as of September 30, 2009	US$0.09
Increase in pro forma net tangible book value per ordinary share attributable to this offering	US$0.10
Pro forma as adjusted net tangible book value per ordinary share after giving effect to this offering	US$0.19
Dilution per ordinary share to new investors	US$0.31
Dilution per ADS to new investors	US$4.71
Dilution to new investors (percentage)*	62.8	%

* Calculated based on the dilution per ADS to new investors as a percentage of the per ADS initial public offering price of US$7.50 per ADS.

A US$0.50 increase (decrease) in the assumed public offering price of US$7.50 per ADS would increase (decrease) our net tangible book value after giving effect to the offering by US$5.8 million, the pro forma as adjusted net tangible book value per ordinary share and per ADS after giving effect to this offering by US$0.01 per ordinary share and US$0.13 per ADS and the dilution per ordinary share and per ADS to new investors in this offering by US$0.02 per ordinary share and US$0.37 per ADS, assuming no change to the number of ADSs offered by us as set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and other offering expenses. The pro forma and pro forma as adjusted information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

36

The following table summarizes, on a pro forma as adjusted basis as of September 30, 2009, the differences between existing shareholders and the new investors with respect to the number of ordinary shares purchased from us, the total consideration paid and the average price per share and the average price per ADS, each paid before deducting the underwriting discounts and commissions and our estimated offering expenses, assuming our sale of ADSs in this offering at the initial public offering price of US$7.50 per ADS, being the mid-point of the range set forth on the cover of this prospectus. The total number of ordinary shares does not include the ordinary shares underlying the ADSs to be sold upon the exercise of the option granted to the underwriters to purchase additional ADSs from us. The pro forma as adjusted information discussed above is illustrative only.

	Shares purchased			Total consideration			Average price   per share	Average price   per ADS
	Number	Percent		Amount	Percent
	(in thousands of US$, except per share and per ADS data)
Existing holders	498,842	72.7	%	68,166	42.1	%	0.14	2.05
New investors	187,313	27.3	%	93,656	57.9	%	0.50	7.50
Total	686,155	100.0	%	161,822	100.0	%	0.24	3.54

A US$0.50 increase (decrease) in the assumed initial public offering price of US$7.50 per ADS would increase (decrease) total consideration paid by new investors, total consideration paid by all shareholders and the average price per ADS paid by all shareholders by US$6.2 million, US$6.2 million and US$0.14, respectively, assuming no change in the number of ADSs sold by us as set forth on the cover page of this prospectus and before deducting the underwriting discounts and commissions and our estimated offering expenses.

The discussion and tables in this section assume no exercise of outstanding stock options. As of September 30, 2009, there were stock options outstanding to purchase a total of 43.8 million ordinary shares, with a weighted average exercise price of US$0.13 per share. To the extent that any of these stock options are exercised, there will be further dilution to new investors.

If the underwriters’ option to purchase additional ADSs is exercised in full, investors purchasing ADSs in this offering from us will hold 30.2% of the total number of our ordinary shares outstanding after this offering.

37

EXCHANGE RATE INFORMATION

Our business is primarily conducted in China, and all of our revenues and expenses are denominated in Renminbi. Unless otherwise noted, all translations from Renminbi to U.S. dollars have been made at a rate of RMB6.8262 to US$1.00, the noon buying rate as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2009. We do not represent that Renminbi or U.S. dollar amounts could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate, the rates below or at all.

The following table sets forth, for the periods indicated, information concerning exchange rates between the Renminbi and the U.S. dollar based on the noon buying rate in New York City for cable transfers of Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York. These rates are provided solely for your convenience and are not necessarily the exchange rates that we used in this prospectus or will use in the preparation of our periodic reports or any other information to be provided to you.

	Noon Buying Rate
Period (Year ended December 31)	Period End	Average(1)	Low	High
	(RMB per US$1.00)
2004	8.2765	8.2768	8.2774	8.2764
2005	8.0702	8.1826	8.2765	8.0702
2006	7.8041	7.9579	8.0702	7.8041
2007	7.2946	7.5806	7.8127	7.2946
2008	6.8225	6.9193	7.2946	6.7800
2009
July	6.8319	6.8317	6.8342	6.8300
August	6.8299	6.8323	6.8358	6.8299
September	6.8262	6.8277	6.8303	6.8247
October	6.8264	6.8267	6.8292	6.8248
November	6.8265	6.8271	6.8300	6.8255
December	6.8259	6.8275	6.8299	6.8244
2010
January (through January 22)	6.8270	6.8270	6.8295	6.8258

Source: Federal Reserve Bank of New York

(1) Annual averages are calculated by using the average of the exchange rates on the last day of each month during the relevant year. Monthly averages are calculated by using the average of the daily rates during the relevant month.

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SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OPERATING DATA

The following selected consolidated financial information and operating data for the periods and as of the dates indicated should be read in conjunction with our audited consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus. Our selected consolidated statement of operations data for the years ended December 31, 2007 and 2008 and the nine months ended September 30, 2009 and selected consolidated balance sheet data as of December 31, 2007 and 2008 and September 30, 2009 have been derived from our audited consolidated financial statements, which are included elsewhere in this prospectus. Our selected consolidated statement of operations data for the nine months ended September 30, 2008 have been derived from our unaudited consolidated financial statements, which are included elsewhere in this prospectus and have been prepared on the same basis as our audited consolidated financial data. The unaudited selected financial data include, in the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary for a fair presentation of the financial position and the results of operations of the interim unaudited period. Our selected consolidated statement of operations data for the year ended December 31, 2006 and selected consolidated balance sheet data as of December 31, 2006 have been derived from our financial statements not included in this prospectus. Our audited and unaudited consolidated financial statements have been prepared and presented in accordance with accounting principles generally accepted in the United States of America, or US GAAP. The historical results are not necessarily indicative of results to be expected in any future period.

We underwent a reorganization in 2006 to become the holding company of our various subsidiaries. Our reorganization became effective on August 24, 2006. Prior to the reorganization, we managed our franchise services business through a number of companies owned by our founders. We have not included financial information for the years ended December 31, 2004 and 2005, as such information is not available on a basis that is consistent with the consolidated financial information for the years ended December 31, 2006, 2007 and 2008. As our company was not created until 2006 in connection with the reorganization as described in this prospectus, the preparation of consolidated financial information for our company prior to such date would require the preparation of consolidated financial information on a predecessor entity basis for the various companies comprising the operations of our company at that time. Such group would include two companies incorporated in the Cayman Islands and seven companies incorporated in the PRC. No financial accounts were prepared in accordance with US GAAP for our company or our subsidiaries, nor were consolidated accounts prepared for our company for 2004 and 2005. Although accounts were prepared for each of the companies incorporated in the PRC on a basis to comply with PRC tax reporting laws and regulations, or PRC Statutory Accounting, given that it would be inappropriate to prepare accounts for the non-PRC companies on the basis of PRC Statutory Accounting, in order to fairly present consolidated financial information for 2004 and 2005, our company would need to adopt uniform US GAAP accounting conventions for all nine entities, which would differ significantly from PRC Statutory Accounting.

As such, our consolidated financial statements cannot be provided on a US GAAP basis or home-country GAAP basis without unreasonable effort or expense. Furthermore, we believe that the omission of selected financial data for those years would not have a material impact on a reader’s understanding of our financial results and condition, and related trends.

39

	For the Year Ended December 31,						For the Nine Months Ended September 30,
	2006		2007		2008		2008		2009
	(RMB)		(RMB)		(RMB)		(RMB)		(RMB)		(US$)(1)
							(unaudited)
	(in thousands, except for share and per share data)
Statement of Operations Data:
Revenue
Net revenues	38,425		189,029		273,359		208,877		443,691		64,998
Costs and Expenses
Commissions and other agent related costs	(4,620	)	(82,866	)	(151,550	)	(116,250	)	(197,978	)	(29,003	)
Operating costs	(9,914	)	(79,886	)	(146,457	)	(110,889	)	(85,183	)	(12,479	)
Selling, general and administrative expenses	(40,285	)	(94,471	)	(102,952	)	(76,456	)	(70,278	)	(10,295	)
Total costs and expenses	(54,819	)	(257,223	)	(400,959	)	(303,595	)	(353,439	)	(51,777	)
(Loss)/Income from operations	(16,394	)	(68,194	)	(127,600	)	(94,718	)	90,252		13,221
Interest income	848		1,708		4,441		2,708		1,575		231
Interest expense	(1,299	)	—		—		—		—		—
Foreign currency exchange loss	(1,537	)	(5,485	)	(5,526	)	(4,458	)	(480	)	(70	)
(Loss)/Income before income tax and share of associates’ losses	(18,382	)	(71,971	)	(128,685	)	(96,468	)	91,347		13,382
Income tax	(799	)	(394	)	(2,076	)	(1,780	)	(2,821	)	(414	)
Share of associates’ losses	(373	)	(409	)	(1,126	)	(1,050	)	(193	)	(28	)
Net (loss)/income	(19,554	)	(72,774	)	(131,887	)	(99,298	)	88,333		12,940
Non-controlling interest	1,524		(1,347	)	(431	)	(431	)	—		—
Net (loss)/income attributable to IFM Investments Limited	(18,030	)	(74,121	)	(132,318	)	(99,729	)	88,333		12,940
Net (loss) income per Share
Basic	(0.07	)	(0.31	)	(0.57	)	(0.43	)	0.13		0.02
Diluted	(0.07	)	(0.31	)	(0.57	)	(0.43	)	0.13		0.02
Net (loss) income per ADS
Basic	(1.12	)	(4.69	)	(8.54	)	(6.43	)	2.00		0.29
Diluted	(1.12	)	(4.69	)	(8.54	)	(6.43	)	1.96		0.29
Weighted average number of ordinary shares used in per share calculations(2):
Basic	260,000,000		260,000,000		260,000,000		260,000,000		260,000,000		260,000,000
Diluted	260,000,000		260,000,000		260,000,000		260,000,000		264,262,500		264,262,500

(1) Translations of RMB amounts into U.S. dollars were made at a rate of RMB6.8262 to US$1.00, the noon buying rate for U.S. dollars in effect on September 30, 2009 in New York City for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York.

(2) On January 4, 2010, we effected a share split whereby all of our issued and outstanding 26,000,000 ordinary shares of par value US$0.01 per share, 20,000,000 Series A preferred shares of par value US$0.01 per share and 11,136,727 Series B preferred shares of par value US$0.01 per share were divided into 260,000,000 ordinary shares of US$0.001 par value per share, 200,000,000 Series A preferred shares of par value US$0.001 per share and 111,367,270 Series B preferred shares of par value US$0.001 per share, respectively, and the number of our authorized shares was increased from 101,374,676 to 1,013,746,760. The share split has been retroactively reflected for all periods presented herein.

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	As of December 31,						As of September 30,
	Actual						Actual		Pro Forma As Adjusted(2)
	2006		2007		2008		2009		2009
	(RMB)		(RMB)		(RMB)		(RMB)	(US$)(1)	(RMB)	(US$)(1)
	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	110,505		331,216		176,977		263,176	38,554	834,102	122,178
Restricted cash	6,793		14,497		17,213		21,565	3,159	21,565	3,159
Accounts receivable, net	6,437		9,965		13,633		60,030	8,794	60,030	8,794
Amount due from related parties	80,789		44,068		38,110		6,210	910	6,210	910
Property and equipment, net	5,822		42,467		42,954		41,076	6,017	41,076	6,017
Intangible assets, net	27,943		26,317		29,796		28,318	4,148	28,318	4,148
Total assets	255,750		513,187		360,895		462,792	67,796	1,033,628	151,420
Accrued expenses and other current liabilities	38,535		52,234		53,597		97,450	14,276	97,450	14,276
Total liabilities	106,073		145,647		111,356		123,660	18,115	123,660	18,115
Convertible redeemable preferred shares	172,131		469,971		501,892		514,162	75,322	—	—
Total shareholders’ (deficit)/equity	(22,454	)	(102,431	)	(252,353	)	(175,030)	(25,641)	914,883	134,025

(1) Translations of RMB amounts into U.S. dollars were made at a rate of RMB6.8262 to US$1.00, the noon buying rate for U.S. dollars in effect on September 30, 2009 in New York City for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York.

(2) Our consolidated balance sheet data as of September 30, 2009 is adjusted to give effect to the automatic conversion of all our ordinary and preferred shares into 418,339,339 Class A and 80,502,938 Class B ordinary shares immediately prior to the closing of this offering, and the issuance and sale of ADSs by us in this offering, assuming an initial public offering price of US$7.50 per ADS (the mid-point of the estimated initial public offering price range) after deducting underwriting discounts and commissions and estimated offering expenses payable by us. A US$0.50 increase (decrease) in the assumed initial public offering price of US$7.50 per ADS would increase (decrease) the amounts representing cash and cash equivalents, total assets and total shareholders’ deficit by US$5.8 million.

	For the year ended or as of December 31,		For the Nine Months Ended or as of September 30,
	2007	2008	2008	2009
			(unaudited)
Other Financial and Operating Data:
Company-owned brokerage services
Net revenues (in thousands of RMB)	151,692	206,076	153,703	407,937
Average number of operating sales offices(1)	143	279	296	233
Average monthly net revenues per operating sales office (in thousands of RMB)	88.4	61.6	57.7	194.5
Mortgage management services
Net revenues (in thousands of RMB)	—	10,650	7,903	22,467
Loan amount of referred mortgages (in thousands of RMB)	—	1,879,500	1,369,000	4,171,000
Franchise services
Net revenues (in thousands of RMB)	37,337	56,633	47,271	13,287
Number of regional sub-franchisors as of period end	23	28	27	28

(1) Equals the sum of the number of operating sales offices that existed at the end of each month in the applicable period, divided by the number of months in such period.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section entitled “Selected Consolidated Financial Information and Operating Data” and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We are a leading comprehensive real estate services provider with the largest network of real estate sales offices in China. We are the exclusive franchisor in China for the CENTURY 21^® brand, one of the world’s most recognized brands in the real estate industry. As of September 30, 2009, our CENTURY 21^® China network covered 34 major cities with more than 1,000 sales offices, employed approximately 14,900 sales professionals and staff and maintained approximately 4.7 million property listings. In the first half of 2009, based on transaction volume, we ranked among the top three market leaders in over 90% of the cities in which we operate and were the market leader in more than 30% of those cities. We primarily focus on China’s fast-growing and highly fragmented secondary real estate market, which we expect to outgrow the primary market, especially in more economically prosperous cities.

We have significant experience providing professional services in the real estate services industry, and have experienced substantial net revenues growth in recent years. We entered the real estate services market in 2000 as a pioneer of the franchise model in China and, from our base in Beijing, have grown our network of sales offices, including our company-owned sales offices and franchised sales offices, to 34 cities. In late 2006, we launched our company-owned brokerage services business. We subsequently launched our mortgage management services which we began managing as a separate segment in 2008. We are now a market leader in Beijing and Shanghai in both of these business lines.

Factors Affecting Our Results of Operations

Our operating results are subject to general conditions typically affecting the real estate services industry, including changes in PRC government policies and laws with respect to real estate and real estate financing, mortgage interest rates, economic growth, seasonality, demographic changes and demand for residential property in China, particularly in the secondary market. In addition, our operating results may be affected by competition from other real estate services companies and increases in operating costs and expenses due to inflation and other factors. Unfavorable changes in any of these conditions could negatively affect our transaction volume and the transaction value of the properties for which we facilitate sales and otherwise adversely affect our results of operations. For a description of the factors affecting the Chinese real estate and real estate services industry, see “Our Industry.”

Our operating results are also affected by company-specific factors, including our revenue growth and ability to effectively manage our operating costs and expenses. We describe certain of these specific factors affecting our statement of operations below.

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Net Revenues. We generate revenue by providing company-owned brokerage services, mortgage management services and franchise services. Our net revenues are presented net of PRC business taxes, discounts and related surcharges. The following table sets forth the net revenues generated by each of our business lines, both as an amount and as a percentage of total net revenues for the periods indicated:

	For the Year Ended December 31,				For the Nine Months Ended September 30,
	2007		2008		2008		2009
	RMB	%	RMB	%	RMB	%	RMB	US$	%
					(unaudited)
Net Revenues:	(in thousands, except for percentages)
Company-owned brokerage services	151,692	80.2	206,076	75.4	153,703	73.6	407,937	59,761	91.9
Mortgage management services	-	-	10,650	3.9	7,903	3.8	22,467	3,291	5.1
Franchise services	37,337	19.8	56,633	20.7	47,271	22.6	13,287	1,946	3.0
Total net revenues	189,029	100.0	273,359	100.0	208,877	100.0	443,691	64,998	100.0

Company-Owned Brokerage Services. Our company-owned brokerage services accounted for 80.2% and 75.4% of net revenues for the years ended December 31, 2007 and 2008, and 73.6% and 91.9% of net revenues for the nine months ended September 30, 2008 and 2009, respectively. Net revenues from our company-owned brokerage services grew substantially in 2008, after we made a strategic decision to expand our business into company-owned brokerage services in Shanghai and Beijing as these markets mature. We further expanded into Shenzhen in mid-2008 aiming to capture the growth potential in the secondary real estate market there. We expect that our company-owned brokerage services will continue to constitute the majority of our net revenues in future periods.

We generate revenue in our company-owned brokerage services primarily through commissions earned from home buyers, sellers, lessors and lessees, principally with respect to the middle to high grade residential properties in the secondary real estate market. We have also recently created new teams dedicated to the primary and commercial real estate sales markets and expect to generate additional revenue from these areas. Most of our agency contracts specifies a commission rate expressed as a percentage of sales or monthly rental price of a particular property. Commissions are generally payable upon the signing of a real estate sales and purchase agreement or rental agreement, at which time we recognize revenue.

Net revenues from our company-owned brokerage services are significantly affected by transaction volume, our commission rates and the average transaction value of the properties that we assist in selling, purchasing and leasing, as follows:

• Transaction volume. Transaction volumes are largely affected by general real estate market conditions in China and local market conditions, our brand recognition, our network of company-owned sales offices and sales professionals, our ability to market and sell our services to a substantial number of purchasers, sellers and lessors of properties, our ability to obtain information on potential sales or rental leads, and the quality of our services. We have grown transaction volumes by increasing the number of company-owned sales offices and by increasing the productivity per existing sales office as measured by average monthly net revenues per operating sales office. We seek to drive our revenues in future periods by maximizing the productivity per existing sales office as we expand our network of company-owned sales offices. We typically experience a ramp-up period after opening a sales office for it to achieve break-even profitability. The length of the ramp-up period depends on various factors, such as the location of each office, the number of competitors and the maturity level of the relevant local market. In addition, we expect the length of this ramp-up period to decrease as the experience of our sales professionals grows, the number of our listings increases and we achieve greater economies of scale. Subject to market conditions, we intend to have at least 500 company-owned sales offices by the end of 2010.

• Commission rates. Our commission rates are regulated by the PRC and provincial governments, which set maximum rates that vary from city to city. Commissions range up to an aggregate 3% of

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transaction value for sales and purchases, and up to one month’s rent in the case of rentals. The rates set by the PRC government have not changed significantly and therefore our commission rates have not changed materially during the two years ended December 31, 2008 or the nine months ended September 30, 2009.

• Average transaction value. The average transaction value for the transactions in which we are involved varies based upon general real estate market conditions in China and local market conditions. Transaction values are impacted by government polices and laws with respect to real estate and real estate financing, bank lending policies and interest rates, and economic growth and demand for residential property in China (particularly in the secondary market), among other factors.

Mortgage Management Services. We began managing our mortgage management services as a separate segment in 2008. Our mortgage management services accounted for 3.9% of net revenues for the year ended December 31, 2008, and 3.8% and 5.1% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, respectively.

We generate revenue in our mortgage management services primarily through commissions earned from commercial banks in consideration of our advisory services to home buyers and home owners and interim guarantee services to mortgage banks. These services principally consist of introducing home mortgage products made available by various commercial banks to home buyers and arranging property financing, valuation services and title transfers. The commissions we receive in consideration for providing such referral services are based upon the amount of the home mortgage entered into by the customer that we refer. In addition, as is customary in the real estate brokerage industry in Beijing, we provide interim guarantees to commercial banks with respect to the mortgage loans they extend to our customers prior to the registration of the mortgage of the property to the bank. We provide these mortgage management services in Beijing and Shanghai under the trade name of Kaisheng.

Revenues from our mortgage management services are significantly affected by transaction volume, commission rates and the average loan amount of the home mortgage sought by our customers. The number of persons seeking home mortgages in connection with the purchase of a property significantly impacts the number of applications for home mortgages for which we can advise or offer services. In this regard, we cross-sell our mortgage management services to clients of our company-owned sales offices. In 2009, a substantial majority of the transactions handled by our company-owned brokerage services in which mortgages were utilized made use of our mortgage management services.

Franchise Services. Our franchise services accounted for 19.8% and 20.7% of net revenues for the years ended December 31, 2007 and December 31, 2008 and 22.6% and 3.0% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, respectively.

We generate revenue in our franchise services primarily by granting regional franchise rights for the CENTURY 21^® brand in China to regional sub-franchisors in various cities. The regional sub-franchisors, in turn, are authorized to grant individual sales office franchise rights to franchisees in their cities. In consideration for such rights, we collect from each regional sub-franchisor an initial franchise fee and ongoing service fees based on the higher of a percentage of the franchisees’ gross income or a fixed monthly amount. Similarly, a regional sub-franchisor collects from its franchisees an initial franchise fee and ongoing service fees.

Revenues from our franchise services are significantly affected by the number of new regional sub-franchisors, the number of new franchisees and ongoing service fees.

• Number of new regional sub-franchisors. Revenues from the initial franchise fees paid by new regional sub-franchisors upon joining the CENTURY 21^® franchise have constituted the substantial majority of our revenue generated by our franchise services. The number of new regional

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sub-franchisors with whom we are able to enter into regional sub-franchisor agreements significantly impacts the initial franchise fees we generate in any particular period.

• Number of new franchisees. Similarly, the number of new franchisees with whom we or our regional sub-franchisors are able to enter into franchise agreements significantly impacts the amount of initial franchise fees the regional sub-franchisor receives and, correspondingly, the franchise fees we are able to generate in any particular period.

• Ongoing service fees. Ongoing service fees are based on the higher of a percentage of the franchisees’ gross income or a fixed monthly amount. Regional sub-franchisors generally agree on these percentages or fixed amounts at the outset of the franchise relationship with a third party, but increases or decreases in the percentage amount or the fixed amount would significantly impact the amount of franchise fees that we are able to generate in any period.

Commissions and other agent related costs. Our commissions and other agent related costs primarily include salaries, benefits and commissions paid to our sales professionals, other staff and management for company-owned brokerage services and, to a lesser degree, for mortgage management services and franchise services. Compensation for our sales professionals and managers consists of a fixed salary and benefit package, together with a variable incentive-based component that is expected to comprise a majority of the sales professional or manager’s compensation. We believe such a commission based system aligns the interests of our sales professionals with our interests, and allows us to control expenses if transaction volumes or property values decline. Commission and other agent related costs amounted to 43.8% and 55.4% of net revenues for the years ended December 31, 2007 and December 31, 2008 and 55.7% and 44.6% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, respectively.

Operating costs. Our operating costs primarily include store rental, equipment and utility costs and ongoing service fees. These expenses primarily consist of leasing costs, for which we typically execute written leases with terms of up to five years, and costs associated with supporting each sales office, including computer, telephone, electricity, office supplies and related expenses. Ongoing service fees refer to the ongoing service, or royalty, fees, that we must pay in connection with our right to use the CENTURY 21^® brand.

Operating costs amounted to 42.3% and 53.6% of net revenues for the years ended December 31, 2007 and December 31, 2008 and 53.1% and 19.2% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, in each case, respectively. The majority of these operating costs are incurred in relation to our company-owned brokerage services, which accounted for 90.2% and 90.5% of operating costs for the years ended December 31, 2007 and December 31, 2008 and 90.1% and 93.1% of operating costs for the nine months ended September 30, 2008 and September 30, 2009, in each case, respectively.

Selling, general and administrative expenses. Our selling, general and administrative expenses primarily include back office and support staff expenses for our company-owned sales offices, advertising and promotions and share-based compensation. Expenses related to back office and support staff primarily consist of compensation and benefits expenses for administrative personnel, including accounting, human resources, transaction support, legal, information technology, employee training, customer service and other similar functions. Advertising and promotions expenses primarily consist of marketing and advertising costs, including contributions to our National Advertising Fund, or NAF.

Selling, general and administrative expenses amounted to 50.0% and 37.7% of net revenues for the years ended December 31, 2007 and December 31, 2008 and 36.6% and 15.8% of net revenues for the nine months ended September 30, 2008 and 2009, respectively. Expenses relating to our company-owned brokerage services accounted for 50.5% and 51.3% of selling, general and administrative expenses for the years ended December 31, 2007 and December 31, 2008, respectively and 54.2% and 54.0% of selling, general and administrative expenses for the nine months ended September 30, 2008 and September 30, 2009, respectively. Expenses relating to franchise services accounted for 18.8% and 13.4% and 11.5% and 12.7% and non-allocated

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costs accounted for 30.7% and 29.9% and 28.6% and 25.7% of selling, general and administrative expenses for the years ended December 31, 2007 and 2008 and the nine months ended September 30, 2008 and 2009, respectively. Non-allocated costs consist primarily of costs and expenses associated with our headquarters. We expect that our selling, general and administrative expenses will increase in the near term as we hire additional personnel and incur additional costs in connection with the expansion of our business and with being a publicly traded company.

Share-based compensation expenses were RMB43,549 and RMB730,453 for the years ended December 31, 2007 and December 31, 2008 and RMB535,504 and RMB1,257,174 (US$184,169) for the nine months ended September 30, 2008 and September 30, 2009, respectively. As of September 30, 2009, there was US$624,613 (approximately RMB4,264,000) of total unrecognized compensation cost related to non-vested share-based compensation granted under the plan. The cost is expected to be recognized over a weighted average period of 2.0 years. As a result of a modification to our Series A Preferred Shares terms on January 27, 2010 as described in Note 22(f) to our consolidated financial statements, we expect to recognize a compensation charge of approximately RMB4.9 million (US$720,000) in January 2010.

Taxation. We are incorporated in the Cayman Islands. Under the current law of the Cayman Islands, we are not subject to income or capital gains tax. In addition, dividend payments are not subject to withholding tax in the Cayman Islands. Dividends from our PRC subsidiaries are subject to a withholding tax at the rate of 10% except Shenzhen CIR, whose dividends are subject to a withholding tax at the rate of 5%. Our current holding structure does not provide for any further treaty relief. Dividends from our Hong Kong subsidiary are exempt from withholding tax as long as after-tax profits are distributed.

Our subsidiaries in China are subject to business tax and related surcharges by various local tax authorities at rates ranging from 5.0% to 5.5% on gross revenues generated from providing real estate services.

Prior to January 1, 2008, pursuant to the Income Tax Law of the PRC concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws, the enterprise income taxes of PRC entities were generally assessed at a statutory rate of 33%, which comprises 30% national income tax and 3% local income tax.

The CIT Law, under which foreign invested enterprises, or FIEs, and domestic companies would be subject to enterprise income tax at a uniform rate of 25%, became effective on January 1, 2008. In accordance with the CIT Law, there will be a transition period for enterprises that currently receive preferential tax treatments granted by relevant tax authorities. Enterprises subject to an enterprise income tax rate lower than 25% may continue to enjoy the lower rate and gradually transition to the new tax rate within five years after the effective date of the CIT Law.

IFM Beijing, Beijing Anxin and IFM SH are subject to the income tax rate of 33% for periods before 2008 and 25% thereafter in accordance with the CIT Law.

As Shanghai Ruifeng and Anshijie are both registered in Shanghai Pu Dong New Area and Shenzhen CIR is registered in Shenzhen special economic zone, they are subject to the preferential income tax rate of 15% according to the Foreign Investment and Foreign Enterprise Income Tax Law before 2008. From January 1, 2008 onwards, the income tax rate is increased progressively from 18% to 25% from 2008 to 2012, respectively, according to preferential treatments granted by the PRC central and local governments.

In October 2009, Beijing Huachuangxunjie Technology Co., Ltd, or Huachuang, obtained a Software Enterprise Certification which entitles it to exemption from corporate income tax for the first two years in which it has taxable income and a 50% reduction in corporate income tax for each of the following three years.

Under the CIT Law, dividends from our PRC subsidiaries out of earnings generated after January 1, 2008, are subject to a withholding tax which may be as high as 20%, although under the detailed implementation rules promulgated by the PRC tax authorities, the effective withholding tax is currently 10%. Distributions of earnings generated before January 1, 2008 are exempt from PRC withholding tax. Dividend payments are not subject to withholding tax in the British Virgin Islands or the Cayman Islands.

Under the CIT Law, enterprises established under the laws of foreign countries or regions and whose “de facto management bodies” are located within the PRC territory are considered PRC resident enterprises, and

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will be subject to the PRC enterprise income tax at the rate of 25% on their worldwide income. Under the implementation rules of the CIT Law, “de facto management bodies” are defined as the bodies that have material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and other assets of an enterprise. We cannot assure you that we will not be deemed to be a PRC resident enterprise under the PRC CIT Law and be subject to the PRC enterprise income tax at the rate of 25% on our worldwide income. See “Risk Factors — Risks Related to Doing Business in China — Dividends payable to us by our PRC subsidiaries and gain on sale of our shares may be subject to PRC withholding taxes, or we may be subject to PRC taxation on our worldwide income and dividends distributed to our investors may be subject to PRC withholding taxes under the new CIT Law.”

Results of Operations

The following table sets forth a summary of our consolidated results of operations for the periods indicated. This information should be read together with our consolidated financial statements and related notes included elsewhere in this prospectus. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

	For the Year Ended December 31,				For the Nine Months Ended September 30,
	2007		2008		2008		2009		2009
	(RMB)		(RMB)		(RMB)		(RMB)		(US$)(1)
					(unaudited)
	(in thousands)
Revenue
Net revenues	189,029		273,359		208,877		443,691		64,998
Costs and Expenses
Commissions and other agent related costs	(82,866	)	(151,550	)	(116,250	)	(197,978	)	(29,003	)
Operating costs	(79,886	)	(146,457	)	(110,889	)	(85,183	)	(12,479	)
Selling, general and administrative expenses	(94,471	)	(102,952	)	(76,456	)	(70,278	)	(10,295	)
Total costs and expenses	(257,223	)	(400,959	)	(303,595	)	(353,439	)	(51,777	)
(Loss) / income from operations	(68,194	)	(127,600	)	(94,718	)	90,252		13,221
Interest income	1,708		4,441		2,708		1,575		231
Foreign currency exchange loss	(5,485	)	(5,526	)	(4,458	)	(480	)	(70	)
(Loss) / income before income tax and share of associates’ losses	(71,971	)	(128,685	)	(96,468	)	91,347		13,382
Income tax	(394	)	(2,076	)	(1,780	)	(2,821	)	(414	)
Share of associates’ losses	(409	)	(1,126	)	(1,050	)	(193	)	(28	)
Net (loss) / income	(72,774	)	(131,887	)	(99,298	)	88,333		12,940
Non-controlling interest	(1,347	)	(431	)	(431)		—		—
Net (loss) / income attributable to IFM Investments Limited	(74,121	)	(132,318	)	(99,729)		88,333		12,940

(1) Translations of RMB amounts into U.S. dollars were made at a rate of RMB6.8262 to US$1.00, the noon buying rate for U.S. dollars in effect on September 30, 2009 in New York City for cable transfers of Renminbi as certified for customs purposes by the Federal Reserve Bank of New York.

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Selected financial information and operational data relating to each of our business lines is set forth below for the periods indicated:

	For the Year Ended December 31,		For the Nine Months Ended September 30,
	2007	2008	2008	2009
Company-owned brokerage services
Net revenues (in thousands of RMB)	151,692	206,076	153,703	407,937
Beijing	62,666	75,543	50,196	187,077
Shanghai	89,026	126,830	101,752	200,414
Shenzhen	—	3,703	1,755	20,446
Average number of operating sales offices(1)	143	279	296	233
Average monthly net revenues per operating sales office (in thousands of RMB)	88.4	61.6	57.7	194.5
Mortgage management services
Net revenues (in thousands of RMB)	—	10,650	7,903	22,467
Loan amount of referred mortgages (in thousands of RMB)	—	1,879,500	1,369,000	4,171,000
Franchise services
Net revenues (in thousands of RMB)	37,337	56,633	47,271	13,287
Number of regional sub-franchisors as of period end	23	28	27	28

(1) Equals the sum of the number of operating sales offices that existed at the end of each month in the applicable period, divided by the number of months in such period.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

Net revenues. Our net revenues increased RMB234.8 million, or 112.4%, from RMB208.9 million for the nine months ended September 30, 2008 to RMB443.7 million (US$65.0 million) for the nine months ended September 30, 2009, primarily due to a significant increase in net revenues generated by our company-owned brokerage services. Our net revenue growth was also partly attributable to the increase in net revenues from our mortgage management services and partially offset by a decrease of net revenues from our franchise services.

Company-Owned Brokerage Services. Net revenues from our company-owned brokerage services increased RMB254.2 million, or 165.4%, from RMB153.7 million for the nine months ended September 30, 2008 to RMB407.9 million (US$59.8 million) for the nine months ended September 30, 2009. This increase was primarily due to a substantial increase in the number of sale and purchase transactions in which we were involved from 4,396 for the nine months ended September 30, 2008 to 12,976 for the nine months ended September 30, 2009. We believe the increase in the number of transactions in which our company-owned brokerage services were involved was primarily attributable to a recovery in China’s real estate market. The increase in the number of transactions was also partially due to the number of transactions we brokered in Shenzhen, a market we entered in the second half of 2008. We have achieved this robust growth in sales volume despite a significant reduction in the number of operating sales offices in Beijing and Shanghai. In Beijing, we decreased from an average of 140 operating sales offices for the nine months ended September 30, 2008 to an average of 101 operating sales offices for the nine months ended September 30, 2009. In Shanghai, we decreased from an average of 148 operating sales offices for the nine months ended September 30, 2008 to an average of 109 operating sales offices for the nine months ended September 30, 2009. These decreases were primarily due to streamlining of our operations in response to the weakness of the real estate market in China in 2008.

Average commission rates remained relatively stable in the nine months ended September 30, 2009 compared to the same period in 2008. However, our average monthly net revenues per operating sales office in Beijing increased by RMB165,967 or 416.6%, from RMB39,838 for the nine months ended September 30, 2008 to RMB205,805 (US$30,149) for the nine months ended September 30, 2009, and our average monthly net revenues per operating sales office in Shanghai increased by RMB127,906, or 167.4%, from RMB76,390 for the nine months ended September 30, 2008 to RMB204,296 (US$29,928) for the nine months ended September 30,

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2009. We believe that these increases were primarily due to improved operational efficiency and the recovery of the real estate market in China during the first nine months of 2009.

Mortgage Management Services. Revenues from our mortgage management services increased RMB14.6 million, or 184.8%, from RMB7.9 million for the nine months ended September 30, 2008 to RMB22.5 million (US$3.3 million) for the nine months ended September 30, 2009, primarily due to a substantial increase in the number of home mortgages for existing homes that utilized our mortgage management services. For the nine months ended September 30, 2009, we provided services for home mortgages for existing homes with an aggregate loan amount of approximately RMB4.2 billion (US$615.3 million) as compared to RMB1.4 billion for the nine months ended September 30, 2008.

Franchise Services. Revenues from our franchise services decreased RMB34.0 million, or 71.9%, from RMB47.3 million for the nine months ended September 30, 2008 to RMB13.3 million (US$1.9 million) for the nine months ended September 30, 2009. This decrease resulted primarily because we did not grant any new regional sub-franchises in the nine months ended September 30, 2009 compared with the nine months ended September 30, 2008, during which period we recognized RMB35.5 million in initial franchise fees from seven newly granted regional sub-franchises. Since September 30, 2009, we have granted two additional regional sub-franchises.

Commissions and other agent related costs. Our commissions and other agent related costs accounted for 55.7% and 44.6% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, respectively and increased RMB81.7 million, or 70.3%, from RMB116.3 million for the nine months ended September 30, 2008 to RMB198.0 million (US$29.0 million) for the nine months ended September 30, 2009, primarily due to RMB81.5 million net increase in costs associated with our company-owned brokerage services. This net increase was primarily due to a RMB95.7 million increase in commission expenses as a result of higher net revenues, and was partially offset by an RMB14.0 million decrease in non-commission, payroll and benefit expenses for our sales professionals as a result of the decrease in the number of company-owned sales offices and sales professionals in the nine months ended September 30, 2009.

Operating costs. Our operating costs accounted for 53.1% and 19.2% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, respectively and decreased RMB25.7 million, or 23.2%, from RMB110.9 million for the nine months ended September 30, 2008 to RMB85.2 million (US$12.5 million) for the nine months ended September 30, 2009, primarily due to a decrease in operating costs for our company-owned brokerage services of RMB20.6 million, or 20.6%, from RMB99.9 million for the nine months ended September 30, 2008 to RMB79.3 million for the nine months ended September 30, 2009. This decrease was primarily due to an RMB11.8 million decrease in sales office rental costs as a result of a reduction of 78 average company-owned operating sales offices in Beijing and Shanghai, offset by the addition of 26 operating sales office in Shenzhen, RMB8.1 million decrease in other sales office related costs such as utilities and telecommunications, and depreciation and amortization expenses. Our operating costs attributable to franchise services also decreased by RMB5.8 million mainly due to a decrease in royalty payments due to Realogy as we did not recognize any initial franchise fee revenue from newly signed regional sub-franchisors during this period.

Selling, general and administrative expenses. Our selling, general and administrative expenses accounted for 36.6% and 15.8% of net revenues for the nine months ended September 30, 2008 and September 30, 2009, respectively and decreased RMB6.2 million, or 8.1%, from RMB76.5 million for the nine months ended September 30, 2008 to RMB70.3 million (US$10.3 million) for the nine months ended September 30, 2009, primarily due to a decrease of RMB8.9 million in marketing expenses as management replaced traditional advertising with internet based marketing for our company-owned brokerage services and franchise services. The overall decrease in selling, general and administrative expenses was partially offset by increases of RMB0.9 million in costs associated with our mortgage management services as a result of hiring additional staff.

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Interest income. Our interest income decreased RMB1.1 million, or 41.8%, from RMB2.7 million for the nine months ended September 30, 2008 to RMB1.6 million (US$0.2 million) for the nine months ended September 30, 2009, mainly as a result of a lower average cash balance maintained for the nine months ended September 30, 2009.

Foreign currency exchange loss. Our foreign currency exchange loss decreased RMB4.0 million, or 89.2%, from RMB4.5 million for the nine months ended September 30, 2008 to RMB0.5 for the nine months ended September 30, 2009 primarily as a result of the stabilization of the exchange rate between the Renminbi and the U.S. dollar.

Net Income. As a result of the foregoing, we had a net income of RMB88.3 million (US$12.9 million) for the nine months ended September 30, 2009 as compared to a net loss of RMB99.3 million for the nine months ended September 30, 2008.

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007

Net revenues. Our net revenues increased RMB84.4 million, or 44.6%, from RMB189.0 million for the year ended December 31, 2007 to RMB273.4 million for the year ended December 31, 2008, primarily due to an increase in net revenues generated by our company-owned brokerage services. Our net revenue growth was also partly attributable to the establishment of our mortgage management services business as a separately managed segment and growth in our franchise services revenue.

Company-Owned Brokerage Services. Net revenues from our company-owned brokerage services increased RMB54.4 million, or 35.9%, from RMB151.7 million for the year ended December 31, 2007 to RMB206.1 million for the year ended December 31, 2008. This increase was primarily due to a substantial increase in the number of sale and purchase transactions in which we were involved from 4,424 for the year ended December 31, 2007 to 6,312 for the year ended December 31, 2008. The increase in the number of transactions in which our company-owned brokerage services were involved was primarily attributable to an increase in the number of sales offices in Beijing and Shanghai. In Beijing we increased from an average of 68 operating sales offices for the year ended December 31, 2007 to an average of 128 operating sales offices for the year ended December 31, 2008. In Shanghai we increased from an average of 75 operating sales offices for the year ended December 31, 2007 to an average of 139 operating sales offices for the year ended December 31, 2008.

Average commission rates remained relatively stable in the year ended December 31, 2008 as compared to the year ended December 31, 2007. As a result of our rapid expansion and, we believe, the weakness of the real estate market in China in 2008, our average monthly net revenues per operating sales office in Beijing, decreased by RMB27,615, or 36.0%, from RMB76,797 for the twelve months ended December 31, 2007 to RMB49,182 for the twelve months ended December 31, 2008. Our average monthly net revenues per operating sales office in Shanghai decreased by RMB22,881, or 23.1%, from RMB98,918 for the twelve months ended December 31, 2007 to RMB76,037 for the twelve months ended December 31, 2008. Revenues from our company-owned brokerage services in Shenzhen were minimal during such periods as these operations were launched in 2008.

Mortgage Management Services. Revenues from our mortgage management services were RMB10.7 million for the year ended December 31, 2008. Our mortgage management services were not separately segmented until 2008 when we began marketing the services under the Kaisheng brand, concentrating on brokering mortgage loan services to customers both inside and outside our CENTURY 21^® China network. For the year ended December 31, 2008, we provided services for home mortgages for existing homes with an aggregate loan amount of approximately RMB1.9 billion.

Franchise Services. Revenues from our franchise services increased by RMB19.3 million, or 51.7%, from RMB37.3 million for the year ended December 31, 2007 to RMB56.6 million for the year ended

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December 31, 2008. This growth was primarily attributable to an increase in the number of our newly-opened operating regional sub-franchisors in 2008 from three in the year ended December 31, 2007 to eight in the year ended December 31, 2008, resulting in an increase in the initial franchise fees recognized as revenue.

Commissions and other agent related costs. Our commissions and other agent related costs increased by RMB68.7 million, or 82.9%, from RMB82.9 million for the year ended December 31, 2007 to RMB151.6 million for the year ended December 31, 2008 primarily due to RMB69.1 million increase in costs associated with our company-owned brokerage services, RMB52.6 million, or 76.1%, of which was attributable to increased costs associated with non-commission, payroll and benefit expenses for our sales professionals as a result of the increase in company-owned sales offices in 2008 described under “– Net Revenues – Company-Owned Brokerage Services” above. This increase was also caused by an increased number of sales professionals and staff for our mortgage management services, which were managed as a separate segment beginning in 2008.

Operating costs. Our operating costs increased by RMB66.6 million, or 83.3%, from RMB79.9 million for the year ended December 31, 2007 to RMB146.5 million for the year ended December 31, 2008, principally due to an increase in operating costs for our company-owned brokerage services of RMB60.6 million, or 84.1%, from RMB72.0 million for the year ended December 31, 2007 to RMB132.6 million for the year ended December 31, 2008. This increase was primarily due to higher sales office rental costs of RMB43.1 million as a result of the addition of 136 company-owned average operating sales offices in Beijing, Shanghai and Shenzhen, RMB16.9 million increase in other sales office related costs such as utilities and telecommunications, and depreciation and amortization expense. Our operating costs attributable to franchise services increased by RMB4.4 million due to an increase in royalty payments to Realogy resulting from our increased initial franchise fee revenue. In addition, the operation of our mortgage management services as a separate segment resulted in costs of RMB1.6 million for the year ended December 31, 2008 being allocated to our mortgage management services.

Selling, general and administrative expenses. Our selling, general and administrative expenses increased by RMB8.5 million, or 9.0%, from RMB94.5 million for the year ended December 31, 2007 to RMB103.0 million for the year ended December 31, 2008, primarily due to RMB17.4 million increase in non-sales payroll costs associated with expansion of company-owned brokerage services and mortgage management services as we hired more back office supporting staff in these business segments, offset in part by RMB4.8 million decrease in advertising and promotion expenses as we changed from traditional print media to more internet based advertising, as well as RMB3.9 million decrease in other general and administrative expenses as we reduced consulting fees and professional fees.

Interest income. Our interest income increased by RMB2.7 million, or 160.0%, from RMB1.7 million for the year ended December 31, 2007 to RMB4.4 million for the year ended December 31, 2008, mainly as a result of our increased average cash balance during 2008 as compared with 2007.

Net loss. As a result of the foregoing, our net loss increased by RMB59.1 million, or 81.2%, from RMB72.8 million for the year ended December 31, 2007 to RMB131.9 million for the year ended December 31, 2008.

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The following table sets forth selected quarterly results of operations for the seven quarters ended September 30, 2009. We have prepared this financial information on the same basis as our audited consolidated financial statements. The operating results in any quarter are not necessarily indicative of the results that may be expected for any future period.

	For Three Months Ended
	March 31, 2008		June 30, 2008		September 30, 2008		December 31, 2008		March 31, 2009		June 30, 2009		September 30, 2009
	(RMB’000)		(RMB’000)		(RMB’000)		(RMB’000)		(RMB’000)		(RMB’000)		(RMB’000)
Revenue
Net revenue	58,912		75,497		74,468		64,482		98,236		165,948		179,507
Costs and Expenses
Commissions and other agent related costs	(32,614	)	(42,213	)	(41,423	)	(35,300	)	(46,763	)	(72,204	)	(79,011	)
Operating costs	(32,004	)	(34,712	)	(44,173	)	(35,568	)	(25,450	)	(29,384	)	(30,349	)
Selling, general and administrative expenses	(22,348	)	(24,944	)	(29,164	)	(26,496	)	(19,259	)	(22,468	)	(28,551	)
Total costs and expenses	(86,966	)	(101,869	)	(114,760	)	(97,364	)	(91,472	)	(124,056	)	(137,911	)
(Loss) Income from operations	(28,054	)	(26,372	)	(40,292	)	(32,882	)	6,764		41,892		41,596
Interest income	1,112		950		646		1,733		406		448		721
Foreign currency exchange loss	(2,205	)	(822	)	(1,431	)	(1,068	)	(337	)	(77	)	(66	)
(Loss) Income before income tax and share of associates’ losses	(29,147	)	(26,244	)	(41,077	)	(32,217	)	6,833		42,263		42,251
Income tax	(558	)	(1,094	)	(128	)	(296	)	(301	)	(1,032	)	(1,488	)
Share of associates’ losses	(833	)	(80	)	(137	)	(76	)	(97	)	(94	)	(2	)
Net (loss) income	(30,538	)	(27,418	)	(41,342	)	(32,589	)	6,435		41,137		40,761
Non-controlling interest	(431	)	—		—		—		—		—		—
Net (loss) income attributable to IFM Investments Limited	(30,969	)	(27,418	)	(41,342	)	(32,589	)	6,435		41,137		40,761

Our Liquidity and Capital Resources

Through September 30, 2009, our principal sources of liquidity were cash generated from our operating activities, capital contributions and sale of preferred shares through private placements. Our net cash used in operating activities was approximately RMB38.7 million, RMB125.4 million for the years ended December 31, 2007 and 2008, respectively and the net cash provided by operating activities was approximately RMB97.5 million for the nine months ended September 30, 2009. Consequently, our accumulated deficit was RMB135.7 million, RMB268.0 million and RMB179.7 million as of December 31, 2007 and 2008 and as of September 30, 2009, respectively. Our cash and cash equivalents consist of cash on hand and liquid investments placed with banks and other financial institutions that are unrestricted as to withdrawal or use and have maturities of three months or less. We have no debt obligations. We expect to utilize a portion of our cash on hand to open and acquire company-owned sales offices in selected new markets as we grow our network of company-owned brokerage services. We currently anticipate that we will be able to meet our needs to fund operations for at least the next twelve months following this offering with operating cash flow and existing cash balances.

We are a holding company with no material operations of our own. We conduct our operations primarily through our subsidiaries in China. As a result, our ability to pay dividends and to finance any debt we may incur depends upon dividends paid by our subsidiaries. If our subsidiaries or any newly formed subsidiaries incur debt on their own behalf in the future, the instruments governing their debt may restrict their ability to pay dividends to us. In addition, our subsidiaries are permitted to pay dividends to us only out of their retained earnings, if any, as determined in accordance with accounting standards and regulations applicable to such subsidiaries. Under

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PRC law, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of our PRC subsidiaries with foreign investments is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund at the discretion of the board. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation of these subsidiaries. In addition, dividend payments from our PRC subsidiaries could be delayed as such dividends may only be distributed upon completion of an annual audit of such subsidiary.

The following table sets forth a summary of our cash flows for the periods indicated:

	For the Year Ended December 31,				For the Nine Months Ended September 30,
	2007		2008		2008		2009		2009
	(RMB)		(RMB)		(RMB)		(RMB)		(US$)
					(unaudited)
	(in thousands)
Net cash (used in) provided by operating activities	(38,721	)	(125,376	)	(106,337	)	97,455		14,277
Net cash (used in) investing activities	(42,483	)	(38,446	)	(34,650	)	(8,915	)	(1,306	)
Net cash provided by (used in) financing activities	307,830		13,272		8,189		(2,313	)	(339	)
Effects of foreign exchange on cash and cash equivalents	(5,915	)	(3,689	)	(4,842	)	(28	)	(4	)
Net increase (decrease) in cash and equivalents	220,711		(154,239	)	(137,640	)	86,199		12,628
Cash and cash equivalents at the beginning of the period	110,505		331,216		331,216		176,977		25,926
Cash and cash equivalents at the end of the period	331,216		176,977		193,576		263,176		38,554

Operating Activities

Our operating activities primarily comprise our company-owned brokerage services, mortgage management services and franchise services. The timing of when we collect our fees on all of the business lines may differ from when we recognize revenue, which may result in significant changes in certain of our related balance sheet items such as deferred revenue and accounts receivable. For example, we collected more funds up front in 2007 related to our franchise fees as compared to 2008, which affected our cash used in operating activities.

For the nine months ended September 30, 2009, cash generated from operating activities amounted to RMB97.5 million, primarily due to RMB88.3 million net income earned during the period and, to a lesser degree, to an increase of RMB43.9 million in accrued expenses and other current liabilities due to increase in commission and other agent related costs, operating costs and selling, general and administrative expenses. These increases were partially offset by an increase of RMB54.5 million in accounts receivable primarily due to an increase in sales volume.

For the nine months ended September 30, 2008, cash used in operating activities amounted to RMB106.3 million, primarily due to RMB99.3 million of net losses during the period and, to a lesser degree, to a decrease of RMB18.7 million in deferred revenue in our franchise services business associated with new regional

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sub-franchisors and an increase of RMB12.4 million in accounts receivable primarily due to an increase in sales volume.

All of our operating cash generated in 2007 and 2008 was used in our operating activities. Significant changes in operating assets and liabilities that impacted our cash used in our operating activities include an increase in prepaid expenses and other current assets of RMB20.3 million in 2007, compared with a decrease in prepaid expenses and other current assets of RMB8.8 million in 2008, and an increase in accrued expenses and other current liabilities of RMB28.7 million in 2007, compared with an increase in accrued expenses and other current liabilities of RMB0.2 million in 2008. As we continue to expand the scale of our business, our working capital requirements are expected to increase as well.

Investing Activities

Our investing activities primarily relate to our purchases and disposals of equipment and acquisition activities.

Net cash used in investing activities amounted to RMB8.9 million for the nine months ended September 30, 2009 primarily due to our purchase of property and equipment. Net cash used in investing activities amounted to RMB34.7 million for the nine months ended September 30, 2008, primarily due to (i) our purchase of property and equipment of RMB19.3 million, (ii) our payment for the acquisition of IFM SH for RMB10.9 million, and, to a lesser degree, to our purchase of intangible assets of RMB4.5 million in connection with the reacquisition of the CENTURY 21^® franchise rights from a franchisee in Shenzhen.

Net cash used in investing activities amounted to RMB38.4 million for the year ended December 31, 2008, primarily due to (i) our purchase of property and equipment of RMB23.1 million and (ii) our payment for the acquisitions of IFM SH and City Integrated Residential Services (China) Limited for an aggregate RMB10.9 million, and, to a lesser degree, to our purchase of intangible assets of RMB4.5 million in connection with the reacquisition of the CENTURY 21^® franchise rights from a franchisee in Shenzhen. See “Our Corporate History and Structure — Our Principal Subsidiaries.”

Net cash used in investing activities amounted to RMB42.5 million for the year ended December 31, 2007, solely due to our purchase of property and equipment.

Financing Activities

Our financing activities primarily consist of capital contributions and issuance and sale of our preferred shares to investors.

Net cash used in financing activities amounted to RMB2.3 million for the nine months ended September 30, 2009 as a result of a net repayment of certain related party loans. Net cash provided by financing activities amounted to RMB8.2 million for the nine months ended September 30, 2008, primarily due to the RMB16.2 million gross proceeds from the issuance of our Series B preferred shares to Realogy and partially offset by an RMB8.0 million net repayment of certain related party loans.

Net cash provided by financing activities amounted to RMB13.3 million for the year ended December 31, 2008, primarily due to the RMB16.2 million in net proceeds from our issuance of our Series B preferred shares to Realogy and partially offset by RMB2.9 million in net repayments of certain related party loans.

Net cash provided by financing activities amounted to RMB307.8 million for the year ended December 31, 2007, primarily due to the RMB325.0 million in proceeds from our issuance of our Series B preferred shares to GL Asia Mauritius II Cayman Limited as well as proceeds received from our issuance of

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Series A preferred shares to Goldman Sachs Strategic Investments, and partially offset by RMB15.3 million in repayments of certain short-term borrowings, and RMB1.9 million in net repayments of certain related party loans.

We incurred RMB4.1 million, RMB42.5 million, RMB23.1 and RMB8.9 million of capital expenditures for the years ended December 31, 2006, 2007 and 2008 and the nine months ended September 30, 2009, respectively. We incurred these capital expenditures primarily in our company-owned brokerage services in connection with the establishment of brokerage stores, and financed these expenditures principally through the issuance of preferred shares.

Contractual Obligations

The following table sets forth our contractual obligations as of December 31, 2008:

Contractual Obligations (in thousands of RMB)	Total	Less than 1 year	1 – 3 years	3 – 5 years	More than 5 years
Operating Lease
Obligations	125,533	56,303	60,375	8,855	-
Minimum Service
Fees	11,104	683	1,366	1,366	7,689
Total	136,637	56,986	61,741	10,221	7,689

Operating Leases

Our operating lease agreements are principally for our administrative offices and real estate brokerage sales offices. These leases have expiration dates, the latest of which is in 2015.

Minimum Service Fees

Pursuant to the master sub-franchise agreement entered into with Realogy, we are required to pay an annual minimum service fee to Realogy for the licensing of the CENTURY 21^® brand. The minimum annual service fee is the greater of US$100,000 (approximately RMB683,000) or an amount calculated by multiplying US$500 (approximately RMB3,000) by the number of sales offices in our CENTURY 21^® franchise network, to be adjusted for inflation or deflation.

Long-term Deposits Payable

We receive security deposits from franchisees which are recorded as long-term deposits payable. These deposits are refundable at the end of the franchise agreement period if the franchisees do not breach the franchise agreements. The long-term deposits payable as of September 30, 2009 were RMB8.9 million.

Off-Balance Sheet Commitments and Arrangements

As is customary in the mortgage management industry in Beijing, we provide interim guarantees to commercial banks in respect of the mortgage loans they extend to property buyers. An interim guarantee covers the period beginning when the bank disburses the mortgage loan to the property buyer and ending when the mortgage registration certificate is issued to the bank by the applicable property registry, which typically takes one to six months. The fair value of the interim guarantees as of December 31, 2007 and 2008 and as of September 30, 2009 was immaterial.

If a bank fails to obtain the mortgage registration certificate or the property buyer defaults on his payment obligations during the term of an interim guarantee, we may be required to pay the amount of the

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delinquent mortgage payments or any measurable loss suffered by the bank exceeding the payment already made by the buyer and the amount recoverable from the property.

Under PRC rules, the maximum financed portion of the purchase price of a property is 80%, which helps reduce our risk exposure. To further mitigate our risk exposure, we usually:

• conduct certain background and credit checks on property buyers and reject less credit-worthy mortgage applications;

• assist in applying for buyers’ title documents, and issue a guarantee in a transaction only after a notice specifying the proposed date for collecting the title document has been issued by the applicable property registry; and

• actively participate in the process of banks’ applying for mortgage registration certificates.

The contingent guarantee obligation in connection with our provision of interim guarantees was RMB143.9 million and RMB227.8 million as of December 31, 2007 and 2008, respectively, and RMB829.3 million as of September 30, 2009. This increase during the nine months ended September 30, 2009 was primarily due to a substantial increase in the number of home mortgages for existing homes that utilized our mortgage management services. We have not experienced any losses associated with our interim guarantees for the years ended December 31, 2007 and 2008. We have accrued RMB0.5 million for the nine months ended September 30, 2009 for the estimated loss associated with our interim guarantees.

Other than the contingent liabilities discussed above and the obligations set forth in the preceding section, we have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or research and development services with us.

Internal Control Over Financial Reporting

When preparing our consolidated financial statements for the years ended December 31, 2007 and 2008, we noted one material weakness in our internal control over financial reporting relating to a lack of sufficient resources to perform period-end financial reporting procedures, to address complex accounting issues under US GAAP and to prepare and review financial statements and related disclosures under US GAAP. This material weakness resulted in adjustments to the Group’s consolidated financial statements for the years ended December 31, 2007 and 2008. A material weakness is defined in PCAOB Standards and Related Rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Following the identification of this material weakness, we have expended additional resources from our management team and additional expenses to implement and maintain effective controls and procedures to remedy this material weakness and any additional weaknesses we may identify in our internal control over financial reporting in the future. In addition, we have hired and will continue to hire more staff for financial reporting and analysis and an external consultant to strengthen our control procedures over financial statement reviews for external reporting. Furthermore, we have expanded our training programs to our new and existing accounting staff on US GAAP financial statement preparation and reporting.

We plan to take additional measures to improve our internal control over financial reporting. These measures include (i) establishing an audit committee to oversee the accounting and financial reporting processes

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as well as external and internal audits of our company, (ii) hiring additional qualified professionals with relevant experience for our finance and accounting department, (iii) providing additional accounting and financial reporting training for our existing personnel, and (iv) increasing the level of interaction among our management, audit committee, independent registered public accounting firm and other external advisors. However, the process of designing and implementing an effective financial reporting system represents a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations.

We believe that the actions we have taken to date have enhanced the reliability and effectiveness of our internal control over financial reporting as of the date of this prospectus. However, our independent registered public accounting firm has not evaluated the effectiveness of the measures we have taken to improve our internal control over financial reporting since such material weakness was noted in connection with the recently completed 2007 and 2008 audits. We cannot assure you that the measures we have taken to date or any measures we take in the future will be sufficient to remediate the material weakness reported by our independent registered public accounting firm and to avoid potential future material weaknesses. See “Risk Factors—When preparing our consolidated financial statements for the years ended December 31, 2007 and 2008, we noted one material weakness in our internal control over financial reporting. If we fail to implement and maintain effective internal control over financial reporting, our ability to accurately report our financial results on a timely basis may be impaired, which could adversely impact investor confidence and the market price of our ADSs.”

Inflation

Inflation in China has not materially impacted our results of operations in recent years. According to the National Bureau of Statistics of China, the change of consumer price index in China was 4.8% and 5.9% in 2007 and 2008, respectively.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with US GAAP, appearing elsewhere in this prospectus. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. An accounting policy is considered critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time such estimate is made, and if different accounting estimates that reasonably could have been used, or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact the consolidated financial statements. We believe that our accounting policies with respect to revenue recognition, allowance for doubtful accounts, property and equipment, goodwill and intangible assets, impairment of long-lived assets, share-based compensation, and income taxes represent critical accounting policies that reflect the more significant judgments and estimates used in the preparation of our consolidated financial statements.

The following descriptions of critical accounting policies, judgments and estimates should be read in conjunction with our consolidated financial statements and other disclosures included in this prospectus. When reviewing our financial statements, you should consider (i) our selection of critical accounting policies, (ii) judgment and other uncertainties affecting the application of such policies and (iii) the sensitivity of reported results to changes in conditions and assumptions.

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Revenue Recognition

We recognize revenue where there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded, net of sales related taxes and discounts.

Company-Owned Brokerage Services

Our company-owned brokerage services business earns most of its revenue from brokerage commissions from secondary real estate property sales, purchases and leasing transactions, referral and service fees of mortgage loan transactions to our mortgage management services segment, and to a lesser extent brokerage commissions from primary real estate property sales and purchase transactions. This commission income is recorded as revenue upon meeting the revenue recognition criteria described above, including the signing of a real estate sales and purchase agreement or rental agreement, the mortgage loan fund being disbursed by banks to the customers, and developers’ confirmation of successful sales of a primary real estate property. All revenue amounts are net of any sales discounts that management estimates based on current circumstances at the time of the sale and historical experience of anticipated subsequent discounts granted to customers.

Deferred revenues are recognized when payments are received in advance of revenue recognition.

Mortgage Management Services

We provide mortgage management services, many of which are provided in connection with our company-owned brokerage services business. We also provide interim financial guarantees to banking institutions in Beijing for a period ranging from approximately one to six months while government-owned property registries process and release the relevant mortgage pledge documents to such institutions.

The mortgage management services income is recognized on a net basis when the mortgage loan funds are disbursed by banks to the customers. The financial guarantee revenue is recognized when the respective mortgage pledge documents are collateralized by the banking institutions. We have not experienced any losses associated with the interim financial guarantees for the fiscal years ended December 31, 2007 and 2008 and we have accrued RMB0.5 million for estimated losses associated with our interim financial guarantees for the nine months ended September 30, 2009.

Franchise Services

We recognize our franchise services revenue as earned. Franchise revenue includes initial franchise fees, which are generally non-refundable and recognized as revenue when all material services or conditions relating to the initial franchise fee have been substantially performed and we have fulfilled all of our commitments and obligations (generally when a franchisee commences its operation under the CENTURY 21^® brand). Our commitments and obligations related to earning the initial franchise fee include providing training and assessing the franchisees’ qualifications for commencement of operations. Franchise revenue also consists of ongoing service fees received from our franchisees. The ongoing service fees received are primarily based on a percentage of the franchisees’ gross income or a fixed monthly amount. The ongoing service fees are accrued as the underlying franchisee revenue is earned. On an ongoing basis, the services we provide to our franchisees include the license to use or sub-franchise CENTURY 21^® brand and system, training services, and the right to participate in and benefit from the marketing campaigns using our NAF as well as information technology and back office support.

We also collect marketing fees from our franchisees and utilize such fees to fund advertising campaigns on behalf of our franchisees (known as National Advertising Fund, or NAF). Management fee income of NAF is recognized in proportion to the NAF that had been spent during the reporting period.

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Allowance for doubtful accounts

We accrue for allowances for doubtful accounts for receivable balances that are unlikely to be collected based on management analysis and estimates. This analysis is based on an assessment of our historical experience with particular customers or franchisees and the age of certain receivable balances, which may indicate that such receivables are no longer fully collectible. If the financial condition of our customers and franchisees were to deteriorate, resulting in an impairment of their ability to make payments, or if such customers or franchisees decided not to pay us, additional allowances could be required that would materially impact our financial position and results of operations.

We have adopted a provisioning policy for doubtful debts for our receivable balances based on the historical experience of the recoverability of the receivables. For the periods presented, our provision based on historical bad debts is approximately 2% of net revenue. The appropriateness of our provisioning is assessed on an ongoing basis based on our actual experience. In addition, we also make specific bad debt provisions for problem account receivable balances (e.g. for certain franchisees). Established reserves have historically been sufficient, and are based on aging, specific customer circumstances, historical experience and current knowledge of the related political and economic environments. It is possible, however, that the accuracy of the management’s estimation process could be impacted by unforeseen circumstances.

Allowances for doubtful accounts charged to selling, general and administrative expenses were RMB4.5 million, RMB5.2 million for the years ended December 31, 2007 and 2008, respectively. The allowance for doubtful accounts ending balance of RMB2.3 million, RMB3.6 million as of December 31, 2007 and 2008, respectively, represents a net ending balance after actual write-offs during the year. Accounts receivable related to company-owned brokerage services fees and franchise services fees are stated net of such allowance balances at the end of year. For the nine months ended September 30, 2009, allowances for doubtful accounts charged to selling, general and administrative expenses were RMB8.1 million, and the ending balance of the allowance for doubtful accounts was RMB6.3 million as of September 30, 2009.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives:

Computers and software	5 years
Furniture, fixtures and equipment	5 years
Vehicles	5 years
Leasehold improvements	Shorter of lease term or useful lives of assets

Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Judgment is required to determine the estimated useful lives of assets and changes in these estimates and assumptions could materially impact our financial position and results of operations.

Gains and losses from the disposals of property and equipment are included in loss from operations.

Goodwill and indefinite-lived intangible assets

Goodwill represents the excess of purchase price over fair value of tangible net assets of acquired businesses after amounts allocated to other intangible assets. Other intangible assets represent the rights to use and sub-franchise the CENTURY 21^® brand in the PRC for 14.5 to 25 years. In addition, intangible assets also represent the customer relationships and real estate listing databases acquired through business combinations consummated in 2006 and 2008. We amortize intangible assets over their estimated useful lives on a straight-line basis.

We test goodwill for impairment at the reporting unit level (operating segment or one level below an operating segment) on an annual basis, or more frequently, if facts and circumstances warrant a review. We make

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judgments about goodwill whenever events or changes in circumstances indicate that an impairment in the value of goodwill recorded on our balance sheet may exist. The timing of an impairment test may result in charges to our statements of operations in our current reporting period that could not have been reasonably foreseen in prior periods. Application of an impairment test of goodwill requires judgment, including the identification of reporting units, assigning assets and liabilities to the reporting units, assigning goodwill to reporting units and estimating the fair value of each reporting unit. Changes in these estimates and assumptions could materially affect the determination of fair value of each reporting unit, which could trigger impairment. More conservative assumptions of the anticipated future benefits from these reporting units could result in impairment charges, which would decrease net income and result in lower asset values on our balance sheet. Conversely, less conservative assumptions could result in smaller or no impairment charges, higher net income and higher asset values. See Note 2(j) “Goodwill and indefinite-lived intangible assets” in the Consolidated Financial Statements for additional information.

Impairment of long-lived assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, we assess the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition where the fair value is lower than the carrying value, measurement of an impairment loss is recognized in the statements of operations for the difference between the fair value, using the expected future discounted cash flows, and the carrying value of the assets. Determination of recoverability is based on estimates and changes in these estimates and assumptions could materially impact our financial position and results of operations. No impairment of long- lived assets was recognized for years ended December 31, 2007 and 2008 and the nine months ended September 30, 2009, respectively.

Share-based Compensation

We use a fair-value based method to account for share-based compensation. Accordingly, share-based compensation is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employees’ requisite service period. For options that were granted with performance conditions which vest subsequent to our initial public offering, share-based compensation expenses would be recognized upon the offering using the graded-vesting method. Share-based compensation for the remaining options granted with service conditions are recognized, net of a forfeiture rate, over the requisite service period of the award, which is the vesting term, based on the fair value of the award on the grant date. Total compensation cost in 2007 and 2008 was RMB43,549 and RMB730,453, respectively and was RMB535,504 and RMB1,257,174 for the nine months ended September 30, 2008 and September 30, 2009. We did not issue any share-based awards prior to 2007. Determining the value of our share-based compensation expense in future periods requires the input of highly subjective assumptions, including the expected life of the share-based payment awards, estimated forfeitures and the price volatility of the underlying shares. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share based compensation expense could be materially different in the future. For example, as of September 30, 2009, approximately US$0.6 million of total unrecognized compensation costs related to unvested share options, which were expected to be recognized over a weighted-average period of 2.0 years. In addition, upon the completion of our initial public offering, approximately US$1.5 million of share-based compensation costs were expected to be recognized over a period of one year.

Determining the fair value of options requires making complex and subjective judgments. In assessing the fair value of the options we have granted, we considered the following principal factors:

• The nature of our business and the contracts and agreements relating to our business;

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• The global economic outlook in general and the specific economic and competitive elements affecting our business;

• The nature and prospects of our industry in China;

• The growth of our operations; and

• Our business risks.

In determining the fair value of our ordinary shares on each grant date, we relied in part on a valuation report prepared by an independent valuer based on data we provided. The valuation report provided us with guidelines in determining the fair value, but the final determination as to the fair value of our share awards was made by our management. To determine the fair value of our ordinary shares, the three generally accepted approaches were considered: the cost, market and income approaches. While useful for certain purposes, the cost approach is generally not considered applicable to the valuation of companies which are a going concern, as it does not capture the future earning potential of the business. Given that our current stage of development is different from those of other publicly listed companies in the same industry, comparability of peer companies’ financial metrics and the relevance of the market approach were considered low. In view of the above, we considered the income approach to be the most appropriate method to derive the fair values of our ordinary shares.

For the income approach, we utilized a discounted cash flow, or DCF, analysis based on our management’s best estimates of projected cash flows as of each of the valuation dates. The projected cash flows include among other things, an analysis of projected revenue growth, gross margins, effective tax rates, capital expenditures and working capital requirements. The income approach involves applying appropriate discount rates to estimated cash flows that are based on earnings forecasts. The assumptions used in deriving the fair value of our ordinary shares are consistent with our business plan. These assumptions include: no material changes in the existing political, legal, fiscal and economic conditions in China; our ability to recruit and retain competent management, key personnel and technical staff to support our ongoing operations; and no material deviation in industry trends and market conditions from economic forecasts. These assumptions are inherently uncertain and subjective. The discount rates reflect the risks management perceived as being associated with achieving the forecasts and were derived by using the Capital Asset Pricing Model, after taking into account systematic risks and company-specific risks. Using this method, we determined the appropriate discount rates to be 22.5%, 23.0%, 23.5%, 22.5%, 21.5%, 21.5%, and 21.5% as of July 16, 2007, December 17, 2007, February 21, 2008, August 11, 2008, February 2, 2009, July 20, 2009, and August 20, 2009, respectively.

We also applied discounts for lack of marketability or, DLOM, to our equity value to reflect the fact that there is no ready public market for our shares as we are a closely held private company. When determining the DLOM, the Black-Scholes option model was used. Under this method, the cost of a put option that could be used to hedge the price change before a privately held share can be sold, is considered as a basis to determine the appropriate discount factor for lack of marketability. Based on the analysis, DLOM of 23% was used for the valuation of our ordinary shares as of each of the option grant date in 2007, 2008, and DLOM of 23%, 17% and 19% was used for the valuation of our ordinary shares as of the option grant date on February 2, 2009, July 20, 2009 and August 20, 2009, respectively.

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Valuation Assumptions: The company estimated the fair value of stock options using Black-Scholes Option Pricing valuation model. The fair value of each option grant is estimated on the date of grant using the Black-Scholes Option Pricing valuation model with the following weighted-average assumptions:

	2007	2008	Nine months ended September 30, 2009
Expected volatility	43.90% - 48.30%	48.30% - 53.30%	70.50% - 75.40%
Risk-free interest rate	4.43% - 5.49%	3.27% - 4.13%	3.09% - 3.76%
Dividend yield	0.00%	0.00%	0.00%
Expected term (in years)	3.4 - 4.8	3.2 - 3.5	3.1 - 3.5
Weighted average fair value of options granted (US$)	0.11	0.09	0.32

Expected Term: Due to insufficient historical information, giving consideration to the contractual terms of the stock-based awards, we adopted the simplified method for estimating the expected term to represent the period that our stock-based awards are expected to be outstanding.

Expected Volatility: The fair value of share-based payments made through the year ended December 31, 2007 and 2008 and the nine months ended September 30, 2009 was valued using the Black-Scholes Option Pricing valuation method with a volatility factor based on the historical stock prices of comparable companies.

Expected Dividend: The Black-Scholes Option Pricing valuation model calls for a single expected dividend yield as an input. We have not declared or paid any cash dividends on its capital stock, and we do not anticipate any dividend payments on its ordinary shares in the foreseeable future.

Risk-Free Interest Rate: We base the risk-free interest rate used in the Black-Scholes Option Pricing valuation method on the implied yield currently available on China treasury bonds constant maturities with an approximate equivalent remaining term.

Estimated Pre-vesting Forfeitures: When estimating forfeitures, we consider both voluntary and company termination behavior.

The grant date, number of options granted, exercise price, fair value and intrinsic value of the options granted to date (based on the mid-point of the estimated price range of the initial public offering price), giving effect, in each case to our 10-for-1 share split, are set forth below. As of September 30, 2009, there were 4,421,880 share options exercisable. The number of options, price and value information below are based upon ordinary shares. Each ADS represent 15 Class A ordinary shares.

	Grant date	Number of options granted	Exercise price	Fair value of ordinary shares	Intrinsic Value
1	16 Jul 07	39,800,000	i) US$0.11 ii) US$0.13	i) US$0.11 ii) US$0.11	i) US$0.39 ii) US$0.37
2	17 Dec 07	5,500,000	US$0.13	US$0.13	US$0.37
3	20 Feb 08	1,700,000	US$0.12	US$0.12	US$0.38
4	11 Aug 08	3,000,000	US$0.08	US$0.08	US$0.42
5	2 Feb 09	200,000	US$0.13	US$0.13	US$0.37
6	20 July 09	700,000	US$0.32	US$0.32	US$0.18
7	20 Aug 09	2,500,000	US$0.33	US$0.33	US$0.17

Income Taxes

We currently have deferred tax assets resulting from net operating loss carryforwards and deductible temporary differences, all of which are available to reduce future taxes payable in our significant tax jurisdictions. The largest component of our deferred tax assets are operating loss carryforwards generated by our PRC subsidiaries due to their historical operating losses. In assessing whether such deferred tax assets can be

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realized in the future, we need to make judgments and estimates on the ability of each of our PRC subsidiaries to generate taxable income in future years. To the extent that we believe that it is more likely than not that some portion or the entire amount of deferred tax assets will not be realized, we established a valuation allowance to offset the deferred tax assets. As of December 31, 2007 and 2008, we recognized a total valuation allowance of RMB16.5 million and RMB46.8 million, respectively. As of September 30, 2009, a total valuation allowance of RMB27.5 million was recognized against deferred tax assets. If we subsequently determine that all or a portion of the carryforwards are more likely than not to be realized, the valuation allowance will be released, which will result in a tax benefit in our consolidated statements of operations.

Quantitative and Qualitative Disclosure About Market Risk

Interest Rate Risk

Our exposure to interest rate risk primarily relates to the interest rates for our outstanding debt and the interest income generated by excess cash invested in liquid investments with original maturities of three months or less. We have not used any derivative financial instruments to manage our interest risk exposure. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates. An increase in interest rates, however, may raise the cost of any debt we incur in the future. In addition, our future interest income may be lower than expected due to changes in market interest rates. With respect to cash and cash equivalents as of December 31, 2008, a 10% decrease in interest rates would have decreased our interest income for the year then ended from RMB4.4 million to RMB4.0 million. In addition, with respect to cash and cash equivalents as of September 30, 2009, a 10% decrease in interest rates would have decreased our interest income for the nine months period then ended from RMB1.6 million to RMB1.4 million.

Foreign Exchange Risk

Substantially all of our revenues and most of our expenses are denominated in RMB. Our exposure to foreign exchange risk primarily relates to cash and cash equivalents denominated in U.S. dollars as a result of our past issuances of preferred shares through a private placement and proceeds from this offering. We do not believe that we currently have any significant direct foreign exchange risk and have not hedged exposures denominated in foreign currencies or any other derivative financial instruments. Although in general, our exposure to foreign exchange risks should be limited, the value of your investment in our ADSs will be affected by the foreign exchange rate between U.S. dollars and RMB because the value of our business is effectively denominated in RMB, while the ADSs will be traded in U.S. dollars.

The value of the RMB against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in China’s political and economic conditions. The conversion of RMB into foreign currencies, including U.S. dollars, has been based on rates set by the People’s Bank of China. On July 21, 2005, the PRC government changed its decade-old policy of pegging the value of the RMB to the U.S. dollar. Under the new policy, the RMB is permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies. This change in policy has resulted in an appreciation of approximately 18.3% of the RMB against the U.S. dollar from December 31, 2005 to December 31, 2008. There remains significant international pressure on the PRC government to adopt an even more flexible currency policy, which could result in a further and more significant appreciation of the RMB against the U.S. dollar. To the extent that we need to convert U.S. dollars we receive from this offering into RMB for our operations, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount we receive from the conversion. Assuming we were to convert the net proceeds received in this offering into the RMB, a 1.0% increase in the value of the RMB against the U.S. dollar would decrease the amount of the RMB we receive by RMB5.7 million. Cash and cash equivalents of the Group include aggregate amounts of US$11.7 million, US$7.8 million and US$1.9 million as of December 31, 2007 and 2008 and September 30, 2009, respectively. A 1.0% increase in the value of the RMB against the U.S. dollar would decrease the amount of the RMB by RMB0.8 million, RMB0.5 million and RMB0.1 million as of December 31, 2007 and 2008 and September 30, 2009, respectively. We have U.S. dollar

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payables of US$9.6 million, US$10.7 million and US$9.6 million as of December 31, 2007 and 2008 and September 30, 2009, respectively. A 1.0% increase in the value of the RMB against the U.S. dollar would increase the payable amount by RMB0.3 million, RMB0.7 million and RMB0.7 million as of December 31, 2007 and 2008 and September 30, 2009, respectively. We have not used any forward contracts or currency borrowings to hedge our exposure to foreign currency exchange risk.

Recent Accounting Pronouncements

In June 2009, the FASB issued authoritative guidance to eliminate the exception to consolidate a qualifying special-purpose entity, change the approach to determining the primary beneficiary of a variable interest entity and require companies to more frequently re-assess whether they must consolidate variable interest entities. Under the new guidance, the primary beneficiary of a variable interest entity is identified qualitatively as the enterprise that has both (a) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. We will adopt this guidance at the beginning of our fiscal year 2010 and we do not expect the adoption of this guidance will have material impact on our consolidated financial statements.

In August 2009, the FASB issued guidance on Fair Value Measurements and Disclosures—Measuring Liabilities at Fair Value. The objective of the new guidance is to provide clarification for the fair value measurement of liabilities, specifically providing clarification that in circumstances in which a quoted price in an active market for an identical liability is not available, a reporting entity is required to measure fair value using certain prescribed techniques. Techniques highlighted include using 1) the quoted price of the identical liability when traded as an asset, 2) quoted prices for similar liabilities or similar liabilities when traded as assets, or 3) another valuation technique that is consistent with the principles of fair value measurements. The new guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. Finally, the guidance clarifies that both a quoted price in an active market for the identical liability and the quoted price for the identical liability when traded as an asset in an active market when no adjustment to the quoted price of the asset are required are Level 1 fair value measurements. We will adopt this guidance at the beginning of its fiscal year 2010, and we do not expect the adoption of this guidance will have a material impact on our consolidated financial statements.

In October 2009, the FASB issued an accounting standard update to revenue recognition relating to multiple-deliverable revenue arrangements. This update modifies the fair value requirements of existing accounting guidance by allowing the use of the “best estimate of selling price” in addition to vendor-specific objective evidence or VSOE, and third-party evidence or TPE, for determining the selling price of a deliverable. A vendor is now required to use its best estimate of the selling price when VSOE or TPE of the selling price cannot be determined. In addition, the residual method of allocating arrangement consideration is no longer permitted. This update requires expanded qualitative and quantitative disclosures and is effective for fiscal years beginning on or after June 15, 2010. These updates may be applied either prospectively from the beginning of the fiscal year for new or materially modified arrangements or retrospectively. We are currently evaluating the impact, if any, that the adoption of this update will have on our consolidated financial statements.

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OUR INDUSTRY

The Economy of the PRC

The PRC economy has grown significantly since the PRC government introduced economic reforms in the late 1970s. This growth has accelerated since China entered the World Trade Organization in 2001. The chart below shows the growth of China’s GDP from 2002 to 2008:

Source: CEIC Data Company, Ltd., or CEIC

Despite the recent financial crisis China’s real GDP growth in 2009 is expected to be not less than 8%. Major cities in China have grown rapidly in recent years, with GDP per capita in Beijing, Shanghai and Shenzhen considerably higher than the national average. The following table sets forth nominal GDP per capita for Beijing, Shanghai, Shenzhen and the national average from 2002 through 2008:

Nominal GDP per capita (in RMB)	2002	2003	2004	2005	2006	2007	2008	Compound Annual Growth Rate
Beijing	30,840	34,892	41,099	45,444	50,467	58,204	63,029	12.7	%
Shanghai	35,329	39,128	46,338	51,529	57,695	66,367	73,124	12.9	%
Shenzhen	46,388	54,545	59,271	60,801	69,450	79,645	89,814	11.6	%
National Average	9,398	10,542	12,336	14,053	16,165	19,524	22,698	15.8	%

Source: CEIC

PRC Real Estate Sector

Governmental Reforms in the Real Estate Sector

The PRC real estate sector remained part of a centrally planned economy until the late 1980s, when the Chinese government initiated reforms to transition real property ownership to a market-oriented system. A constitutional amendment instituted in 1988 allowed Chinese citizens to transfer long-term land use rights in China. This legislative amendment opened the real estate sector to private ownership of real properties and commenced the development of a private real estate market in China.

The PRC government promulgated rules in 1994 requiring companies to establish housing purchase benefit plans for their urban employees. Jointly funded by employers and employees, these plans provided substantial financial assistance to employees for home purchases. The PRC government ended its practice of

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allocating and exchanging housing units for its urban population in 1998. In 1999, to further stimulate the housing market, commercial banks began offering mortgage loans to individual property buyers and extended the maximum mortgage term to 30 years and the maximum financed portion of the purchase price of a property to 80%.

Key Drivers of the PRC Real Estate Sector

China’s economic growth, together with an increase in disposable incomes, a rise in urbanization levels, the emergence of a mortgage lending market and government housing reforms, have driven the expansion of China’s real estate market. Housing reforms continue to encourage private ownership of properties. The chart below sets forth urban disposable income per capita and the urbanization rate in China from 2002 through 2008:

Source: CEIC

Although China has experienced rapid growth in urban disposable incomes and urbanization rates in recent years, China still has substantial potential for growth compared to more developed countries. The chart below shows per capita disposable incomes and urbanization rates in China, Hong Kong and selected developed countries in 2008:

Source: CEIC; Euromonitor

Primary Residential Property Market in the PRC

The PRC primary residential property sector has grown significantly in recent years, with increased real estate investment, higher sales volumes and rising average sales prices. The growth of the primary residential

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property market has contributed to an increase in home inventory. The table below shows selected data for the primary residential property market in China from 2002 to 2008.

	2002	2003	2004	2005	2006	2007	2008	Compound Annual Growth Rate
Investment in residential property development (in billions of RMB)	523	678	884	1,086	1,364	1,801	2,208	27.1	%
GFA of primary residential properties sold (in millions of square meters)	237	298	397	496	554	701	559	15.4	%
Sales revenue from primary residential properties (in billions of RMB)	496	654	1,036	1,456	1,729	2,557	2,042	26.6	%
ASP of primary residential properties (RMB per square meter)	2,092	2,197	2,608	2,937	3,119	3,645	3,567	9.3	%

Source: CEIC

Secondary Residential Property Market in the PRC

The secondary residential property market has also grown significantly since the PRC government commenced reforming the real estate sector. Transaction volumes in secondary residential property markets generally grow in line with an increase in home stocks, as more properties are sold and the turnover rate for existing homes rises. The chart below sets forth the total residential property transaction volume in Beijing from 2003 through November 2009:

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Secondary residential property transaction volumes in Beijing and Shanghai have increased consistently since 2007, and have recently surpassed primary residential property transaction volumes in those cities. The charts below set forth secondary residential property transaction volumes, the ratio of secondary to primary residential market sales in Beijing and Shanghai from 2007 through November 2009:

Source: Beijing Housing Construction Technology Center

Source: Shanghai Jansen Media and Shanghai Youwin Real Estate Information Service

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The chart below shows the average selling price of secondary residential properties in Beijing and Shanghai from the beginning of 2008 through November 2009:

Source: China Index Academy

We believe the chart above demonstrates the resilience in pricing of the secondary residential property market, where, despite the global financial crisis and a downturn in the economy, secondary residential property pricing in Beijing and Shanghai has been relatively stable since 2008 through November 2009.

During 2008, transaction volumes in the PRC residential property market, both primary and secondary, weakened due to domestic monetary tightening and the global financial crisis. In 2009, the PRC government’s economic stimulus plans, together with improved sentiment in the residential property market, have contributed to a strong recovery in secondary residential property transaction volumes. Secondary residential property transaction volumes in Beijing and Shanghai increased 276% and 132%, respectively, in the eleven months ended November 30, 2009 compared to the same period in 2008.

Secondary residential property transaction volumes in Beijing and Shanghai have been relatively resilient and generally outperformed the growth rate of primary transaction volumes in recent years. The charts below set forth the rolling annual growth rates in primary and secondary residential property transaction volumes in Beijing and Shanghai from December 2008 to November 2009:

Source: Beijing Housing Construction Technology Center

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Source: Shanghai Jansen Media and Shanghai Youwin Real Estate Information Service

The PRC residential property markets, particularly in less developed areas, remain relatively nascent. Recent sales have consisted primarily of newly developed residential properties, with secondary residential property transactions representing a relatively small portion of total residential property sales. In contrast, in developed countries, secondary residential property transactions typically represent a majority of total residential property sales. The chart below illustrates the secondary to primary residential property transaction ratio in the United States and key cities in China for the first six months of 2009:

Source: National Association of Realtors; U.S. Census Bureau; CEIC; Beijing Housing Construction
Technology Center; Shanghai Jansen Media and Shanghai Youwin Real Estate Information Service

The secondary to primary residential property transaction ratio for the first six months of 2009 was 1.94 times and 1.30 times for Shanghai and Beijing, respectively. According to CEIC, based on gross floor area, the secondary to primary residential property transaction ratio for the first six months of 2009 was 0.26 times in China. Because the secondary component of a residential property market typically grows as the market matures, transaction volumes in secondary residential property markets in China are expected to increase as the PRC economy develops, just as secondary markets grew in the United States and other developed regions as their economies matured. Secondary residential property markets in China are already more developed in the more economically prosperous cities such as Beijing, Shanghai and Shenzhen, whose economies have grown faster

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than those of other regions in China. As the economies of those cities and other regions of China continue to develop, secondary residential property markets are expected to grow throughout the country.

PRC Real Estate Services Sector

Emergence and Growth of Real Estate Services Companies in China

The real estate services industry in China has become increasingly specialized as it has grown in size and complexity. This industry includes primary brokerage services, secondary brokerage services, mortgage management services and leasing services.

Primary Residential Property Brokerage Services

Primary residential property brokerage services include the brokering of sales of new homes built by property developers and related services. In China, primary residential sales have been driven principally by economic development, which led to rapid urbanization and a resulting increase in land development and gentrification. The primary residential brokerage services market in China is highly competitive and fragmented, with market participants ranging from companies with a national presence to local companies handling projects on an ad hoc basis.

Secondary Residential Property Brokerage Services

Secondary residential property brokerage services include the brokering of existing home sales and leases and related services. The secondary residential property brokerage market in China emerged in 1998, as the central government introduced market-oriented policies to replace the state-planned system for urban housing. The PRC government promulgated the Provisions on the Administration of Urban Real Estate Services in 1996, as revised in 2001, which established the regulatory framework for the industry. As the primary real estate market has grown, China’s secondary real estate market has expanded significantly. As a result, the number of secondary real estate brokerages has increased dramatically in China’s more developed cities.

The PRC government did not heavily regulate the secondary real estate market during its early stages of development, when brokerages frequently engaged in activities such as misappropriation of funds and price arbitrage. In 2006, the Ministry of Construction and the People’s Bank of China jointly issued the Circular Concerning Strengthening the Management of Real Estate Brokerage Services and Regulating the Trading Settlement Capital Account, which introduced regulations that required escrow accounts for home purchases and prohibited price arbitrage.

In addition, local governmental authorities in charge of construction, land resources and other areas regulate the secondary residential property brokerage industry. As a result, regulations governing this sector typically vary across different regions. For example, the maximum commission rate that real estate brokers can charge in Beijing, Shanghai and Shenzhen is 2.8%, 2.0% and 3.0%, respectively, while the maximum commission rate set by the central government is 3.0%.

Since the establishment of the regulatory framework for secondary real estate brokerage services, the ratio of brokered to non-brokered secondary residential property transactions in China’s developed cities has increased significantly. According to the Beijing Housing Construction Technology Center and Shanghai Jansen Media Co., Ltd., in June 2009 the percentage of total secondary residential property transactions conducted through a brokerage was approximately 67.7% in Beijing and 85.2% in Shanghai. In comparison, according to China Index Academy, approximately 60% of secondary property transactions nationally were conducted through brokerages in June 2009, and this national percentage is expected to grow to 80% over the next few years.

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An important aspect of China’s secondary residential property brokerage services industry is the predominance of open listings. Under the open listing system, property listings can be marketed simultaneously by multiple agents. In contrast, property listings in certain other countries, such as the United States, are made on an exclusive basis, which means that they can only be marketed by an exclusive agent. This has led to the emergence of Multiple Listing Services in the United States, where members can pool listings into a centralized system to attract more buyers while maintaining their exclusive listings.

However, due to the predominance of the open listing system in China, brokerages rarely share listing information with their competitors. As a result, larger brokerages are typically more attractive to home buyers, home sellers and sales professionals. For example, home buyers are granted access to a larger listing database, which provides a greater opportunity to find quality homes at reasonable prices. Similarly, home sellers may receive better services from a larger pool of sales professionals, who compete with each other to find the best terms for their customers. Finally, sales professionals can take advantage of more extensive listing databases and better brand recognition and awareness. As a result, large-scale players in the real estate brokerage industry enjoy economies of scale and have a competitive advantage over their smaller counterparts. This ultimately reduces market fragmentation. For instance, Centaline Property Agency Limited and Midland Holdings Limited dominate the secondary residential property brokerage market in Hong Kong, which also operates on an open listing system.

The secondary residential property brokerage industry in China is currently highly fragmented and extremely competitive due to low barriers of entry for smaller players. As of July 2009, 173,560 property brokerage companies and 247,812 property agents were registered with the China National Institute of Real Estate Appraisers and Brokers, with a total of over one million property agents industry-wide. We believe that industry consolidation will become an increasingly prevalent trend, as brokerages with larger networks of stores, stronger brand names and higher standards of professional service increase their market share. The chart below shows China’s top ten secondary real estate brokerage networks in the first half of 2009, as ranked by the China Index Academy based on a number of factors, including the number of cities in which they operate and their total number of stores:

Ranking	Company	Number of Cities Entered	Number of  Sales Offices
1	Century 21	34	> 1,000
2	Centaline	23	539
3	5i5j	8	600
4	Home Link	3	450
5	Hopefluent	4	200
6	MyTopHome	9	200
7	E-House	4	113
8	Midland	7	350
9	Shi-hua Real Estate	2	108
10	Hanyu Property	1	80

Source: China Index Academy

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Mortgage Management Services

Mortgage management services include the provision of advisory, execution and similar services related to mortgage products. The residential mortgage sector in China has grown rapidly in recent years. The total amount of outstanding residential mortgages in China has increased significantly, from RMB825 billion as of December 31, 2002 to RMB2.98 trillion as of December 31, 2008, representing a compound annual growth rate of 23.9%. The chart below shows the amounts of outstanding residential mortgages in China from 2002 to 2008:

Source: CEIC

As the residential mortgage market increases in size and sophistication, specialized mortgage management agents are becoming important channels for commercial banks to distribute their real estate financing products. In addition, mortgage management services are becoming increasingly associated with secondary real estate brokerage companies with large distribution networks, strong brand names and professional service standards.

The PRC government has imposed stringent regulations on the residential mortgage sector, including a minimum down payment requirement of 20% for first mortgages, which increases for subsequent mortgages. Additionally, PRC commercial banks providing residential mortgages place strong emphasis on client investigation and risk control. As a result, the residential mortgage sector in China has a relatively low non-performing loan ratio. According to the China Banking Regulatory Commission, the non-performing loan ratio of residential mortgages in China was approximately 0.91% in 2008.

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OUR BUSINESS

Overview

We are a leading comprehensive real estate services provider with the largest network of real estate sales offices in China. We are the exclusive franchisor in China for the CENTURY 21^® brand, one of the world’s most recognized brands in the real estate industry. As of September 30, 2009, our CENTURY 21^® China network covered 34 major cities with more than 1,000 sales offices, employed approximately 14,900 sales professionals and staff and maintained approximately 4.7 million property listings. In the first half of 2009, based on transaction volume, we ranked among the top three market leaders in over 90% of the cities in which we operate and were the market leader in more than 30% of those cities. We primarily focus on China’s fast-growing and highly fragmented secondary real estate market, which we expect to outgrow the primary market, especially in more economically prosperous cities.

We operate under three different but closely related business lines: company-owned brokerage services, mortgage management services and franchise services. We have deployed a unique business model that has allowed us to rapidly scale our company-owned operations by leveraging the in-depth market knowledge and human capital developed from our franchise network.

We started our franchise services business in 2000 and have rapidly expanded our franchise network and our brand. Our franchise services business grants regional franchise rights for the CENTURY 21^® brand to regional sub-franchisors in China who, in turn, open their own sales offices or grant third parties the right to open sales offices within their region. We generate revenue from our franchise services by collecting initial franchise fees and ongoing service fees from these regional sub-franchisors. Our franchise network has provided us with valuable information to gauge market maturity and identify potential opportunities to establish and grow our company-owned brokerage services business. Until we launched our company-owned brokerage services business in 2006, we generated our net revenues solely from our franchise services business. We started our company-owned brokerage services business in Beijing and Shanghai in 2006 and in Shenzhen in 2008, and have quickly expanded our company-owned sales office network in these cities through organic growth and acquisitions of sales offices owned by third parties. As of September 30, 2009, we had approximately 280 company-owned sales offices, representing approximately 26.1% of our CENTURY 21^® China network. Our company-owned brokerage services business owns and operates regional sub-franchisors and sales offices in the CENTURY 21^® China network. We generate revenue from our company-owned brokerage services primarily through commissions earned from home buyers, sellers, lessors and lessees. In 2008 and the nine months ended September 30, 2009, our company-owned sales offices contributed approximately 75.4% and 91.9% respectively, of our total net revenues.

In 2008, we launched our independent mortgage management services in Beijing and Shanghai, providing services to customers both inside and outside our CENTURY 21^® China network. Our mortgage management services business provides mortgage advisory services to home buyers and home owners and interim guarantee services to commercial banks. We generate revenue from our mortgage management services primarily through commissions earned from commercial banks in consideration of our advisory services and interim guarantee services. Our mortgage management services business is well positioned to take advantage of referrals from our extensive network of company-owned sales offices. In the first nine months of 2009, a substantial majority of the transactions handled by our company-owned brokerage services in which mortgages were utilized made use of our mortgage management services. We have provided services for home mortgages with an aggregate loan amount of approximately RMB6.1 billion since we launched our mortgage management service business through September 30, 2009. Our contingent guarantee obligation associated with our interim guarantees as of September 30, 2009 was RMB829.3 million.

Our rapid growth is supported by our information systems and training programs. Our information systems provide real-time and in-depth management and sales information, support our network of sales offices,

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and drive our marketing efforts. We strongly believe in training members of our management team, who are generally required to complete quarterly training courses. Additionally, all of our sales professionals are required when they join us to complete training courses that we conduct in-house, and are also required to complete monthly refresher or new skills courses.

We have experienced substantial growth since we commenced operations in 2000. Our total net revenues increased from RMB38.4 million in 2006 to RMB273.4 million in 2008, representing a compound annual growth rate of 166.8%, and from RMB208.9 million in the nine months ended September 30, 2008 to RMB443.7 million in the same period in 2009, representing an increase of 112.4%. After incurring net losses of RMB72.8 million and RMB131.9 million for the years ended December 31, 2007 and 2008, respectively, we became profitable during the nine month period ended September 30, 2009 with a net income of RMB88.3 million (US$12.9 million). We have received numerous awards and recognitions for our service quality and business achievements, including the “Highly Appraised Franchisor Award” by the China Chain Store and Franchise Association in 2008 and 2009, “Prominent Real Estate Services Provider” by Sina.com in 2008, and “Most Reputable Real Estate Services Provider” by Sohu.com in 2009.

Our Strengths

We believe that the following strengths differentiate us from our competitors and have enabled us to capture a leading position in the rapidly growing real estate services industry in China:

We leverage one of the world’s most recognized real estate service brands to drive our leadership in China

With more than 130,000 sales professionals in approximately 8,500 sales offices worldwide, the CENTURY 21^® brand is one of the world’s most recognized real estate service brands. As the exclusive franchisor of the CENTURY 21^® brand in China, we benefit from our brand’s association with trust, professionalism, efficiency and quality of service.

We have successfully adapted this well-established global brand for the China market, leveraging our in-depth knowledge of the real estate market in China, decade-long track record and consistent service quality to create a leading real estate service network. In the first half of 2009, based on transaction volume, we ranked among the top three market leaders in over 90% of the cities in which we operate and were the market leader in more than 30% of those cities.

We believe a strong brand in our industry appeals to:

• customers, who trust our credibility, efficiency and service quality;

• franchisees, who are attracted to the customer recognition, systems and professionalism that our brand represents; and

• sales professionals, who are drawn to the long-term career prospects at our company and potential for growth.

We believe that the widespread appeal of our brand and our reputation as a market leader paves the way for sustained business expansion and will help solidify premium market position. We have gained recognition and acclaim in our industry, including the “Highly Appraised Franchisor Award” by China Chain Store and Franchise Association in 2008 and 2009, “Prominent Real Estate Services Provider” by Sina.com in 2008, and “Most Reputable Real Estate Services Provider” by Sohu.com in 2009.

We have a unique business model that allows us to rapidly scale our distribution network and expand our product and service offerings

With more than 1,000 sales offices across 34 cities and approximately 14,900 sales professionals and staff, we have the largest real estate brokerage network in China as a result of our unique business model. By

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franchising to reputable and capable regional sub-franchisors, we have outpaced our competitors in building our brand and network nationally with minimal capital investment. Our franchise network allows us to gather valuable market knowledge to gauge market maturity, build our human capital and identify potential acquisition opportunities to expand our company-owned sales offices. We encourage our regional sub-franchisors to grow their own sales offices within their franchise network and where possible invest directly in our sub-franchisors to help facilitate their growth.

We open or acquire company-owned sales offices in selected new markets when such markets mature. We believe these strategies allow us to rapidly scale our company-owned brokerage services business, lower investment risks, shorten payback periods and significantly improve investment returns. For example, for the first nine months of 2009, our company-owned sales offices in Beijing contributed an average of approximately RMB205,805 of net revenues per month, compared to our franchised sales offices in Beijing which contributed an average of approximately RMB5,263 of net revenues per month.

We believe our national distribution platform and strong brand will allow us to distribute more products and services through our network, which will further drive our net revenues and margin growth. For example, since we launched our mortgage management services business, we have provided services for home mortgages with an aggregate loan amount of approximately RMB6.1 billion up to September 30, 2009.

We are the leader in the faster growing and more sustainable secondary real estate brokerage market

We are the largest secondary property broker in China as ranked by China Index Academy based on the number of cities in which we compete, our sales office count, the number of sales professionals in our network and our transaction volume. The secondary real estate brokerage market in China has become more active in recent years as the market has matured, and we expect secondary sales and leasing volume to outgrow primary sales volume over the long term. This process is consistent with the development of more mature markets such as the United States and Hong Kong. We believe this trend has reached an inflection point in the more economically prosperous cities such as Beijing and Shanghai, where secondary to primary sales volume ratio was 1.30 times and 1.94 times, respectively for all residential property sales during the first six months of 2009, compared with the U.S. ratio of 13.15 times, and the Hong Kong ratio of 5.16 times. As a result, we are well positioned to benefit from the growth in the secondary sales and leasing market in these cities and other cities in China as they mature.

We utilize our nationwide network to maintain a growing database of property listings that draws new customers and provides opportunities for future growth

We actively maintain a large and growing property listing database. Over the last three years, the total number of listings under our franchise network has risen from approximately 1.0 million in August 2006 to approximately 4.7 million as of September 30, 2009. Since the establishment of our company-owned sales offices in Beijing and Shanghai in 2006, we have grown the number of listings in our company-owned sales offices in Beijing and Shanghai to over 1.7 million as of September 30, 2009, which represent approximately 36% of the 4.7 million existing secondary residential units that we have targeted for listing.

This extensive listing database represents an important asset to our business. The predominance of the open listing system in China means that a broker generally only has access to properties listed within his company’s own system. Thus, prospective buyers or tenants are attracted to our network because of the broad range of listings in our network, which in turn drives more home owners to list their properties on our network. In addition, we actively follow up on our listings with marketing efforts by our sales professionals to generate potential leads and transactions. We believe that we will be able to increase our market share and drive our future growth through our continuous efforts to update and expand our property listings database.

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We have developed world class, standardized information systems and training programs to support the scalability of our business model

Since 2000, we have developed and enhanced our proprietary information systems, which are centrally coordinated through our headquarters. We believe that these information systems are critical to allow us to maintain and manage our rapid growth across regions and product lines.

In order to ensure operational efficiency, performance and revenue contribution, we maintain the following systems:

• Sales Information System, which can be accessed by our sales professionals on a real-time basis and facilitates information sharing among our sales professionals efficiently. It also allows us to effectively monitor the activities of our sales professionals;

• Human Resource and Commission Information System, which monitors performance of our sales professionals and allows us to analyze their sales output. This also provides us with a transparent mechanism to determine compensation packages to motivate and retain our sales professionals and staff; and

• Training programs, which include off-line and online training programs. As with other companies in the sector, we have relatively high turnover among our sales professionals, and these programs allow us to continuously provide consistent, systematic and effective training to our new and existing sales professionals and staff.

In order to protect our brand, reputation and business model, we maintain the following risk management systems:

• A two-tiered franchise structure, whereby reputable regional sub-franchisors are granted regional franchise rights and remain responsible for supervising their respective regional businesses;

• A rigorous screening process to select prospective regional sub-franchisors;

• A proven legal structure to ensure that our sub-franchisors and franchisees strictly adheres to our franchise guidelines; and

• Supervisory systems to ensure quality of service and monitoring of sales professionals.

We believe these systems facilitate our growth by allowing us to replicate our systems across business lines and geographies. For example, we have successfully integrated the acquisition of new company-owned sales offices into our business by leveraging the adaptability of our systems, which are consistent among our company-owned sales offices and franchised sales offices.

We have an experienced and stable management team

We have an experienced and stable management team, led by our Chairman, Mr. Donald Zhang, and our Vice Chairman, Mr. Harry Lu, who co-founded the company in 2000. Mr. Zhang and Mr. Lu are US-educated Chinese entrepreneurs who have strategically set out our business model and have extensive experience in the development and operation of the CENTURY 21^® system. As industry leaders, they have played important roles in helping shape and improve the real estate services industry in China. For example, Mr. Lu is currently the Deputy General Secretary of China National Institute of Real Estate Appraisers and Brokers, the leading institution which sets the policies and standards of the real estate brokerage market in China.

Our senior management team consists of experts who have an in-depth understanding of China’s real estate service industry and substantial experience in the real estate brokerage, franchise and mortgage sectors in China. Most members of our core management team have participated in China’s real estate services industry

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since its inception and have been with us since our formation. We believe that the quality and depth of our management team have underpinned our success, allowed us to attract investments from top-tier investors such as Goldman Sachs Strategic Investments, and will drive our future growth and leadership in the China real estate services market.

Our Strategies

Our aim is to further strengthen our leadership as China’s largest real estate service provider, through the following strategies:

Strengthen our distribution network

We intend to further strengthen our distribution network through the following two-pronged strategy:

• Company-owned sales offices: We intend to increase the number of company-owned sales offices in our core markets of Beijing, Shanghai and Shenzhen. Additionally, we intend to expand into new markets once they reach certain levels of maturity and local conditions are favorable, by entering into joint venture arrangements with our existing or new regional sub-franchisors or acquiring third party sales offices. Subject to market conditions, we intend to have at least 500 company-owned sales offices by the end of 2010.

• Franchised sales offices: We intend to continue to leverage our franchise system to expand our network and brand name, and to help us identify new markets in which to build our company-owned brokerage services business. We intend to continue to partner with reputable and capable companies as our regional sub-franchisors to expand our national footprint.

Expand existing product lines

Through our independent mortgage management services business, we aim to build the leading real estate financial service business in China, to serve customers both inside and outside our CENTURY 21^® franchise network. Given the geographic scope of the secondary sales market (unlike the primary market, which is focused on specific buildings or developments), our distribution network is the “point-of-sale” and therefore the ideal place to introduce additional products and services to our customers, including insurance and financing products. In 2009, a substantial majority of the transactions utilizing mortgage services that are handled by our company-owned sales offices used our mortgage management services. We plan to extend our presence to other parts of China in line with the expansion of our company-owned brokerage services business.

We also intend to leverage our extensive distribution network to selectively expand our presence in the primary real estate sales market and the commercial real estate sales and leasing market to complement our leadership in the secondary real estate market. In particular, we have recently built new teams dedicated to the primary and commercial real estate sales markets. We will devote efforts to utilize these cross-selling opportunities across our internal business functions to produce additional revenue streams capitalizing on our existing customer network.

We also intend to utilize our comprehensive database of property listings and information developed through our business and market research efforts to create marketable products that can be sold to our customers.

Enhance brand awareness

We strive to continuously enhance the appeal of our brand to customers, franchisees and sales professionals through effective and systematic marketing campaigns, focusing on the mid- to high-end market. We will continue to utilize the National Advertising Fund to promote our CENTURY 21^® franchise networks

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and enhance brand awareness. In addition, we plan to further expand our marketing team and increase the scale and frequency of our marketing efforts.

We are also committed to utilizing the internet to expand our brand and to drive potential customers to our brokerage network. For the nine-month period ended September 30, 2009, our sales offices have generated significant traffic through our internet advertising efforts.

Furthermore, we plan to provide comprehensive and in-depth market information on a real time basis to premium customers, commercial banks and real estate developers. We believe our circulation of valuable information to these industry players will inspire further confidence in our professionalism and enhance our brand recognition.

Invest in human capital management

Human capital, including approximately 14,900 sales professionals and staff, constitutes our most important resource. Recruiting and retaining quality management, sales professionals and other staff is crucial to our continued expansion and success as a market leader in the real estate services industry.

We believe that the CENTURY 21^® brand, systems and business platform appeal to potential employees looking for long term career prospects. To attract and retain both management and sales professionals of high caliber, we plan to further improve our human resource systems for more accurate assessment of employee performance and enhance our compensation and incentive structure.

We intend to implement a wide variety of training programs, offered to the sales professionals and staff of both our company-owned sales offices and franchised sales offices, on real estate market knowledge, sales practices and techniques and in-house IT training. We plan to further devote efforts to increase the number and enhance the effectiveness of courses available through our training programs and E-learning system, an online training system developed and operated by our in-house human resources management team.

Our Nationwide Network

We operate the largest network of real estate sales offices in China under the CENTURY 21^® brand. As of September 30, 2009, our CENTURY 21^® China network covered 34 major cities with more than 1,000 sales offices, employed approximately 14,900 sales professionals and staff and maintained approximately 4.7 million property listings.

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The map below shows the cities covered by CENTURY 21^® franchise network as of September 30, 2009:

The table below sets forth a summary of the number of sales offices, sales professionals and staff and property listings in our CENTURY 21^® franchise network, as of September 30, 2009:

	Sales Offices	Sales Professionals and Staff	Property Listings
Beijing	183	2,897	1,073,210
Shanghai	158	2,568	1,058,125
Hangzhou	82	1,238	328,923
Chengdu	66	738	216,698
Jinan	59	680	282,554
Wuhan	60	681	220,666
Shenzhen	27	370	302,459
Others	439	5,737	1,215,262
Total	1,074	14,909	4,697,897

Our Services

We operate under three different but closely related business lines: company-owned brokerage services, mortgage management services and franchise services. We have deployed a unique business model that has allowed us to rapidly scale our company-owned operations by leveraging the in-depth market knowledge and human capital developed from our franchise network.

Company-owned Brokerage Services

As of September 30, 2009, we directly own 280 CENTURY 21^® sales offices strategically located in Beijing, Shanghai and Shenzhen, cities in China with among the highest number of secondary market real estate transactions per year. We primarily focus on China’s fast-growing and highly fragmented secondary real estate market, which we expect to outgrow the primary market, especially in more economically prosperous cities. As of September 30, 2009, we had 4,399 sales professionals and staff in our company-owned sales offices. In 2008

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and the nine months ended September 30, 2009, such offices were involved in 6,312 and 12,976 sale and purchase transactions and net revenues from our company-owned brokerage services business represented approximately 75.4% and 91.9% of our total net revenues, respectively.

The table below sets forth the number of our company-owned sales offices and sales professionals and staff in each city as of September 30, 2009:

	Company- owned Sales Offices	Sales Professionals and Staff
Beijing	129	2,091
Shanghai	124	1,938
Shenzhen	27	370
Total	280	4,399

Historically, we have developed our company-owned brokerage services business through organic growth and acquisitions of sales offices owned by third parties. We established Beijing Anxin, the operator of our company-owned sales offices in Beijing, in 2006. In Shanghai and Shenzhen, we acquired the sales offices operated by two pre-existing local players with sufficient local expertise in 2006 and 2008, respectively. After such acquisitions, we started to develop our company-owned brokerage services business locally with the assistance of the local management team.

Through our company-owned brokerage services business, we participate in sales and leasing transactions primarily with respect to middle to high grade residential properties in the secondary real estate market. Our services include property listing, advisory services and transaction negotiation and documentation. When we assist the seller in a real estate transaction, our sales professionals assist the seller in pricing the property and preparing it for sale, advertise the property (including on websites), introduce and promote the property to prospective buyers, and assist the seller in sale negotiations.

When we assist the buyer in a real estate transaction, our sales professionals generally help the buyer locate specific properties that meet the buyer’s personal and financial specifications, show properties to the buyer, assist the buyer in negotiating transaction terms and executing the transaction. We also promote our mortgage management services to our customers to provide the increased convenience of one-stop real estate brokerage services. We also participate in real estate sales and leasing transactions with respect to properties in the primary and commercial real estate markets.

We operate our company-owned brokerage services business under the CENTURY 21^® franchise network. Each of our company-owned sales offices enters into a franchise agreement with one of our two wholly owned regional sub-franchisors. Under this arrangement, our company-owned sales offices are required to pay intra-group royalties to our regional sub-franchisors, who in turn, pay royalties to us. See “— Our Services — Franchise Services” for more information on our CENTURY 21^® franchise network and operations.

Mortgage Management Services

We began operating our independent mortgage management services as a separate segment in 2008 in Beijing and Shanghai, under the independent brand of Kaisheng. Our mortgage management services include comprehensive advisory services in connection with the selection and procurement of mortgage products offered by commercial banks. Our experienced mortgage consultants promote and introduce various mortgage products, and advise home buyers or home owners in the selection of the appropriate mortgage product based on each mortgagor’s individual needs. We also have a call center in Shanghai to promote our mortgage management services business directly to our customers.

As an important aspect of the one-stop real estate brokerage services available within the CENTURY 21^® franchise network, our mortgage management services can be accessed at our closing centers,

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providing a convenient, one-stop option to home buyers and home owners as well as a prime platform for commercial banks to offer their products and services. In 2009, a substantial majority of the transactions utilizing mortgage services that are handled by our company-owned sales offices made use of our mortgage management services. We also provide mortgage management services to customers outside of our CENTURY 21^® China network.

For our mortgage management services, we primarily generate commissions from the commercial banks whose mortgage products we promote. As of September 30, 2009 we had established advisory relationships with 11 commercial banks, such as Bank of China and Industrial and Commercial Bank of China. In some cases, we provide mortgage management services to property owners who need mortgages on their existing properties to obtain consumer loans for acquisition of additional properties and charge commissions based on our services. We provided services for home mortgages with an aggregate loan amount of approximately RMB1.9 billion and RMB4.2 billion in 2008 and the nine months ended September 30, 2009, respectively. Based on the secondary residential property transaction volumes in Beijing and Shanghai for 2008, we estimate that we provided mortgage management services for 6.18% and 1.45% of the home mortgages in Beijing and Shanghai, respectively.

As is customary in the mortgage management industry in Beijing, we provide interim guarantees to commercial banks in respect of the mortgage loans they extend to property buyers. An interim guarantee covers the period beginning when the bank disburses the mortgage loan to the property buyer and ending when the mortgage registration certificate is issued to the bank by the applicable property registry, which typically takes one to six months.

If a bank fails to obtain the mortgage registration certificate or the property buyer defaults on his payment obligations during the term of an interim guarantee, we may be required to pay the amount of the delinquent mortgage payments or any measurable loss suffered by the bank exceeding the payment already made by the buyer and the amount recoverable from the property.

Under the PRC rules, the maximum financed portion of the purchase price of a property is 80%, which helps reduce our risk exposure. To further mitigate our risk exposure, we usually:

• conduct certain background and credit checks on property buyers and reject less credit-worthy mortgage applications;

• assist in applying for buyers’ title documents, and issue a guarantee in a transaction only after a notice specifying the proposed date for collecting the title document has been issued by the applicable property registry; and

• actively participate in the process of banks’ applying for mortgage registration certificates.

As of December 31, 2007 and 2008 and September 30, 2009, the contingent guarantee obligations of our company with respect to the provision of interim guarantee was RMB143.9 million, RMB227.8 million and RMB829.3 million, respectively. As of September 30, 2009, we had not been required to pay any amounts with respect to our interim guarantee services since we commenced this business.

Franchise Services

Our franchise network consists of three levels of franchise rights. First, through IFM Co., our wholly owned subsidiary, we are the exclusive franchisor for the CENTURY 21^® brand in China. IFM Co. in-turn grants the right to franchise the CENTURY 21^® brand within specific geographical regions to sub-franchisors whom we refer to as regional sub-franchisors. The geographical scope of a regional sub-franchisor is generally limited to a particular city, although a few have rights to multiple cities. We own certain of the regional sub-franchisors.

The regional sub-franchisors then either open their own sales offices or grant to independent operators the right to open sales offices within the sub-franchisor’s region. The sales offices owned by us are referred to as

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company-owned sales offices while those owned by third parties are referred to as franchised sales offices or franchisees. As part of our strategy of expanding our network and CENTURY 21^® brand recognition, in addition to owning and operating our company-owned sales offices, we seek to increase the number of franchisees.

As of September 30, 2009, we had 28 regional sub-franchisors with established franchise networks in 34 cities in China with a total of 794 franchised sales offices employing approximately 10,500 sales professionals and staff. The table below sets forth the number of the franchised sales offices in our CENTURY 21^® franchise network, as of September 30, 2009:

	Franchise Sales Offices	Sales Professionals and Staff
Hangzhou	82	1,238
Chengdu	66	738
Jinan	59	680
Beijing*	54	806
Wuhan	60	681
Zhengzhou	59	825
Tianjin	43	616
Qingdao	44	485
Shijiazhuang	37	737
Shanghai*	34	630
Kunming	19	226
Shenyang	24	371
Others*	213	2,477
Total	794	10,510

* We wholly own the regional sub-franchisors for Beijing, Shanghai and Shenzhen. We also own 10%, 15% and 10% of the equity of regional sub-franchisors in Xiamen Shijitonghe Real Estate Consultant Co. Ltd, or Xiamen, Shandong Jinan Sanlian Real Estate Brokerage Co., Ltd., or Shandong, and Shaanxi Lide Industry Investments Co. Ltd, or Xian.

We are the largest real estate brokerage franchisor in China based on the number of sales offices operating under the CENTURY 21^® brand, and the only real estate franchisor with a national footprint.

Pursuant to the franchise agreements we entered into with the entities in our CENTURY 21^® franchise network, we primarily generate revenue from our franchise services business in two ways. First, each regional sub-franchisor pays us an initial sub-franchising fee in consideration of entering into the regional sub-franchise agreement. Second, each regional sub-franchisor pays us ongoing service fees based on its revenue from the sales offices within its respective region, subject to minimum service fee requirements. The regional sub-franchisors generate revenue through an initial franchise fee and ongoing service fees from each sales office established in their regional network.

In addition to generating revenue from our regional sub-franchisors, we leverage the geographic breadth and local market expertise of our CENTURY 21^® franchise network to increase our brand recognition and market share as well as to accumulate market information and local expertise in the geographic regions where we see the business potential for future expansion of our company-owned brokerage services.

Our Franchising Process and Franchise Services

Our franchising process involves conducting market surveys and identifying target regions or locations, identifying potential regional sub-franchisors, and negotiating and signing franchise agreements. Since 2000, we have become more efficient in developing our CENTURY 21^® franchise network. Based on our research and analysis of the real estate market in China, we believe that approximately 100 cities in China meet our criteria to develop our CENTURY 21^® franchise network.

The selection of regional sub-franchisors in target regions is of critical importance to the development of the CENTURY 21^® franchise network. We identify suitable partners in regions where we plan to develop a

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franchise network. An evaluation committee consisting of key members of our senior management team is in charge of reviewing and selecting regional sub-franchisors in new regions. Major criteria for the evaluation process include reputation, financial strength, commitment and industry vision, demonstrated industry and local expertise as well as internal control capability.

After our regional sub-franchisor enters into our network, we start to provide our franchise services, which primarily include the license to use or sub-franchise CENTURY 21^® brand and system, training services, and the right to participate in and benefit from the marketing campaigns using NAF as well as information technology and back office support.

As part of our ongoing monitoring and supervision of a regional sub-franchisor’s performance, we generally require our regional sub-franchisor to (1) comply with a uniform franchise policy and procedure adopted for the region, (2) use our standardized franchise agreement with the franchisees within the region, (3) meet certain performance criteria, including the development of a certain number of franchised sales offices, (4) abstain from engaging in any other real estate brokerage business similar to ours or investing in any franchised sales offices, or other real estate brokerage, consulting or valuation businesses, unless otherwise agreed by us and (5) obtain our consent prior to any transfer of more than 5% of its equity interest. We also have the right to terminate the regional sub-franchise agreement in the event that the regional sub-franchisor materially breaches its obligations under the agreement.

Our Information Systems

We supervise and manage our operations and provide information and back-office support to our franchise network through our proprietary information systems, which primarily include Sales Information System, or SIS and Human Resource and Commission Information System, or HCIS. We maintain certain backup and disaster recovery systems for critical functions of our SIS and HCIS. Our in-house information technology team, with the support from third party outsourcing firms, have developed, maintained and regularly upgraded our information systems, including the following:

• Sales Information System. Embedded with comprehensive information collection, categorization, storage, processing and analysis modules, our SIS is our core back-office platform to provide day-to-day informational and operational support to our franchise network. Our SIS provides listing and customer information management as well as sales office and network management support:

¡ Listing and customer information. Listing and customer information is uploaded or updated to our SIS on a real-time basis through terminals available to individual sales professionals in our franchise network, whether through our company-owned brokerage sales offices or franchised sales offices. Information updating is one of the key functions performed by the sales professionals in our franchise network. The management team of each sales office actively reviews the accuracy of the listing information, and supervises the sales professionals in obtaining updates in connection with individual listings in our SIS on a real-time basis. As such, when providing services to customers, the sales professionals are able to use the information exchange and analytical modules to retrieve the most up-to-date information available at their respective levels of information access authority. As of September 30, 2009, we had approximately 4.7 million property listings in our system. We encourage information sharing and cooperation among sales offices or sales professionals. As a result, for the nine months ended September 30, 2009, a substantial majority of successful brokerage transactions completed by our company-owned sales offices in Beijing and Shanghai involved more than one sales professional.

¡ Management support. Our SIS is also designed to allow our management teams to supervise and manage our operations. The comprehensive analytical tools and multi-

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dimensional supervising modules available in our SIS have become an important part of our strategic decision-making process. As financial and operational data and reports are periodically prepared and presented on a real-time basis, we can swiftly capture significant market and operational trends, or any abnormal occurrence. Our SIS also provides information security supervision services.

Our SIS is designed to allow flexibility with respect to database structure, analytical functions, information points and information access authority, and to enhance adaptability for specific geographic regions to accommodate local customs. Listing and customer information are shared at different levels of access authority based on the specific needs of individual sales offices. Given the different ownership structure of the sales offices in our franchise network, various information sharing structures and access authorities are available to our sales offices.

• Human Resource and Commission Information System. Our HCIS is our core human resource and commission management platform. It monitors performance and manages sales professional commissions, a key component of the compensation structure for our sales professionals based on individual performance. Through information exchange with our SIS, our HCIS allows us to accurately track the performance of each sales professional and credit commissions based on information relating to such sales professional’s performance and contribution in particular brokerage transactions. Apart from commission management, our HCIS provides services relating to human resources, such as employee management, organization structure and transaction tracing.

Marketing and Brand Promotion

Marketing and brand promotion is an important part of building our CENTURY 21^® franchise network in China. We primarily finance our marketing campaigns and activities for brand promotion through our NAF to which all regional sub-franchisors and franchisees within the CENTURY 21^® franchise network in China make monthly contributions. The contributions made to our NAF, net of amounts retained for regional promotion as discussed below, amounted to RMB7.1 million, RMB10.6 million and RMB5.5 million in 2007 and 2008 and the nine months ended September 30, 2009, respectively. Our marketing committee, which consists of key management members in charge of marketing from each of our regional franchise networks, is responsible for directing and supervising the use of the fund. We receive a 15% management fee for our administration of the fund. To promote the CENTURY 21^® brand in regional markets, each regional sub-franchisor retains 30% of its annual contribution to maintain an advertising fund for brand promotion in the local market. We have the policy to apply all contributions to our NAF each year to the marketing campaigns and activities for brand promotion during the relevant year. For major marketing campaigns we hire external marketing professionals to assist our in-house marketing team.

We have adopted an integrated approach to promote the CENTURY 21^® brand:

• Internet, newspapers and publications. We have advertising cooperation arrangements with many Chinese national and regional consumer media outlets, including major newspapers, publications such as China Real Estate Business and Sanlian Life Week Magazine and major internet real estate portals such as SouFun.com.

• Conferences and exhibitions. We organize an annual CENTURY 21^® China Convention, during which we invite all of the sales professionals in the CENTURY 21^® China network as well as major market players in the real estate industry. During the convention, we present awards to top-performing sales professionals in recognition of their achievements during the year. We also actively participate in other real estate conferences, exhibitions and trade shows.

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• Airplane advertising. We promote the CENTURY 21^® brand through our in-flight videos on Air China and Shanghai Airlines.

In addition to our brand building efforts, each sales office may choose to spend certain amounts on marketing property listings through the internet. Through our cooperation arrangement with major internet real estate portals such as SouFun.com, each sales office may promote property listings to advance potential customers’ direct access to such listings and responsible sales professionals. Our sales offices have generated significant traffic through our internet advertising efforts.

Competition

Company-owned Brokerage Services. The real estate brokerage industry is highly competitive in China, particularly in the metropolitan areas in which our company-owned brokerage services businesses operate, such as Beijing, Shanghai and Shenzhen. In addition, the industry has low capital commitment requirements for small operations, lowering the barriers to entry for new participants, especially participants pursuing alternative methods of marketing real estate, such as internet-based listing services. However, significant capital commitments would be required to compete on a regional or national basis. Companies compete for brokerage business primarily on the basis of the services offered, reputation and brand recognition, personal contacts, local expertise and brokerage commission rates. We primarily compete with Centaline (China) Property Consultants Limited in the Beijing, Shanghai and Shenzhen markets for secondary market real estate brokerage business, and to a lesser extent, E-house (China) Holdings Limited in these cities for primary real estate brokerage business. We also compete with regional competitors in each of the regions where we own and operate sales offices.

Mortgage Management Services. Our mortgage management services business covers both the Beijing and Shanghai regions in contrast to our competitors who typically cover a single region. We compete with in-house mortgage management teams of our competitors in the brokerage businesses and in some regions specific competitors including Beijing Houze Investment and Guarantee Company Limited in Beijing and Shanghai Haoyonghang Investment Management Company Limited in Shanghai.

Franchise Services. We compete primarily with regional and local real estate brokerage brand franchisors. In addition, other international real estate brand franchisors, such as Coldwell Banker, have entered or plan to enter into the China market. A real estate broker may choose to affiliate with a regional chain or choose not to affiliate with a franchisor but to remain independent. We believe that competition for the sale of franchises in the real estate brokerage industry is based principally upon the perceived value and quality of the brand, the types of services offered to franchisees, the availability of financing, and the fees the franchisees must pay.

The ability of our real estate brokerage franchisees to compete is important to our prospects for growth. The ability of an individual franchisee to compete may be affected by the quality of its sales professionals, the location of its office, the services provided to its sales professionals, the number of competing offices in the vicinity, its affiliation with a recognized brand name, community reputation, brokerage commission rate and other factors. A franchisee’s success may also be affected by general, regional and its local economic conditions.

Employees and Training

We recruit sales professionals for our company-owned sales offices based on their education, qualification, experience and personality. We recruit on an as-needed basis. Most new recruits undergo a probation period before they are formally hired. We had 842, 4,462, 2,990 and 4,654 employees as of

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December 31, 2006, 2007 and 2008 and September 30, 2009, respectively. The following table sets forth the number of our full-time employees by area of responsibility as of the dates indicated:

	As of December 31,			As of September 30,
	2006	2007	2008	2009
Company management	14	27	42	46
Sales professionals	595	3,707	2,318	3,770
Other employees	233	728	630	838
Total	842	4,462	2,990	4,654

We review the performance of our sales professionals on a periodic basis. We also have our own accreditation system for experienced sales professionals, including those sales professionals at our franchisees. We pay our sales professionals and managers a combination of salaries and sales commissions and pay salaries to all other employees. All our sales professionals and staff are entitled to welfare and benefits as required under PRC laws.

We maintain a comprehensive training system that combines our training programs and our E-learning system, an online learning system developed and operated by our in-house training team. Our training programs and E-learning system are available not only to the sales professionals and staff in our company-owned sales offices, but also to sales professionals and staff in all the sales offices in our CENTURY 21^® franchise network. The courses in our training system include those developed in-house as well as the training courses provided by Realogy. Our training courses cover topics including new-hire training, ethics, brokerage business, sales techniques, information technology, management skills and finance and legal training.

• Training programs. Through various training programs we sponsor, we have an aggregate of 52 courses in the forms of orientation, lecture, seminar or workshop for newly-recruited and experienced sales professionals. We also have 26 management courses for management teams of entities in our CENTURY 21^® franchise network to improve and strengthen their management skills. As of September 30, 2009, we had 405 tutors providing training events in all regions where we have sales offices.

• E-learning system. We started to promote our E-learning online training system in 2008, which currently offers 117 different online courses to sales professionals and staff both in our company-owned sales offices and franchisees. Our E-learning training system provides courses, examinations, analytical and review toolkits and learning forums to our sales professionals and staff. Additionally, regional franchise networks are able to develop their own training courses through the E-learning system.

Intellectual Property

The CENTURY 21^® brand name, including related intellectual property, which we are authorized to use under our master sub-franchise agreement with Realogy, contributes to our competitive advantage in the real estate services market. We also rely on our Sales Information System and Human Resource and Commission Information System, each of which is copyright protected, and our training system that combines our training programs and our E-learning system to manage our business operations. See “—Our Information Systems” and “—Employees and Training.” Since commencement of our operations, our company-owned brokerage and franchise services businesses have significantly relied on the CENTURY 21^® brand name, our proprietary information systems and our training system. To protect our intellectual property, we rely on a combination of trade secrets and copyright laws in China as well as imposing procedural and contractual confidentiality and invention assignment obligations on our sales professionals and staff, contractors and others. The built-in security functions and access authorization mechanisms in our franchise systems also help protect our confidential information.

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We offer our mortgage management services under the trade name of Kaisheng in Beijing and Shanghai. We are in the process of registering our trademark for our mortgage management services in China.

Facilities

Our headquarters are located in Beijing, China, where we lease approximately 1,700 square meters of corporate office space. As of September 30, 2009, our company-owned sales offices in Beijing, Shanghai and Shenzhen occupied an aggregate of approximately 30,000 square meters of leased space. We consider our corporate office space adequate for our current operations, and we expect that we are able to find new office spaces at reasonable rental rates if we open new company-owned sales offices.

Compliance and Legal Proceedings

Our operations in China are regulated by the Ministry of Commerce, the State Administration of Foreign Exchange, the Ministry of Housing and Urban-Rural Development, the Ministry of Land and Resources, the State Administration for Industry and Commerce and their respective local counterparts. See “Regulations” for further details on the regulations promulgated by such bodies. Historically, we have not incurred any material costs in complying with these regulations.

We are subject to various legal proceedings, investigations and claims incidental to the conduct of our business from time to time. We have occasionally, and in each case, successfully, resorted to litigation against certain of our regional sub-franchisors with whom we have terminated our sub-franchise relationship for the sub-franchisor’s material breach of the regional sub-franchise agreement. In addition, we have successfully litigated against third parties who have infringed the CENTURY 21^® trademark. We are not currently a party to, nor are we aware of, any legal proceeding, investigation or claim which, in the opinion of our management, is likely to have a material and adverse effect on our business, financial condition or results of operations.

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OUR CORPORATE HISTORY AND STRUCTURE

We became the exclusive franchisor of the CENTURY 21^® brand in China on March 22, 2000 through IFM Company Limited, or IFM Co., a Cayman Islands company controlled by one of our founders, Mr. Donald Zhang. See “Our Relationship with Realogy and Related Party Transactions.” Since then, we have worked to build the CENTURY 21^® brand and our franchise network of CENTURY 21^® sales offices in China.

We underwent a reorganization and introduced Goldman Sachs Strategic Investments (Asia) L.L.C., or Goldman Sachs Strategic Investments, as an investor to develop our company-owned brokerage services business in 2006. In connection with the reorganization, we incorporated IFM Investments Limited, our company in the Cayman Islands on November 30, 2005 to be the holding company of our various subsidiaries, including IFM Co. In consideration for the contribution of all issued and outstanding shares of IFM Co., our founders received all of the issued and outstanding shares of our company. On August 24, 2006, which is the effective date of our reorganization, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 200,000,000 Series A preferred shares to Goldman Sachs Strategic Investments for US$22.0 million. After this investment, we began to develop our company-owned brokerage services business. In October 2006, we incorporated Beijing Anxin to develop our company-owned sales offices in Beijing. In the same month, we also acquired 14 sales offices from a third party in Shanghai through Shanghai Ruifeng to develop our company-owned brokerage services business in Shanghai. In 2008, we began managing our mortgage management services in Beijing and Shanghai as a separate segment.

On October 19, 2007, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 105,253,600 Series B preferred shares to GL Asia Mauritius II Cayman Limited, for US$40.0 million. On February 21, 2008, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 6,113,670 Series B preferred shares to Realogy, for approximately US$2.3 million.

As part of our reorganization, Xinye, a PRC wholly-owned foreign enterprise controlled by our founders, Mr. Donald Zhang and Mr. Harry Lu, agreed to transfer its 51% equity interests in IFM SH, 11.15% equity interests in IFM Beijing, 10% equity interests in Xiamen, 15% equity invest in Shandong and 10% equity interests in Xian, to us. Xinye completed its transfer of the Shandong interests to us on December 4, 2006, the IFM SH interests on December 4, 2008, the IFM Beijing interests on August 12, 2008, the Xiamen interests on December 26, 2008 and the Xian interests on February 9, 2009.

On January 4, 2010, we effected a share split whereby all of our issued and outstanding 26,000,000 ordinary shares of par value US$0.01 per share, 20,000,000 Series A preferred shares of par value US$0.01 per share and 11,136,727 Series B preferred shares of par value US$0.01 per share were divided into 260,000,000 ordinary shares of US$0.001 par value per share, 200,000,000 Series A preferred shares of par value US$0.001 per share and 111,367,270 Series B preferred shares of par value US$0.001 per share, respectively, and the number of our authorized shares was increased from 101,374,676 to 1,013,746,760.

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The following diagram illustrates our anticipated shareholding and corporate structure with our principal subsidiaries immediately following this offering⁽¹⁾:

(1) Represents economic ownership of our Class A and Class B ordinary shares. Immediately prior to this offering, IFM Overseas Partners, Goldman Sachs Strategic Investments, GL Asia Mauritius II and Realogy each owned 52.1%, 28.4%, 18.4% and 1.1%, respectively, of our ordinary shares.

(2) Consists of 61,108,179 Class A ordinary shares and 80,502,938 Class B ordinary shares, which have substantially the same rights as Class A ordinary shares except that they are not entitled to vote as further described in “Description of Shares Capital—Classes of shares.”

Our Principal Subsidiaries

Company-owned brokerage services

We operate our company-owned brokerage services business through the following subsidiaries:

¡ Beijing Anxin, incorporated on October 19, 2006, is the subsidiary established to own and operate our company-owned sales offices in Beijing.

¡ Shanghai Ruifeng, incorporated on September 28, 2006, is the subsidiary established to own and operate our company-owned sales offices in Shanghai. We acquired 14 sales offices from a third party in Shanghai through Shanghai Ruifeng to develop our company-owned brokerage services business in Shanghai in October 2006.

¡ Shenzhen CIR, incorporated on September 15, 2005, is the subsidiary that owns and operates our company-owned sales offices in Shenzhen. We acquired Shenzhen CIR from a third party to develop our company-owned brokerage services business in Shenzhen in July 2008.

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Franchise services

We operate our franchise services business through the following subsidiaries:

¡ IFM Co., incorporated on October 4, 1999, holds the exclusive franchise rights for the CENTURY 21^® brand in China.

¡ IFM Beijing, incorporated on March 1, 2000, is the exclusive agent of IFM Co. to sub-franchise the CENTURY 21^® network in China in its own name on behalf of IFM Co.

¡ IFM BJ Broker, incorporated on May 27, 2008, is our regional sub-franchisor in Beijing.

¡ IFM SH, incorporated on September 29, 2002, is our regional sub-franchisor in Shanghai and Shenzhen.

Mortgage management services

We operate our mortgage management services business through the following subsidiaries:

¡ MMC BJ, incorporated on August 13, 2007, was established to own and operate our mortgage management services in Beijing.

¡ MMC SH, incorporated on April 8, 2008, was established to own and operate our mortgage management services in Shanghai.

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MANAGEMENT

Directors and Executive Officers

The following table sets forth our current directors, director appointees and executive officers, their ages as of the date of this prospectus and the positions held by them. The business address for each of our directors, director appointees and executive officers, is 26/A, East Wing, Hanwei Plaza, No.7 Guanghua Road, Chaoyang District, Beijing 100004, People’s Republic of China.

Name	Age	Position
Donald Zhang	55	Chairman, Chief Executive Officer
Harry Lu	43	Vice Chairman, President
Kevin Cheng Wei	42	Director and Chief Financial Officer
Kevin Yung	35	Director Appointee and Executive Vice President (1)
Weiping Zhang	55	Director and Vice President
Jennifer Tang	42	Director
Qiang Chai	48	Independent Director
Liang Pei	41	Independent Director
Conor Chiahung Yang	46	Independent Director Appointee (1)
Lihong Ma	37	Legal & HR Vice President
Hao Wang	39	Vice President & General Manager of Franchise Services Business Unit
Qifeng Tan	32	Deputy General Manager of Company-owned Brokerage Services Business Unit
Sheng Kang	36	General Manager of Beijing Kaishengjinglue Guarantee Co. Limited
Wang Yui Fung	40	General Manager of Beijing Anxin
Hau Piu Ip	35	General Manager of Shanghai Ruifeng

(1) Messrs. Kevin Yung and Conor Chiahung Yang have accepted our appointment to be the directors of our company, effective upon the completion of this offering.

Mr. Donald Zhang is one of our co-founders. In addition to founding our company, Mr. Zhang has served as our director and chairman since 2000 and our chief executive officer since 2009. Prior to assuming his role with our company, Mr. Zhang founded Maxpro International Enterprises, Inc. and has served as its chairman and chief executive officer since it was founded in 1992. Maxpro is an import and export and real estate investments company. From 1982 to 1986, Mr. Zhang served as an assistant manager in the procurement department of China National Offshore Oil Corporation. Mr. Zhang received his bachelor’s degree from the University of International Business and Economics in Beijing and a master’s degree in International Trade from Webster University in Missouri. Mr. Zhang is a brother-in-law of Mr. Harry Lu.

Mr. Harry Lu is one of our co-founders. In addition to founding our company, Mr. Lu has served as our director and vice chairman since 2000 and president since 2008. From 1995 to 1999, Mr. Lu served as the general manager of the PRC Region of Maxpro International Enterprises, Inc., managing the China aspects of Maxpro’s import and export and real estate investments business. From 1992 to 1995, he served as the export manager of China National Pharmaceutical and Healthcare Product Import & Export Co., Ltd. Mr. Lu currently serves as the deputy general secretary of the China National Institute of Real Estate Appraisers and Brokers, the policy and standard setting institute of the real estate market in China. Mr. Lu received his bachelor’s degree from Beijing Institute of Technology and his master’s degree from Rutgers Business School, State University of New Jersey. Mr. Lu is a brother-in-law of Mr. Donald Zhang.

Mr. Kevin Cheng Wei has served as our director since November 2008. He joined us as our chief financial officer in December 2007. Prior to joining us, from 2006 to 2007, Mr. Wei served as the chief financial

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officer of Solarfun Power Holdings Co., Limited, a leading Chinese solar company listed on NASDAQ. From 2005 to 2006, Mr. Wei was the chief financial officer of an on-line advertising agency in China. Mr. Wei was the chief audit executive of LG Philips Displays International Ltd. from 2003 to 2005, where he was responsible for managing global internal audit coverage and risk management. From 1999 to 2003, he was Asia Pacific regional corporate audit manager with Altria Corporate Services Inc., including one year at Nabisco Inc. prior to its acquisition by Kraft Foods. Prior to Altria, from 1991 to 1999, Mr. Wei worked with KPMG LLP and Deloitte Touche LLP. Mr. Wei graduated from Central Washington University, where he received his Bachelor of Science degree (cum laude) with a double major in accounting and management information systems.

Mr. Kevin Yung will serve as our director upon the completion of this offering. He has served as our executive vice president since 2009. From 2007 to 2009, Mr. Yung was a partner at China Renaissance, a local financial advisory firm based in Beijing. From 2006 to 2007, Mr. Yung was a vice president with the Special Situations Group of Morgan Stanley. From 2003 to 2006, Mr. Yung was a vice president with the Special Situations Group of Citigroup Capital Markets Asia. From 1998 to 2003, Mr. Yung was an associate with the Real Estate Principal Investing Group of Morgan Stanley in New York, Tokyo and Hong Kong. From 1996 to 1998, Mr. Yung was an analyst with the Real Estate Investment Group at J.P. Morgan in New York. Mr. Yung received his bachelor's degree in finance and economics from Babson College.

Mr. Weiping Zhang has served as our director since 2006 and vice president since 2002. From 2004 to 2007, he was senior vice president of IFM Beijing. From 2002 to 2004, he was deputy general manager for IFM SH. He was the representative of Maxpro International Enterprises, Inc. Beijing office from 1993 to 2002. Maxpro is an import and export and real estate investments company. From 1992 to 1993, Mr. Zhang was the Assistant General Manager of Hong Kong Donglong Company. Mr. Zhang received his bachelor’s degree from Beijing Foreign Language Institute.

Ms. Jennifer Tang has served as our director since 2009. Ms. Tang joined Avenue Asia Singapore Pte Ltd in 2006 and serves as its managing director and head of its legal department. From 2000 to 2006, Ms. Tang held various positions with Hutchison Whampoa Limited, including serving as group senior legal counsel of Hutchison Telecommunications International Ltd, a public company listed on the New York Stock Exchange and the Stock Exchange of Hong Kong. Ms. Tang received her bachelor’s degree in commerce and a bachelor’s degree in law from the University of New South Wales. She is currently admitted as a solicitor in New South Wales and Hong Kong.

Mr. Qiang Chai has served as our independent director since January 2010. Mr. Chai also served as vice president and secretary general of China National Institute of Real Estate Appraisers and Brokers since 1999. From 1992 to 1999, he was the director of the Real Estate and Residence Research Institute and deputy chief economist of the Policy Research Center of the Ministry of Housing and Urban-Rural Development of PRC. From 1985 to 1992, Mr. Chai was chief and deputy director of the Urban Economic Research Office of Urban-Rural Development Economic Institute. Mr. Chai received his bachelor’s degree in engineering from Wuhan University of Technology, and his master’s degree and doctor’s degree in economics from the graduate school of China Academy of Social Sciences.

Mr. Liang Pei has served as our independent director since January 2010. Mr. Pei has served as the secretary general of China Chain Store & Franchise Association since 2002 and an independent director of Fujian New Hua Du Supercenter Co., Ltd. since 2007. From 1992 to 2002, he worked as an official with Ministry of Internal Trade. Mr. Pei received his bachelor’s degree in commerce and economics and doctor’s degree in business administration, both from Renmin University of China.

Mr. Conor Chiahung Yang will serve as our independent director upon the completion of this offering. Mr. Yang is the chief financial officer of AirMedia Group Inc. (Nasdaq:AMCN), and has served in that role since March 2007. Prior to joining AirMedia, he was the chief executive officer of Rock Mobile Corporation from 2004 to February 2007. From 1999 to 2004, Mr. Yang served as the chief financial officer of the Asia Pacific region for CellStar Asia Corporation. Mr. Yang was an executive director of Goldman Sachs (Asia) L.L.C. from

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1997 to 1999. Mr. Yang was a vice president of Lehman Brothers Asia Limited from 1994 to 1996 and worked at Morgan Stanley Asia from 1992 to 1994. Mr. Yang received his MBA degree from University of California, Los Angeles in 1992 and his bachelor’s degree from Fu Jen University in Taiwan in 1985.

Ms. Lihong Ma has served as our legal and HR vice president since 2008. From 2007 to 2008, she was an associate of DLA Piper UK LLP. From 2006 to 2007, and from 2001 to 2004, she was an attorney of Dacheng Law Offices. From 2004 to 2006, Ms. Ma was the head of the legal department of the Beijing office of CapitaLand (China) Investment Co., Ltd. From 1996 to 2000, she was a translator of the Beijing office of Hong Kong Dragon Airlines Limited. From 1995 to 1996, she was a teacher of the training center of Beijing Automobile Industry Group. Ms. Ma received her bachelor’s degree from China University of Politics Science and Law and her master’s degree from Peking University School of Law. Ms. Ma is qualified for PRC Bar.

Mr. Hao Wang has served as the vice president and general manager of our franchise services business unit since 2009. Mr. Wang joined us in 2001 and served as franchise sales manager and franchise sales director of IFM Beijing and the general manager of IFM SH. From 1999 to 2001, he was the general manager of American Haohua Investment Consultant Company. From 1995 to 1999, Mr. Wang was the manager of the marketing division of China Pacific Insurance (Group) Co., Ltd. Mr. Wang received his bachelor’s degree from the Fine Art College of Shanghai University and his EMBA degree from the University of Texas at Arlington.

Mr. Qifeng Tan has served as the deputy general manager of our company-owned brokerage services business unit, executive director of Shenzhen CIR and general manager of Beijing Huachuang Xunjie Technology Co., Limited since 2009. From 2006 to 2009, he was the deputy general manager of Shanghai Ruifeng. From 2001 to 2006, he was project manager of the finance department, franchise manager of the franchise department and manager of the business expansion department of IFM Beijing. Mr. Tan received his associate’s degree from Xi’an Polytechnic Institute and is currently attending the EMBA program at China Central Technology University.

Mr. Sheng Kang has served as the general manager of Beijing Kaishengjinglue Guarantee Co. Limited since 2007. From 2006 to 2007, he was the general manager of Beijing Weijia Anjie Investment Guarantee Co., Ltd. From 2002 to 2006, he was the finance service and trading management director of 5i5j Real Estate Co., Ltd. From 2000 to 2002, Mr. Kang was the deputy general manager of Dongfang Hengji Real Estate Consulting Co., Ltd. of Dongli Group. From 1999 to 2000, he was the project deputy manager of China Xin Xing Construction Development Co., Ltd. Mr. Kang received his bachelor’s degree from Wuhan University of Hydraulic and Electrical Engineering and his master’s degree from Tsinghua University.

Mr. Wang Yui Fung has served as the general manager of Beijing Anxin since 2008. From 2005 to 2008, he was the general manager of Midland Realty Consulting (Shanghai) Co., Ltd. From 2004 to 2005, he was a sales manager at Hanyu Property Agency Co. Limited. From 2003 to 2004, he was regional manager of Nanjing Centaline Property Consultants Ltd. Mr. Fung received his secondary school degree from Moral Training English College in Hong Kong.

Mr. Hau Piu Ip has served as the general manager of Shanghai Ruifeng since 2009. He was a director and general manager of Shanghai Hopefluent Real Properties Consulting Co. Limited since 2007. From 1997 to 2006, he was the senior director of Centaline Property Agency Limited. Mr. Ip received his bachelor’s degree from Liverpool John Moores University and his master’s degree from Tongji University and United Business Institutes of Belgium.

Employment Agreements

We have entered into employment agreements with each of our executive officers. We may terminate an executive officer’s employment for cause, at any time, without remuneration, for certain acts of the officer, including, but not limited to, a conviction or plea of guilty to a felony, negligent or dishonest acts to our detriment or

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misconduct or a failure to perform agreed duties. An executive officer may terminate the employment at any time upon advance written notice. Furthermore, we may terminate an executive officer’s employment at any time without cause, in which case, we will continue to make the base salary payment and certain benefits to the executive officer within a severance period in accordance with the employment agreement. Except for the foregoing, the officer is not entitled to any severance payments upon the termination of the employment for any reason.

Each executive officer has agreed to hold in strict confidence any trade secrets or confidential information of our company. Each officer also agrees to faithfully and diligently serve our company in accordance with the employment agreement and the guidelines, policies and procedures of our company approved from time to time by our board of directors.

Board of Directors

Our board of directors will consist of 9 directors upon completion of this public offering. A director is not required to hold any shares in the company by way of qualification. A director may, subject to any separate requirement for audit committee approval under applicable law or the listing rules of the New York Stock Exchange, and unless disqualified by the chairman of the relevant board meeting, vote with respect to any contract or transaction in which he or she is materially interested provided the nature of the interest is disclosed prior to its consideration and any vote on such contract or transaction. The directors may exercise all the powers of the company which are not, by the Companies Law or its amended and restated articles of association, required to be exercised by shareholders, including the power to borrow money, mortgage its undertaking, property and uncalled capital, and issue debentures or other securities whenever outright or as security for any debt, liability or obligation of the company or of any third party.

Committees of the Board of Directors

We will establish an audit committee under the board of directors immediately upon the completion of this offering. We have adopted a charter for the audit committee, and its members and functions are described below.

Audit Committee

Our audit committee will consist of Conor Chiahung Yang, Liang Pei and Kevin Yung. Conor Chiahung Yang and Liang Pei satisfy the “independence” requirements of Section 303A of the Corporate Governance Rules of the New York Stock Exchange. In addition, Conor Chiahung Yang and Liang Pei meet the “independence” standards under Rule 10A-3 under the Securities Exchange Act of 1934, as amended. Conor Chiahung Yang will be the chair of our audit committee. Our audit committee will consist solely of independent directors that satisfy New York Stock Exchange and SEC requirements within one year of our initial public offering. The purpose of the audit committee is to assist our board of directors with its oversight responsibilities regarding: (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent auditor’s qualifications and independence, and (iv) the performance of our internal audit function and independent auditor. The audit committee will be responsible for, among other things:

• appointing the independent auditors and pre-approving all audit and non-audit services permitted to be performed by the independent auditors;

• reviewing with the independent auditors any audit problems or difficulties and management’s response;

• discussing the annual audited financial statements with management and the independent auditors;

• reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material control deficiencies; and

• meeting separately and periodically with management and the independent auditors.

Duties of Directors

Under Cayman Islands law, our directors have a fiduciary duty to act honestly, in good faith and with a view to our best interests. Our directors also have a duty to exercise the skill they actually possess and such care

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and diligence that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duty of care to us, our directors must ensure compliance with our memorandum and articles of association, as amended from time to time. A shareholder has the right to seek damages if a duty owed by our directors is breached.

The functions and powers of our board of directors include, among others:

• convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings;

• declaring dividends and distributions;

• appointing officers and determining the term of office of officers;

• exercising the borrowing powers of our company and mortgaging the property of our company; and

• approving the transfer of shares of our company, including the registering of such shares in our share register.

Interested Transactions

A director may, subject to any separate requirement for audit committee approval under applicable law or the listing rules of the New York Stock Exchange, and unless disqualified by the chairman of the relevant Board meeting, vote in respect of any contract or transaction in which he or she is interested, provided that the nature of the interest of any directors in such contract or transaction is disclosed by him or her at or prior to its consideration and any vote in that matter.

Terms of Directors and Officers

Pursuant to our amended and restated memorandum and articles of incorporation to be adopted with effect following this offering, our board of directors will be divided into three classes. The members of each class will serve staggered three-year terms. Upon expiration of the term of a class of directors, directors in that class will be elected for three-year terms at the annual meeting of the shareholders in the year in which their respective terms expire. Immediately after the consummation of the offering, the classes will be composed as follows:

Donald Zhang, Kevin Yung and Liang Pei will be Class I directors, whose terms will expire at the first annual meeting of shareholders following this offering.

Harry Lu, Kevin Cheng Wei and Qiang Chai will be Class II directors, whose terms will expire at the second annual meeting of shareholders following this offering; and

Weiping Zhang, Jennifer Tang and Conor Chiahung Yang will be Class III directors, whose terms will expire at the third annual meeting of shareholders following this offering;

Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company.

Except as otherwise provided by law, vacancies on our board may be filled by the affirmative vote of a majority of the directors then in office, or by shareholders. A director elected by the board to fill a vacancy shall hold office only until our next annual general meeting and shall then be eligible for re-election as a director in the class where such vacancy existed.

Compensation of Directors and Executive Officers

For the year ended December 31, 2008, we paid an aggregate of approximately RMB9.3 million in cash compensation to our executive officers, and we did not pay any cash compensation to our non-executive

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directors. In addition, for the year ended December 31, 2008, after giving effect to our 10-for-1 share split effected January 4, 2010, we granted 2,300,000 options to our executive officers and directors to purchase ordinary shares of our company at an average exercise price at US$0.09 per share. These options expire five years after their dates of grant, and the aggregate number of ordinary shares underlying these options is 2,300,000. The total amount set aside or accrued by us to provide pension, retirement or similar benefits for our executive officers and directors for the year ended December 31, 2008 was approximately RMB0.5 million.

Stock Incentive Plan

Stock Incentive Plan. On August 18, 2006, we adopted a stock incentive plan, or the plan, which has been amended on October 19, 2007 and February 1, 2008, to provide additional incentive to those officers, employees, directors, consultants and other service providers of our Group, in order to strengthen the commitment of such persons to our Group, motivate such persons to faithfully and diligently perform their duties and to attract and attain competent and dedicated persons whose efforts will result in the long-term growth and profitability of our Group. The plan permits us to grant five types of awards: incentive stock options, nonqualified stock options, restricted shares, restricted share units and other awards. As of the date of the prospectus, the ordinary shares reserved for issuance under our plan represented 8.48% of our equity interest on a fully-diluted basis and the plan provides for proportional adjustment of such reserved shares in the event of adjustments to the conversion price of the preferred shares. As of September 30, 2009, after giving effect to our 10-for-1 share split effected January 4, 2010, we had outstanding 43.80 million options to purchase ordinary shares of our company exercisable at a weighted average exercise price at US$0.13 per share and the aggregate number of ordinary shares underlying these options is 43.80 million. These options generally expire five years after their dates of grant. See Note 17 “Share-Based Compensation” in the Consolidated Financial Statements for additional information.

Plan Administration. Our board of directors, or a committee designated by our board or directors, will administer the plan. The committee or the full board of directors, as appropriate, will determine the provisions and terms and conditions of granting awards under the plan.

Award Agreement. Options and other awards granted under our plan are evidenced by an award agreement that sets forth the terms, conditions and limitations for each grant. In addition, the award agreement may also provide that securities granted are subject to certain lock-up period following the effective date of a registration statement filed by us under the Securities Act, if so requested by us or any representative of the underwriters in connection with any registration of the offering of any of our securities.

Eligibility. We may grant awards to employees, directors and consultants of our company or any of our related entities, which include our subsidiaries or any entities in which we hold a substantial ownership interest.

Term of the Awards. The term of each award grant shall be stated in the relevant award agreement, provided that the term shall not exceed 10 years from the date of the grant.

Vesting Schedule. In general, the plan administrator determines, or the relevant award agreement specifies, the vesting schedule.

Transfer Restrictions. Awards granted under the plan may not be transferred in any manner by the grantee other than by will or the laws of succession and may be exercised during the lifetime of the grantee only by the grantee.

Termination of the Plan. Our board of directors has the authority to amend or terminate the plan subject to shareholder approval to the extent necessary to comply with applicable law. However, no such action may (i) impair the rights of any grantee unless agreed by the grantee and the plan administrator or (ii) affect the plan administrator’s ability to exercise the powers granted to it under our plan.

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PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to beneficial ownership of our ordinary shares as of the date of this prospectus, by:

• each of our directors and executive officers; and

• each person known to us to own beneficially more than 5.0% of our ordinary shares.

	Ordinary Shares Beneficially Owned Prior to This Offering			Ordinary Shares Beneficially Owned After This Offering(1)
Name	Number(2)	Percent(2)		Number(2)	Percent(2)
Directors and Executive Officers:
Donald Zhang(4)	260,000,000	52.1	%	260,000,000	37.9	%
Harry Lu(5)	52,000,000	10.4	%	52,000,000	7.6	%
Kevin Cheng Wei	*	*		*	*
Kevin Yung(a)	-	-		-	-
Weiping Zhang	-	-		-	-
Jennifer Tang	-	-		-	-
Qiang Chai	-	-		-	-
Liang Pei	-	-		-	-
Conor Chiahung Yang(a)	-	-		-	-
Lihong Ma	*	*		*	*
Hao Wang	-	-		-	-
Qifeng Tan	-	-		-	-
Sheng Kang	*	*		*	*
Wang Yui Fung	*	*		*	*
Hau Piu Ip	-	-		-	-
All Directors and Executive Officers as a group(6)	264,353,676	52.5	%	264,353,676	38.3	%
5% and above Shareholders:
IFM Overseas Partners L.P.(7)	260,000,000	52.1	%	260,000,000	37.9	%
Goldman Sachs Strategic Investments (Asia) L.L.C.(8)	141,611,117	28.4	%	141,611,117	20.6	%
GL Asia Mauritius II Cayman Limited(9)	129,614,081	26.0	%	129,614,081	18.9	%

Notes:

* Upon exercise of all options granted, the individual or the entity would beneficially own less than 1% of our outstanding ordinary shares.

(a) Messrs. Kevin Yung and Conor Chiahung Yang have accepted our appointment to be the directors of our company, effective upon the completion of this offering.

(1) Assumes that the underwriters do not exercise the option to purchase additional ADSs.

(2) Beneficial ownership is determined in accordance with the rules and regulations of the SEC. In computing the number of shares beneficially owned by a person or the percentage ownership of that person, we have included shares that the person has the right to acquire within 60 days of this offering, including through the exercise of any option, warrant or other right or the conversion of any other security. These shares, however, are not included in the computation of the percentage ownership of any other person. The calculation of the number of shares also assumes the conversion of all of our outstanding preferred shares into ordinary shares upon the completion of this offering. Percentage of beneficial ownership of each listed person prior to this offering is based on 498,842,277 ordinary shares outstanding as of the date of this prospectus, including 238,842,277 ordinary shares convertible from our outstanding preferred shares. Percentage of beneficial ownership of each listed person after the offering is based on 686,154,777 ordinary shares outstanding immediately after the closing of this offering.

(4) Includes 260,000,000 Class A ordinary shares beneficially held by Donald Zhang through IFM Overseas Partners L.P.

(5) Includes 52,000,000 of the 260,000,000 Class A ordinary shares held by IFM Overseas Partners L.P. and corresponds to a 20% limited partner interest held in IFM Overseas Partners L.P. by Harry Lu.

(6) Includes (i) 260,000,000 Class A ordinary shares beneficially held by Donald Zhang and Harry Lu through IFM Overseas Partners L.P., and (ii) 4,353,676 Class A ordinary shares underlying share options held by our directors and executive officers as a group that are exercisable within 60 days after the date of this prospectus.

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(7) Includes 260,000,000 Class A ordinary shares held by IFM Overseas Partners L.P. IFM Overseas Limited, a corporation incorporated under the laws of the Cayman Islands that acts as the general partner of IFM Overseas Partners L.P. and exercises investment control over the Class A ordinary shares held by this entity. Maxpro International Enterprises, Inc., a New York corporation, owns 100% of the equity interest in IFM Overseas Limited. Donald Zhang owns 100% of the equity interest in Maxpro International Enterprises, Inc. IFM Holding Company Limited and Harry Lu, each a limited partner of IFM Overseas Partners L.P., hold 80% and 20% of the partnership interest in IFM Overseas Partners L.P., respectively. IFM Holding Company Limited is a corporation incorporated under the laws of Cayman Islands, and is 100% owned by Maxpro International Enterprises, Inc..

(8) Includes 61,108,179 Class A ordinary shares and 80,502,938 Class B ordinary shares issuable upon conversion of the 200,000,000 Series A preferred shares held by Goldman Sachs Strategic Investments (Asia) L.L.C. Goldman Sachs Strategic Investments (Asia) L.L.C. is an indirectly wholly-owned subsidiary of The Goldman Sachs Group, Inc., which is a bank holding company whose shares are listed on the New York Stock Exchange. The address of Goldman Sachs Strategic Investments (Asia) L.L.C. is Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801, USA.

(9) Includes 91,893,513 Class A ordinary shares issuable upon conversion of the 105,253,600 Series B preferred shares. Also includes 37,720,568 ordinary shares, the estimated number of shares to be transferred by IFM Overseas Partners L.P. to GL Asia Mauritius II Cayman Limited, a Cayman Islands exempted company, upon exchange of the secured exchangeable note issued by IFM Overseas Partners L.P. to GL Asia Mauritius II Cayman Limited. The exchangeable note can be exchanged at the option of GL Asia Mauritius II Cayman Limited for such ordinary shares at any time at least 55 days after the offering. The exchange price is based on the fair market value of the shares at the time of the exchange. The estimated number of exchange shares into which the exchangeable note may be exchanged is based on an exchange price of US$7.50 per ADS, the mid-point of the estimated price range of the initial public offering price shown on the cover of this prospectus. GL Asia Mauritius II Cayman Limited is owned 50% by Avenue Asia International, Ltd. and 50% by GL Asia Mauritius II, LLC, but all of GL Asia Mauritius II Cayman Limited’s beneficial interest in the above shares has been allocated solely to GL Asia Mauritius II, LLC. GL Asia Mauritius II, LLC is owned by Avenue Asia Investments, L.P., Avenue Asia Special Situations Fund III, L.P. and Avenue Asia Special Situations Fund IV, L.P., but all of GL Asia Mauritius II, LLC’s beneficial interest in the above shares has been allocated solely to Avenue Asia Special Situations Fund IV, L.P., a Cayman Islands exempted limited partnership. The general partner of Avenue Asia Special Situations Fund IV, L.P. is Avenue Asia Capital Partners IV, Ltd., a Cayman Islands exempted company. The sole shareholder of Avenue Asia Capital Partners IV, Ltd. is Avenue Asia Capital Partners IV, LLC, a Delaware limited liability company. The managing member of Avenue Asia Capital Partners IV, LLC is GL Asia Partners IV, LLC, a Delaware limited liability company, which is controlled by Marc Lasry and Sonia Gardner. Voting and investment power of shares held by GL Asia Mauritius II Cayman Limited may be exercised by Avenue Asia Capital Partners IV, Ltd. or Avenue Asia Capital Management, L.P., a Delaware limited partnership. The general partner of Avenue Asia Capital Management, L.P. is Avenue Asia Capital Management GenPar, LLC, a Delaware limited liability company, which is controlled by Marc Lasry and Sonia Gardner. Mr. Lasry and Ms. Gardner disclaim beneficial ownership with respect to the above shares except to the extent of their pecuniary interest therein. The address of GL Asia Mauritius II Cayman Limited is 2nd Floor Anchorage Centre, Georgetown, Grand Cayman, Cayman Islands.

As of the date of this prospectus, none of our outstanding ordinary shares or preferred shares are held by record shareholders in the United States. Certain holders of our preferred shares have represented to us that they are affiliated with a registered broker-dealer. Based on their representations, we believe that at the time of the purchase of our preferred shares, each of these holders purchased our preferred shares in the ordinary course of business, and had no agreements or understandings, directly or indirectly, with any person to distribute the shares. None of our existing shareholders has different voting rights from other shareholders after the closing of this offering. We are not aware of any arrangement that may at a subsequent date, result in a change of control of our company.

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OUR RELATIONSHIP WITH REALOGY AND RELATED PARTY TRANSACTIONS

Our Relationship with Realogy

In March 2000, IFM Company Limited, or IFM Co. entered into an international master sub-franchise agreement with Cendant Global Services B.V., a subsidiary of Cendant Corporation, the entity from which Realogy was spun off in 2006. Cendant Global Services B.V. assigned its rights under the master sub-franchise agreement to a subsidiary of Realogy which, in turn, assigned such rights to Realogy. IFM Co. became the exclusive franchisor of the CENTURY 21^® brand and system in China for a term of 25 years, extendable at IFM Co.’s election for additional terms of 25 years upon payment of renewal fees of US$4.5 million for each renewal, to be adjusted for inflation or deflation. Under the agreement, IFM Co. is authorized to establish, operate and promote the CENTURY 21^® network in China by using and sublicensing the CENTURY 21^® brand and system owned by Realogy, which includes: (i) the trade names, trademarks, service marks, slogans, logos or other indicia relating to the CENTURY 21^® franchise network; and (ii) the standard franchise agreement, sales tools and brochures, real estate products, programs, services and franchise/sub-franchise plans. Pursuant to our restructuring in 2005, our company was incorporated in the Cayman Islands and IFM Co. became our wholly owned subsidiary.

Under the master sub-franchise agreement, we are required to comply with certain franchise policies adopted by Realogy, as amended from time to time. The master sub-franchise agreement sets out certain terms pursuant to which we are required to operate our franchise services business, including the form of regional sub-franchise agreements to be entered into with regional sub-franchisors and the service fees payable to Realogy. The master sub-franchise agreement also provides that Realogy must approve and has a right of first refusal with respect to any sale or transfer of more than 25% of our equity interest, or any series of transactions resulting in sales or transfer of more than 49% of our equity interest. Realogy has approved this offering and has waived any right of first refusal it may have with respect to this offering. In addition, Realogy agreed not to, during the term of the agreement, license any other parties to sublicense the CENTURY 21^® brand and system to operate real estate brokerages in China.

Upon entering into the master sub-franchise agreement, we paid Realogy an initial franchise fee. Apart from the initial franchise fee, we are required to pay certain ongoing service fees to Realogy, based on revenues generated from initial franchise fees and ongoing service fees collected from our regional sub-franchisors or direct franchisees. The master sub-franchise agreement also includes a minimum annual fee requirement, and to the extent that the service fees payable within a certain year are lower than such minimum amount, we are required to make additional payment to reach the minimum fee requirement. In the years ended December 31, 2007 and 2008 and the nine months ended September 30, 2009, the service fees which were paid or to be paid to Realogy amounted to RMB6.1 million, RMB10.5 million and RMB2.3 million, respectively.

Either party has the right to terminate the master sub-franchise agreement if the other party materially breaches the master sub-franchise agreement. Additionally, Realogy has the right to terminate the master sub-franchise agreement in the event that (1) we assign our rights and obligations without Realogy’s approval, (2) we fail to honor Realogy’s right of first refusal in connection with the assignment, or (3) we become insolvent. Within two years after the master sub-franchise agreement terminates or expires, we may not engage in the real estate brokerage franchise business, subject to certain exceptions. See “Risk Factors—We do not own the CENTURY 21^® brand and our right to use the CENTURY 21^® brand is subject to risks and limitations” for further discussion of the risks associated with this agreement and our reliance thereon.

On June 30, 2002, IFM Co. entered into a cooperation agreement with Beijing International Franchise Management Company Limited, or IFM Beijing, an entity controlled by our founders, Mr. Donald Zhang and Mr. Harry Lu. IFM Beijing then became the exclusive agent of IFM Co. to sub-franchise the CENTURY 21^® brand and system in China on behalf of IFM Co. IFM Beijing is obliged to pay Realogy the service fees payable by IFM

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Co. under the master sub-franchise agreement. We became the controlling shareholder of IFM Beijing in October 2006.

On February 21, 2008, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 6,113,670 Series B preferred shares to Realogy for approximately RMB16.2 million.

Related Party Transactions

Reorganization

We underwent a reorganization in 2006 in connection with our private placement of Series A preferred shares to Goldman Sachs Strategic Investments (Asia) L.L.C., or Goldman Sachs Strategic Investments. Our reorganization went effective on August 24, 2006. As part of our reorganization, Beijing Xinye Jiayuan Real Estate Consulting Service Co., Ltd., or Xinye, a PRC wholly-owned foreign enterprise controlled by our founders, Mr. Donald Zhang and Mr. Harry Lu, agreed to transfer its 51% equity interests in IFM SH, 11.15% equity interests in IFM Beijing, 10% equity interests in Xiamen, 15% equity interests in Shandong and 10% equity interests in Xian, to us. Xinye completed its transfer of the IFM SH interests to us on December 4, 2008, the IFM Beijing interests on August 12, 2008, the Xiamen interests on December 26, 2008, the Shandong interests on December 4, 2006 and the Xian interests on February 9, 2009. See “Our Corporate History and Structure.”

Related Party Loans and other Payments

We have entered into certain loan arrangements in the past with certain of our related parties, including some of our directors, our associate companies, Xinye, a PRC wholly-owned foreign enterprise controlled by Mr. Donald Zhang, our chairman and CEO, and Mr. Harry Lu, our vice chairman and president, and Maxpro International Enterprises Inc., or Maxpro, a New York corporation owned by Mr. Donald Zhang.

The following table sets forth the amounts due to and from those related parties which are controlled by our shareholders as of December 31, 2007, 2008 and September 30, 2009. On September 22, 2009, the amounts due from/to Xinye and Maxpro were fully settled. On the same day, an advance of approximately RMB5.9 million was made to Maxpro which is due on demand. On November 30, 2009, this remaining amount due from Maxpro was fully settled in cash.

		Amounts Outstanding as of
		December 31,		September 30,
Amounts Due from Related Parties	Nature of Advances or Payment	2007	2008	2009
		(in thousands of RMB)
Xinye	Unsecured, interest-free advances with no repayment date, for operations of Xinye	39,656	36,024	-
Maxpro	Unsecured, interest-free advances with no repayment date, for operations of Maxpro	2,114	2,086	5,933
Directors	Unsecured, interest-free loans to directors	2,215	-	-
Amounts Due to Related Parties
Xinye	Amounts payable for transfer of entities as part of the Reorganization	13,377	5,700	-
Maxpro	Loans for operations of IFM Co.	29,266	27,465	-

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Private Placements

On August 24, 2006, pursuant to resolutions of our shareholders and our board of directors, each dated December 18, 2005, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 200,000,000 Series A preferred shares to Goldman Sachs Strategic Investments for approximately RMB170.7 million. On October 19, 2007, pursuant to resolutions of our shareholders and our board of directors, each dated October 19, 2007, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 105,253,600 Series B preferred shares to GL Asia Mauritius II Cayman Limited for a total consideration of approximately RMB290.6 million pursuant to resolutions of our shareholders and our board of directors, each dated July 31, 2008. On February 21, 2008, after giving effect to our 10-for-1 share split effected January 4, 2010, we issued 6,113,670 Series B preferred shares to Realogy for approximately RMB16.2 million. On January 4, 2010, we effected a 10-for-1 share split of our authorized and issued share capital whereby each ordinary share, Series A preferred share and Series B preferred share, in each case par value US$0.01 per share, were divided into 10 ordinary shares, Series A preferred shares or Series B shares, as applicable, in each case par value US$0.001 per share.

The purchasers of our preferred shares were independent third parties prior to their respective investments in us. The prices at which our preferred shares were issued were determined based on arm’s-length negotiations between us and the investors and the transactions were, in each case, approved by our board of directors. Our Series A and Series B preferred shares are convertible into our ordinary shares at any time after their respective issuance prior to the closing of this offering. The initial conversion price is equal to the original per share purchase price of each series of preferred shares, subject to adjustment for any share split, share combination, capital reclassification or reorganization, any distribution made, any of our merger or consolidation with any other person, or any of our share issuance at an issuance price that is lower than the preferred share purchase price originally paid by our investors. In addition, certain holders of our preferred shares are entitled to adjustments if we achieve certain milestones, including the closing of this offering. Under these adjustment provisions, if this offering closes before March 31, 2010, the Series A preferred shareholders’ interest in the company on an as converted basis immediately prior to the closing of the offering will be reduced to 28.4%, and the Series B preferred shareholders’ interest in the company will be adjusted to maintain constant their interest in our company notwithstanding the Series A adjustment. The disclosure in this prospectus regarding the ownership interests of the holders of Series A and Series B preferred shares in the company immediately following the offering assume that this offering closes prior to March 31, 2010. All such adjustments shall be effected in connection with the conversion of the preferred shares immediately prior to the closing of this offering. Immediately prior to the closing of this offering, all issued and outstanding shares of our Series A preferred shares will be automatically converted, at the conversion price then in effect, into 61,108,179 shares of our Class A ordinary shares and 80,502,938 shares of our Class B ordinary shares and all issued and outstanding shares of our Series B preferred shares will be automatically converted, at the conversion price then in effect, into 97,231,160 shares of our Class A ordinary shares.

As part of our private placements, we and our founders granted to each of Goldman Sachs Strategic Investments, GL Asia Mauritius II Cayman Limited and Realogy certain minority protection rights, including pre-emptive rights, rights of first refusal and co-sale rights and consent rights regarding significant corporate actions. We and our founders also granted to Goldman Sachs Strategic Investments and GL Asia Mauritius II Cayman Limited certain corporate governance rights including the right to inspect the company and the right to appoint certain members to our board of directors. These minority protection rights will terminate upon completion of this offering. Our founders also agreed with the investors that until the 181^st day following the completion of this offering, the founders will not transfer or otherwise dispose any of their respective equity interest in us, without the prior written consent of the investors. In addition, we granted to each of Goldman Sachs Strategic Investments, GL Asia Mauritius II Cayman Limited and Realogy certain registration rights in relation to the shares to be issued upon conversion of their respective preferred shares. See “Description of Share Capital—Registration Rights.”

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Goldman Sachs (Asia) L.L.C., an affiliate of Goldman Sachs Strategic Investments (Asia) L.L.C., which owns 200,000,000 of our Series A preferred shares immediately prior to the consummation of the offering, is one of the underwriters of this offering. The offering is being conducted in accordance with the applicable provisions of Rule 2720 of the National Association of Securities Dealers, Inc. Conduct Rules. See “Underwriting.”

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REGULATIONS

The real estate market and our operations in China are regulated by the Ministry of Commerce, the SAFE, the Ministry of Housing and Urban-Rural Development (formerly known as the Ministry of Construction), or the MOHURD, the Ministry of Land and Resources, or the MLR, the State Administration for Industry and Commerce, or the SAIC, and their respective authorized local counterparts.

Regulations on Real Estate Market

Under the laws of the PRC, land is owned either by the state or by rural collective organizations. Generally the land use rights for real estate development purposes must be granted by the local counterparts of the MLR. The government can therefore control the volume of land granted for real estate development each year. The construction of real estate shall also abide by the planning of the local counterparts of the MOHURD. The government policies regulating, among others, (i) the monetary supply and credit markets issued by the People’s Bank of China; (ii) the real estate developer qualification issued by the MOHURD; and (iii) taxes applicable to real estate transaction issued by the State Tax Bureau will have material effect on the real estate market and our business.

Regulations on Real Estate Service Industry

The principal regulations governing the real estate service industry in China include the Law on the Administration of the Urban Real Estate, as amended in August 2007, and the Provisions on the Administration of Urban Real Estate Services, or the Real Estate Services Provision, issued by the MOHURD in January 1996, as amended in August 2001.

Real Estate Service Companies

In accordance with the Law on the Administration of the Urban Real Estate and the Real Estate Services Provision, real estate services refer to services of real estate consultation, appraisal and brokerage. A real estate service company is required to meet certain financial and personnel requirements and register with the SAIC or its local counterpart. To be qualified to engage in real estate services, a company is required to file with the local real estate regulatory authority within one month following the issuance of its business license by the SAIC or its local counterparts. To maintain such qualification, the company must maintain certain organizational, financial and operational criteria, such as possessing sufficient funding and employing qualified personnel. It must also keep proper records and comply with prescribed procedures in delivering its services. Failure to comply with the filing requirement may subject a real estate service company a fine between RMB10,000 and RMB30,000 and disqualify it from providing real estate services.

Pursuant to the Real Estate Services Provision, a real estate brokerage company must have certain number of licensed brokers. Local authorities in Beijing and Shanghai have specific requirements on employing such brokers.

On December 29, 2006, the MOHURD and the People’s Bank of China jointly issued a circular to further strengthen the regulation of the real estate services industry. According to such circular, a real estate brokerage company cannot display information on properties or customers until the execution of a brokerage contract with the relevant clients. Furthermore, a real estate brokerage company is forbidden to display any false or unverified information. The real estate brokerage company and its brokers shall not conceal transaction price and other transaction information from the transacting parties. Such entities are also prohibited from obtaining any gains by purchasing or renting a property at a lower price and then selling or leasing such property at a higher price. The real estate brokerage company is also required to establish a separate account for transaction settlement.

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Real Estate Service Brokers

Pursuant to the Interim Regulations on Professional Qualification for Real Estate Brokerage Professionals and the Implementation Rules on the Examinations of Real Estate Brokerage Professional Qualification issued by the Ministry of Human Resources and Social Security (formerly known as Ministry of Human Resources) and the MOHURD on December 18, 2001 and relevant circulars, real estate brokerage professionals include real estate brokers and assistant real estate brokers. To practice as a qualified real estate broker, an individual must pass an exam and obtain a qualification certificate for real estate brokers, and register with the China National Institute of Real Estate Appraisers and Brokers to obtain the real estate broker license. After obtaining a real estate brokerage license, an individual can act as broker, but may only provide brokerage services in the name of the real estate brokerage company for which he works. Each broker can only serve one real estate service company at a time.

In accordance with the Brokers Administration Measures issued by the SAIC in August 2004, the local offices of the SAIC are the administrative bodies responsible for brokers, including their registration and supervision. Within twenty days after a brokerage company employs or dismisses an individual broker, it must file the individual broker’s information and the related employment contracts with the local offices of SAIC. In addition, no brokerage or broker can engage in any activities beyond the permitted business scope or against a client’s interests. In cases of non-compliance, the local offices of the SAIC can issue warnings or impose fines up to RMB30,000.

Real Estate Consulting Business

In accordance with the Real Estate Services Provisions, any individual providing real estate consulting services must have real estate related credentials or meet certain educational requirements and possess a professional qualification certificate. At least fifty percent of the employees of a company engaging in real estate consulting services should have such qualifications to provide real estate consulting services.

Real Estate Service Charges

According to the Circular on Real Estate Service Charges promulgated by the National Development and Reform Commission (formerly known as State Planning Commission) and the MOHURD on July 7, 1995, a real estate service company must display its service charges, or commissions. Commissions for the sale of real properties should range between 0.5% and 2.5% of the transaction price. For exclusive brokerage services, commissions can be raised to up to 3% of the transaction price. However, the Circular on Real Estate Service Charges only sets a standard for reference with respect to real estate consulting services. Real estate consulting services providers may negotiate and determine their commission rates with clients.

In Beijing, government authorities have issued guidance for commission rates for consulting services that a real estate service company may not exceed. Moreover, the maximum commission rate for exclusive brokerage services has been lowered to 2.8% by the Beijing Price Bureau and the Beijing House and Land Resources Administration Bureau. For property leasing brokerage services, the commission rate may range from 50% to 100% of the underlying properties’ contracted monthly rent.

In Shanghai, pursuant to the Circular on Brokerage Services Charges for Sales and Rental of Residential Properties jointly issued by the Shanghai Price Bureau and the Shanghai House and Land Resources Administration Bureau on August 28, 2003, our PRC real estate brokerage subsidiaries located in Shanghai shall charge clients in accordance with the guidance commission rate. The maximum guidance commission rate for real estate brokerage services is 2% of the purchase price recorded with the real estate trading center. The maximum commission rate for property leasing brokerage services is 70% of the underlying properties’ contracted monthly rent. The guidance commission rate for investigation of property title and conditions, industry and market research, assisting the seller and the purchaser to conclude a property purchase contract and

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handling the registration of title assignment is 2% of the purchase price recorded with the real estate trading center. The maximum commission rate for rental services is 70% of the monthly rent.

In Shenzhen, the guidance commission rate for real estate brokerage services is 3% of the transaction price. A real estate brokerage company may not charge its client a commission rate exceeding 120% of this guidance commission rate.

Regulations on Franchise Business

To regulate the franchise industry, the Ministry of Commerce issued the Administration Regulations on Commercial Franchise on February 6, 2007, the Administration Rules on Filing of Commercial Franchise on April 30, 2007 and the Notice Concerning Authorizing Provincial Commerce Authorities to Conduct Filings of Commercial Franchise in April, 2009. Pursuant to these regulations, a franchisor must be an enterprise with at least two self-operated stores and have been in operation for at least one year. The franchisor should have a mature operating model and the ability to provide operating guidance, technology support and business training to franchisees. The franchisor is required to enter into a written franchise agreement with each of its franchisees, under which the franchisees have the right to terminate this agreement after a designated period. With the exception of renewed franchise agreements, the term of a franchise agreement must be no less than three years, unless otherwise agreed to by the franchisee.

A franchisor starting its franchise business after May 1, 2007 is required to file its business license, sample franchise agreement and other documents to the provincial commerce authority where it is registered for record within fifteen days following the execution of its first franchise agreement with a franchisee inside China. If the franchisor conducts franchise business in two or more municipalities, provinces or autonomous regions, it is required to file with the Ministry of Commerce before May 1, 2009, followed by a filing with the provincial commerce authority where it is registered. Foreign franchisors are also required to file the documents with the Ministry of Commerce. Moreover, the franchisor shall file information regarding the execution, withdrawal, renewal of and amendment to franchise agreements to the commerce authority for record before March 31 of each year.

Any changes in the recorded information of the franchisor should also be filed with the relevant commerce authority within thirty days following the occurrence of these changes. For a franchisor failing to file in accordance with these regulations, the relevant commerce authority may order it to comply within a designated time frame and impose a fine ranging from RMB10,000 to RMB50,000. If the franchisor fails to comply as ordered, the relevant commerce authority may impose another fine ranging from RMB50,000 to RMB100,000 and publicly announce the franchisor’s violation.

The Administration Regulations on Information Disclosure for Commercial Franchise, issued by the Ministry of Commerce on April 30, 2007, further requires a franchisor to disclose its basic information, ownership of business resources, franchise fees charged, products and services to be provided as well as other information to any franchisees at least thirty days prior to the execution of the franchise agreement.

Regulations on Trademarks

The PRC Trademark Law, enacted by the National Congress on August 23, 1982, as amended, and the Implementation Rules of the PRC Trademark Law issued by the State Council on March 10, 1983, as amended, protect the title holders of registered trademarks and grant a renewable term of ten years to a trademark registered in the PRC. The Trademark Office under the SAIC handles trademark registrations and the filing of registered trademark licenses. Pursuant to the Regulations on Filing of Trademark License Contracts, promulgated on August 1, 1997, trademark license contracts are required to be filed with the Trademark Office within three months after executing such license contacts. However, unless otherwise provided in a trademark license contract, failure to complete the filing procedure will not affect the validity of this trademark license contract in

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accordance with the Interpretation Concerning Several Issues on Application of Laws in Handling Trademark Civil Dispute Cases issued by the Supreme People’s Court on October 12, 2002.

Regulations on Foreign Currency Exchange and Dividend Distribution

Foreign currency exchange

The principal regulations governing foreign currency exchange in China are the Foreign Currency Administration Regulations, as amended in 2008. Under these regulations, the Renminbi may be converted for current account items, including the distribution of dividends, interest and royalties payments, trade and service-related foreign exchange transactions. Conversion of the Renminbi for capital account items, such as direct investment, loans, repatriation of investment and investment in securities outside China, however, is still subject to the SAFE’s approval.

Dividend Distribution

Under the relevant regulations, a foreign investment enterprise, or an FIE in China may pay dividends only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, it is required to allocate at least 10% of its accumulated profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of its registered capital. These reserves are not distributable as cash dividends. Our PRC subsidiaries which are FIEs are restricted from distributing any dividends to us until they have met the requirements set out in these regulations.

Pursuant to the Corporate Income Tax Law of the PRC and its implementation rules, which became effective on January 1, 2008, dividends payable by an FIE to its foreign investors will be subject to a 10% withholding tax, unless the foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands and the British Virgin Islands, where two of our offshore holding corporations are incorporated, do not have a tax treaty with China. In accordance with the Arrangement between the Mainland and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion, or the Double Taxation Arrangement, which became effective on January 1, 2007, any dividends from one of our PRC subsidiaries, Shenzhen CIR, paid to City Integrated Residential Services (China) Limited, its direct shareholder established in Hong Kong, may be subject to a withholding tax of the enterprise income tax at the rate of 5%, provided that City Integrated Residential Services (China) Limited holds at least 25% of the equity interest of Shenzhen CIR.

According to Circular of State Administration of Taxation on Printing and Issuing the Administrative Measures for Non-resident Individuals and Enterprises to Enjoy the Treatment under Taxation Treaties which come into force on October 1, 2009, non-resident individuals and enterprises can enjoy the relevant tax treatments relating to dividends under taxation treaties after obtaining approvals from competent tax authorities.

Foreign shareholder’s loan

In accordance with the Interim Provisions on the Management of Foreign Debts issued by the State Development and Reform Commission, the Ministry of Finance and the State Administration of Foreign Exchange of the PRC, or SAFE, which became effective on March 1, 2003, the summation of the accumulated medium-term and long-term debts and the balance of short-term debts borrowed by an FIE shall not exceed the difference between the total investment and the registered capital of the FIE. The FIE shall register the loan agreement with SAFE for the loan extended by its foreign shareholder upon execution of the loan agreement. Such loan agreement will not become valid and effective without such registration.

Regulations on Foreign Exchange Registration of Offshore Investment by PRC Residents

On October 21, 2005, SAFE issued the “State Administration of Foreign Exchange’s Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Round-trip

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Investment via Special Purpose Offshore Companies” (Hui Fa [2005] No. 75), or Notice No. 75, a public notice which became effective on November 1, 2005. Notice No. 75 requires PRC residents to register with the local SAFE branch before directly establishing or indirectly controlling any company referred to in the notice as a “special purpose offshore company” outside of the PRC for the purpose of capital financing with assets or equity interest in an onshore enterprise in the PRC, and to undergo registration procedures after completing an investment in or acquisition of any operating subsidiaries in the PRC via the special purpose offshore company, which we refer to herein as a “round-trip investment.” In addition, any change of shareholding or any other material capital alteration in such special purpose offshore company not involving a round-trip investment, such as a change in share capital or merger and acquisition, must be filed or registered within 30 days from the date of change. The relevant SAFE regulations apply retrospectively to registration of direct or indirect investments made by PRC residents in special purpose offshore companies before Notice No. 75 came into effect.

On May 29, 2007, SAFE promulgated the “Operational Rules for the State Administration of Foreign Exchange’s Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Round-trip Investment via Special Purpose Offshore Companies” (Hui Zong Fa [2007] No. 106), or Notice No. 106, which clarifies the implementation and application of Notice No. 75 and specifies the procedures of SAFE registrations. In accordance with Notice No. 106, the provisions in Notice No. 75 on SAFE registration of direct establishment of the special purpose offshore companies also applies to the round-trip investment by PRC residents who hold a minority equity interest without controlling the special purpose offshore companies.

In the event that a PRC resident with a direct or indirect stake in a special purpose offshore company fails to make the required SAFE registration, the PRC subsidiaries of such special purpose offshore company may be prohibited from distributing their profits to their offshore parent and from paying the offshore parent proceeds from any reduction in capital, share transfer or liquidation in respect of the PRC subsidiaries, and the offshore parent’s ability to contribute additional capital or provide loans, whether using the proceeds from this offering or otherwise, would be impaired. In addition, failure to comply with SAFE registration requirements as described above may also result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

Regulations on Employee Stock Options Plan

On March 28, 2007, the SAFE promulgated the Application Procedure of Foreign Exchange Administration for Domestic Individuals Participating in Employee Stock Option Holding Plan or Stock Option Plan of Overseas Listed Company, or the Stock Option Rule. The purpose of the Stock Option Rule is to regulate foreign exchange administration of Chinese citizens who participate in employee stock holding plans and stock option plans of offshore listed companies. According to the Stock Option Rule, if a Chinese citizen participates in any employee stock holding plan or stock option plan of an offshore listed company, a Chinese domestic agent or the Chinese subsidiary of the offshore listed company is required to file, on behalf of the individual, an application with the SAFE to obtain approval for an annual quota with respect to the purchase of foreign exchange in connection with stock holding or stock option exercises. Concurrent with the filing of the required application with the SAFE, the Chinese domestic agent or the Chinese subsidiary must obtain approval from the SAFE to open a special foreign exchange account at a Chinese bank to hold the funds required in connection with the stock purchase or option exercise, any returned principal profits upon sales of stock, any dividends issued on the stock and any other income or expenditures approved by the SAFE. The Chinese domestic agent or the Chinese subsidiary is also required to obtain approval from the SAFE to open an offshore special foreign exchange account at an offshore trust bank to hold offshore funds used in connection with any employee stock holding plans.

All proceeds obtained by a Chinese citizen from dividends acquired from the offshore listed company through employee stock holding plans or stock option plans, or sales of the offshore listed company’s stock acquired through other methods, must be remitted back to China after relevant offshore expenses are deducted.

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The foreign exchange proceeds from these sales can be converted into Renminbi or transferred to the individuals’ foreign exchange savings account after the proceeds have been remitted back to the special foreign exchange account opened at the Chinese bank. If stock options are exercised on a cashless basis, the Chinese individuals are required to remit the proceeds to the special foreign exchange account. We and our Chinese employees who have been granted stock options will be subject to the Stock Option Rule when our company becomes an offshore listed company. If we or our Chinese employees fail to comply with the Stock Option Rule, we and/or our Chinese employees may face sanctions imposed by foreign exchange authority or any other Chinese government authorities.

Regulations on Labor Contracts

On June 29, 2007, the PRC National People’s Congress enacted the PRC Labor Contract Law, or the Labor Contract Law, which became effective on January 1, 2008. The Implementation Regulation for the PRC Labor Contract Law, or the Implementation Regulation, was promulgated by the State Council and took effect on September 18, 2008. The Labor Contract Law formalizes, among others, workers’ rights concerning overtime hours, pensions and layoffs, the execution, performance, modification and termination of labor contracts, the clauses of labor contracts and the role of trade unions. In particular, it provides for specific standards and procedures for entering into non-fixed-term labor contracts as some of our sales professionals and staff do. Either the employer or the applicable sales professional or staff is entitled to terminate the labor contract in circumstances as prescribed in the Labor Contract Law or if certain preconditions are fulfilled, and in certain cases, the employer is required to pay a statutory severance upon the termination of a labor contract pursuant to the standards provided by the Labor Contract Law.

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DESCRIPTION OF SHARE CAPITAL

We are a Cayman Islands exempted company and our affairs are governed by our amended and restated memorandum and articles of association and the Companies Law (2009 Revision) of the Cayman Islands, which is referred to below as the Companies Law, and the common law of the Cayman Islands. A Cayman Islands exempted company is a company that conducts its business outside of the Cayman Islands, and as such is exempted from certain requirements of the Companies Law.

The following are summaries of certain of the terms and provisions of our amended and restated memorandum and articles of association to be adopted with effect from the listing of our Class A ordinary shares and the Companies Law insofar as they relate to our Class A ordinary shares. These summaries are not complete, and you should read the complete forms of our amended and restated memorandum and articles of association, which will be filed as exhibits to our registration statement on Form F-1. For information on how to obtain copies of our amended and restated memorandum and articles of association, see “Where You Can Find More Information.”

The holders of ADSs will not be treated as our shareholders and will be required to surrender their ADSs for cancellation and withdrawal from the depositary facility in which the Class A ordinary shares are held in order to exercise shareholders’ rights in respect of the Class A ordinary shares. The depositary will agree, so far as it is practical, to vote or cause to be voted the amount of Class A ordinary shares represented by ADSs in accordance with the non-discretionary written instructions of the holder of such ADSs.

Classes of shares

Immediately prior to the consummation of this offering, the share capital of the company shall be divided into ordinary shares of two classes, Class A ordinary shares and Class B ordinary shares and one class of preferred shares. The Class A ordinary shares and Class B ordinary shares shall carry equal rights and rank pari passu with one another other than as set out below.

As regards conversion

Subject to the provisions of the Articles and to compliance with all fiscal and other laws and regulations applicable thereto, including the Law, a holder of Class B ordinary shares shall be entitled at the option of the holder, to convert their Class B ordinary shares into an equal number of fully paid Class A ordinary shares.

As regards Voting Rights

The Class B ordinary shares shall not carry any right to vote.

As regards Transfers

Class B ordinary shares must be converted into Class A ordinary shares prior to any assignment or transfer.

Meetings

Subject to our articles of association, an annual general meeting and any extraordinary general meeting shall be called by not less than ten (10) clear days’ notice in writing. Notice of every general meeting will be given to all of our shareholders.

Notwithstanding that a meeting is called by shorter notice than that mentioned above, but, subject to our articles of association, it will be deemed to have been duly called, if it is so agreed (1) in the case of a meeting

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called as an annual general meeting by all of our shareholders entitled to attend and vote at the meeting; or (2) in the case of any other meeting, by a majority in number of our shareholders having a right to attend and vote at the meeting, being a majority together holding not less than ninety-five percent (95%) in nominal value of the ordinary shares giving that right.

No business other than the appointment of a chairman of the meeting may be transacted at any general meeting unless a quorum is present at the commencement of business. However, the absence of a quorum will not preclude the appointment of a chairman of the meeting. If present, the chairman of our board of directors shall be the chairman presiding at any shareholders’ meetings.

Any one or more of our members present in person or by proxy or (in the case of a member being a corporation) by its duly appointed corporate representative representing not less than one third in nominal value of our total issued voting shares throughout the meeting shall be a quorum. A corporation being a shareholder shall be deemed for the purpose of our articles of association to be present in person if represented by its duly authorized representative. Such duly authorized representative shall be entitled to exercise the same powers on behalf of the corporation which he or she represents as that corporation could exercise if it were our individual shareholder.

The quorum for a separate general meeting of the holders of a separate class of shares is described in “Modification of Rights” below.

Voting Rights Attaching to the Shares

Subject to any rights or restrictions attached to any shares, at any general meeting every holder of Class A ordinary shares who is present in person (or, in the case of a holder of Class A ordinary shares being a corporation, by its duly authorized representative) or by proxy shall have one vote and on a poll every holder of Class A ordinary shares present in person (or, in the case of a holder of Class A ordinary shares being a corporation, by its duly appointed representative) or by proxy shall have one vote for each Class A ordinary shares which such person is the holder. Voting at any meeting of the holder of Class A ordinary shares is by show of hands unless a poll is demanded. A poll may be demanded by the chairman or any other shareholder present in person or by proxy or (in the case of a member being a corporation, by its duly authorized representative).

Any ordinary resolution to be passed by the shareholders requires the affirmative vote of a simple majority of the votes cast at a meeting of our shareholders, while a special resolution requires the affirmative vote of no less than two-thirds of the votes cast at a meeting of our shareholders. Holders of our Class A ordinary shares may by ordinary resolution, among other things, elect directors, and make alterations of capital. See “— Alteration of Capital.” A special resolution is required for matters such as a change of name. See “— Modification of Rights.”

No shareholder shall be entitled to vote or be reckoned in a quorum, in respect of any share, unless such shareholder is registered as our shareholder at the applicable record date for that meeting.

If a recognized clearing house or a central depository (or its nominee(s)) being a corporation is our shareholder, it may authorize such person or persons as it thinks fit to act as its representative(s) at any meeting or at any meeting of any class of shareholders provided that, if more than one person is so authorized, the authorization shall specify the number and class of shares in respect of which each such person is so authorized. A person authorized pursuant to this provision is entitled to exercise the same powers on behalf of the recognized clearing house (or its nominee(s)) as if such person was the registered holder of our shares held by that clearing house (or its nominee(s)) including the right to vote individually on a show of hands.

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Protection of Minority Shareholders

The Grand Court of the Cayman Islands may, on the application of shareholders holding not less than one fifth of our shares in issue, appoint an inspector to examine our affairs and report thereon in a manner as the Grand Court shall direct.

Any shareholder of a company may petition the court which may make a winding up order if the court is of the opinion that it is just and equitable that the company should be wound up or, as an alternative to a winding up order, (a) an order regulating the conduct of the company’s affairs in the future, (b) an order requiring the company to refrain from doing or continuing an act complained of by the shareholder petitioner or to do an act which the shareholder petitioner has complained it has omitted to do, (c) an order authorizing civil proceedings to be brought in the name and on behalf of the company by the shareholder petitioner on such terms as the court may direct, or (d) an order providing for the purchase of the shares of any shareholders of the company by other shareholders or by the company itself and, in the case of a purchase by the company itself, a reduction of the company’s capital accordingly.

Claims against us by our shareholders must, as a general rule, be based on the general laws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders as established by our memorandum and articles of association.

The Cayman Islands courts ordinarily would be expected to follow English case law precedents that permit a minority shareholder to commence a representative action against, or derivative actions in our name to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority and the wrongdoers are themselves in control of us, and (3) an irregularity in the passing of a resolution which requires a qualified (or special) majority.

Pre-emption Rights

There are no pre-emption rights applicable to the issuance of new shares under either Cayman Islands law or our amended and restated memorandum and articles of association.

Liquidation Rights

Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares, if our company shall be wound up the liquidator may, with the sanction of a Special Resolution of our company and any other sanction required by the Companies Law, divide among the shareholders in kind the whole or any part of the assets of our company (whether they shall consist of property of the same kind or not) and may for that purpose value any assets and determine how the division shall be carried out as between the shareholders or different classes of shareholders. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the shareholders as the liquidator, with the like sanction, shall think fit, but so that no shareholders shall be compelled to accept any asset upon which there is a liability. If our company shall be wound up, and the assets available for distribution among the shareholders as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the shareholders in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively. And if winding up the assets available for distribution among the shareholders shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed amongst the shareholders in proportion to the capital paid up at the commencement of the winding up on the shares held by them respectively.

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Modification of Rights

Except with respect to alteration of our share capital (as described below) and the location of our registered office, alterations to our memorandum and articles of association may only be made by special resolution of no less than two-thirds of votes cast at a meeting of the shareholders.

Subject to the Companies Law, all or any of the special rights attached to any class, unless otherwise provided for by the terms of issue of the shares of that class, may be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. The provisions of our articles of association relating to general meetings shall apply mutatis mutandis to every such separate general meeting, but so that the quorum for the purposes of any such separate general meeting other than an adjourned meeting shall be a person or persons together holding, or represented by proxy, on the date of the relevant meeting not less than one-third in nominal value of the issued shares of that class, every holder of shares of the class shall be entitled on a poll to one vote for every such share held by such holder and that any holder of shares of that class present in person or by proxy may demand a poll.

The special rights conferred upon the holders of any class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Alteration of Capital

We may from time to time by ordinary resolution in accordance with the Companies Law alter the conditions of our Memorandum of Association to:

• increase our capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe;

• consolidate and divide all or any of our capital into shares of larger amount than our existing shares;

• divide our shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or such restrictions which in the absence of any such determination by our company in general meeting, as the directors may determine;

• sub-divide our shares, or any of them, into shares of smaller amount than is fixed by the Memorandum of Association (subject, nevertheless, to the Companies Law); or

• cancel any shares which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person.

We may, by special resolution, subject to any confirmation or consent required by the Companies Law, reduce our share capital or any capital redemption reserve fund in any manner authorized by the Companies Law.

Transfer of Shares

Subject to any applicable restrictions set forth in our amended and restated articles of association, including in respect of the Class B ordinary shares, any of our shareholders may transfer all or any of his or her shares by an instrument of transfer in the usual or common form or a form prescribed by the Designated Stock Exchange (as defined in the amended and restated articles of association) or in any other form which our directors may approve.

Our board of directors may, or the Board, in its absolute discretion, and without giving any reason therefor, refuse to register a transfer of any share (not being a fully paid up share) to a person of whom it does not

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approve, or any share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists, and it may also, without prejudice to the foregoing generality, refuse to register a transfer of any share to more than four joint holders or a transfer of any share (not being a fully paid up share) on which our company has a lien. Without limiting the generality of the last sentence, the Board may decline to recognize any instrument of transfer unless:

• a fee of such maximum sum as the Designated Stock Exchange may determine to be payable or such lesser sum as the Board may from time to time require is paid to our company in respect thereof;

• the instrument of transfer is in respect of only one class of share;

• the instrument of transfer is lodged at the Office or such other place at which the Register is kept in accordance with the Law or the Registration Office (as the case may be) accompanied by the relevant share certificate(s) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); and

• if applicable, the instrument of transfer is duly and properly stamped.

If our directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged, send to each of the transferor and the transferee notice of such refusal.

The registration of transfers of shares may be suspended and the register closed at such times and for such periods as our board of directors may from time to time determine, provided, however, that the registration of transfers of shares shall not be suspended nor the register closed for more than thirty (30) days in any year.

Share Repurchase

We are empowered by the Companies Law and our amended and restated articles of association to purchase our own shares, subject to certain restrictions. Our directors may only exercise this power on our behalf, subject to the Companies Law, our amended and restated memorandum and articles of association and to any applicable requirements imposed from time to time by the Designated Stock Exchange and/or the SEC.

Dividends

Subject to the Companies Law and to our amended and restated articles of association, the board of directors may from time to time declare dividends in any currency. Dividends may be declared or paid out of our profits (realised or unrealised) and reserves lawfully available for distribution, including share premium.

Unless and to the extent that the rights attached to any shares or the terms of issue thereof otherwise provide, all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, but no amount paid up on a share in advance of calls shall be treated for the purposes of our amended and restated articles of association as paid up on the share; and all dividends shall be apportioned and paid pro rata according to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid.

Our board of directors may from time to time pay to our shareholders such interim dividends as appear to the directors to be justified by our profits, and in particular (but without prejudice to the generality of the foregoing) if at any time the share capital of our company is divided into different classes, the Board may pay such interim dividends in respect of those shares in the capital of our company which confer on the holders thereof deferred or non-preferential rights as well as in respect of those shares which confer on the holders thereof preferential rights with regard to dividend and may also pay any fixed dividend which is payable on any shares of our company half-yearly or on any other dates, whenever such profits, in the opinion of the Board, justifies such payment.

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Our board of directors may retain any dividends or other monies payable on or in respect of a share upon which we have a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists. Our board of directors may also deduct from any dividend or other monies payable to any shareholder all sums of money, if any, presently payable by him or her to us on account of calls, installments or otherwise.

No dividend shall carry interest against us.

Whenever our board of directors has resolved that a dividend be paid or declared on our share capital, the board of directors may further resolve: (a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up on the basis that the shares so allotted are to be of the same class as the class already held by the allottee, provided that those of our shareholders entitled thereto will be entitled to elect to receive such dividend, or part thereof, in cash in lieu of such allotment; or (b) that those of our shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as our board of directors may think fit on the basis that the shares so allotted are to be of the same class as the class already held by the allottee. We may upon the recommendation of our board of directors by ordinary resolution resolve in respect of anyone particular dividend that notwithstanding the foregoing a dividend may be satisfied wholly in the form of an allotment of shares credited as fully paid without offering any right to our shareholders to elect to receive such dividend in cash in lieu of such allotment.

Any dividend, interest or other sum payable in cash to a holder of shares may be paid by check or warrant sent through the post addressed to the registered address of the shareholder entitled, or in the case of joint holders, to the registered address of the person whose name stands first in our register of shareholders in respect of the joint holding to such person and to such address as the holder or joint holders may in writing direct. Every check or warrant so sent shall be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name stands first on our register of shareholders in respect of such shares, and shall be sent at his or their risk and the payment of any such check or warrant by the bank on which it is drawn shall operate as a good discharge to us in respect of the dividend and/or bonus represented thereby, notwithstanding that it may subsequently appear that the same has been stolen or that any endorsement there on has been forged.

Any dividend unclaimed for six years from the date of declaration of such dividend may be forfeited by the board of directors and shall revert to us.

Whenever the Board or our company in general meeting has resolved that a dividend be paid or declared, our board of directors may direct that any dividend be satisfied wholly or in part by the distribution of specific assets of any kind, and in particular of paid up shares, debentures or warrants to subscribe securities of any other company, and where any difficulty arises in regard to such distribution our directors may settle it as they think expedient, and in particular may disregard fractional entitlements, round the same up or down or provide that the same shall accrue to our benefit, and may fix the value for distribution of such specific assets and may determine that cash payments shall be made to any of our shareholders upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to our board of directors.

Untraceable Shareholders

Our company shall have the power to sell, in such manner as the Board thinks fit, any shares of a holder who is untraceable, but no such sale shall be made unless:

• all checks or warrants in respect of dividends of the shares in question, being not less than three in total number, for any sum payable in cash to the holder of such shares in respect of them sent during the relevant period have remained uncashed;

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• so far as it is aware at the end of the relevant period, our company has not at any time during the relevant period received any indication of the existence of a holder who is the holder of such shares or of a person entitled to such shares by death, bankruptcy or operation of law; and

• our company, if so required by the rules governing the listing of shares on the Designated Stock Exchange, has given notice to, and caused advertisement in newspapers to be made in accordance with the requirements of, the Designated Stock Exchange of its intention to sell such shares in the manner required by the Designated Stock Exchange, and a period of three months or such shorter period as may be allowed by the Designated Stock Exchange has elapsed since the date of such advertisement.

For the purpose of the foregoing, the “relevant period” means the period commencing twelve (12) years before the date of publication of the advertisement referred to under the third bullet point above and ending at the expiry of the period referred to in that paragraph.

The net proceeds of the sale will belong to the company and upon receipt by the company of such net proceeds it shall become indebted to the former Member for an amount equal to such net proceeds.

Board of Directors

We are managed by a board of directors which currently consists of nine members, including three independent directors. Our amended and restated articles of association provide that the board of directors shall consist of not less than two (2) directors.

Pursuant to our amended and restated memorandum and articles of incorporation to be adopted with effect following this offering, our board of directors will be divided into three classes. The members of each class will serve staggered three-year terms. Upon expiration of the term of a class of directors, directors in that class will be elected for three-year terms at the annual meeting of the shareholders in the year in which their respective terms expires.

Our shareholders may by ordinary resolution at any time remove any director before the expiration of his period of office notwithstanding anything in the articles of association or in any agreement between us and such director, and may by ordinary resolution elect another person in his stead. Subject to our articles of association, the directors will have power at any time and from time to time to appoint any person to be a director, either as an addition to the existing directors or to fill a casual vacancy but so that the total amount of directors (exclusive of alternate directors) must not at any time exceed the number fixed in accordance with the articles of association. Any person so elected will hold office during such term only as the director in whose place he is elected would have held the same if he had not been removed.

There are no share ownership qualifications for directors.

Meetings of our board of directors may be convened at any time deemed necessary by the secretary or by any member of our board of directors.

A meeting of our board of directors will be competent to make lawful and binding decisions if a majority of the directors are present or represented. At any meeting of our directors, each director, be it by his or her presence or by his or her alternate, is entitled to one vote. A director may vote in respect of any contract or transaction in which he is interested, provided, (a) such director must, if his interest in such contract or arrangement is material, declare the nature of his interest at the earliest meeting of the board at which it is practicable for him to do so, either specifically or by way of a general notice stating that, by reason of the facts specified in the notice, he is to be regarded as interested in any contracts of a specified description which we may subsequently make and (b) if such contract or arrangement is a transaction with a related party, such transaction has been approved by the Audit Committee.

Questions arising at a meeting of our board of directors are required to be decided by simple majority votes of the members of our board of directors present or represented at the meeting. In the case of a tie vote, the

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chairman of the meeting shall have a second or deciding vote. Our board of directors may also pass resolutions without a meeting by unanimous written consent.

The remuneration to be paid to the directors shall be such remuneration as the directors shall determine. Such remuneration shall be deemed to accrue from day to day. The directors shall also be entitled to be paid their traveling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the directors, or any committee of the directors, or general meetings of the company, or otherwise in connection with our business.

Under Cayman Islands laws, our directors have a duty of loyalty and must act honestly and in good faith and in our best interests. Our directors also have a duty to exercise the care, diligence, and skills that a reasonably prudent person would exercise in comparable circumstances. In fulfilling their duties to us, our directors must ensure compliance with the memorandum and articles of association and the class rights vested thereunder in the holders of the shares. A shareholder may in certain circumstances have rights to damages if a duty owed by the directors is breached.

Issuance of Additional Ordinary Shares or Preferred Shares

Our amended and restated articles of association authorize our board of directors to issue additional ordinary shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.

Our amended and restated articles of association authorizes our board of directors to establish from time to time one or more series of preferred shares and to fix the designations, powers, preferences and relative, participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any, including, without limitation:

• the number of shares constituting each such class or series;

• dividend rights, conversion rights, voting powers, full or limited or no voting powers;

• redemption privileges, liquidation preferences; and

• to increase or decrease the size of any such class or series (but not below the number of shares of any class or series of preferred shares then outstanding) to the extent permitted by law.

Our board of directors may issue series of preferred shares without action by our shareholders to the extent authorized but unissued. Immediately following this offering we will have 100,000,000 authorized but unissued preferred shares, par value US$0.001 per share. Accordingly, the issuance of preferred shares may adversely affect the rights of the holders of the ordinary shares. In addition, the issuance of preferred shares may be used as an anti-takeover device without further action on the part of the shareholders. We have no immediate plans to issue any preferred shares.

Issuance of preferred shares may dilute the voting power of holders of ordinary shares. Subject to applicable regulatory requirements, our board of directors may issue additional ordinary shares without action by our shareholders to the extent of available authorized but unissued shares. The issuance of additional ordinary shares may be used as an anti-takeover device without further action on the part of the shareholders. Such issuance may dilute the voting power of existing holders of ordinary shares.

The listing maintenance requirements of the New York Stock Exchange, which apply so long as our ADSs are quoted on that market, require shareholder approval of certain issuances of our securities equal to or exceeding 20% of the then outstanding voting power of all our securities or the then outstanding number of our ordinary shares.

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Inspection of Books and Records

Holders of our ordinary shares will have no general right under Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited financial statements. See “Where You Can Find More Information.”

Differences in Corporate Law

The Companies Law of the Cayman Islands is modeled after that of the United Kingdom but does not follow recent United Kingdom statutory enactments. In addition, the Companies Law differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant differences between the provisions of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergers and Similar Arrangements

The Companies Law provides for the merger and consolidation of Cayman Islands companies and Cayman Islands and foreign companies if the merged company or continued company will continue to be a Cayman Islands company. In addition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the arrangement in question is approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made, and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in-person or by proxy at a meeting, or meetings convened for that purpose. The convening of the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:

• the statutory provisions as to majority vote have been complied with;

• the shareholders have been fairly represented at the meeting in question;

• the arrangement is one that a businessman would reasonably approve; and

• the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Law.

When a takeover offer is made and accepted by holders of 90% of the shares within four months, the offerer may, within a two-month period, require the holders of the remaining shares to transfer such shares on the terms of the offer. An objection may be made to the Grand Court of the Cayman Islands but is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

If the arrangement and reconstruction are thus approved, any dissenting shareholders would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of U.S. corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

Shareholder Suits

Our Cayman Islands counsel is not aware of any reported class action or derivative action having been brought in a Cayman Islands court. In principle, we will normally be the proper plaintiff and a derivative action may not be brought by a minority shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:

• a company is acting or proposing to act illegally or beyond the scope of its authority;

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• the act complained of, although not beyond the scope of its authority, could be effected duly if authorized by more than a simple majority vote which has not been obtained; and

• those who control the company are perpetrating a “fraud on the minority.”

Under Delaware law, a stockholder may bring a derivative action on behalf of the corporation to enforce the rights of the corporation. Delaware law expressly authorizes stockholder derivative suits on the condition that the stockholder either held the stock at the time of the transaction of which the stockholder complains, or acquired the stock thereafter by operation of law and continues to hold it throughout the duration of the suit. An individual may also commence a class action suit on behalf of himself and other similarly situated stockholders where the requirements for maintaining a class action under Delaware law have been met. A plaintiff instituting a derivative suit is required to serve a demand on the corporation before bringing suit, unless such demand would be futile.

Corporate Governance

Cayman Islands laws do not restrict transactions with directors, requiring only that directors exercise a duty of care and owe a fiduciary duty to the companies for which they serve. Under our amended and restated articles of association, subject to any separate requirement for audit committee approval under the applicable rules of the New York Stock Exchange or unless disqualified by the chairman of the relevant board meeting, so long as a director discloses the nature of his interest in any contract or arrangement in which he is interested, such a director may vote in respect of any contract or proposed contract or arrangement in which such director is interested and may be counted in the quorum at such meeting.

Duties of Directors

Under the common law of the Cayman Islands law members of our board of directors owe a fiduciary duty to the company to act in good faith in their dealings with or on behalf of the company and exercise their powers and fulfill the duties of their office honestly. This duty has four essential elements:

• a duty to act in good faith in the best interests of the company;

• a duty not to personally profit from opportunities that arise from the office of director;

• a duty to avoid conflicts of interest; and

• a duty to exercise powers for the purpose for which such powers were intended.

In addition, the Companies Law imposes various duties on officers of a company with respect to certain matters of management and administration of the company and imposes fines on persons who fail to satisfy those requirements. However, in many circumstances, an individual is only liable if he is knowingly guilty of the default or knowingly and willfully authorizes or permits the default.

Interested Directors

The Companies Law does not require a director who is interested in a transaction entered into by a Cayman company to disclose his interest nor does the Companies Law render such director liable to such company for any profit realized pursuant to such transaction. Such an obligation is imposed under our amended and restated articles of association and a director must act in accordance with his duties at common law (as above).

Voting Rights and Quorum Requirements

Under Cayman Islands law, the voting rights of shareholders are regulated by a company’s articles of association and, in certain circumstances, the Companies Law. The articles of association will govern matters

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such as quorum for the transaction of business, rights of shares and majority votes required to approve any action or resolution at a meeting of the shareholders or board of directors. Under the Companies Law, certain matters must be approved by a special resolution, which is defined as two-thirds of the votes cast by shareholders present at a meeting and entitled to vote, or such higher majority as imposed by a company’s articles of association; otherwise, unless the articles of association otherwise provide, the requisite majority is a simple majority of votes cast.

Indemnification

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our articles of association provide for the indemnification of our directors, auditors and other officers against all losses or liabilities incurred or sustained by him or her as a director, auditor or other officer of our company in defending any proceedings, whether civil or criminal, in which judgment is given in his or her favor, or in which he or she is acquitted provided that this indemnity shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons.

Shareholder Proposals

The Companies Law does not provide shareholders any right to bring business before a meeting or requisition a general meeting.

Approval of Corporate Matters by Written Consent

The Companies Law allows a special resolution to be passed in writing if signed by all the shareholders and authorized by the articles of association.

Calling of Special Shareholders Meetings

The Companies Law does not have provisions governing the proceedings of shareholders meetings which are usually provided in the articles of association.

Staggered Board of Directors

The Companies Law does not contain statutory provisions that require staggered board arrangements for a Cayman Islands company. Such provisions, however, may validly be provided for in the articles of association, and we have provided for a staggered board of directors in our articles of association. Pursuant to such provision, one-third of the current members of our board are required to stand for re-election each year.

Issuance of Preferred Shares

The Companies Law allows shares to be, issued with preferred, deferred or other special rights, whether in. regard to dividends, voting, return of share capital or otherwise. Our articles of association provide that the directors may allot, issue, grant options over or otherwise dispose of shares (including fractions of a share) with or without preferred, deferred or other special rights or restrictions, in one or more series, whether with regard to dividend rights, dividend rates, conversion rights, voting rights, rights and terms of redemption and liquidation preferences or otherwise and to such persons, at such times and on such other terms as they think proper.

Anti-takeover Provisions

The Companies Law does not prevent companies from adopting a wide range of defensive measures, such as staggered boards, blank check preferred stock, removal of directors only for cause and provisions that

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restrict the rights of shareholders to call meetings and submit shareholder proposals. Our articles of association contain the following provisions which may be regarded as defensive measures: (i) a staggered board of directors, (ii) the ability to issue preferred shares and (iii) directors may in their absolute discretion decline to register any transfer of shares (not being a fully paid share) without assigning any reason.

Registration Rights

Upon completion of this offering, certain holders of our ordinary shares and their permitted transferees will be entitled to request that we register our ordinary shares held by them under the Securities Act.

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SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have 12,487,500 outstanding ADSs representing approximately 27.3% of our ordinary shares in issue. All of the ADSs sold in this offering and the ordinary shares they represent will be freely transferable by persons other than our “affiliates” without restriction or further registration under the Securities Act. Sales or perceived sales of substantial amounts of our ADSs in the public market could adversely affect prevailing market prices of our ADSs. Prior to this offering, there has been no public market for our ordinary shares or the ADSs, and we cannot assure you that a regular trading market for our ADSs will develop. Our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system. We do not expect that a trading market will develop for our ordinary shares not represented by the ADSs.

Lock-up Agreements

We and our existing shareholders, including certain of our executive officers and directors, have agreed with the underwriters to certain lock-up arrangements. See “Underwriting”.

A total of 498,842,277 of our ordinary shares are subject to the lock-up agreements.

Rule 144

In general, under Rule 144, a person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of ours at any time during the three months preceding a sale, and who has beneficially owned restricted securities within the meaning of Rule 144 for at least six months (including any period of consecutive ownership of preceding non-affiliated holders) would be entitled to sell those shares, subject only to the availability of current public information about us. A non-affiliated person who has beneficially owned restricted securities within the meaning of Rule 144 for at least one year would be entitled to sell those shares without regard to the provisions of Rule 144.

In general, under Rule 144, our affiliates or persons selling shares on behalf of our affiliates are entitled to sell upon expiration of the lock-up agreements described above, a number of shares that does not exceed the greater of:

• 1% of the number of ordinary shares then outstanding, in the form of ADSs or otherwise, which will equal approximately 6,861,548 shares immediately after this offering; or

• the average weekly trading volume of the ADSs representing our ordinary shares on the New York Stock Exchange during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 701

Beginning 90 days after the date of this prospectus, persons other than affiliates who purchased ordinary shares under a written compensatory plan or contract may be entitled to sell such shares in the United States in reliance on Rule 701. Rule 701 permits affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. Rule 701 further provides that non-affiliates may sell these shares in reliance on Rule 144 subject only to its manner-of-sale requirements. However, the Rule 701 shares would remain subject to lock-up arrangements and would only become eligible for sale when the lock-up period expires.

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Registration Rights

Upon completion of this offering, certain holders of our ordinary shares, in the form of ADSs or otherwise, or their transferees will be entitled to request that we register their shares under the Securities Act, following the expiration of the lock-up agreements described above. See “Description of Share Capital— Registration Rights.”

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DESCRIPTION OF AMERICAN DEPOSITARY SHARES

JPMorgan Chase Bank, N.A., as depositary will issue the ADSs which you will be entitled to receive in this offering. Each ADS will represent an ownership interest in fifteen (15) Class A ordinary shares which we will deposit with the custodian, as agent of the depositary, under the deposit agreement among ourselves, the depositary and registered holders of ADSs on the books of the depositary. In the future, each ADS will also represent any securities, cash or other property deposited with the depositary but which they have not distributed directly to you. Unless specifically requested by you, all ADSs will be issued on the books of our depositary in book-entry form and periodic statements will be mailed to you which reflect your ownership interest in such ADSs. In our description, references to American depositary receipts or ADRs shall include the statements you will receive which reflect your ownership of ADSs.

The depositary’s office is located at 4 New York Plaza, New York, NY 10004.

You may hold ADSs either directly or indirectly through your broker or other financial institution. If you hold ADSs directly, by having an ADS registered in your name on the books of the depositary, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs through your broker or financial institution nominee, you must rely on the procedures of such broker or financial institution to assert the rights of an ADR holder described in this section. You should consult with your broker or financial institution to find out what those procedures are.

As an ADR holder, we will not treat you as a shareholder of ours and you will not have any shareholder rights. Cayman Island law governs shareholder rights. Because the depositary or its nominee will be the shareholder of record for the shares represented by all outstanding ADSs, shareholder rights rest with such record holder. Your rights are those of an ADR holder. Such rights derive from the terms of the deposit agreement to be entered into among us, the depositary and all registered holders from time to time of ADSs issued under the deposit agreement. The obligations of the depositary and its agents are also set out in the deposit agreement. Because the depositary or its nominee will actually be the registered owner of the shares, you must rely on it to exercise the rights of a shareholder on your behalf. The deposit agreement and the ADSs are governed by New York law.

The following is a summary of the material terms of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you. For more complete information, you should read the entire deposit agreement and the form of ADR which contains the terms of your ADSs. You can read a copy of the deposit agreement which is filed as an exhibit to the registration statement of which this prospectus forms a part. You may also obtain a copy of the deposit agreement at the SEC’s Public Reference Room which is located at 100 F Street, NE, Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-732-0330. You may also find the registration statement and the attached deposit agreement on the SEC’s website at http://www.sec.gov.

Share Dividends and Other Distributions

How will I receive dividends and other distributions on the shares underlying my ADSs?

We may make various types of distributions with respect to our securities. The depositary has agreed that, to the extent practicable, it will pay to you the cash dividends or other distributions it or the custodian receives on shares or other deposited securities, after converting any cash received into U.S. dollars and, in all cases, making any necessary deductions provided for in the deposit agreement. You will receive these distributions in proportion to the number of underlying securities that your ADSs represent.

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Except as stated below, the depositary will deliver such distributions to ADR holders in proportion to their interests in the following manner:

Cash. The depositary will distribute any U.S. dollars available to it resulting from a cash dividend or other cash distribution or the net proceeds of sales of any other distribution or portion thereof (to the extent applicable), on an averaged or other practicable basis, subject to (i) appropriate adjustments for taxes withheld, (ii) such distribution being impermissible or impracticable with respect to certain registered ADR holders, and (iii) deduction of the depositary’s expenses in (1) converting any foreign currency to U.S. dollars to the extent that it determines that such conversion may be made on a reasonable basis, (2) transferring foreign currency or U.S. dollars to the United States by such means as the depositary may determine to the extent that it determines that such transfer may be made on a reasonable basis, (3) obtaining any approval or license of any governmental authority required for such conversion or transfer, which is obtainable at a reasonable cost and within a reasonable time and (4) making any sale by public or private means in any commercially reasonable manner. If exchange rates fluctuate during a time when the depositary cannot convert a foreign currency, you may lose some or all of the value of the distribution.

Shares. In the case of a distribution in shares, the depositary will issue additional ADSs to evidence the number of ADSs representing such shares. Only whole ADSs will be issued. Any shares which would result in fractional ADSs will be sold and the net proceeds will be distributed in the same manner as cash to the ADR holders entitled thereto.

Rights to receive additional shares. In the case of a distribution of rights to subscribe for additional shares or other rights, if we provide evidence satisfactory to the depositary that it may lawfully distribute such rights, the depositary will distribute warrants or other instruments in the discretion of the depositary representing such rights. However, if we do not furnish such evidence, the depositary may:

• sell such rights if practicable and distribute the net proceeds in the same manner as cash to the ADR holders entitled thereto; or

• if it is not practicable to sell such rights, do nothing and allow such rights to lapse, in which case ADR holders will receive nothing.

We have no obligation to file a registration statement under the Securities Act in order to make any rights available to ADR holders.

Other Distributions. In the case of a distribution of securities or property other than those described above, the depositary may either (i) distribute such securities or property in any manner it deems equitable and practicable or (ii) to the extent the depositary deems distribution of such securities or property not to be equitable and practicable, sell such securities or property and distribute any net proceeds in the same way it distributes cash.

If the depositary determines that any distribution described above is not practicable with respect to any specific registered ADR holder, the depositary may choose any method of distribution that it deems practicable for such ADR holder, including the distribution of foreign currency, securities or property, or it may retain such items, without paying interest on or investing them, on behalf of the ADR holder as deposited securities, in which case the ADSs will also represent the retained items.

Any U.S. dollars will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability and dealt with by the depositary in accordance with its then current practices.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADR holders.

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There can be no assurance that the depositary will be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified price, nor that any of such transactions can be completed within a specified time period.

Deposit, Withdrawal and Cancellation

How does the depositary issue ADSs?

The depositary will issue ADSs if you or your broker deposit shares or evidence of rights to receive shares with the custodian and pay the fees and expenses owing to the depositary in connection with such issuance. In the case of the ADSs to be issued under this prospectus, we will arrange with the underwriters named herein to deposit such shares.

Shares deposited in the future with the custodian must be accompanied by certain delivery documentation, including instruments showing that such shares have been properly transferred or endorsed to the person on whose behalf the deposit is being made.

The custodian will hold all deposited shares (including those being deposited by or on our behalf in connection with the offering to which this prospectus relates) for the account of the depositary. ADR holders thus have no direct ownership interest in the shares and only have such rights as are contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or in substitution for the deposited shares. The deposited shares and any such additional items are referred to as “deposited securities.”

Upon each deposit of shares, receipt of related delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the fees and charges of the depositary and any taxes or other fees or charges owing, the depositary will issue an ADR or ADRs in the name or upon the order of the person entitled thereto evidencing the number of ADSs to which such person is entitled. All of the ADSs issued will, unless specifically requested to the contrary, be part of the depositary’s direct registration system, and a registered holder will receive periodic statements from the depositary which will show the number of ADSs registered in such holder’s name. An ADR holder can request that the ADSs not be held through the depositary’s direct registration system and that a certificated ADR be issued.

How do ADR holders cancel an ADS and obtain deposited securities?

When you turn in your ADR certificate at the depositary’s office, or when you provide proper instructions and documentation in the case of direct registration ADSs, the depositary will, upon payment of certain applicable fees, charges and taxes, deliver the underlying shares to you or upon your written order. At your risk, expense and request, the depositary may deliver deposited securities at such other place as you may request.

The depositary may only restrict the withdrawal of deposited securities in connection with:

• temporary delays caused by closing our transfer books or those of the depositary or the deposit of shares in connection with voting at a shareholders’ meeting, or the payment of dividends;

• the payment of fees, taxes and similar charges; or

• compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs or to the withdrawal of deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

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Record Dates

The depositary may, after consultation with us if practicable, fix record dates for the determination of the registered ADR holders who will be entitled (or obligated, as the case may be):

• to receive any distribution on or in respect of shares,

• to give instructions for the exercise of voting rights at a meeting of holders of shares,

• to pay the fee assessed by the depositary for administration of the ADR program and for any expenses as provided for in the ADR, or

• to receive any notice or to act in respect of other matters,

all subject to the provisions of the deposit agreement.

Voting Rights

How do I vote?

If you are an ADR holder and the depositary asks you to provide it with voting instructions, you may instruct the depositary how to exercise the voting rights for the shares which underlie your ADSs. As soon as practicable after receiving notice of any meeting or solicitation of consents or proxies from us, the depositary will distribute to the registered ADR holders a notice stating such information as is contained in the voting materials received by the depositary and describing how you may instruct the depositary to exercise the voting rights for the shares which underlie your ADSs, including instructions for giving a discretionary proxy to a person designated by us. For instructions to be valid, the depositary must receive them in the manner and on or before the date specified. The depositary will try, as far as is practical, subject to the provisions of and governing the underlying shares or other deposited securities, to vote or to have its agents vote the shares or other deposited securities as you instruct. The depositary will only vote or attempt to vote as you instruct. The depositary will not itself exercise any voting discretion. Furthermore, neither the depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast or for the effect of any vote.

There is no guarantee that you will receive voting materials in time to instruct the depositary to vote and it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote.

Reports and Other Communications

Will ADR holders be able to view our reports?

The depositary will make available for inspection by ADR holders at the offices of the depositary and the custodian the deposit agreement, the provisions of or governing deposited securities, and any written communications from us which are both received by the custodian or its nominee as a holder of deposited securities and made generally available to the holders of deposited securities.

Additionally, if we make any written communications generally available to holders of our shares, and we furnish copies thereof (or English translations or summaries) to the depositary, it will distribute the same to registered ADR holders.

Fees and Expenses

What fees and expenses will I be responsible for paying?

The depositary may charge each person to whom ADSs are issued, including, without limitation, issuances against deposits of shares, issuances in respect of share distributions, rights and other distributions,

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issuances pursuant to a stock dividend or stock split declared by us or issuances pursuant to a merger, exchange of securities or any other transaction or event affecting the ADSs or deposited securities, and each person surrendering ADSs for withdrawal of deposited securities or whose ADRs are cancelled or reduced for any other reason, US$5.00 for each 100 ADSs (or any portion thereof) issued, delivered, reduced, cancelled or surrendered, as the case may be. The depositary may sell (by public or private sale) sufficient securities and property received in respect of a share distribution, rights and/or other distribution prior to such deposit to pay such charge.

The following additional charges shall be incurred by the ADR holders, by any party depositing or withdrawing shares or by any party surrendering ADSs or to whom ADSs are issued (including, without limitation, issuance pursuant to a stock dividend or stock split declared by us or an exchange of stock regarding the ADRs or the deposited securities or a distribution of ADSs), whichever is applicable:

• a fee of US$1.50 per ADR or ADRs for transfers of certificated or direct registration ADRs;

• a fee of up to US$0.02 per ADS for any cash distribution made pursuant to the deposit agreement;

• a fee of up to US$0.02 per ADS per calendar year (or portion thereof) for services performed by the depositary in administering the ADRs (which fee may be charged on a periodic basis during each calendar year and shall be assessed against holders of ADRs as of the record date or record dates set by the depositary during each calendar year and shall be payable in the manner described in the next succeeding provision);

• reimbursement of such fees, charges and expenses as are incurred by the depositary and/or any of the depositary’s agents (including without limitation, the custodian and expenses incurred on behalf of holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in connection with the servicing of the shares or other deposited securities, the delivery of deposited securities or otherwise in connection with the depositary’s or its custodian’s compliance with applicable law, rule or regulation (which charge shall be assessed on a proportionate basis against holders as of the record date or dates set by the depositary and shall be payable at the sole discretion of the depositary by billing such holders or by deducting such charge from one or more cash dividends or other cash distributions);

• a fee for the distribution of securities (or the sale of securities in connection with a distribution), such fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities (treating all such securities as if they were shares) but which securities or the net cash proceeds from the sale thereof are instead distributed by the depositary to those holders entitled thereto;

• stock transfer or other taxes and other governmental charges;

• cable, telex and facsimile transmission and delivery charges incurred at your request in connection with the deposit or delivery of shares;

• transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; and

• expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars.

We will pay all other charges and expenses of the depositary and any agent of the depositary (except the custodian) pursuant to agreements from time to time between us and the depositary. The charges described above may be amended from time to time by agreement between us and the depositary.

Our depositary has agreed to reimburse us for certain expenses we incur that are related to establishment and maintenance of the ADR program, including investor relations expenses and exchange application and listing fees. Neither the depositary nor we can determine the exact amount to be made available to us because (i) the number of ADSs that will be issued and outstanding, (ii) the level of fees to be charged to holders of ADSs and

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(iii) our reimbursable expenses related to the ADR program are not known at this time. The depositary collects its fees for issuance and cancellation of ADSs directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions, or by directly billing investors, or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide services to any holder until the fees and expenses owing by such holder for those services or otherwise are paid.

Payment of Taxes

ADR holders must pay any tax or other governmental charge payable by the custodian or the depositary on any ADS or ADR, deposited security or distribution. If an ADR holder owes any tax or other governmental charge, the depositary may (i) deduct the amount thereof from any cash distributions, or (ii) sell deposited securities (by public or private sale) and deduct the amount owing from the net proceeds of such sale. In either case the ADR holder remains liable for any shortfall. Additionally, if any tax or governmental charge is unpaid, the depositary may also refuse to effect any registration, registration of transfer, split-up or combination of deposited securities or withdrawal of deposited securities until such payment is made. If any tax or governmental charge is required to be withheld on any cash distribution, the depositary may deduct the amount required to be withheld from any cash distribution or, in the case of a non-cash distribution, sell the distributed property or securities (by public or private sale) to pay such taxes and distribute any remaining net proceeds to the ADR holders entitled thereto.

By holding an ADR or an interest therein, you will be agreeing to indemnify us, the depositary, its custodian and any of our or their respective directors, employees, agents and affiliates against, and hold each of them harmless from, any claims by any governmental authority with respect to taxes, additions to tax, penalties or interest arising out of any refund of taxes, reduced rate of withholding at source or other tax benefit obtained.

Reclassifications, Recapitalizations and Mergers

If we take certain actions that affect the deposited securities, including (i) any change in par value, split-up, consolidation, cancellation or other reclassification of deposited securities or (ii) any distributions not made to holders of ADRs or (iii) any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all of our assets, then the depositary may choose to:

• amend the form of ADR;

• distribute additional or amended ADRs;

• distribute cash, securities or other property it has received in connection with such actions;

• sell any securities or property received and distribute the proceeds as cash; or

• none of the above.

If the depositary does not choose any of the above options, any of the cash, securities or other property it receives will constitute part of the deposited securities and each ADS will then represent a proportionate interest in such property.

Amendment and Termination

How may the deposit agreement be amended?

We may agree with the depositary to amend the deposit agreement and the ADSs without your consent for any reason. ADR holders must be given at least 30 days prior notice of any amendment that imposes or

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increases any fees or charges (other than stock transfer or other taxes and other governmental charges, transfer or registration fees, cable, telex or facsimile transmission costs, delivery costs or other such expenses), or otherwise ADR and ADRs, prejudices any substantial existing right of ADR holders. Such notice need not describe in detail the specific amendments effectuated thereby, but must give ADR holders a means to access the text of such amendment. If an ADR holder continues to hold an ADR or ADRs after being so notified, such ADR holder is deemed to agree to such amendment and to be bound by the deposit agreement as so amended. Notwithstanding the foregoing, if any governmental body or regulatory body should adopt new laws, rules or regulations which would require amendment or supplement of the deposit agreement or the form of ADR to ensure compliance therewith, we and the depositary may amend or supplement the deposit agreement and the ADR at any time in accordance with such changed laws, rules or regulations, which amendment or supplement may take effect before a notice is given or within any other period of time as required for compliance. No amendment, however, will impair your right to surrender your ADSs and receive the underlying securities, except in order to comply with mandatory provisions of applicable law.

How may the deposit agreement be terminated?

The depositary may, and shall at our written direction, terminate the deposit agreement and the ADRs by mailing notice of such termination to the registered holders of ADRs at least 30 days prior to the date fixed in such notice for such termination; provided, however, if the depositary shall have (i) resigned as depositary under the deposit agreement, notice of such termination by the depositary shall not be provided to registered holders unless a successor depositary shall not be operating under the deposit agreement within 45 days of the date of such resignation, and (ii) been removed as depositary under the deposit agreement, notice of such termination by the depositary shall not be provided to registered holders of ADRs unless a successor depositary shall not be operating under the deposit agreement on the 90^th day after our notice of removal was first provided to the depositary. After termination, the depositary’s only responsibility will be (i) to deliver deposited securities to ADR holders who surrender their ADRs, and (ii) to hold or sell distributions received on deposited securities. As soon as practicable after the expiration of six months from the termination date, the depositary will sell the deposited securities which remain and hold the net proceeds of such sales (as long as it may lawfully do so), without liability for interest, in trust for the ADR holders who have not yet surrendered their ADRs. After making such sale, the depositary shall have no obligations except to account for such proceeds and other cash.

Limitations on Obligations and Liability to ADR holders

Limits on our obligations and the obligations of the depositary; limits on liability to ADR holders and holders of ADSs

Prior to the issue, registration, registration of transfer, split-up, combination, or cancellation of any ADRs, or the delivery of any distribution in respect thereof, and from time to time, we or the depositary or its custodian may require:

• payment with respect thereto of (i) any stock transfer or other tax or other governmental charge, (ii) any stock transfer or registration fees in effect for the registration of transfers of shares or other deposited securities upon any applicable register and (iii) any applicable fees and expenses described in the deposit agreement;

• the production of proof satisfactory to it of (i) the identity of any signatory and genuineness of any signature and (ii) such other information, including without limitation, information as to citizenship, residence, exchange control approval, beneficial ownership of any securities, compliance with applicable law, regulations, provisions of or governing deposited securities and terms of the deposit agreement and the ADRs, as it may deem necessary or proper; and

• compliance with such regulations as the depositary may establish consistent with the deposit agreement.

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The issuance of ADRs, the acceptance of deposits of shares, the registration, registration of transfer, split-up or combination of ADRs or the withdrawal of shares, may be suspended, generally or in particular instances, when the ADR register or any register for deposited securities is closed or when any such action is deemed advisable by the depositary; provided that the ability to withdrawal shares may only be limited under the following circumstances: (i) temporary delays caused by closing transfer books of the depositary or our transfer books or the deposit of shares in connection with voting at a shareholders’ meeting, or the payment of dividends, (ii) the payment of fees, taxes, and similar charges, and (iii) compliance with any laws or governmental regulations relating to ADRs or to the withdrawal of deposited securities.

The deposit agreement expressly limits the obligations and liability of the depositary, ourselves and our respective agents. Neither we nor the depositary nor any such agent will be liable if:

• any present or future law, rule, regulation, fiat, order or decree of the United States, the Cayman Islands, the People’s Republic of China or any other country, or of any governmental or regulatory authority or securities exchange or market or automated quotation system, the provisions of or governing any deposited securities, any present or future provision of our charter, any act of God, war, terrorism or other circumstance beyond our, the depositary’s or our respective agents’ control shall prevent or delay, or shall cause any of them to be subject to any civil or criminal penalty in connection with, any act which the deposit agreement or the ADRs provide shall be done or performed by us, the depositary or our respective agents (including, without limitation, voting);

• it exercises or fails to exercise discretion under the deposit agreement or the ADR;

• it performs its obligations under the deposit agreement and ADRs without gross negligence or bad faith;

• it takes any action or refrains from taking any action in reliance upon the advice of or information from legal counsel, accountants, any person presenting shares for deposit, any registered holder of ADRs, or any other person believed by it to be competent to give such advice or information; or

• it relies upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.

Neither the depositary nor its agents have any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs. We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory to us against all expense (including fees and disbursements of counsel) and liability is furnished as often as may be required. The depositary and its agents may fully respond to any and all demands or requests for information maintained by or on its behalf in connection with the deposit agreement, any registered holder or holders of ADRs, any ADRs or otherwise related to the deposit agreement or ADRs to the extent such information is requested or required by or pursuant to any lawful authority, including without limitation laws, rules, regulations, administrative or judicial process, banking, securities or other regulators. The depositary shall not be liable for the acts or omissions made by any securities depository, clearing agency or settlement system in connection with or arising out of book-entry settlement of deposited securities or otherwise. Furthermore, the depositary shall not be responsible for, and shall incur no liability in connection with or arising from, the insolvency of any custodian that is not a branch or affiliate of JPMorgan Chase Bank, N.A.

Additionally, none of us, the depositary or the custodian shall be liable for the failure by any registered holder of ADRs or beneficial owner therein to obtain the benefits of credits on the basis of non-U.S. tax paid against such holder’s or beneficial owner’s income tax liability. Neither we nor the depositary shall incur any liability for any tax consequences that may be incurred by holders or beneficial owners on account of their ownership of ADRs or ADSs.

Neither the depositary nor its agents will be responsible for any failure to carry out any instructions to vote any of the deposited securities, for the manner in which any such vote is cast or for the effect of any such

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vote. Neither the depositary nor any of its agents shall be liable to registered holders of ADRs or beneficial owners of interests in ADSs for any indirect, special, punitive or consequential damages (including, without limitation, lost profits) of any form incurred by any person or entity, whether or not foreseeable and regardless of the type of action in which such a claim may be brought.

The depositary may own and deal in any class of our securities and in ADSs.

Disclosure of Interest in ADSs

To the extent that the provisions of or governing any deposited securities may require disclosure of or impose limits on beneficial or other ownership of deposited securities, other shares and other securities and may provide for blocking transfer, voting or other rights to enforce such disclosure or limits, you agree to comply with all such disclosure requirements and ownership limitations and to comply with any reasonable instructions we may provide in respect thereof. We reserve the right to instruct you to deliver your ADSs for cancellation and withdrawal of the deposited securities so as to permit us to deal with you directly as a holder of shares and, by holding an ADS or an interest therein, you will be agreeing to comply with such instructions.

Books of Depositary

The depositary or its agent will maintain a register for the registration, registration of transfer, combination and split-up of ADRs, which register shall include the depositary’s direct registration system. Registered holders of ADRs may inspect such records at the depositary’s office at all reasonable times, but solely for the purpose of communicating with other holders in the interest of the business of our company or a matter relating to the deposit agreement. Such register may be closed from time to time, when deemed expedient by the depositary.

The depositary will maintain facilities for the delivery and receipt of ADRs.

Pre-release of ADSs

In its capacity as depositary, the depositary shall not lend shares or ADSs; provided, however, that the depositary may (i) issue ADSs prior to the receipt of shares and (ii) deliver shares prior to the receipt of ADSs for withdrawal of deposited securities, including ADSs which were issued under (i) above but for which shares may not have been received (each such transaction a “pre-release”). The depositary may receive ADSs in lieu of shares under (i) above (which ADSs will promptly be canceled by the depositary upon receipt by the depositary) and receive shares in lieu of ADSs under (ii) above. Each such pre-release will be subject to a written agreement whereby the person or entity (the “applicant”) to whom ADSs or shares are to be delivered (a) represents that at the time of the pre-release the applicant or its customer owns the shares or ADSs that are to be delivered by the applicant under such pre-release, (b) agrees to indicate the depositary as owner of such shares or ADSs in its records and to hold such shares or ADSs in trust for the depositary until such shares or ADSs are delivered to the depositary or the custodian, (c) unconditionally guarantees to deliver to the depositary or the custodian, as applicable, such shares or ADSs, and (d) agrees to any additional restrictions or requirements that the depositary deems appropriate. Each such pre-release will be at all times fully collateralized with cash, U.S. government securities or such other collateral as the depositary deems appropriate, terminable by the depositary on not more than five (5) business days’ notice and subject to such further indemnities and credit regulations as the depositary deems appropriate. The depositary will normally limit the number of ADSs and shares involved in such pre-release at any one time to thirty percent (30%) of the ADSs outstanding (without giving effect to ADSs outstanding under (i) above), provided, however, that the depositary reserves the right to change or disregard such limit from time to time as it deems appropriate. The depositary may also set limits with respect to the number of ADSs and shares involved in pre-release with any one person on a case-by-case basis as it deems appropriate. The depositary may retain for its own account any compensation received by it in conjunction with

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the foregoing. Collateral provided pursuant to (b) above, but not the earnings thereon, shall be held for the benefit of the registered holders of ADRs (other than the applicant).

Appointment

In the deposit agreement, each registered holder of ADRs and each person holding an interest in ADSs, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the deposit agreement will be deemed for all purposes to:

• be a party to and bound by the terms of the deposit agreement and the applicable ADR or ADRs, and

• appoint the depositary its attorney-in-fact, with full power to delegate, to act on its behalf and to take any and all actions contemplated in the deposit agreement and the applicable ADR or ADRs, to adopt any and all procedures necessary to comply with applicable laws and to take such action as the depositary in its sole discretion may deem necessary or appropriate to carry out the purposes of the deposit agreement and the applicable ADR and ADRs, the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof.

Governing Law

The deposit agreement and the ADRs shall be governed by and construed in accordance with the laws of the State of New York. In the deposit agreement, we have submitted to the jurisdiction of the courts of the State of New York and appointed an agent for service of process on our behalf.

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TAXATION

The following summary of material Cayman Islands, PRC and United States federal income tax consequences of an investment in our ADSs or ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This summary does not deal with all possible tax consequences relating to an investment in our ADSs or ordinary shares, such as the tax consequences under state, local and other tax laws. To the extent that the discussion relates to matters of Cayman Islands tax law, it represents the opinion of Conyers Dill & Pearman, our Cayman Islands counsel.

Cayman Islands Taxation

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands except for stamp duties that may be applicable on instruments executed in, or brought within, the jurisdiction of the Cayman Islands. The Cayman Islands is not party to any double tax treaties. There are no exchange control regulations or currency restrictions in the Cayman Islands.

People’s Republic of China Taxation

Under the PRC tax laws effective prior to January 1, 2008, dividends paid to foreign investors by foreign-invested enterprises, such as dividends paid to us by our PRC subsidiaries, were exempt from PRC withholding tax. Under the PRC Corporate Income Tax Law and its implementation rules effective on January 1, 2008, all domestic and foreign-invested companies in China are subject to a uniform corporate income tax at the rate of 25% and dividends from a PRC subsidiary to its foreign parent company are subject to a withholding tax at the rate of 10%, unless such foreign parent company’s jurisdiction of incorporation has a tax treaty with China that provides for a reduced rate of withholding tax, or the tax is otherwise exempted or reduced pursuant to the PRC tax laws.

Under the PRC Corporate Income Tax Law, enterprises organized under the laws of jurisdictions outside China with their “de facto management bodies” located within China are considered PRC resident enterprises and therefore be subject to PRC corporate income tax at the rate of 25% on their worldwide income. Under the implementation rules of the PRC Corporate Income Tax Law, “de facto management bodies” is defined as the bodies that have material and overall management and control over the business operations, personnel and human resources, finances and treasury, and acquisition and disposition of properties and other assets of an enterprise. In addition, the Circular Related to Relevant Issues on the Identification of a Chinese holding Company Incorporated Overseas as a Residential Enterprise under the Criterion of De Facto Management Bodies Recognizing issued by the State Administration of Taxation on April 22, 2009 provides that a foreign enterprise controlled by a PRC company or a PRC company group will be classified as a “resident enterprise” with its “de facto management bodies” located within China if the following requirements are satisfied: (i) the senior management and core management departments in charge of its daily operations function mainly in the PRC; (ii) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (iii) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (iv) more than half of the enterprise’s directors or senior management with voting rights reside in the PRC.

The PRC Corporate Income Tax Law and its implementation rules are relatively new and ambiguities exist with respect to the interpretation of the provisions relating to resident enterprise issues. Although our offshore holding companies are not controlled by any PRC company or company group, we cannot assure you that we will not be deemed to be a PRC resident enterprise under the PRC Corporate Income Tax Law. If we are deemed to be a PRC resident enterprise, we will be subject to PRC corporate income tax at the rate of 25% on our worldwide income. In that case, however, dividend income we receive from our PRC subsidiaries may be

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exempt from PRC corporate income tax because the PRC Corporate Income Tax Law and its implementation rules generally provide that dividends received by a PRC resident enterprise from its directly invested entity that is also a PRC resident enterprise is exempt from corporate income tax. However, as there is still uncertainty as to how the PRC Corporate Income Tax Law and its implementation rules will be interpreted and implemented, we cannot assure you that we are eligible for such PRC corporate income tax exemptions or reductions.

In addition, the PRC Corporate Income Tax Law and its implementation rules are relatively new and ambiguities exist with respect to the interpretation of the provisions relating to identification of PRC-sourced income. If we are deemed to be a PRC resident enterprise, dividends distributed to our non-PRC entity investors by us, or the gain our non-PRC entity investors may realize from the transfer of our ordinary shares or ADSs, may be treated as PRC-sourced income and therefore be subject to a 10% PRC withholding tax pursuant to the PRC Corporate Income Tax Law. If we became a PRC resident enterprise under the new PRC tax system and received income other than dividends, our profitability and cash flows would be adversely impacted due to our worldwide income being taxed in China under the PRC Corporate Income Tax Law.

United States Federal Income Taxation

The following is a summary of the material United States federal income tax considerations relating to the acquisition, ownership, and disposition of our ADSs or ordinary shares by a U.S. Holder (as defined below) that will hold ADSs or ordinary shares as “capital assets” (generally, property held for investment) under the United States Internal Revenue Code. This summary is based upon existing United States federal tax law, which is subject to differing interpretations or change, possibly with retroactive effect. This summary does not discuss all aspects of United States federal income taxation that may be important to particular investors in light of their individual investment circumstances, including investors subject to special tax rules (for example, financial institutions, insurance companies, broker-dealers, partnerships and their partners, and tax-exempt organizations (including private foundations)), holders who are not U.S. Holders, holders who own (directly, indirectly, or constructively) 10% or more of our voting stock, investors that will hold their ADSs or ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for United States federal income tax purposes, or investors that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not discuss any non-United States, state, or local tax considerations. Each U.S. Holder is urged to consult its tax advisor regarding the United States federal, state, local, and non-United States income and other tax considerations of an investment in ADSs or ordinary shares.

General

For purposes of this summary, a “U.S. Holder” is a beneficial owner of our ADSs or ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the law of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under the United States Internal Revenue Code.

If a partnership is a beneficial owner of our ADSs or ordinary shares, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. If a U.S. Holder is a partner of a partnership holding our ADSs or ordinary shares, the U.S. Holder is urged to consult its tax advisor regarding an investment in our ADSs or ordinary shares.

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For United States federal income tax purposes, a U.S. Holder of ADSs will be treated as the owner of the underlying shares represented by the ADSs.

Passive Foreign Investment Company Considerations

A non-U.S. corporation, such as our company, will be classified as a “passive foreign investment company” or a PFIC, for United States federal income tax purposes, if, in the case of any particular taxable year, either (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more of its average quarterly assets (as determined on the basis of fair market value) during such year produce or are held for the production of passive income. For this purpose, cash is categorized as a passive asset and the company’s unbooked intangibles are taken into account. A non-U.S. corporation will be treated as owning a proportionate share of the assets and income of any other corporation in which it owns, directly or indirectly, more than 25% (by value) of the stock.

Based on our current income and assets and taking into consideration this offering, we presently do not believe that we should be classified as a PFIC for the current taxable year. While we do not anticipate becoming a PFIC in future taxable years, the composition of our income and our assets will be affected by how, and how quickly, we use our liquid assets and the cash raised in this offering. Under circumstances where we determine not to deploy significant amounts of cash to (i) fund the development of our company-owned brokerage services business; (ii) fund the development of our company-owned sales offices, (iii) invest and upgrade our information and operations systems; or (iv) fund general corporate purposes, our risk of becoming classified as a PFIC may substantially increase.

In estimating the value of our goodwill and other unbooked intangibles, we have taken into account our anticipated market capitalization following the close of this offering. Among other matters, if our market capitalization is less than anticipated or subsequently declines, we may be or become classified as a PFIC for the current or one or more future taxable years. Further, while we believe our classification methodology and valuation approach is reasonable, it is possible that the Internal Revenue Service may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our company being or becoming classified as a PFIC for the current or one or more future taxable years. If we are classified as a PFIC for any year during which a U.S. Holder holds our ADSs or ordinary shares, we generally will continue to be treated as a PFIC for all succeeding years during which such U.S. Holder holds our ADSs or ordinary shares.

Because PFIC status is a fact-intensive determination made on an annual basis, no assurance can be given that we are not or will not become classified as a PFIC, and our PFIC status will depend on whether we continue to follow our capital expenditure plans and the continued existence of goodwill. The discussion below under “Dividends” and “Sale or Other Disposition of ADSs or Ordinary Shares” is written on the basis that we will not be classified as a PFIC for United States federal income tax purposes. The U.S. federal income tax rules that apply if we are classified as a PFIC for our 2010 or subsequent taxable years are generally discussed below under “Passive Foreign Investment Company Rules.”

Dividends

Any cash distributions (including the amount of any PRC tax withheld) paid on our ADSs or ordinary shares out of our earnings and profits, as determined under United States federal income tax principles, will generally be includible in the gross income of a U.S. Holder as dividend income. Because we do not intend to determine our earnings and profits on the basis of United States federal income tax principles, any distribution paid will generally be treated as a “dividend” for United States federal income tax purposes. For taxable years beginning before January 1, 2011, a non-corporate recipient of dividend income generally will be subject to tax on dividend income from a “qualified foreign corporation” at a maximum United States federal tax rate of 15% rather than the marginal tax rates generally applicable to ordinary income provided that certain holding period requirements are met. A non-United States corporation (other than a corporation that is classified as a PFIC for

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the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation (i) if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information program, or (ii) with respect to any dividend it pays on stock (or ADSs in respect of such stock) which is readily tradable on an established securities market in the United States. We have been approved to list the ADSs on the New York Stock Exchange, and our ADSs are expected to be readily tradable on the New York Stock Exchange, which is an established securities market in the United States. In the event that we are deemed to be a PRC resident enterprise under the PRC Corporate Income Tax Law, we may be eligible for the benefits of the United States-PRC income tax treaty. See “Taxation — Peoples’ Republic of China Taxation.” If we are eligible for such benefits, dividends we pay on our ordinary shares, regardless of whether such shares are represented by the ADSs, would be eligible for the reduced rates of taxation. In the event that we are deemed to be a PRC resident enterprise under the PRC Corporate Income Tax Law, a U.S. Holder may be subject to PRC withholding taxes on dividends paid on our ADSs. Dividends received on our ADSs or ordinary shares will not be eligible for the dividends received deduction allowed to corporations.

Dividends generally will be treated as income from foreign sources for United States foreign tax credit purposes. A U.S. Holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit in respect of any foreign withholding taxes imposed on dividends received on ADSs. A U.S. Holder who does not elect to claim a foreign tax credit for foreign tax withheld, may instead claim a deduction, for United States federal income tax purposes, in respect of such withholdings, but only for a year in which such holder elects to do so for all creditable foreign income taxes.

Sale or Other Disposition of ADSs or Ordinary Shares

A U.S. Holder will generally recognize capital gain or loss upon the sale or other disposition of ADSs or ordinary shares in an amount equal to the difference between the amount realized upon the disposition and the holder’s adjusted tax basis in such ADSs or ordinary shares. Any capital gain or loss will be long-term if the ADSs or ordinary shares have been held for more than one year and will generally be United States source gain or loss for United States foreign tax credit purposes. In the event that gain from the disposition of the ADSs or ordinary shares is subject to tax in the PRC, a U.S. Holder that is eligible for the benefits of the income tax treaty between the United States and the PRC may elect to treat the gain as PRC source income. See “Taxation — Peoples’ Republic of China Taxation.” The deductibility of a capital loss may be subject to limitations.

Passive Foreign Investment Company Rules

If we are classified as a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules that have a penalizing effect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to the U.S. Holder (which generally means any distribution paid during a taxable year to a U.S. Holder that is greater than 125 percent of the average annual distributions paid in the three preceding taxable years or, if shorter, the U.S. Holder’s holding period for the ADSs or ordinary shares), and (ii) any gain realized on the sale or other disposition, including a pledge, of ADSs or ordinary shares. Under the PFIC rules, if a U.S. Holder receives any such excess distribution or realizes any such gain, the:

• excess distribution or realized gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or ordinary shares;

• amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (a “pre-PFIC” year) will be taxable as ordinary income;

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• amount allocated to each prior taxable year, other than the current taxable year or a pre-PFIC year, will be subject to tax at the highest tax rate in effect applicable to you for that year; and

• interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than the current taxable year or a pre-PFIC year.

If we are a PFIC for any taxable year during which you hold our ADSs or ordinary shares and any of our non-United States subsidiaries is also a PFIC, you would be treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of these rules.

If we are a PFIC for any taxable year during which a U.S. Holder holds our ADSs or ordinary shares, and unless the U.S. Holder makes a mark-to-market election (as described below), we will continue to be treated as a PFIC with respect to such holder for all subsequent years during which such holder holds the ADSs or ordinary shares, unless we cease to be a PFIC and such holder makes a “deemed sale” election or, in certain circumstances, a “deemed dividend” election with respect to the ADSs or ordinary shares, as applicable. If a deemed sale election is made, the U.S. Holder will be deemed to have sold the ADSs or ordinary shares held by such holder at their fair market value and any gain from such deemed sale would be subject to the PFIC rules described above. If a deemed dividend election is made, the U.S. Holder must include in income as a dividend its pro rata share of certain earnings and profits of our company, and such deemed dividend would be treated as an excess distribution for purposes of the PFIC rules described above. After the deemed sale election or deemed dividend election, so long as we do not become a PFIC in a subsequent taxable year, the U.S. Holder’s ADSs or ordinary shares with respect to which such election was made will not be treated as shares in a PFIC.

As an alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election, provided that the listing on the New York Stock Exchange is approved and that the ADSs are regularly traded. We anticipate that our ADSs should qualify as being regularly traded, but no assurances may be given in this regard. If a U.S. Holder makes this election, the holder will generally (i) include as income for each taxable year the excess, if any, of the fair market value of ADSs held at the end of the taxable year over the adjusted tax basis of such ADSs and (ii) deduct as a loss the excess, if any, of the adjusted tax basis of the ADSs over the fair market value of such ADSs held at the end of the taxable year, but only to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s adjusted tax basis in the ADSs would be adjusted to reflect any income or loss resulting from the mark-to-market election. If a U.S. Holder makes a mark-to-market election in respect of a corporation classified as a PFIC and such corporation ceases to be classified as a PFIC, the holder will not be required to take into account the gain or loss described above during any period that such corporation is not classified as a PFIC.

Because a mark-to-market election cannot be made for any lower-tier PFICs that we may own, you may continue to be subject to the PFIC rules with respect to your indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United States federal income tax purposes.

The “QEF election,” which serves as a further alternative to the foregoing rules, is not available (as set forth below). Subject to certain limitations, a United States person may make a “qualified electing fund” election, or QEF election, with respect to its investment in a PFIC in which the United States person owns shares (directly or indirectly) of the PFIC. If a QEF election is made by a U.S. Holder for the first year in which such U.S. Holder owns shares (directly or indirectly) of the PFIC, such U.S. Holder must generally include in income its pro rata share of the ordinary earnings and capital gains of the foreign corporation for each year such corporation meets the income test or the asset test regardless of whether any distributions are made (and will receive a basis increase to reflect such undistributed amounts included in income). A U.S. Holder may elect to defer actual payment of the tax liability arising from certain “non-passive” income until the PFIC makes actual distributions of amounts previously deemed included in such U.S. Holder’s income, subject to an interest charge generally applicable to underpayments of tax on such deferred tax liability. Notwithstanding the foregoing, a U.S. Holder may be required to report taxable income as a result of the QEF election without corresponding receipts of cash.

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No portion of any such ordinary earnings inclusions would be eligible for the reduced 15% tax rate on individuals in respect of “qualified dividends.” A QEF election will only be possible for a U.S. Holder if the PFIC furnishes such U.S. Holder with a statement, including in it the U.S. Holder’s share of the PFIC’s ordinary earnings and net capital gain. Since the company does not intend to provide the information necessary to enable a U.S. Holder to make a QEF election, the QEF election will not be available to U.S. Holders.

If a U.S. Holder owns our ADSs or ordinary shares during any taxable year that we are a PFIC, the holder must file an annual Internal Revenue Service Form 8621. In the case of a U.S. Holder who has held ADSs or ordinary shares during any taxable year in respect of which we were classified as a PFIC and continues to hold such ADSs or ordinary shares (or any portion thereof) and has not previously determined to make a mark-to- market election, and who is now considering making a mark-to-market election, special tax rules may apply relating to purging the PFIC taint of such ADSs or ordinary shares.

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ENFORCEABILITY OF CIVIL LIABILITIES

We are incorporated in the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands because of the following benefits:

• political and economic stability;

• an effective judicial system;

• a favorable tax system;

• the absence of exchange control or currency restrictions; and

• the availability of professional and support services.

However, certain disadvantages accompany incorporation in the Cayman Islands. These disadvantages include:

• The Cayman Islands has a less developed body of securities laws as compared to that of the United States and these securities laws provide significantly less protection to investors; and

• The Cayman Islands companies may not have standing to sue before the federal courts of the United States.

Our constituent documents do not contain provisions requiring that disputes, including those arising under the securities laws of the United States, between us, our officers, directors and shareholders be arbitrated.

Almost all of our assets are located in China. A majority of our directors and officers are nationals or residents of jurisdictions other than the United States and a substantial portion of their assets are located outside the United States. As a result, it may be difficult for a shareholder to effect service of process within the United States upon these persons, or to enforce against us or them judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state of the United States. We appointed CT Corporation System, 111 Eighth Avenue, New York, New York 10011, as our agent upon whom process may be served in any action brought against us under the securities laws of the United States.

Conyers Dill & Pearman, our counsel as to the laws of the Cayman Islands, and Jun He Law Offices, our counsel as to Chinese law, have advised us respectively that there is uncertainty as to whether the courts of the Cayman Islands or China respectively would:

• recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or

• entertain original actions brought in the Cayman Islands or China respectively against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.

Conyers Dill & Pearman has further advised us that a final and conclusive judgment in the federal or state courts of the United States under which a sum of money is payable, other than a sum payable in respect of taxes, fines, penalties or similar charges, may be subject to enforcement proceedings as debt in the courts of the Cayman Islands under the common law doctrine of obligation. Conyers Dill & Pearman has further advised us that because it is uncertain whether a Cayman Islands court would determine that a U.S. court judgment based on the civil liability provisions of the U.S. federal securities laws is in the nature of a penalty, it is uncertain whether such a liability judgment would be enforceable in the Cayman Islands.

Jun He Law Offices has further advised us that the recognition and enforcement of foreign judgments are provided for under PRC Civil Procedures Law. Under the PRC Civil Procedures Law, courts in China may

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recognize and enforce foreign judgments pursuant to treaties between China and the country where the judgment is rendered or based on reciprocity arrangements for the recognition and enforcement of foreign judgments between jurisdictions. If there are neither treaties nor reciprocity arrangements between China and a foreign jurisdiction where a judgment is rendered, according to the PRC Civil Procedures Law, matters relating to the recognition and enforcement of a foreign judgment in China may be resolved through diplomatic channels. China does not have any treaties or other arrangements that provide for the reciprocal recognition and enforcement of foreign judgments with the United States or the Cayman Islands. As a result, it is generally difficult to recognize and enforce in China a judgment rendered by a court in either of these two jurisdictions.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, the underwriters named below, for whom Goldman Sachs (Asia) L.L.C. and Morgan Stanley & Co. International plc are acting as representatives, have severally agreed to purchase, and we have agreed to sell to them, the number of ADSs indicated in the table below. Goldman Sachs (Asia) L.L.C.’s address is 68^th Floor, Cheung Kong Center, 2 Queen’s Road, Central, Hong Kong. Morgan Stanley & Co. International plc’s address is 25 Cabot Square, Canary Wharf, London E14 4QA.

Underwriter	Number of ADSs
Goldman Sachs (Asia) L.L.C.
Morgan Stanley & Co. International plc
William Blair & Company L.L.C.
Oppenheimer & Co. Inc.
Total	12,487,500

The underwriters are offering the ADSs subject to their acceptance of the ADSs from us and subject to prior sale. The underwriting agreement provides that the obligations of the several underwriters to pay for and accept delivery of the ADSs offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated. The underwriters are obligated to take and pay for all of the ADSs offered by this prospectus if any such ADSs are taken. However, the underwriters are not required to take or pay for the ADSs covered by the underwriters’ option described below.

We have agreed to indemnify the underwriters against, or to contribute to payments the underwriters may be required to make in respect of, liabilities arising out of an untrue or allegedly untrue statement of a material fact contained in the registration statement, prospectus and other offering documents, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading provided that such liabilities do not arise in reliance upon written information furnished to us by the underwriters expressly for use in the aforementioned documents.

The representatives have advised us that the underwriters propose initially to offer the ADSs to the public at the initial public offering price on the cover page of this prospectus and to dealers at that price less a concession not in excess of US$             per ADS. No further discount will be allowed to dealers or re-allowed by dealers to other dealers. After the initial public offering, the public offering price, concession and discount may be changed.

The following table shows the per ADS and total underwriting discounts and commissions to be paid by us in connection with this offering. The amounts in the following table are shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional ADSs as described below.

	Per ADS		Total
	Option Not Exercised	Option Exercised	Option Not Exercised	Option Exercised
Underwriting Discounts and Commissions paid by us	US$	US$	US$	US$
Expenses payable by us	US$	US$	US$	US$

The underwriters have agreed to reimburse us for certain roadshow expenses in connection with the offering.

In addition, we have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of 1,873,125 additional ADSs at the initial public offering price listed

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on the cover page of this prospectus, less underwriters discounts and commissions. To the extent the option is exercised, each underwriter will become obligated, subject to certain conditions, to purchase additional ADSs approximately proportionate to each underwriter’s initial amount reflected in the table above.

We have agreed that we will not offer, sell, contract to sell, pledge, grant any option to purchase, purchase any option or contract to sell, right or warrant to purchase, make any short sale, file a registration statement with respect to, or otherwise dispose of (including entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interests) any of our ADSs or ordinary shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ADSs or ordinary shares without the prior written consent of the representatives for a period ending 180 days after the date of this prospectus, except issuances pursuant to the exercise of employee share options outstanding on the date hereof. However, in the event that either (1) during the last 17 days of the “lock-up” period, we release earnings results or material news or a material event relating to us occurs or (2) prior to the expiration of the “lock-up” period, we announce that we will release earnings results during the 15-day period beginning on the last day of the “lock-up” period, then in either case the expiration of the “lock-up” will be extended until the expiration of the 17-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless the representatives waive, in writing, such an extension.

Each of our existing shareholders, including certain of our executive officers and directors have agreed, subject to certain exceptions, that they will not offer, sell, contract to sell, pledge, grant any option to purchase, purchase any option or contract to sell, right or warrant to purchase, make any short sale, file a registration statement with respect to, or otherwise dispose of (including entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interests) any of our ADSs or ordinary shares or any securities that are convertible into or exchangeable for, or that represent the right to receive, our ADSs or ordinary shares without the prior written consent of the representatives for a period ending 180 days after the date of this prospectus. However, in the event that either (1) during the last 17 days of the relevant “lock-up” period, we release earnings results or material news or a material event relating to us occurs or (2) prior to the expiration of the relevant “lock-up” period, we announce that we will release earnings results during the 15-day period beginning on the last day of the relevant “lock-up” period, then in either case the expiration of the relevant “lock-up” will be extended until the expiration of the 17-day period beginning on the date of the release of the earnings results or the occurrence of the material news or event, as applicable, unless the representatives waive, in writing, such an extension.

We have received an approval for listing our ADSs listed on the New York Stock Exchange under the symbol “CTC.”

In connection with the listing of the ADSs on the New York Stock Exchange, the underwriters have undertaken to sell our ADSs at a minimum price of at least US$4.00 per share, in round lots of 100 shares or more to a minimum of 400 beneficial owners in the United States and to sell these shares in a manner such that we will have more than 1,100,000 publicly held shares outstanding in the United States with an aggregate market value of at least US$40 million and a global market capitalization of at least US$150 million.

Before this offering, there has been no public market for our ordinary shares or ADSs. The initial public offering price was determined through negotiations among us and the representatives. Among the factors considered in determining the initial public offering price are our future prospects and those of our industry in general, our sales, earnings, certain other financial and operating information in recent periods, the price-earnings ratios, price-sales ratios and market prices of securities and certain financial and operating information of companies engaged in activities similar to ours.

An active trading market for the ADSs may not develop. It is also possible that after the offering the ADSs will not trade in the public market at or above the initial public offering price.

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Until the distribution of the ADSs is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our ADSs. However, the representatives, or any person acting for them, on behalf of the underwriters, may engage in transactions that stabilize the price of the ADSs, such as bids or purchases to peg, fix or maintain that price.

In connection with the offering, the underwriters may purchase and sell our ADSs in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of ADSs than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ option to purchase additional ADSs in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional ADSs or purchasing ADSs in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of ADSs available for purchase in the open market as compared to the price at which they may purchase ADSs through the option to purchase additional ADSs. “Naked” short sales are sales in excess of the option to purchase additional ADSs. The underwriters must close out any naked short position by purchasing ADSs in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our ADSs in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of ADSs made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased ADSs sold by or for the account of such underwriter in stabilizing or short covering transactions.

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our ADSs or preventing or retarding a decline in the market price of our ADSs. As a result, the price of our ADSs may be higher than the price that might otherwise exist in the open market.

Neither we nor any of the underwriters makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the ADSs. In addition, neither we nor any of the underwriters makes any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail. In addition, the representatives will be facilitating internet distribution for this offering to certain of their respective internet subscription customers. An electronic prospectus may be made available on the internet website maintained by one or more of the representatives. Other than the prospectus in electronic format, the information contained on, or that may be accessed through, the web site of any of the representatives is not part of this prospectus.

Some of the underwriters and their affiliates have engaged and may in the future engage in investment banking and other commercial dealings in the ordinary course of business with us and our affiliates.

Goldman Sachs Strategic Investments (Asia) L.L.C., an affiliate of Goldman Sachs (Asia) L.L.C., purchased, after giving effect to our 10-for-1 share split effected January 4, 2010, 200,000,000 of our Series A preferred shares for a consideration of US$22.0 million pursuant to a Stock Purchase Agreement dated December 19, 2005. All of our issued and outstanding Series A convertible preferred shares will automatically convert into 61,108,179 Class A and 80,502,938 Class B ordinary shares, at a conversion rate then in effect, upon completion of this offering. Under our amended and restated memorandum and articles of association, as the holder of a majority of our outstanding Series A convertible preferred shares, Goldman Sachs Strategic Investments (Asia)

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L.L.C. is entitled to appoint two directors to our board of directors. Two of our former directors, Messrs. David Chou and Jin-Song Chen, are employees of Goldman Sachs (Asia) L.L.C. Messrs. Chou and Chen resigned from our board of directors on January 4, 2010, and upon completion of this offering, Goldman Sachs Strategic Investments (Asia) L.L.C.’s rights to appoint any directors to our board of directors will terminate.

Selling Restrictions

European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive, each, a relevant member state, with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state, or the relevant implementation date. The ADSs may not be offered to the public in that relevant member state prior to the publication of a prospectus in relation to the ADSs that has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in the relevant member state, all in accordance with the Prospectus Directive, except that with effect from and including the relevant implementation date, an offer of the ADSs to the public may be made in that relevant member state at any time:

• to legal entities which are authorized or regulated to operate in the financial markets or, if not authorized or regulated, whose corporate purpose is solely to invest in securities;

• to any legal entity which has two or more of (i) an average of at least 250 employees during the last financial year; (ii) a total balance sheet of more than € 43,000,000; and (iii) an annual net turnover of more than € 50,000,000, as shown in its last annual or combined accounts;

• to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of representatives of the underwriters; or

• in any other circumstances falling within Article 3(2) of the Prospectus Directive.

For the purposes of the above, the expression an “offer of any ADSs to the public” in relation to any ADSs in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the ADSs to be offered so as to enable an investor to decide to purchase or subscribe the ADSs, as the same may be varied in that member state by any measure implementing the Prospectus Directive in that member state and the expression Prospective Directive means Directive 2003/71/EC and includes any relevant implementing measure in each relevant member state.

United Kingdom

Each of the underwriters has represented, warranted and agreed that (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act of 2000, or the FSMA) received by it in connection with the issue or sale of any ADSs in circumstances in which section 21(1) of the FSMA does not apply to us; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the ADSs in, from or otherwise involving the United Kingdom. The foregoing shall apply in addition to the restrictions set out under the heading “European Economic Area” above.

Japan

The underwriters will not offer or sell any of our ADSs directly or indirectly in Japan or to, or for the benefit of any Japanese person or to others, for re-offering or re-sale directly or indirectly in Japan or to any Japanese person, except in each case pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law of Japan and any other applicable laws and regulations of Japan. For purposes of this paragraph, “Japanese person” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

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Hong Kong

The ADSs may not be offered or sold by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the ADSs may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to ADSs which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Singapore

Each underwriter has acknowledged that this prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, the underwriter has represented and agreed that it has not offered or sold any ADSs or caused the ADSs to be made the subject of an invitation for subscription or purchase and will not offer or sell the ADSs or cause the ADSs to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the ADSs, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore, or the SFA, (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275, of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Note: Where the ADSs are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the ADSs pursuant to an offer made under Section 275 except:

(1) to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;

(2) where no consideration is or will be given for the transfer; or

(3) where the transfer is by operation of law.

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Cayman Islands

This prospectus does not constitute a public offer of the ADSs or ordinary shares, whether by way of sale or subscription, in the Cayman Islands. Each underwriter has represented and agreed that it has not offered or sold, and will not offer or sell, directly or indirectly, any ADSs or ordinary shares in the Cayman Islands.

General

No action may be taken in any jurisdiction other than the United States that would permit a public offering of the ADSs or the possession, circulation or distribution of this prospectus in any jurisdiction where action for that purpose is required. Accordingly, the ADSs may not be offered or sold, directly or indirectly, and neither the prospectus nor any other offering material or advertisements in connection with the ADSs may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

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CONFLICTS OF INTEREST

An affiliate of Goldman Sachs (Asia) L.L.C., one of the underwriters, will beneficially own more than 10% of our outstanding ordinary shares immediately prior to the completion of this offering. Thus, Goldman Sachs (Asia) L.L.C. is deemed to have a “conflict of interest” with us under the applicable provisions of Rule 2720 of the Conduct Rules of the Financial Industry Regulatory Authority, Inc. Accordingly, this offering is being conducted in compliance with the applicable provisions of Rule 2720. Rule 2720 requires that a “qualified independent underwriter” participate in the preparation of the registration statement and the prospectus and exercise the usual standards of due diligence. Morgan Stanley & Co. International plc is acting as the qualified independent underwriter for this offering. Morgan Stanley & Co. International plc is not entitled to any compensation in its capacity as the qualified independent underwriter. We have agreed to indemnify Morgan Stanley & Co. International plc in its capacity as the qualified independent underwriter against liabilities under the Securities Act, or contribute to payments that it may be required to make in that respect.

EXPENSES RELATING TO THIS OFFERING

The following table sets forth the main estimated expenses in connection with this offering, other than the underwriting discounts and commissions, which we will be required to pay:

Securities and Exchange Commission registration fee	US$	15,000
FINRA filing fee	US$	21,000
NYSE listing fee	US$	150,000
Legal fees and expenses	US$	1,800,000
Accounting fees and expenses	US$	890,000
Printing fees	US$	300,000
Other fees and expenses	US$	300,000
Total	US$	3,476,000

All amounts are estimated, except the Securities and Exchange Commission registration fee, the NYSE listing fee and the FINRA filing fee.

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LEGAL MATTERS

The validity of the ADSs and certain other legal matters with respect to U.S. federal and New York law will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP. Certain legal matters with respect to U.S. federal and New York law in connection with this offering will be passed upon for the underwriters by Latham & Watkins. The validity of our ordinary shares represented by the ADSs offered in this offering will be passed upon for us by Conyers Dill & Pearman. Legal matters as to Chinese law will be passed upon for us by Jun He Law Offices and for the underwriters by Commerce & Finance Law Offices. Skadden, Arps, Slate, Meagher & Flom LLP may rely upon Conyers Dill & Pearman with respect to matters governed by the laws of the Cayman Islands and upon Jun He Law Offices with respect to matters governed by Chinese law. Latham & Watkins may rely upon Commerce & Finance Law Offices with respect to matters governed by Chinese law.

EXPERTS

Our consolidated financial statements as of December 31, 2007 and 2008 and September 30, 2009 and for each of the two years in the period ended December 31, 2008 and for the nine months ended September 30, 2009 included in this prospectus have been so included in reliance on the report of PricewaterhouseCoopers Zhong Tian CPAs Limited Company, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

The offices of PricewaterhouseCoopers Zhong Tian CPAs Limited Company are located at 26/F Office Tower A, Beijing Fortune Plaza, 7 Dongsanhuan Zhong Road, Chaoyang District, Beijing 100020, the People’s Republic of China.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the U.S. Securities and Exchange Commission a registration statement (including relevant exhibits and schedules) on Form F-1 (File No. 333-164216) under the Securities Act with respect to our Class A ordinary shares and a registration statement on Form F-6 (File No. 333-164239) under the Securities Act with respect to our ADSs. This prospectus, which constitutes a part of the registration statement, does not contain all of the information contained in the registration statement. You should read the registration statement and its exhibits and schedules for further information with respect to us and our ordinary shares and ADSs. Information regarding the contents of contracts or other documents described in this prospectus is not necessarily complete and you should refer to the actual contracts and documents filed as exhibits to the registration statement for more detailed and complete information.

Immediately upon completion of this offering we will become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements and annual reports to shareholders, and Section 16 short-swing profit and related reporting for our officers and directors and for holders of more than 10% of our Class A ordinary shares. The registration statement, reports and other information so filed can be inspected and copied at the public reference facility maintained by the SEC at 100 F. Street, N.E., Washington, D.C. 20549. You can request copies of these documents upon payment of a duplicating fee by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facility.

Our SEC filings will also be available to the public on the SEC’s internet website at http://www.sec.gov.

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IFM INVESTMENTS LIMITED

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2007 AND 2008 AND AS OF SEPTEMBER 30, 2009	F-3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER  31, 2007 AND 2008 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 (UNAUDITED) AND 2009	F-4
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2008 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009	F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER  31, 2007 AND 2008 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 (UNAUDITED) AND 2009	F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2008 AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 (UNAUDITED) AND 2009	F-7 – F-43

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

IFM Investments Limited:

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, of shareholders’ deficit and of cash flows present fairly, in all material respects, the financial position of IFM Investments Limited and its subsidiaries (collectively, the “Company”) at December 31, 2007 and 2008 and September 30, 2009, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2008, and the nine months ended September 30, 2009 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers Zhong Tian CPAs Limited Company

Beijing, the People’s Republic of China

November 16, 2009, except for Notes 22(d), (e), (f), (g), (h), which are as of January 27, 2010

F-2

IFM INVESTMENTS LIMITED

Consolidated Balance Sheets as of December 31, 2007 and 2008 and as of September 30, 2009

(in thousands, except par value)

	December 31,				September 30,
	2007     RMB		2008     RMB		2009     RMB		2009     US$		2009     RMB		2009     US$
							(Note 2(c))				(Note 2(c))
									Pro-forma (Note 16) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents	331,216		176,977		263,176		38,554		263,176		38,554
Restricted cash	14,497		17,213		21,565		3,159		21,565		3,159
Accounts receivable, net	9,965		13,633		60,030		8,794		60,030		8,794
Amounts due from related parties	44,068		38,110		6,210		910		6,210		910
Prepaid expenses and other current assets	28,677		19,877		20,104		2,945		20,104		2,945
Total current assets	428,423		265,810		371,085		54,362		371,085		54,362
Non-current assets:
Investment in associates	3,367		1,042		849		124		849		124
Property and equipment, net	42,467		42,954		41,076		6,017		41,076		6,017
Intangible assets, net	26,317		29,796		28,318		4,148		28,318		4,148
Goodwill	3,537		9,281		9,281		1,360		9,281		1,360
Other non-current assets	9,076		12,012		12,183		1,785		12,183		1,785
Total assets	513,187		360,895		462,792		67,796		462,792		67,796
LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable	8,809		6,904		10,382		1,521		10,382		1,521
Accrued expenses and other current liabilities	52,234		53,597		97,450		14,276		97,450		14,276
Amounts due to related parties	43,493		34,015		253		37		253		37
Deferred revenue	32,397		5,396		6,324		926		6,324		926
Deferred tax liabilities	-		533		-		-		-		-
Total current liabilities	136,933		100,445		114,409		16,760		114,409		16,760
Long-term deposits payable	8,511		10,573		8,874		1,300		8,874		1,300
Deferred tax liabilities	203		338		377		55		377		55
Total liabilities	145,647		111,356		123,660		18,115		123,660		18,115
Commitments and contingencies (Note 19)
Convertible redeemable preferred shares (US$0.001 par value, 305,254, 311,367 and 311,367 shares authorized, issued and outstanding, with redemption value of RMB547,379, RMB566,470 and RMB566,470 as of December 31, 2007 and 2008 and as of September 30, 2009, respectively) (none outstanding on a pro-forma basis as of September 30, 2009 (unaudited))	469,971		501,892		514,162		75,322		-		-
Shareholders’ (deficit) equity:
Class A ordinary shares (US$0.001 par value, 1,003,609, 1,013,747 and 1,013,747 shares authorized as of December 31, 2007, 2008 and as of September 30, 2009; 260,000 shares issued and outstanding as of December 31, 2007 and 2008 and as of September 30, 2009; 3,133,000 shares authorized, 418,339 shares issued and outstanding on a pro-forma basis (unaudited) as of September 30, 2009)	2,152		2,152		2,152		315		3,233		473
Class B ordinary shares (none outstanding as of December 31, 2007, 2008 and as of September 30, 2009; 100,000 shares authorized, 80,503 shares issued and outstanding on a pro-forma basis (unaudited) as of September 30, 2009)	-		-		-		-		550		81
Additional paid-in capital	28,537		13,508		2,496		366		519,942		76,169
Accumulated deficit	(135,695	)	(268,013	)	(179,680	)	(26,322	)	(184,595	)	(27,042	)
Total IFM Investments Limited shareholders’ (deficit) equity	(105,006	)	(252,353	)	(175,032	)	(25,641	)	344,045		50,401
Non-controlling interest	2,575		-		2		-		2		-
Total shareholders’ (deficit) equity	(102,431	)	(252,353	)	(175,030	)	(25,641	)	344,047		50,401
Total liabilities, convertible redeemable preferred shares and shareholders’ (deficit) equity	513,187		360,895		462,792		67,796		467,707		68,516

The accompanying notes are an integral part of these consolidated financial statements.

F-3

IFM INVESTMENTS LIMITED

Consolidated Statements of Operations for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 (unaudited) and 2009

(in thousands, except per share data)

	Year Ended December 31,				Nine Months Ended September 30,
	2007     RMB		2008     RMB		2008     RMB		2009     RMB		2009     US$
					(unaudited)				(Note 2(c))
Net revenue	189,029		273,359		208,877		443,691		64,998
Costs and expenses:
Commissions and other agent related costs	(82,866	)	(151,550	)	(116,250	)	(197,978	)	(29,003	)
Operating costs	(79,886	)	(146,457	)	(110,889	)	(85,183	)	(12,479	)
Selling, general and administrative expenses	(94,471	)	(102,952	)	(76,456	)	(70,278	)	(10,295	)
Total costs and expenses	(257,223	)	(400,959	)	(303,595	)	(353,439	)	(51,777	)
(Loss) income from operations	(68,194	)	(127,600	)	(94,718	)	90,252		13,221
Interest income	1,708		4,441		2,708		1,575		231
Foreign currency exchange loss	(5,485	)	(5,526	)	(4,458	)	(480	)	(70	)
(Loss) income before income tax and share of associates’ losses	(71,971	)	(128,685	)	(96,468	)	91,347		13,382
Income tax	(394	)	(2,076	)	(1,780	)	(2,821	)	(414	)
Share of associates’ losses	(409	)	(1,126	)	(1,050	)	(193	)	(28	)
Net (loss) income	(72,774	)	(131,887	)	(99,298	)	88,333		12,940
Non-controlling interest	(1,347	)	(431	)	(431	)	-		-
Net (loss) income attributable to IFM Investments Limited	(74,121	)	(132,318	)	(99,729	)	88,333		12,940
Accretion of convertible redeemable preferred shares	(7,247	)	(15,759	)	(11,735	)	(12,269	)	(1,797	)
Income allocated to participating preferred shareholders	-		-		-		(41,451	)	(6,072	)
Net (loss) income attributable to ordinary shareholders	(81,368	)	(148,077	)	(111,464	)	34,613		5,071
Net (loss) income per share, basic	(0.31	)	(0.57	)	(0.43	)	0.13		0.02
Net (loss) income per share, diluted	(0.31	)	(0.57	)	(0.43	)	0.13		0.02
Shares used in calculating net (loss) income per share, basic	260,000		260,000		260,000		260,000		260,000
Shares used in calculating net (loss) income per share, diluted	260,000		260,000		260,000		264,263		264,263

The accompanying notes are an integral part of these consolidated financial statements.

F-4

IFM INVESTMENTS LIMITED

Consolidated Statements of Shareholders’ Deficit for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2009

(in thousands)

	IFM Investments Limited Shareholders’ Deficit
	Ordinary Shares
	Shares	Amount RMB	Additional Paid-in Capital RMB		Accumulated Deficit RMB		Non-controlling Interest RMB		Total Shareholders’ Deficit RMB
Balance as of January 1, 2007	260,000	2,152	35,740		(61,574	)	1,228		(22,454	)
Net (loss) income	-	-	-		(74,121	)	1,347		(72,774	)
Share-based compensation	-	-	44		-		-		44
Accretion of convertible redeemable preferred shares	-	-	(7,247	)	-		-		(7,247	)
Balance as of December 31, 2007	260,000	2,152	28,537		(135,695	)	2,575		(102,431	)
Net (loss) income	-	-	-		(132,318	)	431		(131,887	)
Share-based compensation	-	-	730		-		-		730
Acquisition of non-controlling interest	-	-	-		-		(3,006	)	(3,006	)
Accretion of convertible redeemable preferred shares	-	-	(15,759	)	-		-		(15,759	)
Balance as of December 31, 2008	260,000	2,152	13,508		(268,013	)	-		(252,353	)
Net income	-	-	-		88,333		-		88,333
Share-based compensation	-	-	1,257		-		-		1,257
Establishment of a subsidiary	-	-	-		-		2		2
Accretion of convertible redeemable preferred shares	-	-	(12,269	)	-		-		(12,269	)
Balance as of September 30, 2009	260,000	2,152	2,496		(179,680	)	2		(175,030	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

IFM INVESTMENTS LIMITED

Consolidated Statements of Cash Flows for the years ended December 31, 2007 and 2008 and

for the nine months ended September 30, 2008 (unaudited) and 2009

(in thousands)

	Year Ended December 31,		Nine Months Ended September 30,
	2007     RMB	2008     RMB	2008     RMB	2009     RMB	2009     US$
			(unaudited)		(Note 2(c))
Cash flows from operating activities:
Net (loss) income	(72,774)	(131,887)	(99,298)	88,333	12,940
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	7,464	16,019	12,175	12,927	1,894
Allowance for doubtful accounts	4,542	5,218	3,413	8,061	1,181
Effects of foreign currency exchange loss	5,977	4,408	4,458	480	70
Share-based compensation	44	730	536	1,257	184
Share of associates’ losses	409	1,126	1,050	193	28
Loss on disposals of property and equipment	256	10,679	3,381	1,592	233
Changes in operating assets and liabilities:
Restricted cash	(7,704)	(2,716)	51	(4,352)	(638)
Accounts receivable	(8,070)	(8,886)	(12,440)	(54,458)	(7,978)
Prepaid expenses and other current assets	(20,300)	8,800	6,364	(227)	(33)
Other non-current assets	(7,297)	(2,936)	(4,508)	(171)	(25)
Deferred tax liabilities	(23)	668	211	(494)	(72)
Accounts payable	7,001	(1,905)	(1,202)	1,232	181
Accrued expenses and other current liabilities	28,707	245	(4,389)	43,853	6,425
Deferred revenue	23,626	(27,001)	(18,729)	928	136
Long-term deposits payable	(579)	2,062	2,590	(1,699)	(249)
Net cash (used in) provided by operating activities	(38,721)	(125,376)	(106,337)	97,455	14,277
Cash flows from investing activities:
Purchases of property and equipment	(42,483)	(23,084)	(19,288)	(8,915)	(1,306)
Purchases of intangible assets	-	(4,500)	(4,500)	-	-
Business combinations, net of cash acquired	-	(10,862)	(10,862)	-	-
Net cash used in investing activities	(42,483)	(38,446)	(34,650)	(8,915)	(1,306)
Cash flows from financing activities:
Repayments of short-term borrowings	(15,288)	-	-	-	-
Proceeds from issuance of preferred shares	324,983	16,162	16,162	-	-
Advances from related parties	1,361	12,454	4,595	31,900	4,673
Repayments of advances from related parties	(3,226)	(15,344)	(12,568)	(34,213)	(5,012)
Net cash provided by (used in) financing activities	307,830	13,272	8,189	(2,313)	(339)
Effects of foreign exchange rate changes on cash and cash equivalents	(5,915)	(3,689)	(4,842)	(28)	(4)
Net increase (decrease) in cash and cash equivalents	220,711	(154,239)	(137,640)	86,199	12,628
Cash and cash equivalents at the beginning of the year/period	110,505	331,216	331,216	176,977	25,926
Cash and cash equivalents at the end of the year/period	331,216	176,977	193,576	263,176	38,554
Supplemental disclosure of cash flows information
Income tax paid	1,194	1,416	1,310	43	6

The accompanying notes are an integral part of these consolidated financial statements.

F-6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in Renminbi (“RMB”), unless otherwise stated)

1. ORGANIZATION AND PRINCIPAL ACTIVITIES

a) Organization and principal activities

IFM Investments Limited (the “Company”) was incorporated in the Cayman Islands on November 30, 2005, by IFM Holding Company Ltd. (“IFM Holding”), a Cayman Islands exempt company. In incorporating the Company, IFM Holding contributed all of its equity interests in IFM Company Ltd. (“IFM Co.”), a Cayman Islands exempt company, to the Company. IFM Holding was a wholly-owned subsidiary of Maxpro International Enterprise, Inc. (“Maxpro”), a New York corporation. Maxpro was 100% owned by Mr. Donald Zhang.

On December 15, 2005, IFM Overseas Partners L.P., a Cayman Islands limited partnership (the “Partnership”) was established and IFM Holding and IFM Overseas Limited became the limited and general partner of the Partnership, respectively. IFM Overseas Limited was 100% owned by Mr. Donald Zhang through Maxpro.

On August 24, 2006, IFM Holding contributed all of its equity interests in the Company to the Partnership in exchange for 80% ownership therein. On the same date, Mr. Harry Lu was admitted to the Partnership as a limited partner with a 20% ownership.

Following the contribution of the Company to the Partnership, on August 24, 2006, Goldman Sachs Strategic Investments (Asia) L.L.C. (“Goldman”) committed to invest US$22.0 million (approximately RMB175.3 million) in the Company in exchange for 200.0 million Series A Preferred Shares.

On August 18, 2006, the Company adopted an Employee Stock Option Plan (the “ESOP”). 40.0 million ordinary shares were reserved and authorized for issuance under the ESOP.

On October 19, 2007, the Company issued 105.3 million Series B Preferred Shares to GL Asia Mauritius II Cayman Limited for US$40.0 million (approximately RMB300.6 million).

On October 19, 2007, the shareholders of the Company approved to amend the ordinary shares reserved under the ESOP to 85.3 million and the ordinary shares authorized under the ESOP to 52.5 million.

On February 21, 2008, the Company issued 6.1 million Series B Preferred Shares to Realogy Corporation (“Realogy”) for US$2.3 million (approximately RMB16.7 million).

As of September 30, 2009, there were 260.0 million ordinary shares (held by Partnership), 200.0 million Series A Preferred Shares (held by Goldman), 111.4 million Series B Preferred Shares (held by GL Asia Mauritius II Cayman Limited and Realogy) issued and outstanding, and 43.8 million outstanding share options. There were 487.5 million ordinary shares reserved for issuance upon conversion of the Series A Preferred Shares, 181.0 million ordinary shares reserved for issuance upon conversion of the Series B Preferred Shares, and 85.3 million ordinary shares reserved for issuance under the ESOP.

The Company’s subsidiaries are principally engaged in franchising the CENTURY 21^® brand name and operation systems to regional sub-franchisees and outlet stores (collectively “franchisees”) that are independently-owned and operated. The Company provides operational and administrative services, tools and systems to franchisees, which are designed to assist franchisees in achieving increased revenue and profitability. Specifically, the Company and its subsidiaries operate in the following businesses:

(i) Company-owned Brokerage Services — operates a full-service real estate brokerage business under the CENTURY 21^® brand name in the People’s Republic of China (“PRC”).

F-7

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

(ii) Mortgage Management Services — provides real estate mortgage brokerage and comprehensive advisory services in connection with the selection, application for and procurement of mortgage products to banks and home buyers, with part of these services provided in connection with the Company’s real estate brokerage services business.

(iii) Franchise Services — franchises the CENTURY 21^® brand name and operation system in the PRC. On March 22, 2000, IFM Company Limited (“IFM Co.”), one of the wholly-owned subsidiaries of the Company, entered into an arrangement, a Restated Century 21 International Subfranchise Agreement For the People’s Republic of China (“Master Franchise Agreement”), with Cendant Global Services B.V. (“Cendant”), the owner of the CENTURY 21^® brand, to acquire the exclusive right to use the CENTURY 21^® brand and operation system in the PRC, from year 2000 to 2025 and is extendable at the Group’s election for unlimited additional terms of 25 years upon payment of renewal fees of US$4.5 million for each renewal. Cendant Corporation, Cendant’s parent company, subsequently restructured their business and spun off Cendant into Realogy. As part of this spin-off, Cendant assigned its rights under the Master Franchise Agreement to Realogy.

The Company and its subsidiaries are collectively referred to as the “Group”.

b) Reorganization

The Company was established in the Cayman Islands in 2005 and subsequently reorganized on August 24, 2006 to be the holding company of its subsidiaries to facilitate investments by private equity investors (the “Reorganization”). To complete the Reorganization, entities that were held by Beijing Xinye Jia Yuan Real Estate Consulting Co., Ltd. (“Xinye”), a wholly-owned foreign enterprise, which were under the common control of Mr. Donald Zhang and Mr. Harry Lu, were transferred to the Company. These entities held by Xinye were:

	Name	Place of registration / operation	% of Ownership held by Xinye		Effective date of transfer to the Company	Principal activity
1	Shanghai Yaye Real Estate Brokerage Co., Ltd. (“IFM SH”)	PRC	51	%	Dec 4, 2008	Real estate franchising
2	Beijing Aifeite International Franchise Consulting Company Ltd. (“IFM Beijing”)	PRC	11	%	Aug 12, 2008	Real estate franchising
3	Xiamen Shijitonghe Real Estate Consultant Co., Ltd. (“Xiamen”)	PRC	10	%	Dec 26, 2008	Real estate franchising
4	Shandong Jinan Sanlian Real Estate Brokerage Co., Ltd. (“Shandong”)	PRC	15	%	Dec 4, 2006	Real estate franchising
5	Shaanxi Lide Industry Investments Co., Ltd. (“Xian”)	PRC	10	%	Feb 9, 2009	Real estate franchising

While the above entities were owned by Xinye, the interests in these entities, according to the stipulation of the Stock Purchase Agreement of Series A and Series B Preferred Shares financing, belongs to the Company, and have been transferred to the Company upon the completion of the Reorganization on February 9, 2009.

Accordingly, the accompanying consolidated financial statements have been prepared as if the current corporate structure had been in existence throughout the periods presented.

F-8

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

As of September 30, 2009, the Company’s subsidiaries and equity investments are listed below.

	Name	Date of Incorporation	Place of Incorporation	% of Ownership held by the Company		Relationship with the Company	Principal activity
Subsidiaries
1	IFM Company Ltd. (“IFM Co.”)	Oct 4, 1999	Cayman Islands	100	%	Subsidiary	Holding franchise right
2	Beijing Aifeite International Franchise Consulting Company Ltd. (“IFM Beijing”)	Mar 1, 2000	PRC	100	%	Subsidiary	Real estate franchising
3	City Integrated Residential Services (China) Limited (“CIR”)	Oct 25, 2000	HK	100	%	Subsidiary	Investment holding
4	Shanghai Yaye Real Estate Brokerage Co., Ltd. (“IFM SH”)	Sep 29, 2002	PRC	100	%	Subsidiary	Real estate franchising
5	CIR Real Estate Consultant (Shenzhen) Co., Ltd. (“Shenzhen CIR”)	Sep 15, 2005	PRC	100	%	Subsidiary	Real estate brokerage service
6	Genius Nation Investments Ltd. (“Genius”)	May 18, 2006	British Virgin Islands	100	%	Subsidiary	Investment holding
7	Shanghai Ruifeng Real Estate Investments Consultant Co., Ltd. (“Shanghai Ruifeng”)	Sep 28, 2006	PRC	100	%	Subsidiary	Real estate brokerage service
8	Beijing Anxinruide Real Estate Brokerage Co., Ltd. (“Beijing Anxin”)	Oct 19, 2006	PRC	100	%	Subsidiary	Real estate brokerage service
9	Shanghai Anshijie Real Estate Consultant Co., Ltd. (“Anshijie”)	Nov 28, 2006	PRC	100	%	Subsidiary	Investment holding
10	Beijing Kaishengjinglue Guarantee Co., Ltd. (“MMC BJ”)	Aug 13, 2007	PRC	100	%	Subsidiary	Real estate mortgage brokerage service
11	Shanghai Kaiyi Investment Consultant Management Co., Ltd. (“MMC SH”)	Apr 8, 2008	PRC	100	%	Subsidiary	Real estate mortgage brokerage service
12	Beijing IFM International Real Estate Brokerage Co., Ltd. (“IFM BJ Broker”)	May 27, 2008	PRC	100	%	Subsidiary	Real estate franchising
13	Beijing IFM Investment Managements Limited (“IFM BJ Inv”)	Sep 27, 2008	PRC	100	%	Subsidiary	Investment holding
14	Shanghai Ruifeng Investment Managements Limited (“Ruifeng Inv”)	Nov 20, 2008	PRC	100	%	Subsidiary	Real estate brokerage service
15	Beijing Huachuangxunjie Technology Co., Ltd. (“Huachuang”)	July 16, 2009	PRC	100	%	Subsidiary	Software development and licensing
16	Business Vision Management Consultants Limited (“BVMC”)	Sep 18, 2009	HK	85	%	Subsidiary	Investment holding

F-9

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

	Name	Date of Incorporation	Place of Incorporation	% of Ownership held by the Company		Relationship with the Company	Principal activity
Equity Investments
1	Xiamen Shijitonghe Real Estate Consultant Co., Ltd. (“Xiamen”)	Feb 12, 2001	PRC	10	%	Associate	Real estate franchising
2	Shandong Jinan Sanlian Real Estate Brokerage Co., Ltd. (“Shandong”)	Apr 21, 2005	PRC	15	%	Associate	Real estate franchising
3	Shaanxi Lide Industry Investments Co., Ltd. (“Xian”)	Dec 12, 2005	PRC	10	%	Associate	Real estate franchising

c) Liquidity

The Group’s consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities during the normal course of operations. The Group incurred net loss of approximately RMB72.8 million, RMB131.9 million in the years ended December 31, 2007 and 2008, respectively, and net income of approximately RMB88.3 million for the nine months ended September 30, 2009, and the net cash used in operating activities was approximately RMB38.7 million, RMB125.4 million for the years ended December 31, 2007 and 2008, respectively and the net cash provided by operating activities was approximately RMB97.5 million for the nine months ended September 30, 2009. Accumulated deficit was RMB135.7 million, RMB268.0 million and RMB179.7 million as of December 31, 2007 and 2008 and as of September 30, 2009, respectively. In addition, as described in Note 19(c) to the consolidated financial statements, the Group provided interim financial guarantees to various banking institutions in respect of loans granted by these banking institutions to the Group’s customers. The Group assesses its liquidity by its ability to generate cash to fund its operations, its ability to attract investors and its ability to borrow funds on favorable economic terms. Historically, the Group has relied principally on both operational sources of cash, as well as non-operational sources of financing, from related parties and outside investors, to fund its operations and capital expansion needs. In addition, the management considers that the likelihood of all these financial guarantee liabilities being required to be paid is remote. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing sales while decreasing operating costs and expenses, as well as, generating operational cash flows, continued support from outside sources of financing, and obtaining additional funding to support longer term capital requirements. If management were unsuccessful in achieving one or more of the above-mentioned goals, the Group’s ability to continue as a going concern could be adversely impacted.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) Basis of preparation and consolidation

The consolidated financial statements of the Group have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Group’s consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and the subsidiaries have been eliminated upon consolidation.

The Reorganization as described in Note 1(b) above has been accounted for as a reorganization of businesses under common control in a manner similar to a pooling of interests. Accordingly, the accompanying consolidated financial statements of the Group include the assets and liabilities of the

F-10

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

subsidiaries at their historical carrying amounts. In addition, the accompanying consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flows include the results of operations and cash flows of the Group, as if the current group structure had been in existence throughout the periods presented.

Investments in business entities in which the Group does not have control but has the ability to exercise significant influence over operating and financial policies are accounted for using the equity method.

On December 30, 2009, in preparation for the intended Qualified IPO as defined (Note 17), the shareholders and Board of the Company approved resolutions effecting certain amendments to the authorised and issued share capital to effect a 10-for-one split of the Company’s share capital pursuant to which each ordinary share, Series A and Series B convertible preferred share of the Company was subdivided into 10 shares at a par value of US$0.001 per share. All share and per share amounts presented in the consolidated financial statements have been restated on a retroactive basis to reflect the effect of the share split.

b) Use of estimates

The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the related disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Significant accounting estimates reflected in the Group’s consolidated financial statements mainly include the useful lives of property and equipment and intangible assets, allowance for doubtful accounts, provision for losses associated with the interim financial guarantees, valuation allowance of deferred tax assets, and purchase price allocation relating to business combinations as well as property and equipment and goodwill and intangible assets impairment assessment. In addition, the Group uses assumptions in the valuation model to estimate the fair value of share options granted. The Group bases its estimates of the carrying value of certain assets and liabilities on historical experience and on other various factors that they believe to be reasonable under the circumstances, when the carrying values are not readily available from other sources.

c) Convenience translation

Translations of balances in the consolidated statements of operations, consolidated balance sheets and consolidated statements of cash flows from RMB into United States dollars (“US$”) as of and for the nine months ended September 30, 2009 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.8262, representing the noon buying rate in The City of New York for cable transfers of RMB, as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2009. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2009, or at any other rate.

d) FASB Accounting Standards Codification™

In June 2009, the Financial Accounting Standard Board (“FASB”) established the FASB Accounting Standards Codification™ (the “Codification”) as the single source of authoritative US GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the United States Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative US GAAP for SEC registrants. The Codification did not have a material impact on the Group’s consolidated financial statements upon adoption. Accordingly, the Group’s notes to its consolidated financial statements now explain accounting concepts in plain English rather than cite the specific US GAAP references.

F-11

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

e) Cash and cash equivalents

Cash and cash equivalents consist of cash on hand and demand deposits which are unrestricted as to withdrawal or use, and which have maturities of three months or less.

f) Restricted cash

The restricted cash relates to (i) sales proceeds received from the property buyers on behalf of the property sellers during the purchase process, which are deposited into designated bank accounts, (ii) cash deposited into banking institutions as security deposit for the mortgage management services and (iii) cash proceeds related to National Advertising Fund for marketing purposes on behalf of its franchisees (see Note 2(l)). The total amount of restricted cash is approximately RMB14.5 million, RMB17.2 million and RMB21.6 million as of December 31, 2007 and 2008 and as of September 30, 2009, respectively.

g) Accounts receivable

Accounts receivable represent amounts recognized as revenue which have yet to be received from customers and franchisees. The Group accrued allowance for doubtful accounts for those receivable balances which are unlikely to be collected based on management’s analysis and estimates. Accounts receivable are stated net of allowance for doubtful accounts.

h) Property and equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated on a straight-line basis over the following estimated useful lives:

Computers and software	5 years
Furniture, fixtures and equipment	5 years
Vehicles	5 years
Leasehold improvements	Shorter of lease term or estimated useful lives of assets

Repairs and maintenance expenditures, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Gains and losses from the disposal of property and equipment are included in income (loss) from operations.

i) Intangible assets

Intangible assets as of December 31, 2007 and 2008 and as of September 30, 2009 consist of:

i) CENTURY 21^® franchise rights acquired from Realogy represent the rights to use and sub-franchise the CENTURY 21^® brand in the PRC for an initial period of 25 years (see Note 9). The Group amortizes intangible assets over their estimated useful lives on a straight-line basis.

ii) Acquired intangible assets include the reacquired CENTURY 21^® franchise rights, customer relationships, real estate listing databases and trademark (see Note 7). Acquired intangible assets are recorded at fair value on the acquisition date and the Group amortizes these intangible assets over their estimated useful lives on a straight-line basis.

j) Goodwill and indefinite-lived intangible assets

Goodwill represents the excess of costs over fair value of assets of businesses acquired. Any shortfall represents the amount of goodwill impairment. The Group completes a two-step goodwill impairment test

F-12

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

annually or more frequently if circumstances indicate impairment may have occurred. The first step compares the fair value of each reporting unit to its carrying amount. If the fair value of each reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying value of a reporting unit’s goodwill. The implied fair value of goodwill is determined in a manner similar to accounting for a business combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting unit. The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value of goodwill. This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry to adjust the value of any assets or liabilities. An impairment loss is recognized for any excess in the carrying value of goodwill over the implied fair value of goodwill.

Intangible assets with an indefinite life are tested for impairment annually or more frequently if events or changes in circumstances indicate that the assets might be impaired. The impairment test consists of a comparison of the fair value of the intangible assets to its carrying amount. If the carrying amount exceeds the fair value, an impairment loss is recognized equal in amount to that excess.

The Group reviews the carrying amounts of goodwill and other indefinite-lived intangible assets at November 30 each year to determine if such assets may be impaired. The Group did not incur any impairment loss on goodwill and indefinite-lived intangible assets for all the periods presented.

k) Impairment of long-lived assets

The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be recoverable. When these events occur, the Group assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to result from the use of the assets and their eventual disposition where the fair value is lower than the carrying value, measurement of an impairment loss is recognized in the statements of operations for the difference between the fair value, using the expected future discounted cash flows, and the carrying value of the assets. No impairment of long-lived assets was recognized for the periods presented.

l) Revenue recognition

The Group recognizes revenue where there is persuasive evidence of an arrangement, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Revenues are recorded net of sales related taxes and discounts.

Company-Owned Brokerage Services

As an owner-operator of real estate brokerages, the Group assists customers in listing, marketing, selling, leasing and finding homes and earns brokerage commissions. Brokerage commissions earned are recorded as revenue upon the signing of a real estate sales and purchase agreement between the buyer and the seller or rental agreement between the tenant and the landlord. The signing of such agreements is the evidence of recognition of the provision of our services by the customers.

The staff commissions are recognized concurrently with the associated brokerage commissions revenues, which is upon executing the sales and purchase agreement or rental agreement, and are presented as commission and other agent related costs in the consolidated statements of operations.

F-13

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Mortgage Management Services

The Group provides mortgage management services, many of which are provided in connection with the company-owned brokerage services business. The Group also provides interim financial guarantees to banking institutions in Beijing for a period ranging from approximately one to six months while government-owned property registries process and release the relevant mortgage pledge documents to the relevant banking institutions.

The mortgage management services income is recognized on a net basis when the mortgage loan funds are disbursed by banks to the customers. The financial guarantee revenue is recognized when the respective mortgage pledge documents are collateralized by the banking institutions.

Franchise Services

The Group recognizes franchise fee revenue as earned. Franchise revenue includes initial franchise fees, which are generally non-refundable and recognized by the Group as revenue when all material services or conditions relating to the initial franchise fee have been substantially performed and the Group has fulfilled all its commitments and obligations (generally when a franchisee commences its operations under the CENTURY 21^® brand). Franchise revenue also consists of recurring franchise fees received from the Group’s franchisees. The recurring franchise fees received are primarily based on the higher of a percentage of the franchisees’ monthly gross income or a fixed minimum monthly amount. The recurring franchise fees are accrued as the underlying franchisee revenue is earned. For the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, the Group’s initial franchise fees were RMB14.3 million, RMB41.8 million, RMB35.5 million (unaudited) and RMB1.2 million, respectively.

The Group also collects marketing fees from its franchisees and utilizes such fees to fund advertising campaigns on behalf of its franchisees (known as National Advertising Fund, or NAF). Management fee income of NAF, which is 15% of marketing fees collected from franchisees, is recognized in proportion to the NAF that had been spent during the reporting period.

m) Deferred revenue

Deferred revenue generally consists of advances received from franchisees for initial franchise fees paid prior to the Group fulfilling its obligations and advances of brokerage commission from customers for Company-owned brokerage services as of balance sheet dates and they are recognized and transferred to revenues upon rendering of the services.

n) Advertising expenses

Advertising costs are expensed as incurred. Advertising-related expenses, including promotional expenses and production costs of marketing materials, amounted to RMB24.8 million, RMB20.1 million, RMB17.7 million (unaudited) and RMB8.8 million during the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, respectively.

o) Business tax and related surcharges

The Group is subject to business tax and related surcharges on the services provided in the PRC. Such tax is levied based on revenue at an applicable rate of approximately 5% and is recorded as a reduction of revenues.

p) Foreign currency translation

The functional currency of the Company and its subsidiaries is RMB. Transactions denominated in currencies other than RMB are translated into RMB at the exchange rates prevailing at the dates of the

F-14

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

transactions. Monetary assets and liabilities denominated in foreign currencies are translated into RMB using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are included in the consolidated statements of operations.

q) Fair value of financial instruments

The Group’s financial instruments consist primarily of cash and cash equivalents, restricted cash, accounts receivable, amounts due from/to related parties, accounts payable, financial guarantees, accrued expenses and other liabilities. The fair values of these financial instruments approximate their carrying amounts, as reported in the consolidated balance sheets, due to the short-term maturities of these instruments.

r) Share-based compensation

The Company issues share options granted under a share incentive plan. The cost of employee services received in exchange for stock-based compensation is measured at the grant date fair value of the award. Share options that were granted with performance conditions vest subsequent to the Company’s Qualified IPO as defined (Note 17) and use the graded-vesting method to recognize share-based compensation expenses. Share-based compensation for the remaining share options granted with service conditions are recognized, net of an estimated forfeiture rate, over the requisite service period of the award, which is the vesting term, based on the fair value of the award on the grant date.

s) Investments in associates

Associates are entities over which the Group has the ability to exercise significant influence over the operating and financial policies, but which it does not control. Investments in associates are accounted for by the equity method of accounting. Under this method, the Group’s share of the post-acquisition profits or losses of associates is recognized in the consolidated statement of operations and its share of post-acquisition movements in reserves is recognized in reserves. When the Group’s share of losses in an associate equals or exceeds its interest in the associates, the Group does not recognize further losses, unless the Group has incurred obligations or made payments on behalf of the associates.

The Group reviews investments in associates for impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. The fair value determination, particularly for investments in privately-held companies, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. As of December 31, 2007, the Group had three associates and as of September 30, 2008, the Group has determined that one of the associates, Shandong was impaired. The investment in Shandong amounted to approximately RMB1.3 million and an impairment loss was recorded for the nine months ended September 30, 2008 and for the year ended December 31, 2008. The remaining two investments in associates as of December 31, 2008 and September 30, 2009 were Xiamen and Xian. No impairment losses were recorded for the nine months ended September 30, 2009.

t) Non-controlling interests

Non-controlling interests represent the equity interests in the Group’s subsidiaries that is not attributable, either directly or indirectly, to the Group. Prior to January 1, 2009, if the carrying value of the non-controlling interests’ equity of the subsidiary is reduced to zero, the subsidiary’s losses are no longer allocated to the non-controlling interests.

F-15

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

On January 1, 2009, the Group adopted the new US GAAP guidance, which establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary in an effort to improve the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements. As required, the Group has incorporated the changes in its consolidated financial statements presentation for all periods presented. The retrospective application of this guidance reclassifies non-controlling interest of RMB1.3 million, RMB0.4 million and RMB0.4 million (unaudited) for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008, respectively, as net income attributable to non-controlling interest, a separate line item below net loss in the presentation of net loss attributable to the Group.

As at December 31, 2007, non-controlling interests accounted for 49% of the net assets of IFM SH held by Jinjiang Group Co., Ltd. (“Jinjiang”). In February 2008, the acquisition of this 49% equity interest from Jinjiang was accounted for using the purchase method of accounting. The acquired equity interest of IFM SH was recorded at fair value on the acquisition date. As a result, there was no non-controlling interest as of December 31, 2008. In September 2009, the Group established a majority-owned subsidiary, namely BVMC, which the Group owned 85% equity interest. As of September 30, 2009, non-controlling interests accounted for 15% of the net assets of BVMC held by Mr. Cai Yuxiang.

u) Income tax

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax assets bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which it expects the difference to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the carrying amount of deferred tax assets if it is considered more likely than not that some portion, or all, of the deferred tax assets will not be realized.

On January 1, 2007, the Group adopted the new guidance and management evaluates its open tax positions that exist in each jurisdiction for each reporting period. If an uncertain tax position is taken or expected to be taken in a tax return, the tax benefit from that uncertain position is recognized in the Group’s consolidated financial statements if it is more likely than not that the position is sustainable. The Group does not have any significant uncertain tax positions and there was no effect on its financial condition or results of operations as a result of implementing the new guidance.

v) Guarantees

For certain guarantees a guarantor is required to recognize a liability for the fair value of the obligation undertaken in issuing the guarantee. The Group provides interim guarantee services to banking institutions for the mortgage services it refers to banks as part of its mortgage management services in Beijing. An interim guarantee covers the period beginning when the bank disburses the mortgage loan to the property buyer and ending when the mortgage registration certificate is issued to the bank by the applicable property registry, which generally takes one to six months.

w) Statutory reserves

The Company’s subsidiaries in the PRC are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to China’s Foreign Investment Enterprises, the subsidiaries registered as wholly-owned foreign enterprises or Sino-jointly invested companies under PRC law are required to make appropriations from its after-tax profit as determined under the Accounting

F-16

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Standards for Business Enterprises and the “Accounting System for Business Enterprises” as promulgated by the State of the People’s Republic of China (“PRC GAAP”) to non-distributable reserve fund, including a general reserve, an enterprise expansion fund and a staff welfare and bonus fund. The appropriation to the general reserve fund must be at least 10% of their after tax profits as determined under PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the respective company. Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the boards of directors of the related subsidiaries. In addition, in accordance with the China Company Laws, the subsidiaries of the Company registered as China domestic companies must make appropriations from its after-tax profit as determined under the PRC GAAP to non-distributable reserve funds including a statutory surplus fund, a statutory public welfare fund and a discretionary surplus fund. The appropriation to the statutory surplus fund must be at least 10% of the after-tax profits as determined under PRC GAAP. Appropriation is not required if the surplus fund has reached 50% of the registered capital of the respective company. Appropriation to the statutory public welfare fund and discretionary surplus fund is made at the discretion of the respective company.

The use of the general reserve fund, statutory surplus fund and discretionary surplus fund are restricted to the offsetting of losses or increase in registered capital of the respective company. The enterprise expansion fund can be used to expand production or to increase registered capital. The staff bonus and welfare fund is available to fund payments of special bonus to staff and for collective welfare benefits. The statutory public welfare fund is restricted to capital expenditures for the welfare of employees.

The staff bonus and welfare fund is a liability in nature. Other statutory reserves are not transferable to the Company in the form of cash dividends, loans or advances and are therefore not available for distribution except in liquidation.

No appropriation was made to above statutory reserve funds for the years ended December 31, 2007 and 2008 as these subsidiaries of the Company were in loss position under PRC GAAP. For the nine months ended September 30, 2009, no appropriation to the above statutory reserve funds has been made as the boards of the Companies would make a resolution on the appropriation of such statutory reserve funds, if any, when the annual financial results of the Company’s subsidiaries are available in the future.

x) Operating lease

Leases where substantially all the risks and rewards of ownership of assets remain with the lessor are accounted for as operating leases. Payments made under operating leases net of any incentives received from the lessor are expensed on a straight-line basis over the terms of the underlying lease.

y) Net income (loss) per share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their participating rights to the extent that each class may share income for the period, whereas net loss is allocated to ordinary shares because other participating securities are not contractually obligated to share the loss of the Group. The Group’s convertible redeemable preferred shares are participating securities. Diluted net income (loss) per share is calculated by dividing net income (loss) attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of the ordinary shares issuable upon the exercise of share options (using the treasury stock method) and the conversion of the convertible redeemable preferred shares (using the if-converted method). Ordinary equivalent shares are not included in the denominator of the diluted net income (loss) per share calculation when inclusion of such shares would be anti-dilutive.

F-17

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

z) Recent accounting pronouncements

In June 2009, the FASB issued authoritative guidance to eliminate the exception to consolidate a qualifying special-purpose entity, change the approach to determining the primary beneficiary of a variable interest entity and require companies to more frequently re-assess whether they must consolidate variable interest entities. Under the new guidance, the primary beneficiary of a variable interest entity is identified qualitatively as the enterprise that has both (a) the power to direct the activities of a variable interest entity that most significantly impact the entity’s economic performance, and (b) the obligation to absorb losses of the entity that could potentially be significant to the variable interest entity or the right to receive benefits from the entity that could potentially be significant to the variable interest entity. The Group will adopt this guidance at the beginning of its fiscal year 2010, and it does not expect the adoption of this guidance will have material impact on its consolidated financial statements.

In August 2009, the FASB issued guidance on Fair Value Measurements and Disclosures — Measuring Liabilities at Fair Value. The objective of the new guidance is to provide clarification for the fair value measurement of liabilities, specifically providing clarification that in circumstances in which a quoted price in an active market for an identical liability is not available, a reporting entity is required to measure fair value using certain prescribed techniques. Techniques highlighted include using 1) the quoted price of the identical liability when traded as an asset, 2) quoted prices for similar liabilities or similar liabilities when traded as assets, or 3) another valuation technique that is consistent with the principles of fair value measurements. The new guidance also clarifies that when estimating the fair value of a liability, a reporting entity is not required to include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the transfer of the liability. Finally, the guidance clarifies that both a quoted price in an active market for the identical liability and the quoted price for the identical liability when traded as an asset in an active market when no adjustment to the quoted price of the asset are required are Level 1 fair value measurements. The Group will adopt this guidance at the beginning of its fiscal year 2010, and it does not expect the adoption of this guidance will have material impact on the Group’s consolidated financial statements.

In October 2009, the FASB issued an accounting standard update to revenue recognition relating to multiple-deliverable revenue arrangements. This update modifies the fair value requirements of existing accounting guidance by allowing the use of the “best estimate of selling price” in addition to vendor-specific objective evidence (“VSOE”) and third-party evidence (“TPE”) for determining the selling price of a deliverable. A vendor is now required to use its best estimate of the selling price when VSOE or TPE of the selling price cannot be determined. In addition, the residual method of allocating arrangement consideration is no longer permitted. This update requires expanded qualitative and quantitative disclosures and is effective for fiscal years beginning on or after June 15, 2010. These updates may be applied either prospectively from the beginning of the fiscal year for new or materially modified arrangements or retrospectively. The Group is currently assessing the impact, if any, that the adoption of this update will have on its consolidated financial statements and disclosures.

aa) Fair value measurements

On January 1, 2008, the Group adopted the authoritative guidance which defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles, and expands disclosures about fair value measurement for all of the Group’s financial assets and liabilities and those nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. On January 1, 2009, the Group adopted this standard for all its remaining non financial assets and liabilities and the adoption will prospectively impact the recognition of nonfinancial assets and liabilities in business combinations and the determinations of impairment for nonfinancial assets and liabilities. The carrying amount of the Group’s cash and cash equivalents approximates their fair value due to the short

F-18

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

maturity of those instruments. The carrying value of receivables and payables approximates their market value based on their short-term maturities. As of September 30, 2009, the adoption of the authoritative guidance did not materially affect the Group’s results and financial condition.

3. CERTAIN RISKS

a) Significant risks and uncertainties

The Group operates in a dynamic and high risk real estate industry and is susceptible to fluctuations in the real estate market in the PRC, and the property market in the PRC is at an early stage of development and is volatile, which could have a material adverse effect on the Group’s business, financial condition and results of operations.

b) PRC Regulations

The Chinese market in which the Group operates poses certain macro-economic and regulatory risk and uncertainties. These uncertainties extend to the ability of the Group to conduct business in the real estate sector in the PRC. Though the PRC has, since 1978, implemented a wide range of market-oriented economic reforms, continued reforms and progress towards a full market-oriented economy are uncertain. In addition, the real estate industry remains highly regulated. Restrictions are currently in place and are unclear with respect to which segments of this industry foreign owned entities, like the Group may operate. The Chinese government may issue from time to time new laws or new interpretations on existing laws to regulate areas such as real estate. Regulatory risk also encompasses the interpretation by the tax authorities of current tax laws and the Group’s legal structure and scope of operations in the PRC, which could be subjected to further restrictions which could result in severe limits to the Company’s ability to conduct business in the PRC.

The real estate market in the PRC is typically affected by changes in government policies regarding the real estate industry, the financial market and other related areas. The PRC government has in the past adopted various administrative measures to restrain what it perceived as unsustainable growth in the real estate market, particularly when the real estate market in China has experienced rapid and significant growth. The PRC real estate market could experience a prolonged downturn in the future, which could have a material adverse impact on our business, financial condition and results of operations.

c) Concentration of credit risk

Financial instruments that potentially expose the Group to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable.

The Group’s cash and cash equivalents and restricted cash are deposited with several major financial institutions in PRC. The Group has not experienced any losses on its deposits of cash and cash equivalent and its restricted cash.

The Group is exposed to counterparty credit risk in the event of nonperformance by counterparties to various agreements and sales transactions. The Group manages such risk by evaluating the financial position and creditworthiness of such counterparties. As of December 31, 2007 and 2008 and as of September 30, 2009, there were no significant concentrations of credit risk with any individual counterparty or group of counterparties. Concentrations of credit risk associated with receivables are considered minimal due to the Group’s diverse customer base.

F-19

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

d) Foreign currency risk

The RMB is not freely convertible into foreign currencies. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into other currencies. Cash and cash equivalents of the Group denominated in US$ included aggregate amounts of US$11.7 million, US$7.8 million and US$1.9 million, as of December 31, 2007 and 2008 and as of September 30, 2009, respectively.

e) Guarantee risk

The Group provides interim guarantee services to banking institutions for the mortgage services it refers to banks in Beijing. If a home buyer defaults on the payment obligations during the term of the interim guarantee, the Group is exposed to guarantee risk (see Note 19(c)).

4. ACCOUNTS RECEIVABLE

The following summarizes the Group’s accounts receivable as of December 31, 2007 and 2008 and as of September 30, 2009 (in RMB thousands):

	December 31,				September 30,
	2007		2008		2009
Accounts receivable	12,235		17,261		66,324
Less: Allowance for doubtful accounts	(2,270	)	(3,628	)	(6,294	)
	9,965		13,633		60,030

The following table sets out the movements of the allowance for doubtful accounts for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2009 (in RMB thousands):

	Year ended December 31,				Nine months ended September 30,
	2007		2008		2009
Balance at beginning of the year/period	-		(2,270	)	(3,628	)
Charged to costs and expenses	(4,542	)	(5,218	)	(8,061	)
Write-off of receivable balances and corresponding provisions	2,272		3,860		5,395
Balance at end of the year/period	(2,270	)	(3,628	)	(6,294	)

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following (in RMB thousands):

	December 31,		September 30,
	2007	2008	2009
Prepaid rental	16,331	12,142	14,993
Staff advances and deposits	4,756	1,850	2,193
Prepayments to suppliers	3,559	1,903	1,269
Others	4,031	3,982	1,649
Total	28,677	19,877	20,104

F-20

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

6. PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following (in RMB thousands):

	December 31,				September 30,
	2007		2008		2009
Computers and software	18,657		18,950		20,946
Furniture, fixtures and equipment	11,974		18,814		19,450
Vehicles	4,611		6,353		6,800
Leasehold improvements	14,946		18,652		23,038
	50,188		62,769		70,234
Less: accumulated depreciation and amortization	(7,721	)	(19,815	)	(29,158	)
Property and equipment, net	42,467		42,954		41,076

For the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, depreciation and amortization expense for property and equipment amounted to RMB5.9 million, RMB14.2 million, RMB10.7 million (unaudited) and RMB11.4 million, respectively.

7. BUSINESS COMBINATIONS

a) On February 14, 2008, the Group acquired the remaining 49% equity interest in IFM SH from the third party non-controlling interest holder, Jinjiang. The purchase consideration of RMB4.9 million was allocated to net assets acquired at the date of acquisition and goodwill as follows (in RMB thousands):

	Amount
Net assets acquired	3,530
Goodwill	1,370
Total purchase consideration	4,900

Goodwill represents the excess of the purchase price over the fair value of net assets acquired which are not deductible for tax purposes. The Group did not incur any impairment loss on goodwill for all the periods presented.

b) On July 1, 2008, the Group acquired City Integrated Residential Services (China) Limited (“CIR”), which wholly owned CIR Real Estate Consultant (Shenzhen) Co., Ltd. (“Shenzhen CIR”). The purchase consideration of RMB7.9 million was allocated to net tangible assets and intangible assets acquired at the date of acquisition and goodwill as follows (in RMB thousands):

	Amount	Estimated Useful life
Net tangible assets acquired	2,809
Intangible assets acquired:
Trademark	403	10 years
Customer relationships	266	10 years
Real estate listing databases	64	10 years
Goodwill	4,374
Total purchase consideration	7,916

F-21

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The amortizable intangible assets have estimated useful lives of 10 years. Goodwill represents the excess of the purchase price over the fair value of net tangible assets and intangible assets acquired which are not deductible for tax purposes. The operating results of the entity acquired are included in the Group’s consolidated financial statements since July 1, 2008. The Group did not incur any impairment loss on goodwill for all the periods presented.

Unaudited pro forma financial information

The following unaudited pro forma consolidated results of operations of the Group were prepared assuming that the acquisitions were completed as of the beginning of the earliest period presented (in RMB thousands, except per share data):

	Year ended December 31,				Nine months ended September 30,
	2007		2008		2008
Net revenue	223,646		278,440		213,958
Net loss attributable to ordinary shareholders	(83,103	)	(156,293	)	(119,680	)
Net loss per share, basic	(0.32	)	(0.60	)	(0.46	)
Net loss per share, diluted	(0.32	)	(0.60	)	(0.46	)

8. GOODWILL

The following summarizes the changes in goodwill allocated to the Group’s reportable segments as of December 31, 2007 and 2008 and as of September 30, 2009 (in RMB thousands):

	Company-Owned Brokerage Services		Franchise   Services	Total
	Shanghai	Shenzhen
Balance, January 1, 2007	3,537	-	-	3,537
Acquisitions	-	-	-	-
Balance, December 31, 2007	3,537	-	-	3,537
Acquisitions	-	4,374	1,370	5,744
Balance, December 31, 2008	3,537	4,374	1,370	9,281
Acquisitions	-	-	-	-
Balance, September 30, 2009	3,537	4,374	1,370	9,281

F-22

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

9. INTANGIBLE ASSETS, NET

The following summarizes the Group’s intangible assets as of December 31, 2007 and 2008 and as of September 30, 2009 (in RMB thousands):

	CENTURY 21® franchise rights		Customer relationships		Real estate listing databases		Trademark		Total
Cost	37,257		683		477		-		38,417
Accumulated amortization	(10,445)		(17)		(12)		-		(10,474)
Balance as of January 1, 2007	26,812		666		465		-		27,943
Amortization	(1,510)		(68)		(48)		-		(1,626)
Balance as of December 31, 2007	25,302		598		417		-		26,317
Additions	4,500		266		64		403		5,233
Amortization	(1,601)		(82)		(51)		(20)		(1,754)
Balance as of December 31, 2008	28,201		782		430		383		29,796
Amortization	(1,336	)	(71	)	(41	)	(30	)	(1,478	)
Balance as of September 30, 2009	26,865		711		389		353		28,318

The franchise rights acquired from Realogy entitled the Group to use and sub-franchise the CENTURY 21^® brand in China. The franchise rights for China acquired from Realogy have a contractual period of 25 years with a specific renewal clause for another 25 years upon payment by the Company of US$4.5 million. The Group considered its historical experience in renewing or extending similar franchise agreements when determining the estimated useful life of the franchise rights acquired from Realogy. Given the lack of historical experience of the Group in renewing or extending similar arrangements with Realogy as the franchise relationship was first entered into with Realogy in 2000 for 25 years, the Group considered assumptions that market participants would use about the renewal or extension provisions. Since the Group needs to pay the renewal fee of US$4.5 million, which is equivalent to the fair value of the franchise rights at the time such rights were acquired from Realogy in March 2000, to Realogy for the franchise rights extension, it is uncertain whether market participants would pay this amount for the renewal of franchise rights in the future. Therefore, the Group considered this entity-specific factor and determined that the estimated useful life of the franchise rights acquired from Realogy is the contractual period of 25 years. As a result, the franchise rights acquired from Realogy are recognized as intangible assets and are being amortized over a period of 25 years.

As a result of a change in the Group’s business strategy to grant franchise rights to sub-franchisees in the Shenzhen region, the Group reacquired the CENTURY 21^® franchise rights from a franchisee in Shenzhen for RMB4.5 million in July 2008. This consideration was negotiated on an arm’s length basis. In accordance with the franchise agreement, there are no specific renewal or extension provisions. The Group considered its own historical experience in renewing or extending similar franchise agreements when determining the estimated useful life of the reacquired franchise rights. Given the lack of historical experience of the Group in renewing or extending similar arrangements with other franchisees, the Group considered this entity-specific factor and determined that the estimated useful life of the reacquired franchise rights is the remaining contractual period which is 14.5 years. Therefore, these rights are recognized as intangible assets and are amortized over the remaining contractual life of 14.5 years.

F-23

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The Group has recorded approximately RMB1.6 million, RMB1.8 million, RMB1.4 million (unaudited) and RMB1.5 million of amortization for intangible assets for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, respectively. There was no impairment loss on intangible assets for any of the periods presented.

Based on the Group’s intangible assets subject to amortization, the annual estimated amortization expense related to the above intangible assets is as follows (in RMB thousands):

The remainder of 2009	666
2010	2,144
2011	2,144
2012	2,144
2013	2,144
Thereafter	19,076
Total	28,318

10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following (in RMB thousands):

	December 31,		September 30,
	2007	2008	2009
Salaries, commission and welfare payable	22,515	25,031	50,362
Other taxes payable	3,047	4,450	14,872
Royalty fees payable	1,470	2,366	1,657
Third party deposits	14,480	9,678	14,824
Other current liabilities	10,722	12,072	15,735
Total	52,234	53,597	97,450

Royalty fees payable relate to the Master Franchise Agreement entered into with Realogy. The royalty fees are determined based on the Group’s franchise revenue for the periods.

11. DEFERRED REVENUE

Cash received in advance on contracts is deferred and recognized when the services are rendered. The deferred revenue is primarily related to initial franchise fees received from franchisees and advances received from customers relating to brokerage commissions.

12. LONG-TERM DEPOSITS PAYABLE

The Group receives security deposits from franchisees which are recorded as long-term deposits payable. These deposits are refundable at the end of the franchise agreement period if the franchisees do not breach the franchise agreements. The long-term deposits payable as of December 31, 2007 and 2008 and as of September 30, 2009 were RMB8.5 million, RMB10.6 million and RMB8.9 million, respectively.

F-24

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

13. INCOME TAXES

Taxation in the Cayman Islands and the British Virgin Islands

Neither the Cayman Islands nor the British Virgin Islands currently levies taxes on individuals or corporations based upon profits, income, gains or appreciation. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands or BVI withholding tax will be imposed.

The Company and IFM Co. are tax-exempted companies incorporated in the Cayman Islands. Genius is a tax-exempted company incorporated in the British Virgin Islands.

PRC Corporate Income Tax

Prior to January 1, 2008, pursuant to the Income Tax Law of the PRC concerning Foreign Investment Enterprises and Foreign Enterprises and local income tax laws, the corporate income taxes (“CIT”) of PRC entities were generally assessed at a statutory rate of 33%, which comprises 30% national income tax and 3% local income tax.

On March 16, 2007, the National People’s Congress of PRC enacted the Corporate Income Tax Law, under which Foreign Investment Enterprises and domestic companies would be subject to CIT at a uniform rate of 25%. This became effective on January 1, 2008. In accordance with the CIT Law, there will be a transition period for enterprises which currently receive preferential tax treatments granted by relevant tax authorities. Enterprises that are subject to a corporate income tax rate lower than 25% may continue to enjoy the lower rate and gradually transition to the new tax rate within five years after the effective date of the CIT Law.

IFM Beijing, Beijing Anxin and IFM SH are subject to the income tax rate of 33% before 2008, 25% thereafter in accordance with the CIT Law.

As Shanghai Ruifeng and Anshijie are both registered in Shanghai Pu Dong New Area, and Shenzhen CIR is registered in Shenzhen special economic zone, they are subject to the preferential income tax rate of 15% according to the Foreign Investment and Foreign Enterprise Income Tax Law before 2008. From January 1, 2008 onwards, the income tax rate is to be increased progressively from 18% to 25% from 2008 to 2012, respectively. Accordingly, they are subject to income tax rate of 15%, 18% and 20% in 2007, 2008 and 2009, respectively.

In October 2009, Huachuang obtained a Software Enterprise Certification which entitles it to exemption from CIT for the first two years in which it has taxable income and a 50% reduction in CIT for each of the following three years.

The provision for income tax is as follows (in RMB thousands):

	Year ended December 31,			Nine months ended September 30,
	2007		2008	2008	2009
				(unaudited)
Income tax provision:
Current	417		1,408	1,569	3,315
Deferred	(23	)	668	211	(494	)
Total	394		2,076	1,780	2,821

F-25

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The following table presents the tax impact of significant temporary differences between the tax and financial statement bases of assets and liabilities that gave rise to deferred tax assets and liabilities as of December 31, 2007 and 2008 and as of September 30, 2009 (in RMB thousands):

	December 31,				September 30,
	2007		2008		2009
Current
Deferred tax assets:
Allowance for doubtful accounts	881		770		1,463
Deferred revenue	1,945		948		1,155
Accrued expense and payroll	4,226		4,823		12,068
Disposals of property and equipment	-		753		-
Others	288		828		-
Total deferred tax assets	7,340		8,122		14,686
Less: valuation allowance	(5,337	)	(5,828	)	(14,686	)
	2,003		2,294		-
Deferred tax liabilities:
Timing differences of revenue recognition	(1,755	)	(2,532	)	-
Others	(248	)	(295	)	-
Total deferred tax liabilities	(2,003	)	(2,827	)	-
Net deferred tax liabilities	-		(533	)	-
Non-current
Deferred tax assets:
Net operating loss carry forwards	9,033		38,983		10,999
Intangible assets	2,095		1,955		1,851
Total deferred tax assets	11,128		40,938		12,850
Less: valuation allowance	(11,128	)	(40,938	)	(12,850	)
	-		-		-
Deferred tax liabilities:
Intangible assets and property and equipment	(203	)	(338	)	(377	)
Net deferred tax liabilities	(203	)	(338	)	(377	)

The Group has made a full valuation allowance against its net deferred tax assets. The Group evaluates a variety of factors in determining the amount of valuation allowance, including the Group’s limited operating history, accumulated deficit, existence of taxable temporary differences and expected reversal periods.

The following table sets forth the movements of the valuation allowance for net deferred tax assets for the periods presented:

	Year ended December 31,				Nine months ended September 30,
	2007		2008		2009
Balance at beginning of the year/period	(5,286	)	(16,465	)	(46,766	)
(Provision) write-back for the year/period	(11,179	)	(30,301	)	19,230
Balance at end of the year/period	(16,465	)	(46,766	)	(27,536	)

F-26

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The Group had total net operating loss carried forward as of December 31, 2007 and 2008 and as of September 30, 2009 amounting to RMB39.4 million, RMB177.3 million and RMB49.1 million, respectively, which will begin to expire in 2011.

CIT exemptions and tax rate reduction enjoyed by the Group had no effect on net loss and basic and diluted net loss per share for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008. The increase to net income and basic and diluted net income per share for the nine months ended September 30, 2009 resulting from the combined effects of CIT exemption and tax rate reduction amounted to RMB0.9 million and RMB0.002 per share, respectively.

A reconciliation of income tax of the statutory income tax rate to the Group’s effective tax rate is as follows:

	Year ended December 31,				Nine months ended September 30,
	2007		2008		2008		2009
					(unaudited)
Statutory income tax rates	(33.0	)%	(25.0	)%	(25.0	)%	25.0	%
Effect of preferential tax rate	18.0	%	7.4	%	6.9	%	(1.4	)%
Effect of income tax rate change	0.2	%	(2.8	)%	(3.1	)%	1.9	%
Change in valuation allowance	15.4	%	23.3	%	25.3	%	(21.1	)%
Others	(0.1	)%	(1.4	)%	(2.3	)%	(1.3	)%
Effective tax rate	0.5	%	1.5	%	1.8	%	3.1	%

On December 6, 2007, the State Council issued the detailed implementation regulations of the new PRC Corporate tax law. Pursuant to the regulations, a 10% withholding income tax will be levied on dividends declared on or after January 1, 2008 by foreign investment enterprises to their foreign enterprise shareholders unless the enterprise investor is deemed as a PRC Tax Resident Enterprise (“TRE”).

The Company’s subsidiaries have determined that they have no present plan to declare and pay any dividend on their shares in the foreseeable future. The Group plans to continue to reinvest its subsidiaries’ undistributed earnings, if any, in their operations in China in the foreseeable future.

F-27

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

14. NET (LOSS) INCOME PER SHARE

The following table sets forth the computation of basic and diluted net (loss) income per ordinary share for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009 (in RMB thousands, except per share data):

	Year Ended December 31,				Nine months ended September 30,
	2007		2008		2008		2009
					(unaudited)
Numerator:
Net (loss) income attributable to IFM Investments Limited	(74,121	)	(132,318	)	(99,729	)	88,333
Accretion of Series A Preferred Shares	(4,893	)	(5,032	)	(3,761	)	(3,868	)
Accretion of Series B Preferred Shares	(2,354	)	(10,727	)	(7,974	)	(8,401	)
Income allocated to participating preferred shareholders	-		-		-		(41,451	)
Numerator for basic and diluted net (loss) income per share	(81,368	)	(148,077	)	(111,464	)	34,613
Denominator:
Weighted-average shares — basic	260,000		260,000		260,000		260,000
Potential dilutive shares:
Preferred shares*	-		-		-		-
Options*	-		-		-		4,263
Weighted averages shares — diluted	260,000		260,000		260,000		264,263
Net (loss) income per share — basic	(0.31	)	(0.57	)	(0.43	)	0.13
Net (loss) income per share — diluted	(0.31	)	(0.57	)	(0.43	)	0.13

Net income for the nine months ended September 30, 2009 has been allocated to the ordinary shares and preferred shares based on their respective rights to share in dividends.

* The potentially dilutive securities were not included in the calculation of dilutive net (loss) income per share in those periods where their inclusion would be anti-dilutive.

15. CONVERTIBLE REDEEMABLE PREFERRED SHARES

On August 24, 2006, the Company issued 200.0 million shares of Series A convertible redeemable preferred shares (Series A Preferred Shares) in exchange for cash of US$21.4 million (approximately RMB170.7 million), net of issuance cost of US$0.6 million (approximately RMB4.6 million).

On October 19, 2007, the Company issued approximately 105.3 million shares of Series B convertible redeemable preferred shares (Series B Preferred Shares) in exchange for cash of US$38.7 million (approximately RMB290.6 million), net of issuance cost of US$1.3 million (approximately RMB10.0 million).

On February 21, 2008, the Company issued approximately 6.1 million shares of Series B Preferred Shares in exchange for cash of US$2.2 million (approximately RMB16.2 million), net of issuance cost of US$0.1 million (approximately RMB0.5 million).

F-28

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The Group has determined that the convertible redeemable preferred shares should not be classified as liabilities since the preferred shares are contingently redeemable and that conversion and redemption features embedded in the convertible redeemable preferred shares are not required to be bifurcated and accounted for as a derivative since the embedded features do not permit or require net settlement and therefore do not meet the definition of a derivative. Since the conversion price of the convertible redeemable preferred shares exceeded the fair value of the Group’s ordinary shares on the date of issuance of the Preferred Shares, no portion of the proceeds from the issuance was accounted for as attributable to the conversion feature.

The Company’s convertible redeemable preferred shares with outstanding balances as of September 30, 2009 are as follows:

		Original Issue Price Per Share	Shares
	Date of Issuance		Authorized	Issued and Outstanding	Carrying Amount	Liquidation Amount
		RMB	(’000)	(’000)	(RMB’000)	(RMB’000)
Series A	Aug 24, 2006	0.88	200,000	200,000	185,930	201,661
Series B	Oct 19, 2007	2.86	105,254	105,254	311,226	345,718
Series B	Feb 21, 2008	2.71	6,113	6,113	17,006	19,091
			311,367	311,367	514,162	566,470

The key terms of the Series A and Series B Preferred Shares are as follows:

Dividend rights

The holders of the Series A and Series B Preferred Shares are entitled to participate in non-cumulative dividend of 8% payable on an as-converted basis, when declared by the Board of Directors. As long as Preferred Shares are outstanding, the Company may not pay any dividend to ordinary shareholders until all dividends declared and payable to the preferred shareholders have been paid. In the event the Company shall declare a dividend to the holders of ordinary shares, then in each such case, the holders of Preferred Shares shall be entitled to a proportionate share of such dividend on an as-converted basis.

Redemption rights

In the event that a qualified initial public offering does not occur within six years of the Series A issuance date or five years of the Series B issuance date, the holders of Series A and Series B Preferred Shares may redeem any or all of Series A and Series B Preferred Shares at a redemption price equal to 115% of the original preferred shares issuance price per share plus all declared but unpaid dividends adjusted for share splits, share dividends, recapitalizations and other adjustments.

The carrying value of the convertible redeemable preferred shares was accreted from its carrying value on the date of issuance to the redemption value using effective interest method over the period from date of issuance to the earliest redemption date. The accretion was recorded against retained earnings, or in the absence of retained earnings, by charges against additional paid-in capital. Once additional paid-in capital has been exhausted, additional charges should be recorded by increasing the accumulated deficit.

Liquidation preferences

In the event of a liquidation, dissolution or winding up of the Company, available assets and funds of the Company are first distributed to the holders of Series A and Series B Preferred Shares at their original issuance price per share multiplied by 115% plus any declared but unpaid dividends adjusted for share

F-29

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

splits, share dividends, recapitalizations, and other adjustments. In the event that available assets and funds are insufficient to permit payment to the holders of the Series A and Series B Preferred Shares, the assets and funds will be distributed ratably to the Series A and Series B Preferred Shares holders based on their proportional share ownership. After the distribution to the holders of Series A and Series B Preferred Shares are made, any remaining legally available assets and funds shall be distributed to the holders of ordinary shares and Series A and Series B Preferred Shares pro rata on an as-converted basis.

Voting rights

The holder of each Series A and Series B Preferred Shares shall be entitled to such number of votes as equals the whole number of ordinary shares into which such holder’s collective Series A and Series B Preferred Shares are convertible immediately after the close of business on the record date of the determination of the Company’s shareholders entitled to vote or, if no such record date is established, at the date such vote is taken or any written consent of the Company’s shareholders is first solicited. The holders of Series A and Series B Preferred Shares shall vote together with the holders of ordinary shares, and not as a separate class or series, on all matters put before the members.

Conversion rights

Each of the convertible preferred shares is convertible into the number of fully-paid ordinary shares as determined by dividing the original issue price applicable to such convertible preferred shares by the conversion price in effect at that time. The conversion price of Series A and Series B Preferred Shares shall initially be the original issue price of such Series A and Series B Preferred Shares and shall be adjusted in accordance with conversion provision contained in the Company’s Articles of Association.

With respect to the Series A Preferred Shares, these conversion provisions include certain performance-based adjustments related to certain targets of net profits after tax for the years ended December 31, 2008 and 2009 or the completion of a Qualified IPO as defined (Note 17) prior to December 31, 2009. Depending on whether the pre-determined targets are met, the conversion price of the Series A Preferred Shares may be adjusted such that the Series A Preferred Shareholders’ percentage ownership on an as-converted basis would decrease.

The pre-determined target was not met for December 31, 2008. In the event there is any adjustment to the Series A Preferred Share conversion price, the Series B conversion price will also be adjusted such that the Series B Preferred Shareholders’ percentage ownership on an as-converted basis immediately following such adjustment remains the same as the shareholding immediately prior to the adjustment to the Series A Preferred Share conversion price.

16. UNAUDITED PRO-FORMA BALANCE SHEET AND NET (LOSS) INCOME PER SHARE

All of the Series A and Series B convertible redeemable preferred shares will automatically be converted into ordinary shares at the applicable conversion price upon a Qualified IPO as defined in Note 17 or the proposed IPO conducted in accordance with the Registration Statement on Form F-1 (File No. 333-164216) as filed with the United States Securities and Exchange Commission. The pro-forma balance sheet as of September 30, 2009 presents an adjusted financial position as if the conversion of the Series A and Series B convertible redeemable preferred shares into ordinary shares occurred on September 30, 2009.

The unaudited pro-forma basic and diluted net (loss) income per share for the year ended December 31, 2008 and for the nine months ended September 30, 2009, giving effect to the assumed conversion of the

F-30

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Series A and Series B convertible redeemable preferred shares into ordinary shares on the original dates of issuance are as follows (in RMB thousands, except per share data):

	Year Ended December 31, 2008		Nine Months Ended September 30, 2009
Numerator:
Net (loss) income attributable to ordinary shareholders	(148,077	)	34,613
Add: Income allocated to participating preferred shareholders	-		41,451
Add: Accretion of convertible redeemable preferred shares	15,759		12,269
Less: Pro-forma effect of compensation expense from Series A convertible redeemable preferred shares modification	(4,915	)
Numerator for pro-forma basic and diluted net (loss) income per share	(137,233	)	88,333
Denominator:
Denominator for basic net (loss) income per share	260,000		260,000
Pro-forma effect of Series A convertible redeemable preferred shares	141,611		141,611
Pro-forma effect of Series B convertible redeemable preferred shares	96,485		97,231
Denominator for pro-forma basic (loss) income per share	498,096		498,842
Potential dilutive securities:
Options	-		3,721
Denominator for pro-forma diluted (loss) income per share	498,096		502,563
Basic net (loss) income per share	(0.28	)	0.18
Diluted net (loss) income per share	(0.28	)	0.18

The above unaudited pro forma financial information was presented giving effect to the conversion of the Series A and B Preferred Shares as of September 30, 2009 as well as the amendments made pursuant to special resolutions of the Board dated October 22, 2009 and January 27, 2010 with respect to the performance-based adjustments to the Series A Preferred Shares (Note 22 (c) and (f)) and the redesignation of the ordinary shares effective immediately prior to the consummation of the IPO (Note 22 (e)(ii)).

17. SHARE-BASED COMPENSATION

On August 18, 2006, and as amended and restated on October 19, 2007 and February 1, 2008, the Company adopted the 2006 Stock Incentive Plan and the Amended and Restated 2006 Stock Incentive Plan (the “Plan”) under which 52.5 million shares have been authorized for issuance and 85.3 million shares have been reserved for issuance. In accordance with the Plan, if there is an adjustment to the then-in effect Series A Preferred Share conversion price (Note 15), the number of shares reserved for issuance under the Plan shall be increased or decreased to such number of shares representing 8.41% of the equity interest of the Company, on a fully-diluted basis.

In 2007, two batches of share options were granted under the Plan. For share-based award granted with performance conditions (Batch A), one-third (1/3) of the option shall become vested and exercisable on the 181st day following the date of a Qualified IPO and the remaining two-thirds (2/3) of the share options shall become vested and exercisable on the first anniversary of a Qualified IPO. For share-based award granted with service conditions (Batch B), one-fourth (1/4) of the option shall vest and become exercisable on the first anniversary of the effective date of the employment and the remaining three-fourths (3/4) shall vest quarterly over the following eight quarters.

“Qualified IPO” shall mean a firm commitment, underwritten registered public offering by the Company of its Ordinary Shares on an internationally recognized, major stock exchange acceptable to the preferred share

F-31

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

holders (including, for example, the New York Stock Exchange or the NASDAQ), with a valuation of the Company, as a result of such public offering, of not less than US$400 million and with gross proceeds to the Company of at least US$100 million.

In 2008, two batches of share options were granted under the Plan based on service conditions. For Batch C, one-third (1/3) of the Option Shares covered by the grant shall vest and become exercisable on each of the first, second and third anniversary dates of the Effective Date of the Option Agreement. Under Batch D, one-third (1/3) of the Option Shares covered by the Option shall vest and become exercisable on each of the first, second and third anniversary dates of the date of Employment of Optionee.

On February 2, 2009, the Company granted share options for 200,000 shares to a certain employee. One-third (1/3) of the share options should vest and become exercisable on each of the first, second and third anniversary dates of the date of employment of the option holder.

On July 20, 2009, the Company granted 700,000 share options to certain employees. One-third (1/3) of the share options should vest and become exercisable on each of the first, second and third anniversary dates of the date of employment of option holders.

On August 20, 2009, the Company granted 2,500,000 share options to certain employees. Of the total 2,500,000 share options granted, 1,500,000 share options should vest one-half (1/2) of the option on the first anniversary of the effective date of the employment agreement between the option holders and the Company, with the remaining share options vesting on each of the following four calendar quarters. The remaining 1,000,000 share options should vest one-third (1/3) of the share options on each of the first, second and third anniversary dates of the date of employment of the option holders.

The exercise price for the purchase of Option Shares upon the exercise of all or any portion of the Option shall be the Fair Market Value price per Share on the date of grant as determined by the Administrator in its sole discretion. The Fair Market Value is provided by an independent third-party valuer at each of the share options’ grant date. The term of the share options is five years from the grant date.

Valuation Assumptions: The Company estimated the fair value of share options using Black-Scholes Option Pricing valuation model. The fair value of each option grant is estimated on the date of grant with the following weighted-average assumptions:

	Year ended December 31, 2007	Year ended December 31, 2008	Nine months ended September 30, 2009
Expected volatility	43.90%-48.30%	48.30%-53.30%	70.50%-75.40%
Risk-free interest rate	4.43%-5.49%	3.27%-4.13%	3.09%-3.76%
Dividend yield	0.00%	0.00%	0.00%
Expected term (in years)	3.4-4.8	3.2-3.5	3.1-3.5
Weighted average fair value of the underlying shares on the date of option grants (US$)	0.11	0.09	0.32

Expected Term: Due to insufficient historical information, giving consideration to the contractual terms of the share-based awards, the Company adopted the simplified method for estimating the expected term to represent the period that the Company’s share-based awards are expected to be outstanding.

Expected Volatility: The fair value of share-based payments made through the years ended December 31, 2007 and 2008 and the nine months ended September 30, 2009 was valued using the Black-Scholes Option

F-32

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Pricing valuation method with a volatility factor based on the historical stock prices of comparable companies.

Expected Dividend: The Black-Scholes Option Pricing valuation model calls for a single expected dividend yield as an input. The Company has never declared or paid any cash dividends on its capital stock, and the Company does not anticipate any dividend payments on its ordinary shares in the foreseeable future.

Risk-Free Interest Rate: The Company bases the risk-free interest rate used in the Black-Scholes Option Pricing valuation method on the implied yield currently available on China Treasury Bonds constant maturities with an approximate equivalent remaining term.

Estimated Pre-vesting Forfeitures: When estimating forfeitures, the Company considers both voluntary and company termination behavior.

The following table summarizes the Group’s share options activities for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2009:

			Share options Outstanding
	Share options available		Number of Share options		Weighted Average Exercise Price (US$)
Balance as of December 31, 2006	40,000,000		-		-
Share options authorized	12,352,110		-		-
Share options granted	(45,300,000	)	45,300,000		0.12
Share options cancelled/forfeited	500,000		(500,000	)	0.11
Balance as of December 31, 2007	7,552,110		44,800,000		0.12
Share options authorized	124,770		-		-
Share options granted	(4,700,000	)	4,700,000		0.09
Share options cancelled/forfeited	7,600,000		(7,600,000	)	0.11
Balance as of December 31, 2008	10,576,880		41,900,000		0.12
Share options granted	(3,400,000	)	3,400,000		0.32
Share options cancelled/forfeited	1,500,000		(1,500,000	)	0.11
Balance as of September 30, 2009	8,676,880		43,800,000		0.13

The weighted-average grant date fair value of options granted for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2009 was US$0.05, US$0.04 and US$0.17 per option, respectively. The following table summarizes the weighted average remaining contractual life and exercise price for the share options outstanding and exercisable as of September 30, 2009:

	Share options Outstanding			Share options Exercisable
Range of Exercise Prices (US$)	Number of options outstanding	Weighted Average Remaining Contractual Life (In years)	Weighted Average Exercise Price (US$)	Number of options outstanding	Weighted Average Remaining Contractual Life (In years)	Weighted Average Exercise Price US($)
0.08	3,000,000	3.86	0.08	1,000,000	3.86	0.08
0.11-0.12	12,050,000	2.86	0.11	500,000	3.39	0.12
0.13	25,550,000	2.89	0.13	2,921,880	3.21	0.13
0.32-0.33	3,200,000	4.87	0.33	-	-	-
	43,800,000	3.10	0.13	4,421,880	3.38	0.11

F-33

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

There were no share options exercisable as of December 31, 2007. There were 1,475,000 and 4,421,880 share options exercisable as of December 31, 2008 and as of September 30, 2009, respectively. The total fair value of options vested is US$70,675 and US$198,972 (approximately RMB482,000 and RMB1,358,000) as of December 31, 2008 and September 30, 2009, respectively. The intrinsic value of exercisable share options has not been included as the Company was a private company in the periods presented.

Share-based compensation expense for share-based awards granted with performance conditions is to be recognized using the graded-vesting method. For the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, the Company did not recognize any share-based compensation as the vesting of the performance condition awards is contingent upon a Qualified IPO which is not considered probable until the event happens. Share-based compensation expenses for other batches of share-based awards which are based on service conditions are recognized using the straight-line attribution approach. For the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, the Company has recognized share-based compensation of approximately RMB44,000, RMB730,000, RMB536,000 (unaudited) and RMB1,257,000, respectively.

As of September 30, 2009, there was US$624,613 (approximately RMB4,264,000) of total unrecognized compensation cost related to non-vested share-based compensation granted under the plan. The cost is expected to be recognized over a weighted average period of 2.0 years.

18. EMPLOYEE BENEFIT PLANS

The Group participates in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. PRC labor regulations require the companies to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant labor bureau is responsible for meeting all retirement benefit obligations; the Group has no further commitments beyond its monthly contribution. Employees of the Company located in the PRC are covered by the retirement schemes defined by local practice and regulations, which are essentially defined contribution schemes. The PRC government is directly responsible for the payments of the benefits to these employees.

The total contributions for such employee benefits were approximately RMB11.2 million, RMB18.9 million, RMB15.7 million (unaudited), and RMB11.9 million for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009, respectively. Amounts accrued and included in salaries, commission and welfare payable in the accompanying balance sheets were approximately RMB4.6 million, RMB7.7 million and RMB8.2 million as of December 31, 2007 and 2008 and as of September 30, 2009, respectively.

19. COMMITMENTS AND CONTINGENCIES

a) Contractual obligations with franchisees

The Group establishes franchise arrangements with franchisees in the PRC to grant trademark of “CENTURY 21^®” for a contractual period and receives recurring franchise fees throughout the period. The Group is obligated to provide ongoing support to franchisees for the operation of “CENTURY 21^®” system and provide operational guidance and training to franchisees.

b) Operating lease commitments

The Group has operating lease agreements principally for its administrative offices and real estate brokerage stores. These leases expire by 2015 and are renewable upon negotiation. Rental expenses under operating leases

F-34

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009 were RMB38.3 million, RMB84.4 million, RMB64.1 million (unaudited) and RMB52.2 million, respectively.

Future minimum lease payments under these non-cancellable operating lease agreements as of September 30, 2009 are as follows (in RMB thousands):

The remainder of 2009	19,483
2010	60,922
2011	38,699
2012	19,783
2013	6,146
Thereafter	3,203
Total	148,236

c) Contingent guarantee obligations

The Group provides interim guarantee services to banking institutions for the mortgage services it refers to banks as part of its mortgage management services in Beijing. An interim guarantee covers the period beginning when the bank disburses the mortgage loan to the property buyer and ending when the mortgage registration certificate is issued to the bank by the applicable property registry, which generally takes one to six months. The Group measures its financial guarantees based on their fair values. The fair value of the financial guarantee as of December 31, 2007 and 2008 and as of September 30, 2009 were immaterial.

If a bank fails to obtain the mortgage registration certificate or the property buyer defaults on his payment obligations during the term of an interim guarantee, the Group may be required to pay the amount of the delinquent mortgage payments or any measurable loss suffered by the bank exceeding the payment already made by the buyer and the amount recoverable from the property. As of December 31, 2007 and 2008 and September 30, 2009, the contingent guarantee obligations of the Group were approximately RMB143.9 million, RMB227.8 million and RMB829.3 million, respectively.

The Group has not been required to pay any amounts with respect to its guarantee services since the commencement of this business. The Group performs regular assessment on any potential losses associated with the interim financial guarantees based on the payment status of the guaranteed loans. The Group accrued nil, nil and approximately RMB0.5 million for the estimated loss associated with the interim guarantees as of December 31, 2007 and 2008 and as of September 30, 2009, respectively.

d) Minimum Service Fees

The Group is required to pay annual minimum service fees to Realogy for the licensing of the CENTURY 21^® brand to 2025. The minimum service fees is the greater of the minimum of US$100,000 (approximately RMB683,000) or an amount calculated by multiplying US$500 (approximately RMB3,000) by the number of sales offices in our CENTURY 21^® franchise network. The minimum service fees for future years are as follows (in RMB thousands):

The remainder of 2009	-
2010	683
2011	683
2012	683
2013	683
Thereafter	7,686
Total	10,418

F-35

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

e) Litigation

From time to time, the Group is involved in claims and legal proceedings that arise in the ordinary course of business. Based on currently available information, management does not believe that the ultimate outcome of these unresolved matters, individually and in the aggregate, is likely to have a material adverse effect on the Group’s financial position or results of operations. However, litigation is subject to inherent uncertainties and the Group’s view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Group’s financial position and results of operations for the period in which the unfavorable outcome occurs, and potentially in future periods.

20. RELATED PARTY TRANSACTIONS

The table below sets forth the related parties and their relationships with the Group:

Related Parties	Relationships with the Group
Maxpro International Enterprises Inc. (“Maxpro”)	100% owned by Donald Zhang, the ultimate shareholder of the Company
Beijing Xinye Jiayuan Real Estate Consulting Services Co., Ltd. (“Xinye”)	80% owned by Donald Zhang, 20% owned by Harry Lu, the ultimate shareholders of the Company
Regional entities (Xiamen, Shandong, Xian)	Associates

As of December 31, 2007 and 2008 and September 30, 2009, the amounts due from/to related parties consisted of the following (in RMB thousands):

	December 31,		September 30,
	2007	2008	2009
Amounts due from related parties
Xinye	39,656	36,024	-
Maxpro	2,114	2,086	5,933
Directors	2,215	-	-
Regional entities	83	-	277
Total amounts due from related parties	44,068	38,110	6,210
Amounts due to related parties
Xinye	13,377	5,700	-
Maxpro	29,266	27,465	-
Regional entities	850	850	253
Total amounts due to related parties	43,493	34,015	253

The amounts due from Xinye were advances for the operations of Xinye. Amounts due to Xinye related to amounts payable for the transfer of the entities as part of the Reorganization. The balances with Xinye were unsecured, interest-free and had no fixed terms of repayment.

F-36

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The amounts due from Maxpro related to the unsecured advances for the operations of Maxpro. The payable to Maxpro were advances for the operations of IFM Co. The amounts with Maxpro are unsecured, interest-free and have no fixed terms of repayment.

On September 22, 2009, the amounts due from/to Xinye and Maxpro were fully settled. On the same day, an advance of approximately RMB5.9 million was made to Maxpro which is due on demand.

Amounts due from Directors related to unsecured loans made to Directors bearing no interest. These amounts were fully repaid in 2008.

The amounts due from the three regional entities related to royalty fees receivable. The amounts due to the regional companies related to security deposits for franchise rights placed with the Group.

21. SEGMENT INFORMATION

The reportable segments represent the Group’s operating segments for which separate financial information is available and which is utilized on a regular basis by its chief operating decision maker (“CODM”) to assess performance and to allocate resources. In identifying its reportable segments, the Group also considers the nature of services provided by its operating segments. The Group’s CODM has been identified as the Chairman and Vice Chairman, who review the consolidated and segment results when making decisions about allocation of resources and assessing performance of the Group.

Management has determined that the Group operates in three reportable segments in 2007: Company-owned Brokerage Services located in Beijing and Shanghai, Franchise Services and Mortgage Management Services. Company-owned Brokerage Services in Beijing and Shanghai involve brokering transactions from secondary real estate property sales, purchases and leasing transactions, referral and service fees of mortgage loan transactions to our mortgage management services segment while Company-owned Brokerage Services in Shanghai also provides brokering services in primary real estate property sales and purchase transactions in addition to the above transactions in Beijing. Franchise Services generate revenue by selling regional franchise rights for the CENTURY 21^® brand in China to regional franchisees in various cities.

Company-Owned Brokerage Services located in Shenzhen was acquired in 2008 (see Note 7(b)) and became a new reportable segment. The Mortgage Management Services business grew substantially in 2008 and accordingly had its revenue, costs and expenses reviewed separately by the CODM starting from 2008. Mortgage Management Services include comprehensive advisory services in connection with the selection, application for and procurement of mortgage products offered by commercial banks.

Management evaluates the operating results of each of its reportable segments based upon (1) revenue from external customers, (2) commissions and other agent related costs, (3) operating costs, (4) selling, general and administrative expense, (5) income (loss) from operations and (6) net income (loss), each of which is presented in the Group’s Consolidated Statements of Operations. Corporate executive compensation and headquarters rental cost and interest income are not allocated among segments and are recorded as non-allocated items. The CODM does not review balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

F-37

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

The following tables summarize the selected revenue and expense information for each reportable segment for the year ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009:

	Year ended December 31, 2007
	(in RMB thousands)
	Company-Owned Brokerage Services						Franchise Services		Non- allocated		Total
	Beijing		Shanghai		Total
Revenue from external customers	62,666		89,026		151,692		37,337		-		189,029
Commissions and other agent related costs	(30,914	)	(46,623	)	(77,537	)	(5,329	)	-		(82,866	)
Operating cost	(33,983	)	(38,045	)	(72,028	)	(7,858	)	-		(79,886	)
Selling, general and administrative expenses	(16,636	)	(31,081	)	(47,717	)	(17,754	)	(29,000	)	(94,471	)
(Loss) income from operations	(18,867	)	(26,723	)	(45,590	)	6,396		(29,000	)	(68,194	)
Net (loss) income	(18,656	)	(26,664	)	(45,320	)	6,478		(33,932	)	(72,774	)

	Year ended December 31, 2008
	(in RMB thousands)
	Company-Owned Brokerage Services						Total		Franchise Services		Mortgage Management Services		Non- allocated		Total
	Beijing		Shanghai		Shenzhen
Revenue from external customers	75,543		126,830		3,703		206,076		56,633		10,650		-		273,359
Commissions and other agent related costs	(58,394	)	(84,693	)	(3,517	)	(146,604	)	(2,130	)	(2,816	)	-		(151,550	)
Operating cost	(58,071	)	(70,496	)	(4,010	)	(132,577	)	(12,291	)	(1,589	)	-		(146,457	)
Selling, general and administrative expenses	(23,095	)	(26,989	)	(2,721	)	(52,805	)	(13,772	)	(5,561	)	(30,814	)	(102,952	)
(Loss) income from operations	(64,017	)	(55,348	)	(6,545	)	(125,910	)	28,440		684		(30,814	)	(127,600	)
Net (loss) income	(63,938	)	(55,297	)	(6,183	)	(125,418	)	27,000		225		(33,694	)	(131,887	)

	Nine Months ended September 30, 2008 (unaudited)
	(in RMB thousands)
	Company-Owned Brokerage Services						Total		Franchise Services		Mortgage Management Services		Non- allocated		Total
	Beijing		Shanghai		Shenzhen
Revenue from external customers	50,196		101,752		1,755		153,703		47,271		7,903		-		208,877
Commissions and other agent related costs	(44,981	)	(65,662	)	(1,843	)	(112,486	)	(1,777	)	(1,987	)	-		(116,250	)
Operating cost	(43,734	)	(54,254	)	(1,919	)	(99,907	)	(9,899	)	(1,083	)	-		(110,889	)
Selling, general and administrative expenses	(18,284	)	(21,997	)	(1,127	)	(41,408	)	(8,783	)	(4,404	)	(21,861	)	(76,456	)
(Loss) income from operations	(56,803	)	(40,161	)	(3,134	)	(100,098	)	26,812		429		(21,861	)	(94,718	)
Net (loss) income	(56,744	)	(40,119	)	(3,128	)	(99,991	)	25,439		314		(25,060	)	(99,298	)

	Nine Months ended September 30, 2009
	(in RMB thousands)
	Company-Owned Brokerage Services						Total		Franchise Services		Mortgage Management Services		Non- allocated		Total
	Beijing		Shanghai		Shenzhen
Revenue from external customers	187,077		200,414		20,446		407,937		13,287		22,467		-		443,691
Commissions and other agent related costs	(85,970	)	(96,125	)	(11,906	)	(194,001	)	(688	)	(3,289	)	-		(197,978	)
Operating cost	(34,292	)	(38,153	)	(6,879	)	(79,324	)	(4,738	)	(1,121	)	-		(85,183	)
Selling, general and administrative expenses	(17,666	)	(16,867	)	(3,398	)	(37,931	)	(8,922	)	(5,331	)	(18,094	)	(70,278	)
Income (loss) from operations	49,149		49,269		(1,737	)	96,681		(1,061	)	12,726		(18,094	)	90,252
Net income (loss)	49,250		49,329		(1,712	)	96,867		(1,538	)	9,927		(16,923	)	88,333

F-38

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

All of the Group’s revenues from external customers are generated in the PRC.

22. SUBSEQUENT EVENTS

(a) On August 17, 2009, the Company entered into a definitive agreement to establish a majority-owned subsidiary in Beijing, China, which will engage in advisory services focusing on commercial properties. In accordance with the agreement, the Company will need to inject RMB2.55 million as paid-in capital, and will initially own 85% of this entity and has the option to acquire the remaining 15% depending on operation performance. As of October 31, 2009, this subsidiary has not been established.

(b) On October 20, 2009, the Company established a majority-owned subsidiary in Beijing, China, which will engage in advisory services focusing on the primary residential properties market. In accordance with the agreement, the Company injected RMB700,000 as paid-in capital and initially owns 70% of this entity and has the option to acquire the remaining 30% depending on the operation’s performance.

(c) On October 22, 2009, a special resolution of the Board was made to amend the Third Amended and Restated Articles of Association of the Company with respect to the performance-based adjustments to the Series A Preferred Shares. The change in fair value to the Series A Preferred Shares as a result of this modification was immaterial.

(d) On November 30, 2009, the amounts due from Maxpro were fully settled in cash.

(e) On December 30, 2009, in preparation for the intended Qualified IPO, the shareholders and Board of the Company approved resolutions effecting certain amendments to the authorised and issued share capital to:

(i) effect a 10-for-one split of the Company’s share capital pursuant to which each ordinary share, Series A and Series B convertible preferred share of the Company was subdivided into 10 shares at a par value of US$0.001 per share.

(ii) immediately upon the closing of the Qualified IPO prior to March 31, 2010:

• increase the authorised share capital of the Company from US$1,325,114 divided into 1,013,746,760 ordinary shares, 200,000,000 Series A Preferred Shares and 111,367,270 Series B Preferred Shares to US$3,333,000 divided into 3,021,632,730 ordinary shares, 200,000,000 Series A Preferred Shares and 111,367,270 Series B Preferred Shares by the creation of an additional 2,007,885,970 ordinary shares;

• reorganize the share capital such that the total authorised share capital of the Company of 3,333,000,000 shares of a nominal or par value of US$0.001 each shall be reclassified and re-designated into 3,133,000,000 Class A ordinary shares of a nominal or par value of US$0.001 each (the “Class A Ordinary Shares”), 100,000,000 Class B ordinary shares of a nominal or par value of US$0.001 each (the “Class B Ordinary Shares”) and 100,000,000 preferred shares of a nominal or par value of US$0.001 each (the “Preferred Shares”);

• convert all of the then currently issued and outstanding 200,000,000 Series A Preferred Shares and 111,367,270 Series B Preferred Shares into 238,842,277 Class A Ordinary Shares in accordance with the conversion rights disclosed in Note 15;

• re-designate all of the then issued and outstanding ordinary shares into Class A Ordinary Shares on a one to one basis and further re-designate 80,502,938 of the then issued and outstanding Class A Ordinary Shares registered in the name of Goldman Sachs Strategic Investments (Asia) L.L.C. into 80,502,938 Class B Ordinary Shares.

F-39

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

(iii) On October 22, 2009, a special resolution of the Board was made to amend the Third Amended and Restated Articles of Association of the Company with respect to the performance-based adjustments to the Series A Preferred Shares, which resulted in a modification to the Company’s share options. This modification made each share option exercisable into 0.87 ordinary shares upon the completion of a Qualified IPO prior to March 31, 2010. If the completion of Qualified IPO occurs subsequent to March 31, 2010, the number of ordinary shares that can be purchased by 1 share option would be further adjusted. This modification does not result in any incremental fair value because the terms of the share options included such anti-dilution provisions.

All share and per share amounts presented in the consolidated financial statements have been restated on a retroactive basis to reflect the effect of share split and issuances.

(f) On January 27, 2010, the shareholders and Board of the Company approved resolutions deeming their proposed offering (the “Proposed IPO”) to be a Qualified IPO. As a result of this resolution, the terms of the Series A Preferred Shares performance-based adjustments have been modified such that they are effective upon the Proposed IPO as well a Qualified IPO as defined in Note 17. This modification will result in compensation expense of approximately US$720,000 on the modification date.

(g) On January 27, 2010, the Company notified certain of the option holders under Batch A (Note 17), that the terms of their awards would be modified to deem the Proposed IPO to be a Qualified IPO for purposes of the Batch A vesting schedule. The Company is currently assessing whether there is any incremental fair value to be recognized as compensation expense as a result of this modification.

(h) The Group has performed an evaluation of subsequent events through January 27, 2010, which is the date the financial statements were issued, with no other events or transactions needing recognition or disclosure identified.

23. RESTRICTED NET ASSETS

Relevant PRC laws and regulations permit payments of dividends by the Company’s PRC subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, the PRC subsidiaries are required to annually appropriate 10% of net after-tax income to the general reserve fund or statutory surplus fund (see Note 2(w)) prior to payment of any dividends, unless such reserve funds have reached 50% of its respective registered capital. As a result of these and other restrictions under PRC laws and regulations, the PRC subsidiaries are restricted in their ability, which restricted portion amounted to approximately RMB293.5 million, RMB264.0 million and RMB313.3 million as of December 31, 2007 and 2008 and as of September 30, 2009, respectively. Even though the Company currently does not require any such dividends, loans or advances from the PRC subsidiaries for working capital and other funding purposes, the Company may in the future require additional cash resources from the PRC subsidiaries due to changes in business conditions, to fund future acquisitions and development, or merely to declare and pay dividends to make distributions to shareholders.

24. ADDITIONAL INFORMATION—CONDENSED FINANCIAL STATEMENTS

The separate condensed financial statements of IFM Investments Limited (the “Company”) as presented below have been prepared in accordance with Securities and Exchange Commission Regulation S-X

F-40

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Rule 5-04 and Rule 12-04 and present the Company’s investments in its subsidiaries under the equity method of accounting. Such investments are presented on the separate condensed balance sheets of the Company as “Long-term investments”.

The Company was incorporated in the Cayman Islands on November 30, 2005, by IFM Holding Company Ltd. (“IFM Holding”), a Cayman Islands exempt company. IFM Holding was a wholly-owned subsidiary of Maxpro International Enterprise, Inc. (“Maxpro”), a New York corporation. Maxpro was 100% owned by Mr. Donald Zhang.

The subsidiaries did not pay any dividend to the Company for the periods presented. Certain information and footnote disclosures generally included in financial statements prepared in accordance with US GAAP have been condensed and omitted. The footnote disclosures contain supplemental information relating to the operations of the Company, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company.

The Company did not have significant capital and other commitments, long-term obligations, or guarantees as of September 30, 2009.

Operating expense for the Company for the years ended December 31, 2007 and 2008 and for the nine months ended September 30, 2008 and 2009 included share-based compensation as a result of the options granted to employees of the Company in 2007, 2008, and 2009. Total share-based compensation for the years ended December 31, 2007 and 2008, and for the nine months ended September 30, 2008 and 2009 were approximately RMB44,000, RMB730,000, RMB536,000 (unaudited) and RMB1,257,000, respectively.

F-41

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Financial information of parent company

Condensed Balance Sheets

(in thousands, except par value)

	December 31,				September 30,
	2007           RMB		2008           RMB		2009 RMB		2009 US$
							(Note 2(c))
ASSETS
Current assets:
Cash and cash equivalents	84,232		52,238		8,887		1,302
Amounts due from subsidiaries, associates and related parties	45,223		34,583		64,922		9,511
Prepaid expenses and other current assets	1,410		-		-		-
Total current assets	130,865		86,821		73,809		10,813
Non-current assets:
Long-term investments	254,339		175,424		270,365		39,607
Total assets	385,204		262,245		344,174		50,420
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accrued expenses and other current liabilities	5,034		5,897		2,520		369
Amounts due to subsidiaries, associates and related parties	15,205		6,809		2,524		370
Total liabilities	20,239		12,706		5,044		739
Convertible redeemable preferred shares (US$0.001 par value, 305,254, 311,367 and 311,367 shares authorized, issued and outstanding with redemption value of RMB 547,379, RMB 566,470 and RMB 566,470 as of December 31, 2007 and 2008 and as of September 30, 2009, respectively)	469,971		501,892		514,162		75,322
Shareholders’ deficit:
Ordinary shares (US$0.001 par value, 1,003,609, 1,013,747 and 1,013,747 shares authorized as of December 31, 2007 and 2008 and as of September 30, 2009; 260,000 shares issued and outstanding as of December 31, 2007 and 2008 and as of September 30, 2009, respectively)	2,152		2,152		2,152		315
Additional paid-in capital	28,537		13,508		2,496		366
Accumulated deficit	(135,695	)	(268,013	)	(179,680	)	(26,322	)
Total shareholders’ deficit	(105,006	)	(252,353	)	(175,032	)	(25,641	)
Total liabilities, convertible redeemable preferred shares and shareholders’ deficit	385,204		262,245		344,174		50,420

F-42

IFM INVESTMENTS LIMITED

Notes to Consolidated Financial Statements — (Continued)

Financial information of parent company

Condensed Statements of Operations

(in thousands)

	Year Ended December 31,				Nine Months Ended September 30,
	2007           RMB		2008           RMB		2008 RMB		2009 RMB		2009 US$
					(unaudited)				(Note 2(c))
Costs and expenses:
Selling, general and administrative expenses	(16,343	)	(14,202	)	(8,897	)	(6,573	)	(963	)
Total costs and expenses	(16,343	)	(14,202	)	(8,897	)	(6,573	)	(963	)
Loss from operations	(16,343	)	(14,202	)	(8,897	)	(6,573	)	(963	)
Interest income	901		1,325		1,048		19		3
Foreign currency exchange loss	(8,425	)	(7,635	)	(7,316	)	(54	)	(8	)
Loss before share of subsidiaries’ and associates’ losses (income)	(23,867	)	(20,512	)	(15,165	)	(6,608	)	(968	)
Share of subsidiaries’ and associates’ (losses) income	(50,254	)	(111,806	)	(84,564	)	94,941		13,908
Net (loss) income	(74,121	)	(132,318	)	(99,729	)	88,333		12,940
Accretion of convertible redeemable preferred shares	(7,247	)	(15,759	)	(11,735	)	(12,269	)	(1,797	)
Income allocated to participating preferred shareholders	-		-		-		(41,451	)	(6,072	)
Net (loss) income attributable to ordinary shareholders	(81,368	)	(148,077	)	(111,464	)	34,613		5,071

Condensed Statements of Cash Flows

(in thousands)

	Year Ended December 31,				Nine Months Ended September 30,
	2007     RMB		2008     RMB		2008     RMB		2009     RMB		2009     US$
					(unaudited)				(Note 2(c))
Net cash used in operating activities	(20,754	)	(13,736	)	(10,566	)	(9,959	)	(1,459	)
Net cash used in investing activities	(201,190	)	(32,889	)	(32,889	)	-		-
Net cash provided by (used in) financing activities	279,341		19,137		18,354		(33,367	)	(4,888	)
Effect of exchange rate changes on cash and cash equivalents	(3,898	)	(4,506	)	(4,743	)	(25	)	(4	)
Net increase (decrease) in cash and cash equivalents	53,499		(31,994	)	(29,844	)	(43,351	)	(6,351	)
Cash and cash equivalents at the beginning of year/period	30,733		84,232		84,232		52,238		7,653
Cash and cash equivalents at the end of year/period	84,232		52,238		54,388		8,887		1,302

F-43

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 6. Indemnification of Directors and Officers.

Cayman Islands law does not limit the extent to which a company’s articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our amended and restated Articles of Association provide for indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such, except through their own fraud or dishonesty.

Pursuant to the form of indemnification agreements filed as Exhibit 10.2 to this Registration Statement, we will agree to indemnify our directors and officers against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being such a director or officer.

The form of Underwriting Agreement to be filed as Exhibit 1.1 to this Registration Statement will also provide for indemnification of us and our officers and directors.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 7. Recent Sales of Unregistered Securities.

During the past three years, we have issued the following securities (including options to acquire our ordinary shares). We believe that each of the following issuances was exempt from registration under the Securities Act in reliance on Regulation S under the Securities Act or pursuant to Section 4(2) of the Securities Act regarding transactions not involving a public offering. On January 4, 2010, we effected a share split whereby all of our issued and outstanding 26,000,000 ordinary shares of par value US$0.01 each, 20,000,000 Series A preferred shares of par value US$0.01 each and 11,136,727 Series B preferred shares of par value US$0.01 each were divided into 260,000,000 ordinary shares of US$0.001 par value each, 200,000,000 Series A preferred shares of par value US$0.001 each and 111,367,270 Series B preferred shares of par value US$0.001 each, respectively, and the number of our authorized shares was increased from 101,374,676 to 1,013,746,760. The share split has been retroactively reflected for the information presented below.

Purchaser	Date of Sale or Issuance	Number of Securities	Consideration (US$)	Underwriting Discount and Commission
Goldman Sachs Strategic Investments (Asia) L.L.C.	August 24, 2006	200,000,000 Series A preferred shares	22,000,000	Not applicable
GL Asia Mauritius II Cayman Ltd	October 19, 2007	105,253,600 Series B preferred shares	40,000,000	Not applicable
Realogy Corporation	February 21, 2008	6,113,670 Series B preferred shares	2,323,406	Not applicable
Certain directors, officers, employees, and consultants of the Registrant	July 16, 2007	options to purchase a total of 39,800,000 ordinary shares	Not applicable1	Not applicable
Certain directors, officers, employees, and consultants of the Registrant	December 17, 2007	options to purchase a total of 5,500,000 ordinary shares	Not applicable1	Not applicable

II-1

Purchaser	Date of Sale or Issuance	Number of Securities	Consideration (US$)	Underwriting Discount and Commission
Certain directors, officers, employees, and consultants of the Registrant	February 20, 2008	options to purchase a total of 1,700,000 ordinary shares	Not applicable1	Not applicable
Certain directors, officers, employees, and consultants of the Registrant	August 11, 2008	options to purchase a total of 3,000,000 ordinary shares	Not applicable1	Not applicable
Certain directors, officers, employees, and consultants of the Registrant	February 2, 2009	options to purchase a total of 200,000 ordinary shares	Not applicable1	Not applicable
Certain directors, officers, employees, and consultants of the Registrant	July 20, 2009	options to purchase a total of 700,000 ordinary shares	Not applicable1	Not applicable
Certain directors, officers, employees and consultants of the Registrant	August 20, 2009	options to purchase a total of 2,500,000 ordinary shares	Not applicable1	Not applicable

¹ Issued pursuant to the 2006 Stock Incentive Plan, as amended

Item 8. Exhibits and Financial Statement Schedules.

(a)    Exhibits

See Exhibit Index beginning on page II-5 of this registration statement.

Item 9. Undertakings.

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant under the provisions described in Item 6, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1)        For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(b) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2)        For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-2

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the People's Republic of China, on January 27, 2010.

IFM INVESTMENTS LIMITED
By:	/s/  Donald Zhang
	Name: Donald Zhang
	Title:  Chairman of the Board of Directors            Chief Executive Officer

II-3

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below does hereby constitute and appoint Donald Zhang and Harry Lu, and each of them singly, as his true and lawful attorneys-in-fact and agents, each with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and sign any registration statement for the same offering covered by this Registration Statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, as amended, and all post-effective amendments thereto and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

Signatures	Title	Date
/s/  Donald Zhang Name: Donald Zhang	Chairman of the Board of Directors and Chief Executive Officer (principal executive officer)	January 27, 2010
/s/  Harry Lu Name: Harry Lu	Vice Chairman of the Board of Directors and President	January 27, 2010
/s/  * Name: Kevin Cheng Wei	Director and Chief Financial Officer (principal financial and accounting officer)	January 27, 2010
/s/  * Name: Weiping Zhang	Director	January 27, 2010
/s/  * Name: Jennifer Tang	Director	January 27, 2010
/s/  * Name: Qiang Chai	Director	January 27, 2010
/s/  * Name: Liang Pei	Director	January 27, 2010
/s/  * Name: Gregory F. Lavelle Title:  Managing Director            Puglisi & Associates	Authorized Representative in the United States	January 27, 2010

* By:	/s/  Donald Zhang
	Donald Zhang Attorney-in-fact

II-4

IFM INVESTMENTS LIMITED

EXHIBIT INDEX

Exhibit Number	Description of Documents
1.1*	Form of Underwriting Agreement.
3.1**	Memorandum and Articles of Association of the Registrant, as currently in effect.
3.2**	Amended and Restated Memorandum and Articles of Association of the Registrant.
4.1	Registrant’s Specimen American Depositary Receipt (included in Exhibit 4.3).
4.2*	Registrant’s Specimen Certificate for Class A ordinary shares.
4.3*	Form of Deposit Agreement among the Registrant, the depositary and holder of the American Depositary Receipts.
4.4*	Registration Rights Agreement, dated as of December 30, 2009, granting registration rights to certain shareholders of the Registrant.
5.1*	Opinion of Conyers Dill & Pearman regarding the validity of the ordinary shares being registered.
8.1*	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain U.S. tax matters.
8.2*	Opinion of Conyers Dill & Pearman regarding certain Cayman Islands tax matters.
10.1*	Amended and Restated 2006 Stock Incentive Plan.
10.2*	Form of Indemnification Agreement with the Registrant’s directors.
10.3*	Form of Employment Agreement with Donald Zhang, Harry Lu, Kevin Cheng Wei, Kevin Yung and Weiping Zhang.
10.4*	English translation of Form of Labor Contract with Lihong Ma, Hao Wang, Qifeng Tan and Sheng Kang.
10.5*	English translation of Labor Contract with Wang Yui Fung.
10.6*	English translation of Labor Contract with Hau Piu Ip.
10.7*	Restated CENTURY 21 International Sub-franchise Agreement for the People’s Republic of China, dated as of March 22, 2000.
21.1*	Subsidiaries of the Registrant.
23.1**	Consent of PricewaterhouseCoopers Zhong Tian CPAs Limited Company, an Independent Registered Public Accounting Firm.
23.2	Consent of Conyers & Dill Pearman (included in Exhibit 5.1).
23.3	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 8.1).
23.4*	Consent of Jun He Law Offices.
23.5*	Consent of Conor Chiahung Yang.
23.6*	Consent of Kevin Yung.
24.1*	Powers of Attorney (included on signature page).
99.1*	Code of Business Conduct and Ethics of the Registrant.

* Filed previously.

** Filed herewith.

II-5

EX-3.1

Exhibit 3.1

THE COMPANIES LAW OF THE CAYMAN ISLANDS (2007 REVISION)

COMPANY LIMITED BY SHARES

FIFTH AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION

OF

IFM INVESTMENTS LIMITED

(Adopted by Special Resolution of the Shareholders on January 27, 2010)

1. The name of the Company is IFM Investments Limited.

2. The Registered Office of the Company shall be at the offices of Trident Trust Company (Cayman) Limited, Fourth Floor, One Capital Place, P.O. Box 847GT, Grand Cayman, Cayman Islands, British West Indies or at such other place as the Directors may from time to time decide.

3. The objects for which the Company is established are unrestricted and shall include, but without limitation, the following:

(a)	(i)	To carry on the business of an investment company and to act as promoters and entrepreneurs and to carry on business as financiers, capitalists, concessionaires, merchants, brokers, traders, dealers, agents, importers and exporters and to undertake and carry on and execute all kinds of investment, financial, commercial, mercantile, trading and other operations.
	(ii)	To carry on whether as principals, agents or otherwise howsoever the business of realtors, developers, consultants, estate agents or managers, builders, contractors, engineers, manufacturers, dealers in or vendors of all types of property including services.

(b) To exercise and enforce all rights and powers conferred by or incidental to the ownership of any shares, stock, obligations or other securities including without prejudice to the generality of the foregoing all such powers of veto or control as may be conferred by virtue of the holding by the Company of some special proportion of the issued or nominal amount thereof, to provide managerial and other executive, supervisory and consultant services for or in relation to any company in which the Company is interested upon such terms as may be thought fit.

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(c) To purchase or otherwise acquire, to sell, exchange, surrender, lease, mortgage, charge, convert, turn to account, dispose of and deal with real and personal property and rights of all kinds and, in particular, mortgages, debentures, produce, concessions, options, contracts, patents, annuities, licenses, stocks, shares, bonds, policies, book debts, business concerns, undertakings, claims, privileges and choses in action of all kinds.

(d) To subscribe for, conditionally or unconditionally, to underwrite, issue on commission or otherwise, take, hold, deal in and convert stocks, shares and securities of all kinds and to enter into partnership or into any arrangement for sharing profits, reciprocal concessions or cooperation with any person or company and to promote and aid in promoting, to constitute, form or organise any company, syndicate or partnership of any kind, for the purpose of acquiring and undertaking any property and liabilities of the Company or of advancing, directly or indirectly, the objects of the Company or for any other purpose which the Company may think expedient.

(e) To stand surety for or to guarantee, support or secure the performance of all or any of the obligations of any person, firm or company whether or not related or affiliated to the Company in any manner and whether by personal covenant or by mortgage, charge or lien upon the whole or any part of the undertaking, property and assets of the Company, both present and future, including its uncalled capital or by any such method and whether or not the Company shall receive valuable consideration thereof.

(f) To engage in or carry on any other lawful trade, business or enterprise which may at any time appear to the Directors of the Company capable of being conveniently carried on in conjunction with any of the aforementioned businesses or activities or which may appear to the Directors or the Company likely to be profitable to the Company.

In the interpretation of this Memorandum of Association in general and of this Clause 3 in particular no object, business or power specified or mentioned shall be limited or restricted by reference to or inference from any other object, business or power, or the name of the Company, or by the juxtaposition of two or more objects, businesses or powers and that, in the event of any ambiguity in this clause or elsewhere in this Memorandum of Association, the same shall be resolved by such interpretation and construction as will widen and enlarge and not restrict the objects, businesses and powers of and exercisable by the Company.

4. Except as prohibited or limited by law, the Company shall have full power and authority to carry out any object and shall have and be capable of from time to time and at all times exercising any and all of the powers at any time or from time to time exercisable by a natural person or body corporate in doing in any part of the world whether as principal, agent, contractor or otherwise whatever may be considered by it necessary for the attainment of its objects and whatever else may be considered by it as incidental or conducive thereto or consequential thereon, including, but without in any way restricting the generality of the foregoing, the power to make any alterations or amendments to this Memorandum of Association and the Articles of Association of the Company considered necessary or convenient in the manner set out in the Articles of Association of the Company, and the power to do any of the following acts or things, viz: to pay all expenses of and incidental to the promotion,

2

formation and incorporation of the Company; to register the Company to do business in any other jurisdiction; to sell, lease or dispose of any property of the Company; to draw, make, accept, endorse, discount, execute and issue promissory notes, debentures, bills of exchange, bills of lading, warrants and other negotiable or transferable instruments; to lend money or other assets and to act as guarantors; to borrow or raise money on the security of the undertaking or on all or any of the assets of the Company including uncalled capital or without security; to invest monies of the Company in such manner as the Directors determine; to promote other companies; to sell the undertaking of the Company for cash or any other consideration; to distribute assets in specie to Members of the Company; to make charitable or benevolent donations; to pay pensions or gratuities or provide other benefits in cash or kind to Directors, officers, employees, past or present and their families; to purchase Directors and officers liability insurance and to carry on any trade or business and generally to do all acts and things which, in the opinion of the Company or the Directors, may be conveniently or profitably or usefully acquired and dealt with, carried on, executed or done by the Company in connection with the business aforesaid PROVIDED THAT the Company shall only carry on the businesses for which a license is required under the laws of the Cayman Islands when so licensed under the terms of such laws.

5. The liability of each Member is limited to the amount from time to time unpaid on such Member’s shares.

The share capital of the Company is US $1,325,114.03 divided into 101,374,676 Ordinary Shares of a nominal or par value of US$0.01 each, 20,000,000 Series A Shares of a nominal or par value of US$0.01 each and 11,136,727 Series B Shares of a nominal or par value of US$0.01 each with the power, insofar as is permitted by law, to redeem or purchase any of its shares and to increase or reduce the said capital subject to the provisions of the Companies Law (2007 Revision) and the Articles of Association and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless the conditions of issue shall otherwise expressly declare every issue of shares whether declared to be preferred or otherwise shall be subject to the powers hereinbefore contained.

6. If the Company is registered as exempted, its operations will be carried on subject to the provisions of Section 193 of the Companies Law (2007 Revision) and, subject to the provisions of the Companies Law (2007 Revision) and the Articles of Association, it shall have the power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

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THE COMPANIES LAW OF THE CAYMAN ISLANDS (2007 REVISION)

COMPANY LIMITED BY SHARES

FIFTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION

OF

IFM INVESTMENTS LIMITED

(Adopted by Special Resolution of the Shareholders on January 27, 2010)

Definitions

1. In these Articles, Table A in the First Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith:

“Additional Ordinary Shares” means all Ordinary Shares issued by the Company; provided that the term “Additional Ordinary Shares” does not include (i) any securities issued to employees, consultants, officers or directors of the Company pursuant to any stock option, share purchase, share bonus or other equity incentive plans, agreements or arrangements of the Company; (ii) securities issued upon conversion of the Preferred Shares or upon exercise of any outstanding warrants or options; (iii) securities issued in connection with any share split, share dividend, combination, recapitalization or other similar transaction of the Company; or (iv) any other security that is issued with the approval of a majority of the Board of Directors and each of the Investors’ Directors.

“Additional Series B SPA” means that certain Securities Purchase Agreement dated January 31, 2008 by and among the Company, Realogy and each of the Company Warrantors, the Founders, IFM Overseas, GL and GL Mauritius GS and Goldman Sachs Strategic Holdings Limited, as amended from time to time.

“Alternate Director” means an acting director appointed by a Director to temporarily perform his functions as a Director of the Company as described in Article 78.

“Amended 2006 ESOP” means the employee stock option plan which permits the issuance of up to 8,527,494 Ordinary Shares to key employees, officers, directors, consultants or other service providers of the Company.

“Ancillary Agreements” means, collectively, the Memo and Articles and the Right of First Refusal and Co-Sale Agreement.

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“Annual Business Plan” means the annual business plan and budget prepared by the Company.

“Applicable Series” has the meaning set forth in Article 20.

“Articles” or “Articles of Association” means these Articles as originally framed or as from time to time altered by Special Resolution.

“Auditors” mean the persons who for the time being perform the duties of auditors for the Company.

“Automatic Conversion Event” has the meaning set forth in Article 17.

“Board of Directors” means the board of directors for the time being of the Company.

“Breach Notice” has the meaning set forth in Article 13(a).

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for business in New York, Hong Kong and Beijing.

“Cendant Subfranchise Agreement” means that certain Restated Century 21 International Subfranchise Agreement for the Peoples Republic of China dated March 22, 2000 between Cendant Global Services B.V. and IFMCo, and as amended on October 4, 2005.

“Century 21 Marks and System” has the meaning as set forth in the Cendant Subfranchise Agreement.

“Closing for Series A Shares” means 10 am., on 24 August, 2006.

“Closing for Series B Shares” means 10 am., on 19 October, 2007.

“Combined Years 2/3 Milestone” means the Company’s combined average (arithmetic average) NPAT for the twelve (12) month periods ending on December 31,2008 and December 31, 2009 (“Combined Year 2/3”), which shall be no less than RMB89,210,000. The Company’s financial statements for purposes of the Year 2, Year 3 and Combined Years 2/3 Milestones shall be prepared in accordance with US GAAP and audited by a “Big Four” accounting firm reasonably acceptable to GS.

“Company” means the above-named IFM Investments Limited.

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“Conversion Date” means the date specified in any notice served by a holder of Preferred Shares electing to convert such shares or the date on which automatic conversion is to occur in accordance with Article 17.

“Conversion Price” means the price at with each Ordinary Share shall be issued upon conversion of the Preference Shares without the payment of any additional consideration by the holders thereof, and initially means, with respect to the Series A Preference Shares US$1.10 per share, and with respect to the Series B Preference Shares US$3.7670 per share, each as adjusted pursuant to Articles 21 and 22 hereto.

“Conversion Shares” means Ordinary Shares issuable upon conversion of the Preferred Shares.

“Cooperation Agreement” means the Cooperation Agreement between IFMCo and IFM Beijing dated June 30, 2002 and its supplements and amendments dated January 10, 2003, December 10, 2005, and July 10, 2007.

“Directors” mean duly elected and incumbent members of the Board of Directors of the Company and each of them a “Director”.

“Dispute Notice” has the meaning set forth in Article 13(d).

“Dollars” or “US$” refers to the dollar currency of the United States of America and references to cents or ¢ should be construed accordingly.

“Effective Series A Conversion Price” means, with respect to any Ordinary Share Equivalent at a given time, an amount equal to the quotient of (i) the sum of any consideration, if any, received by the Company with respect to the issuance of such Ordinary Share Equivalent and the lowest aggregate consideration receivable by the Company, if any, upon the exercise, exchange or conversion of the Ordinary Share Equivalent over (ii) the number of Ordinary Shares issuable upon the exercise, conversion or exchange of the Ordinary Share Equivalent.

“Electronic Messaging” means the type of Electronic Record that is transmitted via an electronic network to the e-mail address of a person.

“Electronic Record” has the same meaning as in the Electronic Transactions Law (2003 Revision) of the Cayman Islands.

“Exchangeable Note” means the Exchangeable Note issued by IFM Overseas to GL pursuant to the Note Purchase Agreement.

“Founders” means Mr. Donald Zhang and Mr. Harry Hang Lu.

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“Genius” means Genius Nation Investment Limited, a company incorporated and existing under the laws of British Virgin Islands.

“Group Company” means each of IFM Overseas, the Company and Persons (other than a natural person) controlled by the Company, including without limitation, IFMCo, Genius, IFM Beijing, Shanghai Anshijie, the Shanghai Regional Subfranchisor, and each MMC Entity and NRT Entity, and “Group Companies” means each Group Company collectively taken together.

“Fully-Diluted Basis” means (i) the number of Ordinary Shares which would be outstanding if all securities convertible into or exchangeable or exercisable for Ordinary Shares held by all security holders, including without limitation any holder of options to purchase Ordinary Shares pursuant to the Amended 2006 ESOP, were converted or exchanged or exercised in full and (ii) as applied to a particular shareholder, the number of Ordinary Shares which would be held by such Shareholder if all securities convertible into or exchangeable or exercisable for Ordinary Shares held by such Shareholder were converted or exchanged or exercised in full.

“GS” means Goldman Sachs Strategic Investments (Asia) L.L.C. and any of its permuted assignees.

“GL” means GL Asia Mauritius II Cayman Ltd. and any of its permitted assignees.

“GL Mauritius” means GL Asia Mauritius II Ltd. and any of its permitted assignees.

“IFM Being” means Beijing IFM Franchise Consultant Co., Ltd.

“IFMCo” means IFM Company Ltd., a Cayman Islands company.

“IFM Overseas” means IFM Overseas Partners L.P., a Cayman Islands limited partnership acting by its general partner, IFM Overseas Limited.

“Intellectual Property” means any and all (i) rights to sub-license Century 21 Marks and System (as defined in the Cendant Subfranchise Agreement), (ii) the real estate agency information management system, or sales information system, including all upgrades thereto, (iii) registered and unregistered copyrights, copyright registrations and applications, author’s rights and works of authorship, (iv) know-how, trade secrets and patents (including symbolic patents), (v) proprietary processes and operational procedures, (vi) trade names, trade dress, trademarks, and service marks, and registrations and applications therefor, and (vii) the goodwill of the business symbolized or represented by the foregoing, customer lists and other proprietary information and common-law rights.

“Investors” means GS, GL and any of their permitted transferees and assignees.

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“Investors’ Directors” means the Series A Directors and the Series B Director.

“IPO” means a firm-commitment underwritten initial public offering of the Company’s Ordinary Shares.

“Liquidation Preference” means the superior right holders of the outstanding Preferred Shares have in an event of liquidation, dissolution or winding-up of the Company as set forth in Article 127.

“Maxpro” means Maxpro International Enterprise, Inc., a New York corporation.

‘Member” shall bear the meaning ascribed to in the Statute.

“Memo and Articles” means the Memorandum of Association and Articles of Association as amended from time to time, pursuant to the laws of the Cayman Islands.

“MMC Business” means estate mortgage services, housing financial services, property evaluation services, guaranty, settlement and insurance service business in China conducted by the MMC Entities.

“MMC Entities” means one or more offshore holding companies, either directly or indirectly, wholly-owned by the Company, and one or more wholly foreign-owned enterprises owned by such holding companies, which will own and operate the MMC Business in China.

“Month” means calendar month.

“Note Purchase Agreement” means that certain Note Purchase Agreement dated September 11, 2007 by and among IFM Overseas and GL, as amended from time to time.

“NPAT” means audited consolidated net profit after tax.

“NRT Business” means the real estate brokerage business conducted in the PRC by the NRT Entities, which shall comply with the terms and conditions of the Cendant Subfranchise Agreement.

“NRT Entities” means one or more entities wholly owned by such entity approved by the Investors, in each case, and established or acquired in the PRC to own and operate the NRT Business, including without limitation Shanghai Ruifeng Real Estate Investment Consultant Co., Ltd. and Beijing Anxinruide Real Estate Agency Co., Ltd.

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“Ordinary Shares” means ordinary shares in the capital of the Company of par value US$0.01 and having the rights provided for in these Articles.

“Ordinary Share Directors” means the four directors appointed by holders of a majority of the Ordinary Shares pursuant to Article 69.

“Ordinary Share Equivalents” has the meaning set forth in Article 20(b).

“Original Issue Date” means in relation to Preferred Shares, the first date on which any share of the applicable series of Preferred Shares are first issued by the Company.

“Person” means any individual, corporation, partnership, limited partnership, proprietorship, association, limited liability company, firm, trust, estate or other enterprise or entity.

“PRC” means the People’s Republic of China, but solely for the purposes of this Memo and Articles, excluding the Hong Kong Special Administrative Region, Macau Special Administrative Region and the islands of Taiwan.

“Preferred Shares” means the Series A Shares and Series B Shares.

“Preferred Share Percentage” means eighty percent (80%).

“Qualified Exchange” means (i) The New York Stock Exchange, the Nasdaq Global Select Market, or the Nasdaq Global Market or (ii) any other exchange of recognized international reputation and standing duly approved by the Board of Directors, including the affirmative vote of the Series A Directors and the Series B Director.

“Qualified IPO” or “Qualified Public Offering” means (i) a firm commitment, underwritten registered IPO by the Company of its Ordinary Shares on either a Qualified Exchange or other internationally recognized, major stock exchange approved by, among others, the Series A Directors and the Series B Director, that values the Company at no less than US$400,000,000 immediately after the IPO and that results in aggregate proceeds to the Company of at least US$100,000,000, net of Selling Expenses, as evidenced by the due execution of an underwriting or similar agreement in relation to the public offering, (ii) an offering conducted in accordance with the Registration Statement on Form F-1 (File No. 333-164216) as filed with the United States Securities and Exchange Commission which prices the ADSs at no less than US$7.00 per ADS with the gross proceeds of not less than US$87,412,500, as evidenced by the due execution of an underwriting or similar agreement in relation to the public offering, or (iii) such other offering of Ordinary Shares of the Company as is unanimously approved by the Founders, holders of the Series A Shares and holders of the Series B Shares.

“Realogy” means Realogy Corporation, a Delaware, U.S.A. corporation.

“Recapitalization” means any share split, share dividend, share combination or consolidation or other recapitalization in relation to the shares of the Company.

“Redemption Date” has the meaning set for in Article 13(a).

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“Redemption Notice” has the meaning set for in Article 13(a).

“Redemption Request” has the meaning set for in Article 13(a).

“Regional Subfranchisor Equity Interests” means a 51% equity interest in IFM Beijing, a 51% equity interest in Shanghai Ya Ye Real Estate Agency Company Limited, a 15% equity interest in Shandong San Lian Real Estate Agency Company Limited, a 10% equity interest in Xiamen Shi Ji Tong He Real Estate Consulting Company Limited, a 10% equity interest in Nanjing Xin Cheng Shi Real Estate Consulting Company Limited, and a 10% equity interest in Shanxi Li De Industry Investment Co Ltd.

“Regional Subfranchisors” means Shanghai Ya Ye Real Estate Agency Company Limited Shandong San Lian Real Estate Agency Company Limited Xiamen Shi Ji Tong He Real Estate Consulting Company Limited Nanjing Xin Cheng Shi Real Estate Consulting Company Limited and Shanxi Li De Industry Investment Co Ltd.

“Registered Office” means the registered office for the time being of the Company.

“Right of First Refusal and Co-Sale Agreement” means the amended and restated right of first refusal and co-sale agreement entered into between the Company, the Founders, GS, GL, Realogy and IFM Overseas.

“RMB” means Renminbi, the legal currency of the PRC.

“Seal” means the common seal of the Company and includes every duplicate seal.

“Secretary” includes an Assistant Secretary and any person appointed to perform the duties of Secretary of the Company.

“Selling Expenses” means, with respect to the issue or sale of any securities, any expenses payable directly or indirectly by the Company and any underwriting, brokerage or similar commissions, compensation, discounts or concessions paid or allowed by the Company in connection with such issue or sale.

“Series A Conversion Price” has the meaning set forth in Article 14, as adjusted pursuant to Articles 20 and 21.

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“Series A Directors” means the two directors appointed by the holders of a majority of the Series A Shares pursuant to Article 69.

“Series A Original Purchase Price” means, with respect to the Series A Shares, US$1.10 per share.

“Series A Redemption Price” has the meaning set forth in Article 13(a).

“Series A Shares” means preferred shares in the capital of the Company of par value US$0.01, all of which are designated as Series A Shares issued subject to and in accordance with the Statute and these Articles and having the rights provided for in these Articles.

“Series A SPA” means that certain Stock Purchase Agreement dated December 19, 2005 by and among the Company, GS, each of the Company Warrantors (as set forth therein) and the Founders, and as amended from time to time.

“Series B Conversion Price” has the meaning set forth in Article 14, as adjusted pursuant to Articles 20 and 21.

“Series B Director” means the one director appointed by the holders of a majority of the Series B Shares pursuant to Article 69.

“Series B Original Purchase Price” means, with respect to the Series B Shares, US$3.7670 per share, provided that with respect to the Series B Shares purchased by Realogy pursuant to the Additional Series B SPA, the Series B Original Purchase Price means US$3.80 per share (together with the Series A Original Purchase Price, the “Original Purchase Price”).

“Series B Redemption Price” has the meaning set forth in Article 13(b).

“Series B Shares” means preferred shares in the capital of the Company of par value US$0.01, all of which are designated as Series B Shares issued subject to and in accordance with the Statute and these Articles and having the rights provided for in these Articles.

“Series B SPA” means that certain Securities Purchase Agreement dated September 11, 2007 by and among the Company, GL, GL Mauritius and each of the Company Warrantors (as set forth therein), the Founders, IFM Overseas, GS and Goldman Sachs Strategic Holdings Limited, as amended from time to time.

“Shanghai Anshijie” means Shanghai Anshijie Real Estate Investment Consultant Co., Ltd.

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“Shanghai Regional Subfranchisor” means Shanghai Ya Ye Real Estate Agency Company Limited

“Special Resolution” has the same meaning as in the Statute and includes a resolution approved in writing as described herein.

“Statute” means the Companies Law of the Cayman Islands as amended and every statutory modification or re-enactment thereof for the time being in force.

“US GAAP” means generally accepted accounting principles in the United States, consistently applied, as in effect from time to time.

“Written” and “in writing” include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record.

“Xinye” means Beijing Xin Ye Jia Yuan Real Estate Consulting Services Company Limited

“Year 2 Milestone” means the Company’s NPAT for the twelve (12) month period from January 1, 2008 to December 31, 2008 (“Year 2”) being no less than RMB56,770,000.

“Year 3 Milestone” means the Company’s NPAT for the twelve (12) month period from January 1, 2009 to December 31, 2009 (“Year 3”) being no less than RMB121,650,000.

Words importing the singular number include the plural number and vice versa.

Words importing the masculine gender include the feminine gender.

Words importing persons include corporations.

In these Articles, Section 8 of the Electronic Transactions Law (2003 Revision) shall not apply.

2. The business of the Company may be commenced as soon after incorporation as the Directors shall see fit, notwithstanding that part only of the shares may have been allotted.

3. The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company including the expenses of registration.

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Certificates for Shares

4. Certificates representing shares of the Company shall be in such form as shall be determined by the Directors. Such certificates shall be under seal. All certificates for shares shall be consecutively numbered or otherwise identified and shall specify the shares to which they relate. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered in the register of Members of the Company. All certificates surrendered to the Company for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled. The Directors may authorize certificates to be issued with the seal and authorized signature(s) affixed by some method or system of mechanical process.

5. Notwithstanding Article 4 of these Articles, if a share certificate be defaced, lost or destroyed, it may be renewed on payment of a fee of one dollar (US$1.00) or such lesser sum and on such terms (if any) as to evidence and indemnity and the payment of the expenses incurred by the Company in investigating evidence, as the Directors may prescribe.

Issue of Shares

6. At the date of the adoption of these amended and restated Articles, the Company is authorized to issue 101,374,676 Ordinary Shares and 31,136,727 preferred shares, 20,000,000 of which are designated Series A Shares and 11,136,727 of which are designated as Series B Shares.

(a) The powers, preferences and rights, and the qualifications, limitations or restrictions thereof in respect to the Ordinary Shares and the Preferred Shares shall be subject as herein provided on such other terms as the Directors think proper, provided that shares shall not be issued partly paid.

(b) Subject as herein provided (including without limitation Articles 11 and 12), all Shares in the Company for the time being unallotted and unissued shall be under the control of the Directors, who may allot, issue or grant options over or otherwise dispose of Shares of the Company with or without preferred, deferred or other special rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise, and to such persons at such times and on such other terms as they think proper. All Shares shall be issued fully paid.

7. The Company shall maintain a register of its Members, and every person whose name is entered as a Member in the register of Members shall be entitled without payment to receive within 30 days after allotment or lodgment of transfer (or within such other period as the conditions of issue shall provide) one certificate for all his shares or several certificates each for one or more of his shares provided that in respect of a share or shares held jointly by several persons, the Company shall not be bound to issue more than one certificate and delivery of a certificate for a share to one of the several joint holders shall be sufficient delivery to all such holders.

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Transfer of Shares

8. The instrument of transfer of any shares shall be in writing and shall be executed by or on behalf of the transferor, and the transferor shall be deemed to remain the holder of a share until the name of the transferee is entered in the register in respect thereof.

9. The Directors may in their absolute discretion decline to register any transfer of Ordinary Shares. If the Directors refuse to register a transfer, they shall notify the transferee within 15 days of such refusal. The Directors shall register any transfer of Preferred Shares except where holders proposing or effecting the transfers of the Preferred Shares are subject to binding written agreements with the Company which restrict the transfer of the Preferred Shares held by such holders and such holders have not complied with the terms of such agreements or the restrictions have not been waived in accordance with their terms. Notwithstanding any provision to the contrary in these Articles, the Directors must register any transfer of Ordinary Shares requested by a mortgagee upon due and proper enforcement of its rights under a share mortgage.

10. The registration of transfers may be suspended at such time and for such periods as the Directors may from time to time determine, provided always that such registration shall not be suspended for more than 30 days in any year.

Variation of Rights of Shares

11. Variation of Rights of Shares

(a) Except as provided elsewhere in these Articles, if at any time the share capital of the Company is divided into different classes of shares, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may not, whether or not the Company is being wound-up, be varied without the consent in writing of the holders of a majority of the issued shares of that class, or the sanction of a resolution passed at a general meeting of the holders of the shares of that class; provided that if such variation has a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

(b) The rights attached to the Series A Shares may, whether or not the Company is being wound-up, only be varied with the prior written approval of the holders of at least two-thirds (66.667%) of the Series A Shares then outstanding. The rights attached to the Series B Shares may, whether or not the Company is being wound-up, only be varied with the prior written approval of the holders of at least two-thirds (66.667%) of the Series B Shares then outstanding; provided that if such variation has a negative material impact on the rights and privileges accruing to the Preferred Shares held by Realogy and such impact is disproportionate to any negative material impact on the other holders of the Series B Shares, the approval of Realogy will be required;

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(c) For so long as any Preferred Shares remain outstanding, notwithstanding any other provision of these Articles and in addition to any other vote or consent required elsewhere in the Memo and Articles or by the Companies Law, the following acts of any Group Company shall require the prior written approval of the holders of at least a Preferred Share Percentage of the Preferred Shares then outstanding (where transactions below are denominated in U.S. currency, the equivalent RMB amount shall be calculated based on an exchange rate of US$1=RMB8.11):

(i) any amendment of the Memo and Articles or equivalent charter documents of any Group Company; provided that if such amendment has a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

(ii) any merger, consolidation or reorganization involving any Group Company (whether or not the Group Company is the surviving corporation), provided that if the terms of such merger, consolidation or reorganization have a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

(iii) any sale, mortgage, pledge, transfer, lease, exchange or other disposition of all or substantially all of the assets of any Group Company, including the disposition or exclusive license of any of the Company’s Intellectual Property (for the avoidance of doubt, this shall exclude the sublicensing of the Century 21 Marks and System to Territorial Subfranchisors (as defined in the Cendant Subfranchise Agreement) and to Group Company franchisees in the ordinary course of business but including any assignment, amendment, termination or variation of the Cendant Subfranchise Agreement and the Cooperation Agreement); the grant of rights to operate any Group Company, or transfer of any operating rights by any Group Company; liquidation of all or substantially all of any Group Company; winding-up of any Group Company; or a voluntary or involuntary dissolution, or revocation of voluntary dissolution (judicial or non-judicial), of any Group Company; provided that if the terms of any such transaction set forth in this clause (ii) have a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

(iv) any increase or decrease in the total number of directors comprising the Board of Directors of any Group Company;

(v) issuance or sale by any Group Company of any equity or debt securities other than (x) any issuance of Conversion Shares, (y) any grant of stock options under the Amended 2006 ESOP and (z) any issuance of Ordinary Shares upon exercise of such stock options;

(vi) creation, incurrence, assumption or permission to exist any mortgage, pledge, charge, lien or other encumbrance on all or substantially all of assets of any Group Company; and

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(d) For the avoidance of doubt and notwithstanding anything to the contrary in the Memo and Articles, Realogy’s consent will not be required in the case of sale of all the Company’s shares or all or substantially all the assets of the Company under the circumstances set forth in Section 2.8 of the Right of First Refusal and Co-Sale Agreement.

12. Voting Rights.

(a) Subject to the provisions of the Memo and Articles, at all general meetings of the Company: (a) the holder of each Ordinary Share issued and outstanding shall have one vote in respect of each Ordinary Share held, and (b) the holder of each Preferred Share shall be entitled to such number of votes as equals the whole number of Ordinary Shares into which such holder’s collective Preferred Shares are convertible immediately after the close of business on the record date of the determination of the Company’s shareholders entitled to vote or, if no such record date is established, at the date such vote is taken or any written consent of the Company’s shareholders is first solicited. Subject to provisions to the contrary elsewhere in the Memo and Articles, or as required by the Companies Law, the holders of Preferred Shares shall vote together with the holders of Ordinary Shares, and not as a separate class or series, on all matters put before the Members.

(b) Protective Provisions. For so long as any Preferred Shares remain outstanding, in addition to any other vote or consent required elsewhere in the Memo and Articles or by the Companies Law, no Group Company shall take any of the following actions without the prior approval of the Board of Directors including in each case the affirmative vote (or written consent) of each of the Investors’ Directors (where transactions below are denominated in U.S. currency, the equivalent RMB amount shall be calculated based on an exchange rate of US$1=RMB8.11.

(i) repurchase or redemption of any debt or equity security; reclassification of issued securities; and increases, decreases or the alteration of the existing issued share capital of any Group Company; provided that if such transaction has a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

(ii) public offerings and/or registration of debt or equity securities of any Group Company other than those that validly result in a Qualified IPO, whether the sale of securities is made in connection therewith by such Group Company or by any shareholder of such Group Company; any action in preparation for an IPO, including without limitation the appointment of any investment bank or financial advisor in connection with any sale or IPO of any Group Company; or the granting of any registration rights with respect to any debt or equity securities of any Group Company;

(iii) declaration or payment of dividend by any Group Company before an IPO; provided that if such dividend is distributed or paid in such a manner as to have a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

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(iv) sale of Ordinary Shares by IFM Overseas prior to an IPO, except for the transfer of Ordinary Shares to GL pursuant to the exercise of the Exchangeable Note;

(v) sale by any member of the management of any shares acquired through the exercise of options under the Amended 2006 ESOP before an IPO;

(vi) sale before an IPO by any other shareholder (excluding the Investors) of an amount of shares higher than 5% of the total issued number of shares at the Closing;

(vii) adoption, termination, or material amendment to the terms of the Amended 2006 ESOP or other stock option plan (including the number of shares reserved under such plans, vesting period, and exercise price of options), and any approval of grants on non-standard terms; provided that if such adoption, termination or material amendment has a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required;

(viii) any loans to any director, officer or employee by any Group Company;

(ix) any related party transaction by any Group Company (excluding transactions between entities owned or controlled by the Company which are (i) made in the ordinary course of business, and have a transaction amount of US$500,000 or less with such dollar amount to be cumulative within any given 12 month period between the same Group Company affiliates, (ii) are on arms-length terms and (iii) do not otherwise adversely affect the rights or interests of the holders of the Preferred Shares);

(x) incurrence of indebtedness, guarantee or creation of liability for borrowed money in excess of US$500,000 in the aggregate at any time by any Group Company;

(xi) purchase or lease by any Group Company of any real estate property, whether purchased or leased, valued in excess of US$100,000;

(xii) establishment by a Group Company of any subsidiaries, any acquisition by a Group Company of the assets or equity of another business entity in an amount in excess of US$500,000, and any establishment by any Group Company of a joint venture, partnership or strategic alliance with another business entity (including the establishment of MMC Entities, but excluding (i) the Company’s right to establish subsidiaries or acquire assets or equity of another business in connection with the NRT Businesses with a transaction amount of less than US$5 million, provided that such action (1) in each case is expressly budgeted for in the Company’s then applicable annual business plan and (2) does not otherwise adversely affect the rights or interests of holders of the Preferred Shares; and (ii) the Company’s investment in minority equity interests in the Regional Subfranchisors;

(xiii) purchase by any Group Company of listed or unlisted securities;

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(xiv) change in the number of authorized Directors of the Board by any Group Company;

(xv) selection and change of the Auditors or any material change in accounting practices or policies of any Group Company;

(xvi) approval or adoption of any annual budget and any business plan, or any material amendment thereto or to the Annual Business Plan of any Group Company;

(xvii) any change to the scope of any Group Company’s business as described in any business plan;

(xviii) adoption or amendment of employment agreements with any of the Founders;

(xix) approval of each Group Company’s chief financial officer, and controller or financial manager;

(xx) the selection of, and any change in, any Person retained by the Company or any Group Company (other than employees hired thereby in the ordinary course) to provide tax advisory services thereto or to assist in the preparation of tax returns thereof;

(xxi) the entry into any transaction or series of related transactions by any of the Company or the Group Companies, or by any combination of the foregoing, which has the principal objective or effect of securing a tax benefit thereof; and

(xxii) the restructuring of any of the Company or the Group Companies, or of any combination of the foregoing, or of the business, operations or practices thereof, provided that if the terms of any such restructuring have a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required.

13. Redemption. Except as provided for in this Article 13, the Preferred Shares shall not be redeemable.

(a) Optional Redemption of Preferred Shares. At any time following the earlier of (i) the fifth anniversary following the date of the Closing for Series B Shares and in the event the Company has not been listed on a Qualified IPO or (ii) subject to Article 13(c), such time as the holders of not less the Preferred Share Percentage of the then outstanding Preferred Shares shall deliver notice in writing to the Company that the Company and/or its affiliates is in material breach of any of its representations, warranties or covenants under the Series A SPA, the Series B SPA, the Additional Series B SPA or the Ancillary Agreements (the “Breach

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Notice”), the holders of the Preferred Share Percentage of the then outstanding Preferred Shares may, by written request to the Company (the “Redemption Request”), require that the Company redeem all, but not less than all, of the outstanding Preferred Shares in accordance with the following terms. A Redemption Request shall be given by hand or by mail to the registered office of the Company at least thirty (30) days prior to the date set forth therein on which the Preferred Shares are to be redeemed. Following receipt of the Redemption Request, the Company shall within ten (10) calendar days give written notice (the “Redemption Notice”) to each holder of record of Preferred Shares, at the address last shown on the records of the Company for such holder(s). Such notice shall indicate that a Preferred Share Percentage of the holders of the Preferred Shares have elected redemption of their Preferred Shares pursuant to the provisions of this Article 13(a), shall specify the redemption date, shall direct the holders of Preferred Shares to submit their share certificates to the Company on or before the scheduled redemption date and shall direct the holders of Preferred Shares who have not otherwise elected to redeem their Preferred Shares of the process whereby such other holders also may elect to redeem their Preferred Shares pursuant to the provisions of this Article 13(a). The redemption price for each Series A Share redeemed pursuant to this Article 13(a) shall be equal to one hundred fifteen percent (115%) of the Series A Original Purchase Price, plus all dividends accrued and unpaid with respect to such shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) (the “Series A Redemption Price”). The redemption price for each Series B Share redeemed pursuant to the provisions of this Article 13(a) shall be equal to one hundred fifteen percent (115%) of the Series B Original Purchase Price, plus all dividends accrued and unpaid with respect to such shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) (the “Series B Redemption Price”). The redemption of any Preferred Shares pursuant to this Article 13(a) will take place within thirty (30) days of the date of such Redemption Notice at the offices of the Company, or such earlier date or other place as the holders electing to redeem their Preferred Shares and the Company may mutually agree in writing (each a “Redemption Date”). At a Redemption Date, subject to applicable law, the Company will, from any source of assets or funds legally available therefor, redeem (i) each Series A Share that has been submitted for redemption by paying in cash therefor the Series A Redemption Price and (ii) each Series B Share that has been submitted for redemption by paying in cash therefore the Series B Redemption Price, in each case against surrender by such holder at the Company’s principal office of the certificate representing such share. From and after a Redemption Date, if the Company makes the Series A Redemption Price or Series B Redemption Price available to a holder of a Series A Share or a Series B Share, as applicable, all rights of the holder of such Series A Share or Series B Share (except the right to receive the Series A Redemption Price or the Series B Redemption Price, as applicable) will cease with respect to such Series A Share or Series B Share, as applicable, and such Series A Share or Series B Share will not thereafter be transferred on the books of the Company or be deemed outstanding for any purpose whatsoever.

(b) Insufficient Funds. If the Company’s assets or funds which are legally available on the date that any redemption payment under this Article 13(a) is due are insufficient to pay in full all redemption payments to be paid at a Redemption Date, or if the Company is otherwise prohibited by applicable law from making such redemption, those assets or funds which are legally available shall be used to the extent permitted by applicable law to pay all redemption payments due on such date ratably in proportion to the full amounts to which the holders to which such redemption payments are due would otherwise be respectively entitled thereon. Thereafter, all assets or funds of the Company that become legally available for the redemption of shares shall immediately be used to pay the redemption payment which the Company did not pay on the date that such redemption payments were due. Without limiting any rights of the holders of Preferred Shares which are set forth in the Memo and Articles, or are otherwise available under law, the balance of any shares subject to redemption hereunder with respect to which the Company has become obligated to pay the redemption payment but which it has not paid in full shall continue to have all the powers, designations,

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preferences and relative participating, optional, and other special rights (including, without limitation, rights to accrue dividends) which such shares had prior to such date, until the redemption payment has been paid in full with respect to such shares. No Preferred Share acquired by the Company by reason of redemption, purchase conversion or otherwise shall be reissued.

(c) Dispute Resolution. In the event the Company provides written notice to the holders of not less than a Preferred Share Percentage of then outstanding Preferred Shares pursuant to Article 13(a) within twenty (20) calendar days of receiving a Breach Notice, contesting whether it and/or its affiliates have materially breached any of the representations, warranties or covenants under the Series A SPA, the Series B SPA, the Additional Series B SPA or the Ancillary Agreements and describing in reasonable detail the Company’s basis for its position (the “Dispute Notice”), then such dispute shall be resolved through consultation. Such consultation shall begin immediately upon receipt of the Dispute Notice by the holders of a Preferred Share Percentage of the then outstanding Preferred Shares. If within thirty (30) calendar days following the date on which such Dispute Notice is given the dispute cannot be resolved, the dispute shall be submitted to arbitration in accordance with Section 11.13 of the Series B SPA, upon the request of one party with notice to the other relevant party. If the arbitration tribunal determines that a material breach has occurred, then the redemption as described in Article 13(a), shall proceed immediately upon such determination. If the arbitration tribunal determines that no material breach has occurred, then the Company will not be obligated to proceed with such redemption.

Conversion of Preferred Shares

14. The holders of the Preferred Shares shall have the following rights described below with respect to the conversion of the Preferred Shares into Ordinary Shares. Each holder of Preferred Shares shall be entitled to convert any or all of its Preferred Shares held by it at any time, without the payment of any additional consideration, into such number of fully paid Ordinary Shares per Preferred Share, determined as follows.

The number of Ordinary Shares to which a holder shall be entitled upon conversion of any Preferred Share shall be:

(i) in respect of a conversion of any Series A Share, the quotient of the Series A Original Purchase Price divided by the then prevailing Conversion Price in respect of the Series A Shares (the “Series A Conversion Price”); and

(ii) in respect of a conversion of any Series B Share, the quotient of the Series B Original Purchaser Price divided by the then prevailing Conversion Price in respect of the Series B Shares (the “Series B Conversion Price”).

The initial Series A Conversion Price shall equal the Series A Original Purchase Price and the initial Series B Conversion Price shall equal the Series B Original Purchase Price. For the avoidance of doubt, the initial conversion ratio for Preferred Shares to Ordinary Shares shall be 1:1, subject to adjustments of the relevant Conversion Price, as set forth below. Such conversion shall be effected by the redemption of the Preferred Shares either at the Series A Original Purchase Price in respect of the Series A Shares, or Series B Original Purchase Price in respect of the Series B Shares, and the application of the proceeds thereof in consideration for the issue to the relevant holder of the appropriate number of Ordinary Shares at the relevant Conversion Price.

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15. The holder of any Preferred Shares who desires to convert such shares into Ordinary Shares shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or any transfer agent for the Preferred Shares, and shall give written notice to the Company at such office that such holder has elected to convert such shares. Such notice shall state the number of Preferred Shares being converted. Thereupon, the Company shall promptly (and in any event within five (5) Business Days) issue and deliver to such holder at such office a certificate or certificates for the number of Ordinary Shares to which the holder is entitled. No fractional Ordinary Shares shall be issued upon conversion of the Preferred Shares, and the number of Ordinary Shares to be so issued to a holder of Preferred Shares upon the conversion of such Preferred Shares (after aggregating all fractional Ordinary Shares that would be issued to such holder) shall be rounded to the nearest whole share (with one-half being rounded upward). Such conversion shall be deemed to have been made at the close of business on the date of the surrender of the certificates representing the Preferred Shares to be converted, and the person entitled to receive the Ordinary Shares issuable upon such conversion shall be treated for all purposes as the record holder of such Ordinary Shares on such date.

16. Upon conversion, all declared and unpaid share dividends on the Preferred Shares shall be paid in shares and all declared and unpaid cash dividends on the Preferred Shares, if any, shall be paid either in cash or by the issuance of further Ordinary Shares, at the option of the holders of the Preferred Shares, in accordance with the provisions of these Articles.

17. Without any action being required by the holder of such share and whether or not the certificates representing such share are surrendered to the Company or its transfer agent, each Preferred Share shall automatically be converted into the appropriate number of Ordinary Shares at the then prevailing Series A Conversion Price in respect of the Series A Shares or Series B Conversion Price in respect of the Series B Shares upon the earlier of the closing of: (i) a Qualified IPO, (ii) any other IPO approved by the Board of Directors including the approval of the Series A Directors and Series B Director, or (iii) the vote or written consent of the holders of more than a Preferred Share Percentage of the then outstanding Preferred Shares (voting together as a single class) (each of the events referred to in (i), (ii) and (iii) are referred to herein as an “Automatic Conversion Event”). Any conversion of Preferred Shares made pursuant to this Article shall be effected in accordance with the provisions of this Article and Article 14 hereof by the redemption of the requisite number of Preferred Shares and the issuance of the appropriate number of Ordinary Shares at the then prevailing Series A Conversion Price or Series B Conversion Price, as appropriate.

18. No fractions of Ordinary Shares shall be issued upon conversion of any Preferred Shares. The Company shall aggregate all fractional Ordinary Shares that would be issued to the holder of the Preferred Shares and shall issue the relevant whole number of Ordinary Share, rounded to the nearest whole share (with one-half being rounded upward).

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19. In the event of an automatic conversion pursuant to Article 17, all outstanding Preferred Shares shall be converted automatically without any further action by the holders thereof and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent in respect of such Preferred Shares. The Company will give notice of the automatic conversion to the holders of Preferred Shares within five (5) Business Days after the Conversion Date. The Company will not issue certificates in respect of any Ordinary Shares into which Preferred Shares have been converted upon automatic conversion unless the certificates in respect of the Preferred Shares so converted are either delivered to the registered office of the Company or to the office of its transfer agent in respect of such Preferred Shares or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates.

Adjustment of Conversion Price

20. The Conversion Price for all series of Preferred Shares shall be adjusted from time to time as provided below:

(a) Adjustment for Share Splits and Combinations. If the Company shall at any time, or from time to time, effect a subdivision of the outstanding Ordinary Shares, the Conversion Price in effect immediately prior to such subdivision shall be proportionately decreased. Conversely, if the Company shall at any time, or from time to time, combine the outstanding Ordinary Shares into a smaller number of shares, the Conversion Price in effect immediately prior to the combination shall be proportionately increased. Any adjustment under this paragraph shall become effective at the close of business on the date the subdivision or combination becomes effective.

(b) Adjustment for Ordinary Share Dividends and Distributions. If the Company makes (or fixes a record date for the determination of holders of Ordinary Shares entitled to receive) a dividend or other distribution to the holders of Ordinary Shares payable in additional Ordinary Shares (thereafter referred to as “Ordinary Share Equivalents”), the Conversion Price then in effect shall be decreased as of the time of such issuance (or in the event such record date is fixed, as of the close of business on such record date) by multiplying such Conversion Price then in effect by a fraction (i) the numerator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and (ii) the denominator of which is the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of Ordinary Shares issuable in payment of such dividend or distribution.

(c) Adjustments for Other Dividends. If the Company at any time, or from time to time, makes (or fixes a record date for the determination of holders of Ordinary Shares entitled to receive) a dividend or other distribution payable in securities of the Company other than Ordinary Shares or Ordinary Share Equivalents, then, and in each such event, provision shall be made so that, upon conversion of any Preferred Share thereafter, the holder thereof shall receive, in addition to the number of Ordinary Shares issuable thereon, the amount of securities of the Company which the holder of such share would have received had the Preferred Shares been converted into Ordinary Shares immediately prior to such event, all subject to further adjustment as provided herein.

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(d) Reorganizations, Mergers, Consolidations, Reclassifications, Exchanges, Substitutions. If at any time, or from time to time, any capital reorganization or reclassification of the Ordinary Shares (other than as a result of a share dividend, subdivision, split or combination otherwise treated above) occurs or the Company is consolidated, merged or amalgamated with or into another Person (other than a consolidation, merger or amalgamation treated as a Liquidation Event pursuant to Article 127, then in any such event, provision shall be made so that, upon conversion of any Preferred Share thereafter, the holder thereof shall receive the kind and amount of shares and other securities and property which the holder of such share would have received had the Preferred Shares been converted into Ordinary Shares on the date of such event, all subject to further adjustment as provided herein, or with respect to such other securities or property, in accordance with any terms applicable thereto.

21. Special Adjustment to the Series A Conversion Price.

(a) Series A Conversion Price Adjustments of Preferred Shares for Certain Dilutive Issuances. The Series A Conversion Price for the Series A Shares Series shall be subject to adjustment from time to time as follows:

(i) Adjustment of Series A Conversion Price Upon Issuance of Shares Below Original Purchase Price. In the event that any time after the Original Issue Date of the Series A Shares the Company shall issue any Additional Ordinary Shares without consideration or for a consideration per share less than the Series A Original Purchase Price, then the Series A Conversion Price in effect shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Series A Conversion Price by a fraction, the numerator of which shall be the number of Ordinary Shares outstanding immediately prior to such issue, plus the number of Ordinary Shares which the aggregate consideration received by the Company for the total number of the Additional Ordinary Shares so issued would purchase at the Series A Conversion Price, and the denominator of which shall be the number of Ordinary Shares outstanding immediately prior to such issue plus the number of such Additional Ordinary Shares so issued. For the purposes of this subsection 21(a)(i), all Ordinary Shares issuable upon conversion of all outstanding Preferred Shares and the exercise and/or conversion of any other outstanding Ordinary Share Equivalents shall be deemed to be outstanding. In no event will any adjustment hereunder be made to the extent it would result in any additional shares being issued for an amount which is less than the par value of such shares.

(ii) No adjustment indicated under this subsection 21(a)(i) shall be made for:

(1) the sale of shares of up to 8,527,494 Ordinary Shares issuable to employees, consultants and/or directors pursuant to a written incentive plan approved by each Investors’ Director, such number of Ordinary Shares subject to increase upon the approval of the Board of Directors and including all of the Investors’ Directors;

(2) Ordinary Shares issued pursuant to a stock split or consolidation;

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(3) Ordinary Shares issued or issuable upon conversion of Preferred Shares; or

(4) securities issuable or issued in connection with a public offering in which all the outstanding Preferred Shares are converted into Ordinary Shares.

(b) For the purpose of making any adjustment to the Series A Conversion Price or number of Ordinary Shares issuable upon conversion of the shares of the Applicable Series, as provided above:

(i) To the extent it consists of cash, the consideration received by the Company for any issue or sale of securities shall be computed at the net amount of cash received by the Company after deduction of any underwriting or similar commissions, compensations, discounts or concessions paid or allowed by the Company in connection with such issue or sale;

(ii) To the extent it consists of property other than cash, consideration other than cash received by the Company for any issue or sale of securities shall be computed at the fair market value thereof (as determined in good faith by a majority of the Board of Directors including each of the Investors’ Directors, if any), as of the date of the adoption of the resolution specifically authorizing such issue or sale, irrespective of any accounting treatment of such property; and

(iii) If Additional Ordinary Shares or Ordinary Share Equivalents exercisable, convertible or exchangeable for Additional Ordinary Shares are issued or sold together with other stock or securities or other assets of the Company for consideration which covers both, the consideration received for the Additional Ordinary Shares or such Ordinary Share Equivalents shall be computed as that portion of the consideration received (as determined in good faith by a majority of the Board of Directors including each of the Investors’ Directors, if any) to be allocable to such Additional Ordinary Shares or Ordinary Share Equivalents.

(c) If at any time, or from time to time, the Company issues any Ordinary Share Equivalents exercisable, convertible or exchangeable for Additional Ordinary Shares and the Effective Conversion Price of such Ordinary Share Equivalents is less than the Series A Conversion Price in effect immediately prior to such issuance, then, for purposes of calculating any adjustment with respect to the Series A Conversion Price at the time of such issuance the Company shall be deemed to have issued the maximum number of Additional Ordinary Shares issuable upon the exercise, conversion or exchange of such Ordinary Share Equivalents and to have received in consideration for each Additional Ordinary Share deemed issued an amount equal to the Effective Conversion Price.

(i) In the event of any increase in the number of Ordinary Shares deliverable or any reduction in consideration payable upon exercise, conversion or exchange of any Ordinary Share Equivalent where the resulting Effective Conversion Price is less than the Series A Conversion Price of the Applicable Series at such date, including, but not limited to, a change resulting from the antidilution provisions thereof, the Series A Conversion Price, shall be recomputed to reflect such change as if, at the time of issue for such Ordinary Share Equivalent, such Effective Conversion Price applied.

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(ii) For any Ordinary Share Equivalent with respect to which the Series A Conversion Price has been adjusted under this subclause (c), no further adjustment of the Series A Conversion Price shall be made solely as a result of the actual issuance of Ordinary Shares upon the actual exercise or conversion of such Ordinary Share Equivalent.

(d) Performance-Based Adjustment to Series A Conversion Price

(i) Year 2 and Year 3 Adjustments. Subject to the following paragraph, if an anti-dilution adjustment is required pursuant to the matrix set forth in Annex A to these Articles (“Annex A”), then no later than five (5) Business Days following the date that the Company has received from its independent auditors, the audited financial statements for Year 2 and Year 3, as applicable, then the Series A Conversion Price shall be adjusted to reflect (i) the price per share that the holders of Series A Shares would have paid had the price per share of the Series A Shares been based upon the post-money equity ownership percentage of the Company (on a Fully-Diluted Basis) immediately following the Closing for Series A Shares, as determined pursuant to the matrix set forth in Annex A; and (ii) any other adjustments to the Series A Conversion Price after the Closing for Series A Shares which are otherwise applicable pursuant to Articles 20, 21 or other provisions of these Articles. Without limitation of Article 21, the Company shall deliver a certificate of adjustment to the holders of the Series A Shares within such five (5) Business Day period, which certificate shall set forth in reasonable detail the Company’s calculation of any adjustment to the Series A Conversion Price pursuant to the terms hereof. The holders of the Series A Shares shall have the right to review such statement and to discuss with the Company any purported discrepancies in the adjustment calculation. Any disputes in connection therewith shall be resolved pursuant to Section 11.12 of the Series A SPA. Notwithstanding the foregoing, in no event will the combined adjustments reflected in the matrix result in a Series A Conversion Price which would allow the holders of Series A Share receiving an ownership percentage of the Company in excess of 60% (on a Fully-Diluted Basis) if exercised immediately following the Closing for Series A Shares.

(ii) Combined Years 2/3 Adjustment. If the Combined Years 2/3 Milestone is not achieved, then the then prevailing Series A Conversion Price shall be adjusted to reflect (i) the price per share that the holders of the Series A Shares would have paid, had the price per share of the Series A Shares been based upon the post-money ownership percentage of the Company (on a Fully-Diluted Basis) immediately following the Closing for Series A Shares as determined pursuant to the following formula:

Combined Year 2/3 Adjusted Ownership Percentage = [(2 - (actual NPAT for Combined Year 2/3)/RMB81,100,000) x 0.3],

and (ii) any other adjustments to the Series A Conversion Price after the Closing for Series A Shares which are otherwise applicable pursuant to Articles 20, 21 or other provisions of these Articles. For the avoidance of doubt, the number “RMB81,100,000” used in the above formula reflects a predetermined adjustment to the Combined Year 2/3 Milestone for purposes of calculating the Combined Year 2/3 Adjusted Ownership Percentage.

(iii) In the event of an automatic conversion of the Series A Shares pursuant to these Articles during the period between (a) the end of Year 2 or Year 3, as applicable, and (b) the date that the Company has received from its independent auditors the audited financial statements for the applicable year, the performance adjustment in respect of the Series A Conversion Price set

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forth in this Article 21(d) shall continue to apply irrespective of the automatic conversion of the Series A Shares into Ordinary Shares, and the holders of such recently converted shares shall be entitled to receive such number of Additional Ordinary Shares, if any, as would have been issued had the financial statements been received, and the applicable performance adjustment set forth in this Article 2l(d), within five (5) Business Days following the Company’s receipt of such financial statements, been applied to the Series A Conversion Price prior to the automatic conversion.

(iv) In the event a Qualified Public Offering occurs at any time prior to June 30, 2010, notwithstanding any other provision of this Article 21(d), then the Series A Conversion Price shall be adjusted to reflect the price per share that the holders of Series A Shares would have paid as of the Closing for Series A Shares had the price per share of the Series A Shares been based upon the post-money equity ownership percentage of the Company (on a Fully-Diluted Basis) as of the date immediately prior to the consummation of the Qualified Public Offering, being:

Qualified Public Offering Prior to:	Series A Shares Equity Percentage
December 31, 2009	25.5	%
March 31, 2010	26.0	%
April 30, 2010	27.0	%
May 31, 2010	29.5	%
June 30, 2010	32.0	%

(e) Repayment Obligation Adjustment to Series A Conversion Price.

(i) Adjustments Related to Company Acquisition of Regional Subfranchisor Equity Interests. Upon evidence of payment by the Company to Xinye pursuant to Section 8.2(i) of the Series A SPA, in a form reasonably satisfactory to the Investors, the then prevailing Series A Conversion Price shall be automatically reduced, concurrently with such payment, to a price (calculated to the nearest cent) determined by multiplying the then prevailing Series A Conversion Price by a fraction, the numerator of which shall be US$55,000,000 minus the Regional Subfranchisors Purchase Price (as defined in the Series A SPA), and the denominator of which shall be US$55,000,000. Upon repayment of the Regional Subfranchisors Purchase Price (as defined in the SPA), by way of repayment of the Regional Subfranchisors Loan Amount (as defined in the SPA) to IFM Beijing or otherwise as set forth in Section 8.2(ii) of the Series A SPA, the then prevailing Series A Conversion Price shall be automatically adjusted upward as if the downward conversion price adjustment in the prior sentence did not take effect. To the extent any amount needs to be converted into U.S. currency, such amount shall be calculated based on an exchange rate of US$1 = RMB8.11. In no event will any adjustment hereunder be made to the extent it would result in any additional shares being issued for an amount which is less than the par value of such shares.

(ii) Adjustments Related to Company Acquisition of Remaining Equity Interests of IFM Beijing. Upon evidence of payment by the Company to Xinye and Maxpro pursuant to Section 8.2(v) of the Series A SPA, in a form reasonably satisfactory to the Investors, the then prevailing Series A Conversion Price shall be automatically reduced, concurrently with such payment, to a price (calculated to the nearest cent) determined by multiplying the then prevailing Series A Conversion Price by a fraction, the numerator of which shall be US$55,000,000 minus the Remaining IFM Beijing Purchase Price (as defined in the Series A SPA), and the denominator of which shall be US$55,000,000.

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Upon repayment of the Remaining IFM Beijing Purchase Price (as defined in the Series A SPA and excluding any consideration paid to the Investors), by way of repayment of the Xinye IFM Beijing Loan Amount (as defined in the Series A SPA) and the Maxpro Remaining IFM Beijing Loan Amount (as defined in the Series A SPA) to IFM Beijing or as otherwise set forth in Section 8.2(vi) of the Series A SPA, the then prevailing Series A Conversion Price shall be automatically adjusted upward as if the downward conversion price adjustment in the prior sentence did not take effect. To the extent any amount needs to be converted into U.S. currency, such amount shall be calculated based on an exchange rate of US$1 = RMB8.11. In no event will any adjustment hereunder be made to the extent it would result in any additional shares being issued for an amount which is less than the par value of such shares.

21A. Special Adjustment to the Series B Conversion Price.

(a) Series B Conversion Price Adjustments of Preferred Shares for Certain Dilutive Issuances. The Series B Conversion Price shall be subject to adjustment from time to time as follows:

(i) Adjustment of Series B Conversion Price Upon Issuance of Shares Below Original Purchase Price. In the event that any time after the Original Issue Date of the Series B Shares the Company shall issue any Additional Ordinary Shares without consideration or for a consideration per share less than the Series B Original Purchase Price, then the Series B Conversion Price in effect shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent) determined by multiplying such Series B Conversion Price by a fraction, the numerator of which shall be the number of Ordinary Shares outstanding immediately prior to such issue, plus the number of Ordinary Shares which the aggregate consideration received by the Company for the total number of the Additional Ordinary Shares so issued would purchase at the Series B Conversion Price, and the denominator of which shall be the number of Ordinary Shares outstanding immediately prior to such issue plus the number of such Additional Ordinary Shares so issued. For the purposes of this subsection 21(a)(a)(i), all Ordinary Shares issuable upon conversion of all outstanding Preferred Shares and the exercise and/or conversion of any other outstanding Ordinary Share Equivalents shall be deemed to be outstanding. In no event will any adjustment hereunder be made to the extent it would result in any additional shares being issued for an amount which is less than the par value of such shares.

(ii) No adjustment indicated under this subsection 21A(a)(a)(i) shall be made for:

(1) the sale of shares of up to 8,527,494 Ordinary Shares issuable to employees, consultants and/or directors pursuant to a written incentive plan approved by each Investors’ Director, such number of Ordinary Shares subject to increase upon the approval of the Board of Directors including all of the Investors’ Directors;

(2) Ordinary Shares issued pursuant to a stock split or consolidation;

(3) Ordinary Shares issued or issuable upon conversion of Preferred Shares; or

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(4) securities issuable or issued in connection with a public offering in which all the outstanding Preferred Shares are converted into Ordinary Shares.

(b) For the purpose of making any adjustment to the Series B Conversion Price or number of Ordinary Shares issuable upon conversion of the shares of the Series B Shares, as provided above:

(i) To the extent it consists of cash, the consideration received by the Company for any issue or sale of securities shall be computed at the net amount of cash received by the Company after deduction of any underwriting or similar commissions, compensations, discounts or concessions paid or allowed by the Company in connection with such issue or sale;

(ii) To the extent it consists of property other than cash, consideration other than cash received by the Company for any issue or sale of securities shall be computed at the fair market value thereof (as determined in good faith by a majority of the Board of Directors including each of the Investors’ Directors, if any), as of the date of the adoption of the resolution specifically authorizing such issue or sale, irrespective of any accounting treatment of such property; and

(iii) If Additional Ordinary Shares or Ordinary Share Equivalents exercisable, convertible or exchangeable for Additional Ordinary Shares are issued or sold together with other stock or securities or other assets of the Company for consideration which covers both, the consideration received for the Additional Ordinary Shares or such Ordinary Share Equivalents shall be computed as that portion of the consideration received (as determined in good faith by a majority of the Board of Directors including each of the Investors’ Directors, if any) to be allocable to such Additional Ordinary Shares or Ordinary Share Equivalents.

(c) If at any time, or from time to time, the Company issues any Ordinary Share Equivalents exercisable, convertible or exchangeable for Additional Ordinary Shares and the Effective Conversion Price of such Ordinary Share Equivalents is less than then prevailing Series B Conversion Price, then, for purposes of calculating any adjustment with respect to the Series B Conversion Price at the time of such issuance the Company shall be deemed to have issued the maximum number of Additional Ordinary Shares issuable upon the exercise, conversion or exchange of such Ordinary Share Equivalents and to have received in consideration for each Additional Ordinary Share deemed issued an amount equal to the Effective Conversion Price.

(i) In the event of any increase in the number of Ordinary Shares deliverable or any reduction in consideration payable upon exercise, conversion or exchange of any Ordinary Share Equivalent where the resulting Effective Conversion Price is less than the then prevailing Series B Conversion Price, including, but not limited to, a change resulting from the antidilution provisions thereof, the Series B Conversion Price, shall be recomputed to reflect such change as if, at the time of issue for such Ordinary Share Equivalent, such Effective Conversion Price applied.

(ii) For any Ordinary Share Equivalent with respect to which the Series B Conversion Price has been adjusted under this subclause (c), no further adjustment of the Series B Conversion Price shall be made solely as a result of the actual issuance of Ordinary Shares upon the actual exercise or conversion of such Ordinary Share Equivalent.

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(d) If the Series A Share Conversion Price is adjusted pursuant to Article 21(d), concurrently with such adjustment to the Series A Share Conversion Price, the then prevailing Series B Share Conversion Price shall be adjusted to reflect (i) the price per share that the holders of Series B Shares purchased pursuant to the Series B SPA and the Additional Series B SPA would have paid had the price per share of the Series B Shares been based upon the post-money equity ownership percentage of the Company (on a Fully-Diluted Basis) immediately following the Closing for such Series B Shares being 17.39% and 1.00% respectively (ii) to the extent that such adjustments have not previously been made, any other adjustments to the Series B Conversion Price after the Closing for Series B Shares that are otherwise applicable pursuant to Articles 20, 21A or other provisions of these Articles. Without limitation of Article 21, the Company shall deliver a certificate of adjustment to the holders of the Series B Shares within such five (5) Business Day period, which certificate shall set forth in reasonable detail the Company’s calculation of any adjustment to the Series B Conversion Price pursuant to the terms hereof. The holders of the Series B Shares shall have the right to review such statement and to discuss with the Company any purported discrepancies in the adjustment calculation. Any disputes in connection therewith shall be resolved pursuant to Section 11.13 of the Series B SPA.

(e) If the Series A Share Conversion Price is adjusted pursuant to Article 21(e), the then prevailing Series B Share Conversion Price shall be adjusted so that the Series B Shares shall be convertible into such number of Ordinary Shares representing the same percentage of the Company (on a Fully-Diluted Basis) as the Series B Shares would have been convertible into immediately prior to the adjustment to the Series A Conversion Price pursuant to Article 2l(e).

22. The Company shall not, by amendment of its Articles of Association or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Company but rather shall at all times in good faith assist in the carrying out of all the provisions of Articles 20 - 28 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the holders of Preferred Shares against impairment.

23. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to these Articles, the Company at its expense shall promptly (and in any event within five (5) Business Days) compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of Preferred Shares affected thereby a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall further, upon the written request at any time of any holder of Preferred Shares, promptly (and in any event within five (5) Business Days) furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, (ii) the Conversion Price at the time in effect, and (iii) the number of Ordinary Shares and the amount, if any, of other property which at the time would be received upon the conversion of Preferred Shares as of the date the written request was received.

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24. Other Dilative Events. In case any event shall occur as to which the other provisions of these Articles 20-28 are not strictly applicable, but the failure to make any adjustment to the Conversion Price would not fairly protect the conversion rights of the Preferred Shares in accordance with the essential intent and principles hereof, then, in each such case, the Company, in good faith, shall determine the appropriate adjustment to be made, on a basis consistent with the essential intent and principles established in these Articles 20-28, necessary to preserve, without dilution, the conversion rights of the Preferred Shares.

25. Notice of Record Date. In the event the Company shall propose to take any action of the type or types requiring an adjustment to the Conversion Price or the number or character of the Preferred Shares as set forth herein, the Company shall give notice to the holders of the Preferred Shares, which notice shall specify the record date, if any, with respect to any such action and the date on which such action is to take place. Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice) on the Conversion Price and the number, kind or class of shares or other securities or property which shall be deliverable upon the occurrence of such action or deliverable upon the conversion of the Preferred Shares. In the case of any action which would require the fixing of a record date, such notice shall be given at least twenty (20) days prior to the date so fixed, and in the case of all other actions, such notice shall be given at least thirty (30) days prior to the taking of such proposed action.

26. Reservation of Shares Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued Ordinary Shares, solely for the purpose of effecting the conversion of the Preferred Shares, such number of its Ordinary Shares as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Shares. If at any time the number of authorized but unissued Ordinary Shares shall not be sufficient to effect the conversion of all then outstanding Preferred Shares, the Company will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Ordinary Shares to such number of shares as shall be sufficient for such purpose.

27. Notices. Any notice required or permitted pursuant to these Articles 20-28 shall be given in writing and shall be given either personally or by sending it by next-day or second-day courier service, fax, electronic mail or similar means to each holder of record at the address of such holder appearing on the books of the Company. Where a notice is sent by next-day or second-day courier service, service of the notice shall be deemed to be effected by properly addressing, pre-paying and sending by next-day or second-day service through an internationally-recognized courier a letter containing the notice, with a confirmation of delivery, and to have been effected at the expiration of two days after the letter containing the same is sent as aforesaid. Where a notice is sent by fax or electronic mail, service of the notice shall be deemed to be effected by properly addressing, and sending such notice through a transmitting organization, with a written confirmation of delivery, and to have been effected on the day the same is sent as aforesaid.

28. Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of Ordinary Shares upon conversion of Preferred Shares, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of Ordinary Shares in a name other than that in which the Preferred Shares so converted were registered.

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Commission on Sale of Shares

29. The Company shall not pay a commission to any person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares of the Company. The Company may on any issue of shares pay such brokerage as may be lawful.

Nonrecognition of Trusts

30. No person shall be recognized by the Company as holding any share upon any trust, and the Company shall not be bound by or be compelled in any way to recognize (even when having notice thereof), any equitable, contingent, future or partial interest in any share, or any interest in any fractional part of a share or (except only as is otherwise provided by these Articles or the Statute) any other rights in respect of any share, except an absolute right to the entirety thereof in the registered holder.

Registration of Empowering Instruments

31. The Company shall be entitled to charge a fee not exceeding one dollar (US$1.00) on the registration of every probate, letters of administration, certificate of death or marriage, power of attorney or other instrument.

Transmission of Shares

32. In case of the death of a Member, the survivor or survivors where the deceased was a joint holder, and legal personal representatives of the deceased where he was a sole holder, shall be the only persons recognized by the Company as having any title to his interest in the shares, but nothing herein contained shall release the estate of any such deceased holder from any liability in respect of any shares which had been held by him solely or jointly with other persons.

33. (a) Any person becoming entitled to a share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may from time to time be required by the Directors and subject as hereinafter provided, elect either to be registered himself as holder of the share or to make such transfer of the share to such other person nominated by him as the deceased or bankrupt person could have made and to have such person registered as the transferee thereof, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the share by that Member before his death or bankruptcy as the case may be.

(b) If the person so becoming entitled shall elect to be registered himself as holder, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects.

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34. A person becoming entitled to a share by reason of the death or bankruptcy or liquidation or dissolution of the holder (or in any other case than by transfer) shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share, except that he shall not, before being registered as a Member in respect of the share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company; provided, however, that the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the share and, if the notice is not complied with within ninety (90) days, the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the share until the requirements of the notice have been complied with.

Amendment of Memorandum of Association,

Change of Location of Registered Office and Alteration of Capital

35. (a) Subject to and insofar as permitted by the provisions of the Statute and these Articles (including without limitation Articles 11 and 12), the Company may from time to time by ordinary resolution alter or amend its Memorandum of Association otherwise than with respect to its name and objects and may, without restricting the generality of the foregoing:

(i) increase the share capital by such sum to be divided into shares of such amount or without nominal or par value as the resolution shall prescribe, and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine;

(ii) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;

(iii) by subdivision of its existing shares or any of them divide the whole or any part of its share capital into shares of smaller amount than is fixed by the Memorandum of Association or into shares without nominal or par value; or

(iv) cancel any shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person.

(b) All new shares created hereunder shall be subject to the same provisions with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the shares in the original share capital.

(c) Subject to the provisions of the Statute, the Company may by Special Resolution change its name or alter its objects.

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(d) Subject to the provisions of the Statute, the Company may by Special Resolution reduce its share capital and any capital redemption reserve fund.

(e) Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its registered office.

Closing Register of Members or Fixing Record Date

36. For the purpose of determining members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or members entitled to receive payment of any dividend, or in order to make a determination of members for any other proper purpose, the Directors of the Company may provide that the register of members shall be closed for transfers for a stated period but not to exceed in any case forty (40) days. If the register of members shall be so closed for the purpose of determining members entitled to notice of or to vote at a meeting of members such register shall be so closed for at least ten (10) days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the register of members.

37. In lieu of or apart from closing the register of members, the Directors may fix in advance a date as the record date for such determination of members entitled to notice of or to vote at a meeting of the members and for the purpose of determining the members entitled to receive payment of any dividend the Directors may, at or within 90 days prior to the date of declaration of such dividend fix a subsequent date as the record date for such determination.

38. If the register of members is not so closed and no record date is fixed for the determination of the members entitled to notice of or to vote at a meeting of members or members entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of members. When a determination of members entitled to vote at any meeting of members has been made as provided in this section, such determination shall apply to any adjournment thereof.

General Meeting

39. (a) Subject to paragraph (c) hereof, the Company shall within one (1) year of its incorporation and in each year of its existence thereafter hold a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as the Directors shall appoint and if no other time and place is prescribed by them, it shall be held at the registered office of the Company on the second Wednesday in December of each year at ten o’clock in the morning.

(b) At these meetings the report of the Directors (if any) shall be presented.

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(c) If the Company is exempted as defined in the Statute it may but shall not be obligated to hold an annual general meeting.

40. The Directors may, whenever they think fit, and they shall on the requisition of Members of the Company, holding at the date of the deposit of the requisition not less than one-tenth of such of the paid-up capital of the Company as at the date of the deposit carries the right of voting at general meetings of the Company, proceed to convene a general meeting of the Company.

(a) The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the registered office of the Company, and may consist of several documents in like form, each signed by one or more requisitionists.

(b) If the Directors do not within twenty-one (21) days from the date of the deposit of the requisition, duly proceed to convene a general meeting, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three (3) months after the expiration of the said twenty-one (21) days.

(c) A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors.

Notice of General Meetings

41. At least five (5) days’ notice shall be given of an annual general meeting or any other general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given, and of the day for which it is given, and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in manner hereinafter mentioned, or in such other manner, if any, as may be prescribed by the Company; provided, that a general meeting of the Company shall, whether or not the notice specified in this Article has been given and whether or not the provisions of the preceding Article have been complied with, be deemed to have been duly convened if it is so agreed:

(a) In the case of a general meeting called as an annual general meeting by all the members entitled to attend and vote thereat or their proxies; and

(b) in the case of any other general meeting by a majority in number of the members having a right to attend and vote at the meeting, being a majority together holding not less than seventy-five per cent (75%) in nominal value or in the case of shares without nominal value or par value seventy-five per cent (75%) of the shares in issue, or their proxies.

42. The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by any person entitled to receive notice shall not invalidate the proceedings of that meeting.

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Proceedings at General Meetings

43. No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business; three (3) members present in person or by proxy (including in each case among the members present, at least one representative of the Series A Shares and one representative of the Series B Shares) shall be quorum provided always that if the Company has one shareholder or record the quorum shall be one (1) Member present in person or by proxy.

44. A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by all Members for the time being entitled to receive notice of and to attend and vote at general meetings (or being corporations by their duly authorized representatives) shall be as valid as if the same had been passed at a general meeting of the Company duly convened and held.

45. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved and if in any other case it shall stand adjourned to the same day in the next week at the same time and place, or to such other time or such other place as the directors may determine; and, if at the adjourned meeting, a quorum is not present in person or by proxy within half an hour from the time appointed for the meeting, the Members present in person or by proxy shall be deemed a quorum.

46. The Chairman, if any, of the Board of Directors shall preside as Chairman at every general meeting of the Company, or if there is no such Chairman, or if he shall not be present within fifteen (15) minutes after the time appointed for the holding of the meeting, or is unwilling to act, the Directors present shall elect one of their number to be Chairman of the meeting.

47. If at any general meeting no Director is willing to act as Chairman or if no Director is present within fifteen (15) minutes after the time appointed for holding the meeting, the Members present shall choose one of their number to be Chairman of the meeting.

48. The Chairman may, with the consent of any general meeting duly constituted hereunder, and shall if so directed by the holders, present in person or by proxy, of a majority of the shares held by Members present at that meeting in person or by proxy, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a general meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting; save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned general meeting.

49. At any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is, before or on the declaration of the result of the show of hands, demanded by the Chairman or any other member present or by proxy.

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49A. Subject to the applicable laws of the Cayman Islands and these Articles, any question posed for consideration of the Members at any general meeting shall be decided by the affirmative votes of a majority of the votes cast in accordance with the provisions of these Articles and in the case of an equality of votes the resolution shall fail.

50. Unless a poll so demanded a declaration by the Chairman that a resolution has on a show of hands been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in the Company’s Minute Book containing the Minutes of the proceedings of the meeting shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favor of or against such resolution.

51. The demand for a poll may be withdrawn.

Votes of Members

52. Subject to any rights or restrictions for the time being attached to any class or classes of shares, on a poll, every Member present in person or by proxy shall be entitled to one vote in respect of each Ordinary Share held by him, and, in the case of each Preferred Share held by him, to that many votes to which he would be entitled, if he converted such Preferred Shares into Ordinary Shares in accordance with the provisions of these Articles on the record date in respect of the Meeting at which the poll is taken, or, if no record date is established, the date the poll was taken.

53. In the case of joint holders of record, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose, seniority shall be determined by the order in which the names stand in the register of Members.

54. A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote on a poll by his committee, receiver, curator bonis, or other person in the nature of a committee, receiver or curator bonis appointed by that court, and any such committee, receiver, curator bonis or other persons may vote by proxy.

55. No Member shall be entitled to vote at any general meeting unless he is registered as a shareholder of the Company on the record date for such meeting.

56. No objection shall be raised to the qualification of any voter, except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at such general meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the Chairman of the general meeting whose decision shall be final and conclusive.

57. On a poll, votes may be given either personally or by proxy.

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58. The provisions of these Articles relating to general meetings shall apply to every such general meeting of the holders of one class of shares except that the necessary quorum at any meeting or adjournment thereof shall be one (1) person holding or representing by proxy a majority of the issued shares of the class and that any holder of shares of the class present in person or by proxy may demand a poll.

Record Dates

59. For purposes of determining the Members entitled to notice of any meeting or to vote thereat or entitled to give written consent without a meeting, the Board of Directors may fix, in advance, a record date, which shall not be more than 20 days nor less than 10 days before the date of any such meeting, nor more than 10 days before any such action without a meeting, and in such event only shareholders of record on the date so fixed are entitled to notice and to vote or to give consents, as the case may be, notwithstanding the registration of any transfer of any shares.

60. If the Board of Directors does not so fix a record date:

(a) the record date for determining Members entitled to notice of or to vote at any general meeting shall be at the close of business on the Business Day next preceding the day on which notice is given or, if notice is waived, at the close of business on the Business Day next preceding the day on which the meeting is held; and

(b) the record date for determining members entitled to give written consent without a meeting, (i) when no prior action by the Board of Directors has been taken, shall be the day on which the first written consent is given, or (ii) when prior action by the Board of Directors has been taken, shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to that action, or the sixtieth (60th) day before the date of such other action, whichever is later.

61. For the purposes of determining the Members entitled to receive payment of any dividend or other distribution or allotment of any rights or the Members entitled to exercise any rights in respect of any other lawful action (other than as provided above), the Board of Directors may fix, in advance, a record date, which shall not be more than 10 days before any such action. In that case, only Members of record at the close of business on the date so fixed are entitled to receive the dividend, distribution or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Company after the record date so fixed. If the Board of Directors does not so fix a record date, then the record date for determining Members for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the applicable resolution or the fifth day before the date of that action, whichever is later.

Proxies

62. The instrument appointing a proxy shall be in writing and shall be executed under the hand of the appointor or of his attorney duly authorized in writing or, if the appointor is a corporation under the hand of an officer or attorney duly authorized in that behalf. A proxy need not be a Member of the Company.

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63. The instrument appointing a proxy shall be deposited at the registered office of the Company or at such other place as is specified for that purpose in the notice convening the meeting no later than the time for holding the meeting, or adjourned meeting, provided that the Chairman of the Meeting may at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited upon receipt of telex, cable or telecopy confirmation from the appointor that the instrument of proxy duly signed is in the course of transmission to the Company.

64. The instrument appointing a proxy may be in any usual or common form and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. A validly executed proxy which does not state that it is irrevocable shall continue in full force and effect unless (i) the person who executed the proxy revokes it prior to the time of voting by delivering a notice in writing to the Company stating that the proxy is revoked or by executing a subsequent proxy and presenting it to the meeting or by voting in person at the meeting, or (ii) written notice of the death or incapacity of the maker of that proxy is received by the Company before the vote pursuant to which that proxy is counted; provided, however, that no proxy shall be valid after the expiration of 60 days from the date of the proxy, unless otherwise provided in the proxy.

65. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy is executed, or the transfer of the share in respect of which the proxy is given provided that no intimation in writing of such death, insanity, revocation or transfer as aforesaid shall have been received by the Company at the registered office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy.

66. Any corporation which is a Member of record of the Company may in accordance with its Articles or in the absence of such provision by resolution of its directors or other governing body, authorize such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company, and the persons so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member of record of the Company.

67. Shares of its own capital belonging to the Company and held by it in a fiduciary capacity shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time.

Inspectors of Election

68. Before any meeting of the Members, the Board of Directors may appoint an inspector or inspectors of election to act at the meeting or its adjournment. If no inspector of election is so appointed, then the chairman of the meeting may, and on the request of any Member or a Member’s proxy shall, appoint an inspector or inspectors of election to act at the meeting. The number of inspectors

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shall be either one or three. If inspectors are appointed at a meeting pursuant to the request of one or more Members or proxies, then the holders of a majority of shares or their proxies present at the meeting shall determine whether one or three inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, then the chairman of the meeting may, and upon the request of any Member or a Member proxy, shall, appoint a person to fill that vacancy.

Such inspectors shall:

(a) determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies;

(b) receive votes, ballot or consents;

(c) hear and determine all challenges and questions in any way arising in connection with the right to vote;

(d) count and tabulate all votes or consents;

(e) determine when the polls shall close;

(f) determine the result; and

(g) do any other acts that may be proper to conduct the election or vote with fairness to all Members.

Directors

69. (a) There shall be a Board of Directors consisting of seven (7) Directors.

(b) Notwithstanding the foregoing, the holders of a majority of the outstanding Ordinary Shares, voting as a separate class, shall be entitled to elect four (4) Directors of the Company (the “Ordinary Share Directors”), one of whom shall be the Company’s chief executive officer. In the case of any vacancy in any office of the Ordinary Share Directors, a successor shall be elected to hold office for the unexpired term of such director by the affirmative vote of the holders of a majority of the outstanding Ordinary Shares, given at a special meeting of such holders duly called or by an action by written consent for that purpose or, in the absence of action by such holders, by action of the remaining Directors as provided in Article 101. Each of the Ordinary Share Directors may be removed from the Board of Directors during such director’s term of office, either for or without cause by, and only by, the affirmative vote of the holders of a majority of the outstanding Ordinary Shares, given at a special meeting of the members duly called or by an

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action by written consent for that purpose. In addition to the requirements of the Statute with respect to the amendment of these Articles, the provisions of this Article 69 may not be modified, amended, waived or terminated without the written consent or affirmative vote of holders of a majority of the outstanding Ordinary Shares, voting as a separate class.

(c) For so long as any Series A Shares remain outstanding, the holders of a majority of the outstanding Series A Shares, voting as a separate class, shall be entitled to elect two (2) Directors of the Company (the “Series A Directors”). In the case of any vacancy in the office of a Series A Director, a successor shall be elected to hold office for the unexpired term of such director by the affirmative vote of the holders of at least a majority of the outstanding Series A Shares, given at a special meeting of such holders duly called or with the consent in writing of holders of at least a majority of the outstanding Series A Shares for that purpose or, in the absence of action by such holders, by action of the remaining Directors as provided in Article 101. Each of the Series A Directors may be removed from the Board of Directors during such director’s term of office, either for or without cause by, and only by, the affirmative vote of the holders of at least a majority of the outstanding Series A Shares, given at a special meeting of the members duly called or with the consent in writing of holders of at least a majority of the outstanding Series A Shares for that purpose. In addition to the requirements of the Statute with respect to the amendment of these Articles, the provisions of this Article 69 may not be modified, amended, waived or terminated without the written consent or affirmative vote of holders of at least a majority of the outstanding Series A Shares, voting as a separate class.

(d) For so long as any Series B Shares remain outstanding, the holders of a majority of the outstanding Series B Shares, voting as a separate class, shall be entitled to elect one (1) Director of the Company (the “Series B Director”). In the case of any vacancy in the office of a Series B Director, a successor shall be elected to hold office for the unexpired term of such director by the affirmative vote of the holders of at least a majority of the outstanding Series B Shares, given at a special meeting of such holders duly called or with the consent in writing of holders of at least a majority of the outstanding Series B Shares for that purpose or, in the absence of action by such holders, by action of the remaining Directors as provided in Article 101. The Series B Director may be removed from the Board of Directors during such director’s term of office, either for or without cause by, and only by, the affirmative vote of the holders of at least a majority of the outstanding Series B Shares, given at a special meeting of the members duly called or with the consent in writing of holders of at least a majority of the outstanding Series B Shares for that purpose. In addition to the requirements of the Statute with respect to the amendment of these Articles, the provisions of this Article 69 may not be modified, amended, waived or terminated without the written consent or affirmative vote of holders of at least a majority of the outstanding Series B Shares, voting as a separate class.

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(e) From such time as no Series A Shares remain outstanding, for so long as GS continues to hold at least five percent (5%) of the outstanding capital stock of the Company, GS shall be entitled to elect one (1) Director. From such time as no Series B Shares remain outstanding, for so long as GL continues to hold at least five percent (5%) of the outstanding capital stock of the Company, GL shall be entitled to elect one (1) Director. The remuneration to be paid to the Directors shall be such remuneration as the Directors shall determine. Such remuneration shall be deemed to accrue from day to day. The Directors shall also be entitled to be paid their traveling, hotel and other expenses properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other.

70. The Directors may by resolution award special remuneration to any Director of the Company undertaking any special work or services for, or undertaking any special mission on behalf of, the Company other than his ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity, shall be in addition to his remuneration as a Director.

71. A Director or Alternate Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine.

72. A Director or Alternate Director may act by himself or his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director.

73. A shareholding qualification for Directors may be fixed by the Company in general meeting, but unless and until so fixed, no qualification shall be required.

74. A Director or Alternate Director of the Company may be or become a director or other officer of or otherwise interested in any corporation promoted by the Company, or in which the Company may be interested as shareholder or otherwise, and no such Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company.

75. No person shall be disqualified from the office of Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director shall be in any way interested be or be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or transaction by reason of such Director holding office or of the fiduciary relation thereby established. A Director shall be at liberty to vote in respect of any contract or transaction in which he is so interested as aforesaid; provided, however, that the nature of the interest of any Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon.

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76. A general notice that a Director is a shareholder of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure under the preceding Article and, after such genera! notice, it shall not be necessary to give special notice relating to any particular transaction.

Alternate Directors

77. Subject to the exception contained in these Articles about Managing Directors, a Director who expects to be unable to attend Directors’ Meetings because of absence, illness, or otherwise may appoint any person to be an Alternate Director to act in his stead and such appointee whilst he holds office as an Alternate Director shall, in the event of absence therefrom of his appointor, be entitled to attend meetings of the Directors and to vote thereat and to do, in the place and stead of his appointor, any other act or thing which his appointor is permitted or required to do by virtue of his being a Director as if the Alternate Director were the appointor, other than appointment of an Alternate to himself, and he shall ipso facto vacate office if and when his appointor ceases to be a Director or removes the appointee from office. Any appointment or removal under this Article shall be effected by notice in writing under the hand of the Director making the same.

Powers and Duties of Directors

78. The business of the Company shall be managed by the Directors who may pay all expenses incurred in promoting, registering and setting up the Company, and may exercise all such powers of the Company as are not, from time to time by the Statute, or by these Articles, or such regulations, being not inconsistent with the aforesaid, as may be prescribed by the Company in general meeting required to be exercised by the Company in general meeting; provided, however, that no regulations made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made.

79. The Directors may from time to time and at any time by powers of attorney appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorneys as the Directors may think fit and may also authorize any such attorney to delegate all or any of the powers, authorities and discretions vested in him.

80. All checks, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall from time to time by resolution determine.

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81. The Directors shall cause minutes to be made in books provided for the purpose:

(a) of all appointments of officers made by the Directors;

(b) of the names of the Directors (including those represented thereat by an alternate or by proxy) present at each meeting of the Directors and of any committee of the Directors; or

(c) of all resolutions and proceedings at all meetings of the Company and of the Directors and of committees of Directors.

82. The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependents and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

83. The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture stock and other securities, whether outright or as security for any debt, liability or obligation of the Company or of any third party.

Management

84. The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three (3) next following paragraphs shall be without prejudice to the general powers conferred by this paragraph.

(a) The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any persons to be members of such committees or local boards or any managers or agents and may fix their remuneration.

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(b) The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorize the members for the time being of any such local board, or any of them, to fill up any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any person so appointed and may annul or vary any such delegation, but no person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

(c) Any such delegates as aforesaid may be authorized by the Directors to subdelegate all or any of the powers, authorities, and discretions for the time being vested in them.

Managing Directors

85. The Directors may, from time to time, appoint one or more of their body to the office of Managing Director (by not an Alternate Director) to the office of Managing Director for such term and at such remuneration (whether by way of salary, or commission, or participation in profits, or partly in one way and partly in another) as they may think fit but his appointment shall be subject to determination ipso facto if he ceases from any cause to be a Director and no Alternate Director appointed by him can act in his stead as a Director or Managing Director.

86. The Directors may entrust to and confer upon a Managing Director any of the powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit and either collaterally with or to the exclusion of their own powers and may from time to time revoke, withdraw, alter or vary all or any of such powers.

Proceedings of Directors

87. Except as otherwise provided by these Articles, the Directors shall meet together for the dispatch of business, convening, adjourning and otherwise regulating their meetings as they think fit. Questions arising at any meeting shall be decided by a majority of votes of the Directors and Alternate Directors present at a meeting at which there is a quorum, the vote of an Alternate Director not being counted if his appointor be present at such meeting. In case of an equality of votes, the Chairman shall have a second or casting vote.

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A Director or Alternate Director may, and the Secretary on the requisition of a Director or Alternate Director shall, at any time summon a meeting of the Directors by at least two days’ notice in writing to every Director and Alternate Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors (or their Alternates) either at, before or after the meeting is held and PROVIDED FURTHER if notice is given in person, by cable, telex or telecopy the same shall be deemed to have been given on the day it is delivered to the Directors or transmitting organization as the case may be. The provisions on Notice of General Meetings shall apply mutatis mutandis with respect to notices of meetings of Directors.

88. The quorum necessary for the transaction of the business of the Directors shall be at least majority of the total number of Directors then in office and shall include at least the Series A Directors and the Series B Director. For the purposes of this Article an Alternate Director or proxy appointed by a Director shall be counted in a quorum at a meeting at which the Director appointing him is not present. If that quorum is not present within 30 minutes from the time when the meeting should have begun or if during the meeting there is no longer a quorum, the meeting shall be adjourned no later than two (2) Business Days from the originally called meeting and at that second adjourned meeting, if a quorum is still not present, a third meeting shall be adjourned no later than two (2) Business Days from the second adjourned meeting. At such third adjourned meeting, a majority of the Directors then in office (or their Alternates) and present shall constitute a quorum. If the Series A Directors or the Series B (or their Alternates) are unable to attend the Board meeting in person, they (or their Alternates) will be allowed to attend by teleconference.

89. The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose.

90. The Directors may elect a Chairman of their Board and determine the period for which he is to hold office; but if no such Chairman is elected, or if at any meeting the Chairman is not present within thirty minutes after the time appointed for holding the meeting the Directors present may choose one of their number to be Chairman of the meeting.

91. The Directors may delegate any of their powers to committees consisting of such member or members of the Board of Directors (including Alternate Director in the absence of their appointers) as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.

92. A committee may meet and adjourn as it thinks proper. Questions arising at any meeting shall be determined by a majority of votes of the members present, and in the case of an equality of votes the Chairman shall have a second or casting vote.

93. All acts done by any meeting of the Directors or of a committee of Directors (including any person acting as an Alternate Director) shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or Alternate Director, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director or Alternate Director as the case may be.

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94. Members of the Board of Directors or of any committee thereof may participate in a meeting of the Board or of such committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to this provision shall constitute presence in person at such meeting. A resolution in writing (in one or more counterparts), signed by all the Directors for the time being or all the members of a committee of Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors or committee as the case may be duly convened and held.

95. (a) A Director may be represented at any meetings of the Board of Directors by a proxy appointed by him in which event the presence or vote of the proxy shall for all purposes be deemed to be that of the Director.

(b) The provisions of Articles 62 to 66 shall mutatis mutandis apply to the appointment of proxies by Directors.

Resignations and Vacancies

96. The office of a Director shall be vacated:

(a) If he gives notice in writing to the Company that he resigns the office of Director;

(b) If he absents himself (without being represented by proxy or an Alternate Director appointed by him) from three consecutive meetings of the Board of Directors without special leave of absence from the Directors, and they pass a resolution that he has by reason of such absence vacated office;

(c) If he dies, becomes bankrupt or makes any arrangement or composition with his creditors generally;

(d) If he is found a lunatic or becomes of unsound mind.

97. Any Director may resign effective on giving written notice to the Board of Directors, unless the notice specifies a later time for that resignation to become effective. If the resignation of a Director is effective at a future time, the Members or the Board of Directors may elect a successor to take office when the resignation becomes effective, in accordance with Articles 98 and 100.

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98. Vacancies in the Board of Directors shall be filled by the vote of the holders of that class or series of shares originally entitled to elect the Director (in accordance with Article 69) whose absence or resignation created such vacancy.

99. A vacancy or vacancies in the Board of Directors shall be deemed to exist (i) in the event of the death, resignation or removal of any Director, (ii) if the Board of Directors by resolution declares vacant the office of a Director who has been declared of unsound mind by an order of court or convicted of a criminal offense punishable by imprisonment, (iii) if the authorized number of Directors is increased, or (v) if the Members fail, at any meeting of members at which any Director or Directors are elected, to elect the number of Directors to be elected at that meeting. Upon any vacancy arising as a result of paragraph (i) or (ii) above the Director concerned shall cease to be a Director.

100. The Directors shall have power from time to time to appoint any person to be a Director at any time to fill any vacancy or vacancies not filled by the vote of the relevant Members in accordance with Article 98. Each Director so elected shall hold office until the next annual meeting of the Members or until a successor has been elected and qualified.

Presumption of Assent

101. A Director of the Company who is present at a meeting of the Board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the Minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the Secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favor of such action.

Seal

102. (a) The Company may, if the Directors so determine, have a Seal which shall, subject to paragraph (c) hereof, only be used by the authority of the Directors or of a committee of the Directors authorized by the Directors in that behalf and every instrument to which the Seal has been affixed shall be signed by one person who shall be either a Director or the Secretary or Secretary-Treasurer or some person appointed by the Directors for the purpose.

(b) The Company may have for use in any place or places outside the Cayman Islands, a duplicate seal or seals each of which shall be a facsimile of the Common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used.

(c) A Director, Secretary or other officer or representative or attorney may without further authority of the Directors affix the Seal of the Company over his signature alone to any document of the Company required to be authenticated by him under Seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever.

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Officers

103. The Company may have a President, a Secretary or Secretary-Treasurer appointed by the Directors who may also from time to time appoint such other officers as they consider necessary, all for such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors from time to time prescribe.

Dividends

104. Each Preferred Share and Ordinary Share shall have the right to receive dividends and shall carry the following rights to dividends:

Subject to the Statute, the Directors may from time to time declare dividends (including interim dividends) and distributions on the Preferred Shares or Ordinary Shares outstanding if the Company authorizes payment of the same out of the funds of the Company lawfully available therefor. Notwithstanding any provision in these Articles to the contrary, dividends shall accrue on the Preferred Shares as follows:

(a) The holders of the outstanding Preferred Shares shall be entitled to receive, out of any funds legally available therefor, non-cumulative dividends at the simple rate of 8% of the Original Purchase Price for the Applicable Series of the Preferred Shares (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) per annum for each Preferred Share held by such holder, payable if, as and when declared by the Company’s Board of Directors.

(b) No dividends or other distributions shall be made or declared, whether in cash, in property, or in any other shares of the Company, with respect to any other class or series of shares of the Company, unless and until dividends in like amount have been paid in full on the Preferred Shares or declared and set apart for payment.

(c) In the event the Company shall declare a dividend or similar distribution to the holders of Ordinary Shares (other than a distribution described Article 126), then, in each such case, the holders of Preferred Shares shall be entitled to a proportionate share of any such dividend or distribution as though the holders of Preferred Shares were holders of the number of Ordinary Shares into which their Preferred Shares are convertible as of the record date fixed for the determination of the holders of Ordinary Shares entitled to receive such distribution.

105. Without prejudice and in addition to Article 104, in the event of a sale of all or substantially all of the assets of the Company, a merger or consolidation of the Company with or into another entity (except a merger or consolidation in which the holders of capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity, or a merger or consolidation for purposes of reincorporating into another domicile) or a transfer (whether by merger, reorganization or other transaction) in which 50% of the outstanding voting power of the Company is transferred, the Directors may declare a dividend on the Preferred Shares or Ordinary Shares in accordance with Articles 126 and 127.

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106. All dividends declared shall be declared payable to the holders thereof registered on the record date specified by the Directors at the time such dividends are declared.

107. The Directors may, before declaring any dividends, or distributions set aside such sums as they think proper as a reserve or reserves which shall at the discretion of the Directors, be applicable for any purpose of the Company and pending such application may, at the like discretion, be employed in the business of the Company.

108. No dividend or distribution shall be payable except out of the profits of the Company, realized or unrealised or out of the share premium account or as otherwise permitted by the Statute.

109. The Directors may deduct from any dividend or distribution payable to any Member all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

110. The Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of paid up shares, debentures, or debenture stock of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Directors.

111. Any dividend, distribution, interest or other monies payable in cash in respect of shares may be paid by cheque or warrant sent through the post directed to the registered address of the holder or, in the case of joint holders, to the holder who is first named on the register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any dividends, bonuses, or other monies payable in respect of the share held by them as joint holders.

112. No dividend shall bear interest against the Company.

Capitalization

113. The Company may upon the recommendation of the Directors by ordinary resolution authorize the Directors to capitalise any sum standing to the credit of any of the Company’s reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit or profit and loan amount or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a

49

distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued shares (not being redeemable shares) for allotment and distribution credited as fully paid up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalization, with full power to the Directors to make such provisions as they think fit for the case of shares becoming distributable in fractions. The Directors may authorize any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalization and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned.

Books of Account

114. The Directors shall cause proper books of account to be kept with respect to:

(a) all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes places;

(b) all sales and purchases of goods by the Company; and

(c) the assets and liabilities of the Company.

Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company’s affairs and to explain its transactions.

115. The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of members not being Directors and no member (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by Statute or authorized by the Directors or by the Company in general meeting.

116. The Directors may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law.

Audit

117. The Company may at any annual general meeting appoint an Auditor or Auditors of the Company who shall hold office until the next annual general meeting and may fix his or their remuneration.

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118. The Directors may before the first annual general meeting appoint an Auditor or Auditors of the Company who shall hold office until the first annual general meeting unless previously removed by an ordinary resolution of the Members in general meeting in which case the Members at that meeting may appoint Auditors. The Directors may fill any casual vacancy in the office of Auditor but while any such vacancy continues the surviving or continuing Auditor or Auditors, if any, may act. The remuneration of any Auditor appointed by the Directors under this Article may be fixed by the Directors.

119. Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

120. Auditors shall at the next annual general meeting following their appointment and at any other time during their term of office, upon request of the Directors or any general meeting of the Members, make a report on the accounts of the Company in general meeting during their tenure of office.

Notices

121. Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by post, cable, electronic messaging, facsimile transmission or telex or express courier service to him or to his address as shown in the register of Members or, when notice is given by electronic messaging, by sending it to the e-mail address provided by such Member, such notice, if mailed, to be forwarded airmail if the address be outside the Cayman Islands.

122. (a) Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, pre-paying and posting a letter containing the notice, and to have been effected at the expiration of sixty hours after the letter containing the same is posted as aforesaid.

(b) Where a notice is sent by cable, telex or telecopy service of the notice shall be deemed to be effected by properly addressing and sending such notice through a transmitting organization, and to have been effected on the day the same is sent as aforesaid.

123. A notice may be given by the Company to the joint holders of record of a share by giving the notice to the joint holder first named on the register of Members in respect of the share.

124. A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a share or shares in consequence of the death or bankruptcy of a Member by sending it through the post as aforesaid in a pre-paid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred.

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125. Notice of every general meeting shall be given in any manner hereinbefore authorized to:

(a) every person shown as a Member in the register of Members as of the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the register of Members; and

(b) every person upon whom the ownership of a share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member of record where the Member of record but for his death or bankruptcy would be entitled to receive notice of the meeting.

No other person shall be entitled to receive notices of general meetings.

Liquidation Rights

126. Liquidation Preferences. Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (a “Liquidation Event”):

(a) Before any distribution or payment shall be made to the holders of any Ordinary Shares, each holder of Preferred Shares shall be entitled to receive, on parity with each other, an amount equal to one hundred and fifteen percent (115%) of (i) the Series A Original Purchase Price (in the case of a holder of Series A Shares) and (ii) the Series B Original Purchase Price (in the case of a holder of Series B Shares) (in each case as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions), plus all dividends declared and unpaid with respect thereto (as adjusted for any share splits, share dividends, combinations, recapitalizations and similar transactions) per Preferred Share then held by such holder (the “Liquidation Preference”). If, upon any such liquidation, distribution, or winding up, the assets of the Company shall be insufficient to make payment of the foregoing amounts in full on all Preferred Shares, then such assets shall be distributed among the holders of Preferred Shares, ratably in proportion to the full amounts to which they would otherwise be respectively entitled thereon.

(b) After distribution or payment in full of the amount distributable or payable on the Preferred Shares pursuant to Article 126(a), the remaining assets of the Company available for distribution to members shall be distributed ratably among the holders of the then outstanding Preferred Shares on an as-converted basis, together with the holders of the then outstanding Ordinary Shares.

(c) For the purpose of this Article, in the event the outstanding Series A Shares shall be subdivided (by share split, or otherwise), into a greater number of Series A Shares, the Series A Original Purchase Price for each class of Series A Shares then in effect shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding Series A Shares shall be combined or consolidated, by reclassification or otherwise, into a lesser number of Series A Shares, the Series A Original Purchase Price for each class of Series A Shares then in effect shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased. In the event the outstanding Series B Shares shall be subdivided (by share split, or otherwise), into a greater number of Series B Shares, the Series B Original Purchase Price for each class of Series B Shares then in effect shall, concurrently with the effectiveness of such subdivision, be proportionately decreased. In the event the outstanding Series B Shares shall be combined or consolidated, by reclassification or otherwise, into a lesser number of Series B Shares, the Series B Original Purchase Price for each class of Series B Shares then in effect shall, concurrently with the effectiveness of such combination or consolidation, be proportionately increased.

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127. Liquidation on Sale or Merger. The following events shall be treated as a Liquidation Event pursuant to Article 126 unless waived by the holders of at least a Preferred Share Percentage of the outstanding Preferred Shares, voting together as a single group on an as-converted basis:

(a) any consolidation, amalgamation or merger of the Company with or into any other Person or other corporate reorganization, in which the members of the Company immediately prior to such consolidation, amalgamation, merger or reorganization, own less than 50% of the Company’s voting power immediately after such consolidation, merger, amalgamation or reorganization, or any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred, but excluding any transaction effected solely for tax purposes or to change the Company’s domicile; or

(b) a sale, lease or other disposition of all or substantially all of the assets of the Company; and upon any such event, any proceeds resulting to the shareholders of the Company therefrom shall be distributed in accordance with the terms of Article 126.

(c) In any of such events, if the consideration received by the Company is other than cash, the value of such non-cash consideration will be deemed its fair market value. Any securities shall be valued as follows:

(i) Securities not subject to investment letter or other similar restrictions on free marketability covered by (ii) below:

(1) If traded on a securities exchange or through the Nasdaq Global or Global Select Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange or system over the thirty (30) day period ending three (3) days prior to the closing;

(2) If actively traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day period ending three (3) days prior to the closing; and

(3) If there is no active public market, the value shall be the fair market value thereof, as determined in by the Board of Directors acting in good faith.

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(ii) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a shareholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined pursuant to subparagraphs (1), (2) and (3) above to reflect the approximate fair market value thereof, as determined by the Board of Directors.

(d) Written notice of any liquidation, dissolution or winding up, including any transaction deemed to be such an action under Article 127, stating a record date or date on which a record shall be taken with respect to an event as described in Article 127 shall be delivered in person, mailed by certified or registered mail, return receipt requested, or sent by telecopier or telex, not less than twenty (20) days prior to the record date stated therein, to the holders of record of Preferred Shares, such notice to be addressed to each such holder at its address as shown by the records of the Company. The notice period set forth in this Article 127(d) may be shortened (but not to less than ten (10) days) by the vote or written consent of holders of at least a Preferred Share Percentage of the outstanding Preferred Shares, voting together as a single class.

Indemnity

128. Every Director (including for the purposes of this Article any alternate Director appointed pursuant to the provisions of these Articles) or officer for the time being and from time to time of the Company (but not including the Company’s auditors) and their heirs, executors, administrators and personal representatives shall be indemnified and secured harmless, to the maximum extent permitted by law, out of the assets and funds of the Company against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by him in or about the conduct of the Company’s business or affairs or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by him in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere. No such Director, alternate Director, or officer of the Company (but not including the Company’s auditors) shall be liable (a) for the acts, receipts, neglects, defaults or omissions of any other such Director, officer or agent of the Company or (b) for any loss on account of defect of title to any property of the Company or (c) on account of the insufficiency of any security in or upon which any money of the Company shall be invested or (d) for any loss incurred through any bank, broker or other similar person or (e) for any loss occasioned by any negligence, default, breach of duty, breach of trust, error of judgment or oversight on his part or (f) for any loss, damage or misfortune whatsoever which may happen in or arise from the execution or discharge of the duties, powers authorities, or discretions of his office or in relation thereto, unless the same shall happen through his own dishonesty or willful default.

Fiscal Year

129. Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31 in each year and, following the year of incorporation, shall begin on 1st January in each year.

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Amendments of Articles and Memorandum of Association

130. Subject to the Statute and these Articles (including without limitation Articles 11 and 12), the Company may at any time and from time to time by Special Resolution alter or amend these Articles or the Company’s Memorandum of Association, in whole or in part; provided that if such amendment has a negative material impact on the rights and privileges accruing to the Preferred Shares held by any holder of Preferred Shares and such impact is disproportionate to any negative material impact on the other holders of Preferred Shares, the approval of such disproportionately affected holder of Preferred Shares will be required.

Transfer by Way of Continuation

131. If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands.

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ANNEX A

Anti-Dilution Adjustments Matrix in respect of the Series A Shares

	Year 2 Milestone	Year 3 Milestone	Combined Years 2/3 Milestone
Achievement of Milestone?/Resulting Series A Shares Ownership Percentage	Yes = 35%	Yes = 30%	Yes = 30%
Achievement of Milestone?/Resulting Series A Shares Ownership Percentage	Yes = 35%	No = 35%	Yes = 30%
Achievement of Milestone?/Resulting Series A Shares Ownership Percentage	Yes = 35%	No = 35%	No = Combined Year 2/3 Adjusted Ownership Percentage
Achievement of Milestone?/Resulting Series A Shares Ownership Percentage	No = 40%	Yes = 35%	Yes = 30%
Achievement of Milestone?/Resulting Series A Shares Ownership Percentage	No = 40%	Yes = 35%	No = Combined Year 2/3 Adjusted Ownership Percentage
Achievement of Milestone?/Resulting Series A Shares Ownership Percentage	No = 40%	No = 40%	No = Combined Year 2/3 Adjusted Ownership Percentage

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EX-3.2

Exhibit 3.2

The Companies Law (Revised)

Company Limited by Shares

THE AMENDED AND RESTATED

ARTICLES OF ASSOCIATION

OF

IFM INVESTMENTS LIMITED

(Adopted by way of a special resolution passed on December 30, 2009

and effective from the listing of the Class A Ordinary Shares

of the Company on the NYSE)

I N D E X

SUBJECT	Article No.
Table A	1
Interpretation	2
Share Capital	3
Alteration Of Capital	4-7
Share Rights	8-9
Variation Of Rights	10-11
Shares	12-15
Share Certificates	16-21
Lien	22-24
Calls On Shares	25-33
Forfeiture Of Shares	34-42
Register Of Members	43-44
Record Dates	45
Transfer Of Shares	46-51
Transmission Of Shares	52-54
Untraceable Members	55
General Meetings	56-58
Notice Of General Meetings	59-60
Proceedings At General Meetings	61-65
Voting	66-77
Proxies	78-83
Corporations Acting By Representatives	84
No Action By Written Resolutions Of Members	85
Board Of Directors	86
Retirement of Directors	87-88
Disqualification Of Directors	89
Executive Directors	90-91
Alternate Directors	92-95
Directors’ Fees And Expenses	96-99
Directors’ Interests	100-103
General Powers Of The Directors	104-109
Borrowing Powers	110-113
Proceedings Of The Directors	114-123
Audit Committee	124-126
Officers	127-130
Register of Directors and Officers	131
Minutes	132
Seal	133
Authentication Of Documents	134
Destruction Of Documents	135
Dividends And Other Payments	136-145
Reserves	146
Capitalisation	147-148
Subscription Rights Reserve	149
Accounting Records	150-154
Audit	155-160

Notices	161-163
Signatures	164
Winding Up	165-166
Indemnity	167
Amendment To Memorandum and Articles of Association And Name of Company	168
Information	169

INTERPRETATION

TABLE A

1. The regulations in Table A in the Schedule to the Companies Law (Revised) do not apply to the Company.

INTERPRETATION

2. (1) In these Articles, unless the context otherwise requires, the words standing in the first column of the following table shall bear the meaning set opposite them respectively in the second column.

WORD	MEANING
“Audit Committee”	the audit committee of the Company formed by the Board pursuant to Article 124) hereof, or any successor audit committee.
“Auditor”	the independent auditor of the Company which shall be an internationally recognized firm of independent accountants.
“Articles”	these Articles in their present form or as supplemented or amended or substituted from time to time.
“Board” or “Directors”	the board of directors of the Company or the directors present at a meeting of directors of the Company at which a quorum is present.
“capital”	the share capital from time to time of the Company.
“Class A Ordinary Shares”	class A ordinary shares of par value US$0.001 each of the Company having the rights set out in these Articles;
“Class B Ordinary Shares”	class B ordinary shares of par value US$0.001 each of the Company having the rights set out in these Articles;
“clear days”	in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect.
“clearing house”	a clearing house recognised by the laws of the jurisdiction in which the shares of the Company (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.

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“Company”	IFM Investments Limited.
“competent regulatory authority”	a competent regulatory authority in the territory where the shares of the Company (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such territory.
“Conversion Date”	in respect of a Conversion Notice means the Business Day on which that Conversion Notice is delivered.
“Conversion Notice”	a written notice delivered to the Company at its Office (and as otherwise stated therein) stating that a holder of Class B Ordinary Shares elects to convert the number of Class B Ordinary Shares specified therein pursuant to Article 9.
“Conversion Number”	in relation to any Class B Ordinary Shares, such number of Class A Ordinary Shares as may, upon exercise of the Conversion Right, be issued at the Conversion Rate in force on the relevant Conversion Date.
“Conversion Rate”	means, at any time, on a 1 : 1 basis, subject to adjust in accordance with Article 9(b).
“Conversion Right”	in respect of a Class B Ordinary Share means the right of its holder, subject to the provisions of the Articles and to any applicable fiscal or other laws or regulations including the Law, to convert all or any of its Class B Ordinary Shares, into the Conversion Number of Class A Ordinary Shares.
“debenture” and “debenture holder”	include debenture stock and debenture stockholder respectively.
“Designated Stock Exchange”	the New York Stock Exchange.
“dollars” and “$”	dollars, the legal currency of the United States of America.
“Exchange Act”	the Securities Exchange Act of 1934, as amended.
“head office”	such office of the Company as the Directors may from time to time determine to be the principal office of the Company.
“Law”	The Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands.

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“Member”	a duly registered holder from time to time of the shares in the capital of the Company.
“month”	a calendar month.
“NASD”	National Association of Securities Dealers.
“NASD Rules”	the rules set forth in the NASD Manual.
“Notice”	written notice unless otherwise specifically stated and as further defined in these Articles.
“Office”	the registered office of the Company for the time being.
“ordinary resolution”	a resolution shall be an ordinary resolution when it has been passed by a simple majority of votes cast by such Members as, being entitled so to do, vote in person or, in the case of any Member being a corporation, by its duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which not less than ten (10) clear days’ Notice has been duly given;
“paid up”	paid up or credited as paid up.
“Register”	the principal register and where applicable, any branch register of Members of the Company to be maintained at such place within or outside the Cayman Islands as the Board shall determine from time to time.
“Registration Office”	in respect of any class of share capital such place as the Board may from time to time determine to keep a branch register of Members in respect of that class of share capital and where (except in cases where the Board otherwise directs) the transfers or other documents of title for such class of share capital are to be lodged for registration and are to be registered.
“SEC”	the United States Securities and Exchange Commission.
“Seal”	common seal or any one or more duplicate seals of the Company (including a securities seal) for use in the Cayman Islands or in any place outside the Cayman Islands.
“Secretary”	any person, firm or corporation appointed by the Board to perform any of the duties of secretary of the Company and includes any assistant, deputy, temporary or acting secretary.

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“special resolution”	a resolution shall be a special resolution when it has been passed by a majority of not less than two-thirds of votes cast by such Members as, being entitled so to do, vote in person or, in the case of such Members as are corporations, by their respective duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which not less than ten (10) clear days’ Notice, specifying (without prejudice to the power contained in these Articles to amend the same) the intention to propose the resolution as a special resolution, has been duly given. Provided that, except in the case of an annual general meeting, if it is so agreed by a majority in number of the Members having the right to attend and vote at any such meeting, being a majority together holding not less than ninety-five (95) per cent. in nominal value of the shares giving that right and in the case of an annual general meeting, if it is so agreed by all Members entitled to attend and vote thereat, a resolution may be proposed and passed as a special resolution at a meeting of which less than ten (10) clear days’ Notice has been given;
	a special resolution shall be effective for any purpose for which an ordinary resolution is expressed to be required under any provision of these Articles or the Statutes.
“Statutes”	the Law and every other law of the Legislature of the Cayman Islands for the time being in force applying to or affecting the Company, its Memorandum of Association and/or these Articles.
“year”	a calendar year.

(2) In these Articles, unless there be something within the subject or context inconsistent with such construction:

(a) words importing the singular include the plural and vice versa;

(b) words importing a gender include both gender and the neuter;

(c) words importing persons include companies, associations and bodies of persons whether corporate or not;

(d) the words:

(i) “may” shall be construed as permissive;

(ii) “shall” or “will” shall be construed as imperative;

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(e) expressions referring to writing shall, unless the contrary intention appears, be construed as including printing, lithography, photography and other modes of representing words or figures in a visible form, and including where the representation takes the form of electronic display, provided that both the mode of service of the relevant document or notice and the Member’s election comply with all applicable Statutes, rules and regulations;

(f) references to any law, ordinance, statute or statutory provision shall be interpreted as relating to any statutory modification or re-enactment thereof for the time being in force;

(g) save as aforesaid words and expressions defined in the Statutes shall bear the same meanings in these Articles if not inconsistent with the subject in the context;

(h) references to a document being executed include references to it being executed under hand or under seal or by electronic signature or by any other method and references to a notice or document include a notice or document recorded or stored in any digital, electronic, electrical, magnetic or other retrievable form or medium and information in visible form whether having physical substance or not;

(i) Section 8 of the Electronic Transactions Law (2003) of the Cayman Islands, as amended from time to time, shall not apply to these Articles to the extent it imposes obligations or requirements in addition to those set out in these Articles.

SHARE CAPITAL

3. (1) The share capital of the Company at the date on which these Articles come into effect shall be divided into shares of a par value of US$0.001 each.

(2) Subject to the Law, the Company’s Memorandum and Articles of Association and, where applicable, the rules of the Designated Stock Exchange and/or any competent regulatory authority, any power of the Company to purchase or otherwise acquire its own shares shall be exercisable by the Board in such manner, upon such terms and subject to such conditions as it thinks fit.

(3) No share shall be issued to bearer.

ALTERATION OF CAPITAL

4. (1) Subject to the provisions of Article 4(2), the Company may from time to time by ordinary resolution in accordance with the Law alter the conditions of its Memorandum of Association to:

(a) increase its capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe;

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(b) consolidate and divide all or any of its capital into shares of larger amount than its existing shares;

(c) without prejudice to the powers of the Board under Article 12, divide its shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or such restrictions which in the absence of any such determination by the Company in general meeting, as the Directors may determine provided always that, for the avoidance of doubt, where a class of shares has been authorized by the Company no resolution of the Company in general meeting is required for the issuance of shares of that class and the Directors may issue shares of that class and determine such rights, privileges, conditions or restrictions attaching thereto as aforesaid, and further provided that where the Company issues shares which do not carry voting rights, the words “non-voting” shall appear in the designation of such shares and where the equity capital includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights, must include the words “restricted voting” or “limited voting”;

(d) sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum of Association (subject, nevertheless, to the Law), and may by such resolution determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred, deferred or other rights or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or new shares;

(e) cancel any shares which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of its capital by the amount of the shares so cancelled or, in the case of shares, without par value, diminish the number of shares into which its capital is divided.

(2) No alteration may be made of the kind contemplated by Article 4(1), or otherwise, to the par value of the Class A Ordinary Shares or the Class B Ordinary Shares unless an identical alteration is made to the par value of the Class B Ordinary Shares or the Class A Ordinary Shares, as the case may be.

5. The Board may settle as it considers expedient any difficulty which arises in relation to any consolidation and division under the last preceding Article and in particular but without prejudice to the generality of the foregoing may issue certificates in respect of fractions of shares or arrange for the sale of the shares representing fractions and the distribution of the net proceeds of sale (after deduction of the expenses of such sale) in due proportion amongst the Members who would have been entitled to the fractions, and for this purpose the Board may authorise some person to transfer the shares representing fractions to their purchaser or resolve that such net proceeds be paid to the Company for the Company’s benefit. Such purchaser will not be bound to see to the application of the purchase money nor will his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

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6. The Company may from time to time by special resolution, subject to any confirmation or consent required by the Law, reduce its share capital or any capital redemption reserve in any manner permitted by law.

7. Except so far as otherwise provided by the conditions of issue, or by these Articles, any capital raised by the creation of new shares shall be treated as if it formed part of the original capital of the Company, and such shares shall be subject to the provisions contained in these Articles with reference to the payment of calls and instalments, transfer and transmission, forfeiture, lien, cancellation, surrender, voting and otherwise.

SHARE RIGHTS

8.     (a) Subject to the provisions of the Law, the rules of the Designated Stock Exchange and the Memorandum and Articles of Association and to any special rights conferred on the holders of any shares or class of shares, and without prejudice to Article 12 hereof, any share in the Company (whether forming part of the present capital or not) may be issued with or have attached thereto such rights or restrictions whether in regard to dividend, voting, return of capital or otherwise as the Board may determine, including without limitation on terms that they may be, or at the option of the Company or the holder are, liable to be redeemed on such terms and in such manner, including out of capital, as the Board may deem fit.

(b) Subject to the Law, any preferred shares may be issued or converted into shares that, at a determinable date or at the option of the Company or the holder if so authorised by its Memorandum of Association, are liable to be redeemed on such terms and in such manner as the Company before the issue or conversion may by ordinary resolution of the Members determine. Where the Company purchases for redemption a redeemable share, purchases not made through the market or by tender shall be limited to a maximum price as may from time to time be determined by the Board, either generally or with regard to specific purchases. If purchases are by tender, tenders shall comply with applicable laws.

9. Subject to Article 8(a), the Memorandum of Association and any resolution of the Members to the contrary and without prejudice to any special rights conferred thereby on the holders of any other shares or class of shares, the share capital of the Company shall be divided into shares of two classes, Class A Ordinary Shares and Class B Ordinary Shares. The Class A Ordinary Shares and Class B Ordinary Shares shall carry equal rights and rank pari passu with one another other than as set out below.

(a) As regards conversion

(i) Subject to the provisions hereof and to compliance with all fiscal and other laws and regulations applicable thereto, including the Law, a holder of Class B Ordinary Shares shall have the Conversion Right in respect of each Class B Ordinary Share.

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(ii) Each Class B Ordinary Share shall be converted at the option of the holder, at any time after issue and without the payment of any additional sum, into such number of fully paid Class A Ordinary Shares calculated at the Conversion Rate then in effect. Such conversion shall take effect on the Conversion Date. A Conversion Notice shall not be effective if it is not accompanied by the share certificates in respect of the relevant Class B Ordinary Shares and such other evidence (if any) as the Directors may reasonably require to prove the title of the person exercising such right (or, if such certificates have been lost or destroyed, such evidence of title and such indemnity as the Directors may reasonably require). Any and all taxes and stamp, issue and registration duties (if any) arising on conversion shall be borne by the Company.

(iii) To the extent the Conversion Rate is one Class A Ordinary Share for one Class B Ordinary Share, on the Conversion Date every Class B Ordinary Share shall automatically be re-designated and re-classified as a Class A Ordinary Share with such rights and restrictions attached to and shall rank pari passu in all respects with the Class A Ordinary Shares then in issue.

(iv) If the Conversion Rate is not on a one for one basis, the conversion shall take effect in such manner permitted by law (including, without limitation, by way of repurchase set out in Section 37 of the Companies Law Cap. 22 of the Cayman Islands) as any one Director considers appropriate without the further authorization of the Board and any one Director shall have all such power and take all actions necessary to give effect to the conversion.

(v) On the Conversion Date, the Company shall allot and issue the relevant Class A Ordinary Shares to the converting Shareholder, enter or procure the entry of the name of the relevant holder of Class B Ordinary Shares as the holder of the relevant number of Class A Ordinary Shares resulting from the conversion of the Class B Ordinary Shares in, and make any other necessary and consequential changes to, the Register of Members and shall procure that certificates in respect of the relevant Class A Ordinary Shares, together with a new certificate for any unconverted Class B Ordinary Shares comprised in the certificate(s) surrendered by the holder of the Class B Ordinary Shares, are issued to the holders of the Class A Ordinary Shares and Class B Ordinary Shares, as the case may be.

(vi) Until such time as the Class B Ordinary Shares have been converted into Class A Ordinary Shares the Company shall:

(1) at all times keep available for issue and free of all liens, charges, options, mortgages, pledges, claims, equities, encumbrances and

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other third-party rights of any nature, and not subject to any pre-emptive rights out of its authorized but unissued share capital, such number of authorized but unissued Class A Ordinary Shares as would enable all Class B Ordinary Shares to be converted into Class A Ordinary Shares and any other rights of conversion into, subscription for or exchange into Class A Ordinary Shares to be satisfied in full;

(2) maintain such amounts standing to the credit of its share premium and share capital accounts as to permit the conversion of the Class B Ordinary Shares into Class A Ordinary Shares by way of repurchase pursuant to Section 37 of the Companies Law Cap. 22 of the Cayman Islands; and

(3) not make any issue, grant or distribution or take any other action if the effect would be that on the conversion of the Class B Ordinary Shares to Class A Ordinary Shares it would be required to issue Class A Ordinary Shares at a price lower than the par value thereof.

(b) Adjustments of Conversion Rate and/or Conversion Price

(i) Subject as herein provided, the Conversion Rate shall from time to time be adjusted in accordance with the following relevant provisions.

(ii) If and whenever a Class A Ordinary Share by reason of any consolidation or sub-division becomes of a different nominal amount, the Conversion Rate in force immediately prior thereto shall be adjusted by multiplying it by the revised nominal amount and dividing the result by the former nominal amount. Within 2 Business Days of any such adjustment the Company will send to the holder of Class B Ordinary Shares a certificate signed by a director of the Company setting forth brief particulars of the event giving rise to the adjustment, the Conversion Rate in effect prior to such adjustment, the adjusted Conversion Rate on the effective date of the adjustment. Each such adjustment shall be effective from the close of business in Hong Kong on the day preceding the date on which the consolidation or sub-division becomes effective.

(c) As regards Voting Rights

The Class B Ordinary Shares shall not carry any right to vote.

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(d) As regards Transfers

The Class B Ordinary Shares may not be assigned or transferred in whole or in part. Class B Ordinary Shares must be converted into Class A Ordinary Shares prior to any such assignment or transfer.

VARIATION OF RIGHTS

10. Subject to the Law and without prejudice to Article 8, all or any of the special rights for the time being attached to the shares or any class of shares may, unless otherwise provided by the terms of issue of the shares of that class, from time to time (whether or not the Company is being wound up) be varied, modified or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting all the provisions of these Articles relating to general meetings of the Company shall, mutatis mutandis, apply, but so that:

(a) the necessary quorum (whether at a separate general meeting or at its adjourned meeting) shall be a person or persons (or in the case of a Member being a corporation, its duly authorized representative) together holding or representing by proxy not less than one-third in nominal value of the issued shares of that class;

(b) every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him; and

(c) any holder of shares of the class present in person or by proxy or authorised representative may demand a poll.

11. The special rights conferred upon the holders of any shares or class of shares shall not, unless otherwise expressly provided in the rights attaching to or the terms of issue of such shares, be deemed to be varied, modified or abrogated by the creation or issue of further shares ranking pari passu therewith.

SHARES

12. (1) Subject to the Law, these Articles and, where applicable, the rules of the Designated Stock Exchange and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, the unissued shares of the Company (whether forming part of the original or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times and for such consideration and upon such terms and conditions as the Board may in its absolute discretion determine but so that no shares shall be issued at a discount. In particular and without prejudice to the generality of the foregoing, the Board is hereby empowered to authorize by resolution or resolutions from time to time the issuance of one or more classes or series of preferred shares and to fix the designations, powers, preferences and relative, participating, optional and other rights, if any, and the qualifications, limitations and restrictions thereof, if any, including, without limitation, the number of shares constituting each such class or series, dividend rights, conversion rights, redemption privileges, voting

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powers, full or limited or no voting powers, and liquidation preferences, and to increase or decrease the size of any such class or series (but not below the number of shares of any class or series of preferred shares then outstanding) to the extent permitted by Law. Without limiting the generality of the foregoing, the resolution or resolutions providing for the establishment of any class or series of preferred shares may, to the extent permitted by law, provide that such class or series shall be superior to, rank equally with or be junior to the preferred shares of any other class or series.

(2) Neither the Company nor the Board shall be obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to Members or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the Board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever. Except as otherwise expressly provided in the resolution or resolutions providing for the establishment of any class or series of preferred shares, no vote of the holders of preferred shares of or ordinary shares shall be a prerequisite to the issuance of any shares of any class or series of the preferred shares authorized by and complying with the conditions of the Memorandum and Articles of Association.

(3) The Board may issue options, warrants or convertible securities or securities of similar nature conferring the right upon the holders thereof to subscribe for, purchase or receive any class of shares or securities in the capital of the Company on such terms as it may from time to time determine.

13. The Company may in connection with the issue of any shares exercise all powers of paying commission and brokerage conferred or permitted by the Law. Subject to the Law, the commission may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or partly in one and partly in the other.

14. Except as required by law, no person shall be recognised by the Company as holding any share upon any trust and the Company shall not be bound by or required in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any share or any fractional part of a share or (except only as otherwise provided by these Articles or by law) any other rights in respect of any share except an absolute right to the entirety thereof in the registered holder.

15. Subject to the Law and these Articles, the Board may at any time after the allotment of shares but before any person has been entered in the Register as the holder, recognise a renunciation thereof by the allottee in favour of some other person and may accord to any allottee of a share a right to effect such renunciation upon and subject to such terms and conditions as the Board considers fit to impose.

SHARE CERTIFICATES

16. Every share certificate shall be issued under the Seal or a facsimile thereof and shall specify the number and class and distinguishing numbers (if any) of the shares to which it

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relates, and the amount paid up thereon and may otherwise be in such form as the Directors may from time to time determine. No certificate shall be issued representing shares of more than one class. The Board may by resolution determine, either generally or in any particular case or cases, that any signatures on any such certificates (or certificates in respect of other securities) need not be autographic but may be affixed to such certificates by some mechanical means or may be printed thereon.

17. (1) In the case of a share held jointly by several persons, the Company shall not be bound to issue more than one certificate therefor and delivery of a certificate to one of several joint holders shall be sufficient delivery to all such holders.

(2) Where a share stands in the names of two or more persons, the person first named in the Register shall as regards service of notices and, subject to the provisions of these Articles, all or any other matters connected with the Company, except the transfer of the shares, be deemed the sole holder thereof.

18. Every person whose name is entered, upon an allotment of shares, as a Member in the Register shall be entitled, without payment, to receive one certificate for all such shares of any one class or several certificates each for one or more of such shares of such class upon payment for every certificate after the first of such reasonable out-of-pocket expenses as the Board from time to time determines.

19. Share certificates shall be issued within the relevant time limit as prescribed by the Law or as the Designated Stock Exchange may from time to time determine, whichever is the shorter, after allotment or, except in the case of a transfer which the Company is for the time being entitled to refuse to register and does not register, after lodgment of a transfer with the Company.

20. (1) Upon every transfer of shares the certificate held by the transferor shall be given up to be cancelled, and shall forthwith be cancelled accordingly, and a new certificate shall be issued to the transferee in respect of the shares transferred to him at such fee as is provided in paragraph (2) of this Article. If any of the shares included in the certificate so given up shall be retained by the transferor a new certificate for the balance shall be issued to him at the aforesaid fee payable by the transferor to the Company in respect thereof.

(2) The fee referred to in paragraph (1) above shall be an amount not exceeding the relevant maximum amount as the Designated Stock Exchange may from time to time determine provided that the Board may at any time determine a lower amount for such fee.

21. If a share certificate shall be damaged or defaced or alleged to have been lost, stolen or destroyed a new certificate representing the same shares may be issued to the relevant Member upon request and on payment of such fee as the Company may determine and, subject to compliance with such terms (if any) as to evidence and indemnity and to payment of the costs and reasonable out-of-pocket expenses of the Company in investigating such evidence and preparing such indemnity as the Board may think fit and, in case of damage or defacement, on delivery of the old certificate to the Company provided always that where share warrants have been issued, no new share warrant shall be issued to replace one that has been lost unless the Board has determined that the original has been destroyed.

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LIEN

22. The Company shall have a first and paramount lien on every share (not being a fully paid share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that share. The Company shall also have a first and paramount lien on every share (not being a fully paid share) registered in the name of a Member (whether or not jointly with other Members) for all amounts of money presently payable by such Member or his estate to the Company whether the same shall have been incurred before or after notice to the Company of any equitable or other interest of any person other than such member, and whether the period for the payment or discharge of the same shall have actually arrived or not, and notwithstanding that the same are joint debts or liabilities of such Member or his estate and any other person, whether a Member of the Company or not. The Company’s lien on a share shall extend to all dividends or other moneys payable thereon or in respect thereof. The Board may at any time, generally or in any particular case, waive any lien that has arisen or declare any share exempt in whole or in part, from the provisions of this Article.

23. Subject to these Articles, the Company may sell in such manner as the Board determines any share on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable, or the liability or engagement in respect of which such lien exists is liable to be presently fulfilled or discharged nor until the expiration of fourteen (14) clear days after a notice in writing, stating and demanding payment of the sum presently payable, or specifying the liability or engagement and demanding fulfillment or discharge thereof and giving notice of the intention to sell in default, has been served on the registered holder for the time being of the share or the person entitled thereto by reason of his death or bankruptcy.

24. The net proceeds of the sale shall be received by the Company and applied in or towards payment or discharge of the debt or liability in respect of which the lien exists, so far as the same is presently payable, and any residue shall (subject to a like lien for debts or liabilities not presently payable as existed upon the share prior to the sale) be paid to the person entitled to the share at the time of the sale. To give effect to any such sale the Board may authorise some person to transfer the shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the shares so transferred and he shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale.

CALLS ON SHARES

25. Subject to these Articles and to the terms of allotment, the Board may from time to time make calls upon the Members in respect of any moneys unpaid on their shares (whether on account of the nominal value of the shares or by way of premium), and each Member shall (subject to being given at least fourteen (14) clear days’ Notice specifying the time and place of payment) pay to the Company as required by such notice the amount called on his shares. A call may be extended, postponed or revoked in whole or in part as the Board determines but no member shall be entitled to any such extension, postponement or revocation except as a matter of grace and favour.

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26. A call shall be deemed to have been made at the time when the resolution of the Board authorising the call was passed and may be made payable either in one lump sum or by instalments.

27. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the shares in respect of which the call was made. The joint holders of a share shall be jointly and severally liable to pay all calls and instalments due in respect thereof or other moneys due in respect thereof.

28. If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest on the amount unpaid from the day appointed for payment thereof to the time of actual payment at such rate (not exceeding twenty per cent. (20%) per annum) as the Board may determine, but the Board may in its absolute discretion waive payment of such interest wholly or in part.

29. No Member shall be entitled to receive any dividend or bonus or to be present and vote (save as proxy for another Member) at any general meeting either personally or by proxy, or be reckoned in a quorum, or exercise any other privilege as a Member until all calls or instalments due by him to the Company, whether alone or jointly with any other person, together with interest and expenses (if any) shall have been paid.

30. On the trial or hearing of any action or other proceedings for the recovery of any money due for any call, it shall be sufficient to prove that the name of the Member sued is entered in the Register as the holder, or one of the holders, of the shares in respect of which such debt accrued, that the resolution making the call is duly recorded in the minute book, and that notice of such call was duly given to the Member sued, in pursuance of these Articles; and it shall not be necessary to prove the appointment of the Directors who made such call, nor any other matters whatsoever, but the proof of the matters aforesaid shall be conclusive evidence of the debt.

31. Any amount payable in respect of a share upon allotment or at any fixed date, whether in respect of nominal value or premium or as an instalment of a call, shall be deemed to be a call duly made and payable on the date fixed for payment and if it is not paid the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call duly made and notified.

32. On the issue of shares the Board may differentiate between the allottees or holders as to the amount of calls to be paid and the times of payment.

33. The Board may, if it thinks fit, receive from any Member willing to advance the same, and either in money or money’s worth, all or any part of the moneys uncalled and unpaid or instalments payable upon any shares held by him and upon all or any of the moneys so advanced (until the same would, but for such advance, become presently payable) pay interest at such rate (if any) as the Board may decide. The Board may at any time repay the amount so advanced upon giving to such Member not less than one month’s Notice of its intention in that behalf, unless before the expiration of such notice the amount so advanced shall have been called up on the shares in respect of which it was advanced. Such payment in advance shall not entitle the holder of such share or shares to participate in respect thereof in a dividend subsequently declared.

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FORFEITURE OF SHARES

34. (1) If a call remains unpaid after it has become due and payable the Board may give to the person from whom it is due not less than fourteen (14) clear days’ Notice:

(a) requiring payment of the amount unpaid together with any interest which may have accrued and which may still accrue up to the date of actual payment; and

(b) stating that if the Notice is not complied with the shares on which the call was made will be liable to be forfeited.

(2) If the requirements of any such Notice are not complied with, any share in respect of which such Notice has been given may at any time thereafter, before payment of all calls and interest due in respect thereof has been made, be forfeited by a resolution of the Board to that effect, and such forfeiture shall include all dividends and bonuses declared in respect of the forfeited share but not actually paid before the forfeiture.

35. When any share has been forfeited, notice of the forfeiture shall be served upon the person who was before forfeiture the holder of the share. No forfeiture shall be invalidated by any omission or neglect to give such Notice.

36. The Board may accept the surrender of any share liable to be forfeited hereunder and, in such case, references in these Articles to forfeiture will include surrender.

37. Any share so forfeited shall be deemed the property of the Company and may be sold, re-allotted or otherwise disposed of to such person, upon such terms and in such manner as the Board determines, and at any time before a sale, re-allotment or disposition the forfeiture may be annulled by the Board on such terms as the Board determines.

38. A person whose shares have been forfeited shall cease to be a Member in respect of the forfeited shares but nevertheless shall remain liable to pay the Company all moneys which at the date of forfeiture were presently payable by him to the Company in respect of the shares, with (if the Directors shall in their discretion so require) interest thereon from the date of forfeiture until payment at such rate (not exceeding twenty per cent. (20%) per annum) as the Board determines. The Board may enforce payment thereof if it thinks fit, and without any deduction or allowance for the value of the forfeited shares, at the date of forfeiture, but his liability shall cease if and when the Company shall have received payment in full of all such moneys in respect of the shares. For the purposes of this Article any sum which, by the terms of issue of a share, is payable thereon at a fixed time which is subsequent to the date of forfeiture, whether on account of the nominal value of the share or by way of premium, shall notwithstanding that time has not yet arrived be deemed to be payable at the date of forfeiture, and the same shall become due and payable immediately upon the forfeiture, but interest thereon shall only be payable in respect of any period between the said fixed time and the date of actual payment.

39. A declaration by a Director or the Secretary that a share has been forfeited on a specified date shall be conclusive evidence of the facts therein stated as against all persons

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claiming to be entitled to the share, and such declaration shall (subject to the execution of an instrument of transfer by the Company if necessary) constitute a good title to the share, and the person to whom the share is disposed of shall be registered as the holder of the share and shall not be bound to see to the application of the consideration (if any), nor shall his title to the share be affected by any irregularity in or invalidity of the proceedings in reference to the forfeiture, sale or disposal of the share. When any share shall have been forfeited, notice of the declaration shall be given to the Member in whose name it stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof, shall forthwith be made in the register, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or make any such entry.

40. Notwithstanding any such forfeiture as aforesaid the Board may at any time, before any shares so forfeited shall have been sold, re-allotted or otherwise disposed of, permit the shares forfeited to be bought back upon the terms of payment of all calls and interest due upon and expenses incurred in respect of the share, and upon such further terms (if any) as it thinks fit.

41. The forfeiture of a share shall not prejudice the right of the Company to any call already made or instalment payable thereon.

42. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a share, becomes payable at a fixed time, whether on account of the nominal value of the share or by way of premium, as if the same had been payable by virtue of a call duly made and notified.

REGISTER OF MEMBERS

43. (1) The Company shall keep in one or more books a Register of its Members and shall enter therein the following particulars, that is to say:

(a) the name and address of each Member, the number and class of shares held by him and the amount paid or agreed to be considered as paid on such shares;

(b) the date on which each person was entered in the Register; and

(c) the date on which any person ceased to be a Member.

(2) The Company may keep an overseas or local or other branch register of Members resident in any place, and the Board may make and vary such regulations as it determines in respect of the keeping of any such register and maintaining a Registration Office in connection therewith.

44. The Register and branch register of Members, as the case may be, shall be open to inspection for such times and on such days as the Board shall determine by Members without charge or by any other person, upon a maximum payment of $2.50 or such other sum specified by the Board, at the Office or Registration Office or such other place at which the Register is kept in accordance with the Law. The Register including any overseas or local or other branch register of Members may, after compliance with any notice requirement of the Designated

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Stock Exchange, be closed at such times or for such periods not exceeding in the whole thirty (30) days in each year as the Board may determine and either generally or in respect of any class of shares.

RECORD DATES

45. For the purpose of determining the Members entitled to notice of or to vote at any general meeting, or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of shares or for the purpose of any other lawful action, the Board may fix, in advance, a date as the record date for any such determination of Members, which date shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other such action.

If the Board does not fix a record date for any general meeting, the record date for determining the Members entitled to a notice of or to vote at such meeting shall be at the close of business on the day next preceding the day on which notice is given, or, if in accordance with these Articles notice is waived, at the close of business on the day next preceding the day on which the meeting is held. If corporate action without a general meeting is to be taken, the record date for determining the Members entitled to express consent to such corporate action in writing, when no prior action by the Board is necessary, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Company by delivery to its head office. The record date for determining the Members for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

A determination of the Members of record entitled to notice of or to vote at a meeting of the Members shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.

TRANSFER OF SHARES

46. Subject to these Articles including, without limitation, in the case of Class B Ordinary Shares, Article 9(d), any Member may transfer all or any of his shares by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange or in any other form approved by the Board and may be under hand or, if the transferor or transferee is a clearing house or a central depository house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Board may approve from time to time.

47. The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the Board may dispense with the execution of the instrument of transfer by the transferee in any case which it thinks fit in its discretion to do so. Without prejudice to the last preceding Article, the Board may also resolve, either generally or in any particular case, upon request by either the transferor or transferee, to accept mechanically executed transfers. The transferor shall be deemed to remain the holder of the share until the

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name of the transferee is entered in the Register in respect thereof. Nothing in these Articles shall preclude the Board from recognising a renunciation of the allotment or provisional allotment of any share by the allottee in favour of some other person.

48. (1) The Board may, in its absolute discretion, and without giving any reason therefor, refuse to register a transfer of any share (not being a fully paid up share) to a person of whom it does not approve, or any share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists, and it may also, without prejudice to the foregoing generality, refuse to register a transfer of any share to more than four joint holders or a transfer of any share (not being a fully paid up share) on which the Company has a lien.

(2) The Board in so far as permitted by any applicable law may, in its absolute discretion, at any time and from time to time transfer any share upon the Register to any branch register or any share on any branch register to the Register or any other branch register. In the event of any such transfer, the shareholder requesting such transfer shall bear the cost of effecting the transfer unless the Board otherwise determines.

(3) Unless the Board otherwise agrees (which agreement may be on such terms and subject to such conditions as the Board in its absolute discretion may from time to time determine, and which agreement the Board shall, without giving any reason therefor, be entitled in its absolute discretion to give or withhold), no shares upon the Register shall be transferred to any branch register nor shall shares on any branch register be transferred to the Register or any other branch register and all transfers and other documents of title shall be lodged for registration, and registered, in the case of any shares on a branch register, at the relevant Registration Office, and, in the case of any shares on the Register, at the Office or such other place at which the Register is kept in accordance with the Law.

49. Without limiting the generality of the last preceding Article, the Board may decline to recognise any instrument of transfer unless:-

(a) a fee of such maximum sum as the Designated Stock Exchange may determine to be payable or such lesser sum as the Board may from time to time require is paid to the Company in respect thereof;

(b) the instrument of transfer is in respect of only one class of share;

(c) the instrument of transfer is lodged at the Office or such other place at which the Register is kept in accordance with the Law or the Registration Office (as the case may be) accompanied by the relevant share certificate(s) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); and

(d) if applicable, the instrument of transfer is duly and properly stamped.

50. If the Board refuses to register a transfer of any share, it shall, within three months after the date on which the transfer was lodged with the Company, send to each of the transferor and transferee notice of the refusal.

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51. The registration of transfers of shares or of any class of shares may, after compliance with any notice requirement of the Designated Stock Exchange, be suspended at such times and for such periods (not exceeding in the whole thirty (30) days in any year) as the Board may determine.

TRANSMISSION OF SHARES

52. If a Member dies, the survivor or survivors where the deceased was a joint holder, and his legal personal representatives where he was a sole or only surviving holder, will be the only persons recognised by the Company as having any title to his interest in the shares; but nothing in this Article will release the estate of a deceased Member (whether sole or joint) from any liability in respect of any share which had been solely or jointly held by him.

53. Any person becoming entitled to a share in consequence of the death or bankruptcy or winding-up of a Member may, upon such evidence as to his title being produced as may be required by the Board, elect either to become the holder of the share or to have some person nominated by him registered as the transferee thereof. If he elects to become the holder he shall notify the Company in writing either at the Registration Office or Office, as the case may be, to that effect. If he elects to have another person registered he shall execute a transfer of the share in favour of that person. The provisions of these Articles relating to the transfer and registration of transfers of shares shall apply to such notice or transfer as aforesaid as if the death or bankruptcy of the Member had not occurred and the notice or transfer were a transfer signed by such Member.

54. A person becoming entitled to a share by reason of the death or bankruptcy or winding-up of a Member shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the share. However, the Board may, if it thinks fit, withhold the payment of any dividend payable or other advantages in respect of such share until such person shall become the registered holder of the share or shall have effectually transferred such share, but, subject to the requirements of Article 75(2) being met, such a person may vote at meetings.

UNTRACEABLE MEMBERS

55. (1) Without prejudice to the rights of the Company under paragraph (2) of this Article, the Company may cease sending cheques for dividend entitlements or dividend warrants by post if such cheques or warrants have been left uncashed on two consecutive occasions. However, the Company may exercise the power to cease sending cheques for dividend entitlements or dividend warrants after the first occasion on which such a cheque or warrant is returned undelivered.

(2) The Company shall have the power to sell, in such manner as the Board thinks fit, any shares of a Member who is untraceable, but no such sale shall be made unless:

(a) all cheques or warrants in respect of dividends of the shares in question, being not less than three in total number, for any sum payable in cash to the holder of such shares in respect of them sent during the relevant period in the manner authorised by the Articles of the Company have remained uncashed;

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(b) so far as it is aware at the end of the relevant period, the Company has not at any time during the relevant period received any indication of the existence of the Member who is the holder of such shares or of a person entitled to such shares by death, bankruptcy or operation of law; and

(c) the Company, if so required by the rules governing the listing of shares on the Designated Stock Exchange, has given notice to, and caused advertisement in newspapers to be made in accordance with the requirements of, the Designated Stock Exchange of its intention to sell such shares in the manner required by the Designated Stock Exchange, and a period of three months or such shorter period as may be allowed by the Designated Stock Exchange has elapsed since the date of such advertisement.

For the purpose of the foregoing, the “relevant period” means the period commencing twelve (12) years before the date of publication of the advertisement referred to in paragraph (c) of this Article and ending at the expiry of the period referred to in that paragraph.

(3) To give effect to any such sale the Board may authorise some person to transfer the said shares and an instrument of transfer signed or otherwise executed by or on behalf of such person shall be as effective as if it had been executed by the registered holder or the person entitled by transmission to such shares, and the purchaser shall not be bound to see to the application of the purchase money nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings relating to the sale. The net proceeds of the sale will belong to the Company and upon receipt by the Company of such net proceeds it shall become indebted to the former Member for an amount equal to such net proceeds. No trust shall be created in respect of such debt and no interest shall be payable in respect of it and the Company shall not be required to account for any money earned from the net proceeds which may be employed in the business of the Company or as it thinks fit. Any sale under this Article shall be valid and effective notwithstanding that the Member holding the shares sold is dead, bankrupt or otherwise under any legal disability or incapacity.

GENERAL MEETINGS

56. An annual general meeting of the Company shall be held in each year other than the year in which these Articles were adopted at such time and place as may be determined by the Board.

57. Each general meeting, other than an annual general meeting, shall be called an extraordinary general meeting. General meetings may be held at such times and in any location in the world as may be determined by the Board.

58. Only a majority of the Board or the Chairman of the Board may call extraordinary general meetings, which extraordinary general meetings shall be held at such times and locations (as permitted hereby) as such person or persons shall determine.

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NOTICE OF GENERAL MEETINGS

59. (1) An annual general meeting and any extraordinary general meeting may be called by not less than ten (10) clear days’ Notice but a general meeting may be called by shorter notice, subject to the Law, if it is so agreed:

(a) in the case of a meeting called as an annual general meeting, by all the Members entitled to attend and vote thereat; and

(b) in the case of any other meeting, by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than ninety-five per cent. (95%) in nominal value of the issued shares giving that right.

(2) The notice shall specify the time and place of the meeting and, in case of special business, the general nature of the business. The notice convening an annual general meeting shall specify the meeting as such. Notice of every general meeting shall be given to all Members other than to such Members as, under the provisions of these Articles or the terms of issue of the shares they hold, are not entitled to receive such notices from the Company, to all persons entitled to a share in consequence of the death or bankruptcy or winding-up of a Member and to each of the Directors and the Auditors.

60. The accidental omission to give Notice of a meeting or (in cases where instruments of proxy are sent out with the Notice) to send such instrument of proxy to, or the non-receipt of such Notice or such instrument of proxy by, any person entitled to receive such Notice shall not invalidate any resolution passed or the proceedings at that meeting.

PROCEEDINGS AT GENERAL MEETINGS

61. (1) All business shall be deemed special that is transacted at an extraordinary general meeting, and also all business that is transacted at an annual general meeting, with the exception of:

(a) the declaration and sanctioning of dividends;

(b) consideration and adoption of the accounts and balance sheet and the reports of the Directors and Auditors and other documents required to be annexed to the balance sheet;

(c) the election of Directors;

(d) appointment of Auditors (where special notice of the intention for such appointment is not required by the Law) and other officers; and

(e) the fixing of the remuneration of the Auditors, and the voting of remuneration or extra remuneration to the Directors.

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(2) No business other than the appointment of a chairman of a meeting shall be transacted at any general meeting unless a quorum is present at the commencement of the business. At any general meeting of the Company, any one or more Members entitled to vote and present in person or by proxy or (in the case of a Member being a corporation) by its duly authorised representative representing not less than one-third in nominal value of the total issued voting shares in the Company throughout the meeting shall form a quorum for all purposes.

62. If within thirty (30) minutes (or such longer time not exceeding one hour as the chairman of the meeting may determine to wait) after the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned to the same day in the next week at the same time and place or to such time and place as the Board may determine. If at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the meeting shall be dissolved.

63. The chairman of the Company shall preside as chairman at every general meeting. If at any meeting the chairman is not present within fifteen (15) minutes after the time appointed for holding the meeting, or is not willing to act as chairman, the Directors present shall choose one of their number to act, or if one Director only is present he shall preside as chairman if willing to act. If no Director is present, or if each of the Directors present declines to take the chair, or if the chairman chosen shall retire from the chair, the Members present in person or by proxy and entitled to vote shall elect one of their number to be chairman.

64. The chairman may adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business which might lawfully have been transacted at the meeting had the adjournment not taken place. When a meeting is adjourned for fourteen (14) days or more, at least seven (7) clear days’ notice of the adjourned meeting shall be given specifying the time and place of the adjourned meeting but it shall not be necessary to specify in such notice the nature of the business to be transacted at the adjourned meeting and the general nature of the business to be transacted. Save as aforesaid, it shall be unnecessary to give notice of an adjournment.

65. If an amendment is proposed to any resolution under consideration but is in good faith ruled out of order by the chairman of the meeting, the proceedings on the substantive resolution shall not be invalidated by any error in such ruling. In the case of a resolution duly proposed as a special resolution, no amendment thereto (other than a mere clerical amendment to correct a patent error) may in any event be considered or voted upon.

VOTING

66. Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with these Articles, at any general meeting on a show of hands every Member present in person (or being a corporation, is present by a duly authorised representative), or by proxy shall have one vote and on a poll every Member present in person or by proxy or, in the case of a Member being a corporation, by its duly authorised representative shall have one vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or instalments is treated

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for the foregoing purposes as paid up on the share. Notwithstanding anything contained in these Articles, where more than one proxy is appointed by a Member which is a clearing house or a central depository house (or its nominee(s)), each such proxy shall have one vote on a show of hands. A resolution put to the vote of a meeting shall be decided on a show of hands unless (before or on the declaration of the result of the show of hands or on the withdrawal of any other demand for a poll) a poll is demanded by the chairman of such meeting or by any one Member present in person or in the case of a Member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting. A demand by a person as proxy for a Member or in the case of a Member being a corporation by its duly authorised representative shall be deemed to be the same as a demand by a Member.

67. Unless a poll is duly demanded and the demand is not withdrawn, a declaration by the chairman that a resolution has been carried, or carried unanimously, or by a particular majority, or not carried by a particular majority, or lost, and an entry to that effect made in the minute book of the Company, shall be conclusive evidence of the facts without proof of the number or proportion of the votes recorded for or against the resolution.

68. If a poll is duly demanded the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. There shall be no requirement for the chairman to disclose the voting figures on a poll.

69. A poll demanded on the election of a chairman, or on a question of adjournment, shall be taken forthwith. A poll demanded on any other question shall be taken in such manner (including the use of ballot or voting papers or tickets) and either forthwith or at such time (being not later than thirty (30) days after the date of the demand) and place as the chairman directs. It shall not be necessary (unless the chairman otherwise directs) for notice to be given of a poll not taken immediately.

70. The demand for a poll shall not prevent the continuance of a meeting or the transaction of any business other than the question on which the poll has been demanded, and, with the consent of the chairman, it may be withdrawn at any time before the close of the meeting or the taking of the poll, whichever is the earlier.

71. On a poll votes may be given either personally or by proxy.

72. A person entitled to more than one vote on a poll need not use all his votes or cast all the votes he uses in the same way.

73. All questions submitted to a meeting shall be decided by a simple majority of votes except where a greater majority is required by these Articles or by the Law. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of such meeting shall be entitled to a second or casting vote in addition to any other vote he may have.

74. Where there are joint holders of any share any one of such joint holder may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding. Several executors or administrators of a deceased Member in whose name any share stands shall for the purposes of this Article be deemed joint holders thereof.

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75. (1) A Member who is a patient for any purpose relating to mental health or in respect of whom an order has been made by any court having jurisdiction for the protection or management of the affairs of persons incapable of managing their own affairs may vote, whether on a show of hands or on a poll, by his receiver, committee, curator bonis or other person in the nature of a receiver, committee or curator bonis appointed by such court, and such receiver, committee, curator bonis or other person may vote on a poll by proxy, and may otherwise act and be treated as if he were the registered holder of such shares for the purposes of general meetings, provided that such evidence as the Board may require of the authority of the person claiming to vote shall have been deposited at the Office, head office or Registration Office, as appropriate, not less than forty-eight (48) hours before the time appointed for holding the meeting, or adjourned meeting or poll, as the case may be.

(2) Any person entitled under Article 53 to be registered as the holder of any shares may vote at any general meeting in respect thereof in the same manner as if he were the registered holder of such shares, provided that forty-eight (48) hours at least before the time of the holding of the meeting or adjourned meeting, as the case may be, at which he proposes to vote, he shall satisfy the Board of his entitlement to such shares, or the Board shall have previously admitted his right to vote at such meeting in respect thereof.

76. No Member shall, unless the Board otherwise determines, be entitled to attend and vote and to be reckoned in a quorum at any general meeting unless he is duly registered and all calls or other sums presently payable by him in respect of shares in the Company have been paid.

77. If:

(a) any objection shall be raised to the qualification of any voter; or

(b) any votes have been counted which ought not to have been counted or which might have been rejected; or

(c) any votes are not counted which ought to have been counted;

the objection or error shall not vitiate the decision of the meeting or adjourned meeting on any resolution unless the same is raised or pointed out at the meeting or, as the case may be, the adjourned meeting at which the vote objected to is given or tendered or at which the error occurs. Any objection or error shall be referred to the chairman of the meeting and shall only vitiate the decision of the meeting on any resolution if the chairman decides that the same may have affected the decision of the meeting. The decision of the chairman on such matters shall be final and conclusive.

PROXIES

78. Any Member entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A Member

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who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a Member. In addition, a proxy or proxies representing either a Member who is an individual or a Member which is a corporation shall be entitled to exercise the same powers on behalf of the Member which he or they represent as such Member could exercise.

79. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same. In the case of an instrument of proxy purporting to be signed on behalf of a corporation by an officer thereof it shall be assumed, unless the contrary appears, that such officer was duly authorised to sign such instrument of proxy on behalf of the corporation without further evidence of the facts.

80. The instrument appointing a proxy and (if required by the Board) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to such place or one of such places (if any) as may be specified for that purpose in or by way of note to or in any document accompanying the notice convening the meeting (or, if no place is so specified at the Registration Office or the Office, as may be appropriate) not less than forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote or, in the case of a poll taken subsequently to the date of a meeting or adjourned meeting, not less than twenty-four (24) hours before the time appointed for the taking of the poll and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve (12) months from the date named in it as the date of its execution, except at an adjourned meeting or on a poll demanded at a meeting or an adjourned meeting in cases where the meeting was originally held within twelve (12) months from such date. Delivery of an instrument appointing a proxy shall not preclude a Member from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

81. Instruments of proxy shall be in any common form or in such other form as the Board may approve (provided that this shall not preclude the use of the two-way form) and the Board may, if it thinks fit, send out with the notice of any meeting forms of instrument of proxy for use at the meeting. The instrument of proxy shall be deemed to confer authority to demand or join in demanding a poll and to vote on any amendment of a resolution put to the meeting for which it is given as the proxy thinks fit. The instrument of proxy shall, unless the contrary is stated therein, be valid as well for any adjournment of the meeting as for the meeting to which it relates.

82. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal, or revocation of the instrument of proxy or of the authority under which it was executed, provided that no intimation in writing of such death, insanity or revocation shall have been received by the Company at the Office or the Registration Office (or such other place as may be specified for the delivery of instruments of proxy in the notice convening the meeting or other document sent therewith) two hours at least before the commencement of the meeting or adjourned meeting, or the taking of the poll, at which the instrument of proxy is used.

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83. Anything which under these Articles a Member may do by proxy he may likewise do by his duly appointed attorney and the provisions of these Articles relating to proxies and instruments appointing proxies shall apply mutatis mutandis in relation to any such attorney and the instrument under which such attorney is appointed.

CORPORATIONS ACTING BY REPRESENTATIVES

84. (1) Any corporation which is a Member may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or at any meeting of any class of Members. The person so authorised shall be entitled to exercise the same powers on behalf of such corporation as the corporation could exercise if it were an individual Member and such corporation shall for the purposes of these Articles be deemed to be present in person at any such meeting if a person so authorised is present thereat.

(2) If a clearing house (or its nominee(s)) or a central depository entity, being a corporation, is a Member, it may authorise such persons as it thinks fit to act as its representatives at any meeting of the Company or at any meeting of any class of Members provided that the authorisation shall specify the number and class of shares in respect of which each such representative is so authorised. Each person so authorised under the provisions of this Article shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the clearing house or central depository entity (or its nominee(s)) as if such person was the registered holder of the shares of the Company held by the clearing house or a central depository entity (or its nominee(s)) including the right to vote individually on a show of hands.

(3) Any reference in these Articles to a duly authorised representative of a Member being a corporation shall mean a representative authorised under the provisions of this Article.

NO ACTION BY WRITTEN RESOLUTIONS OF MEMBERS

85. Any action required or permitted to be taken at any annual or extraordinary general meetings of the Company may be taken only upon the vote of the Members at an annual or extraordinary general meeting duly noticed and convened in accordance with these Articles and the Law and may not be taken by written resolution of Members without a meeting.

BOARD OF DIRECTORS

86. (1) Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two (2). There shall be no maximum number of Directors unless otherwise determined from time to time by the Members in general meeting. The Directors shall be elected or appointed in the first place by the subscribers to the Memorandum of Association or by a majority of them and thereafter in accordance with this Article 86 and Article 87 and shall hold office until their successors are elected or appointed. The Board of Directors shall be divided into three classes: Class I, Class II and Class III. Each class shall

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consist of as nearly equal numbers of directors as possible, and designated Class I, Class II, and Class III. The term of office of Class I shall expire at the first annual meeting of Members following the effectiveness of these Articles, and each third annual meeting of Members thereafter; the term of office of Class II shall expire at the second annual meeting of Members following the effectiveness of these Articles, and each third annual meeting of Members thereafter; and the term of office of Class III shall expire at the third annual meeting of Members following the effectiveness of these Articles, and each third annual meeting of Members thereafter. As soon as practicable following the effectiveness of these Articles, the Directors then in office shall by resolution of the Board of Directors select which of such Directors shall be Class I Directors, Class II Directors and Class III Directors. Directors added to the board of directors between annual meetings of Members by reason of an increase in the authorized number of directors shall belong to the class designated by the Board of Directors; provided however that the number of board seats designated to belong to Class I, Class II and Class III must be as nearly equal in number as possible. There shall be no shareholding qualification for Directors unless prescribed by special resolution.

(2) Subject to the Articles and the Law, the Company may by ordinary resolution elect any person to be a Director either to fill a casual vacancy or as an addition to the existing Board.

(3) The Directors shall have the power from time to time and at any time to appoint any person as a Director to fill a casual vacancy on the Board or as an addition to the existing Board. Any Director so appointed by the Board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election.

(4) No Director shall be required to hold any shares of the Company by way of qualification and a Director who is not a Member shall be entitled to receive notice of and to attend and speak at any general meeting of the Company and of all classes of shares of the Company.

(5) Subject to any provision to the contrary in these Articles, a Director may be removed by way of an ordinary resolution of the Members at any time before the expiration of his period of office notwithstanding anything in these Articles or in any agreement between the Company and such Director (but without prejudice to any claim for damages under any such agreement).

(6) A vacancy on the Board created by the removal of a Director under the provisions of subparagraph (5) above may be filled by the election or appointment by ordinary resolution of the Members at the meeting at which such Director is removed or by the affirmative vote of a simple majority of the remaining Directors present and voting at a Board meeting.

(7) The Company may from time to time in general meeting by ordinary resolution increase or reduce the number of Directors but so that the number of Directors shall never be less than two (2).

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RETIREMENT OF DIRECTORS

87. (1) Notwithstanding any other provisions in the Articles, at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of three (3), the number nearest to but not greater than one-third) shall retire from office by rotation provided that notwithstanding anything herein, the chairman of the Board and/or the managing director of the Company shall not, whilst holding such office, be subject to retirement by rotation or be taken into account in determining the number of Directors to retire in each year. The retiring Directors shall be determined in accordance with the provisions of Article 86(1).

(2) A retiring Director shall be eligible for re-election. The Directors to retire by rotation shall include (so far as necessary to ascertain the number of directors to retire by rotation) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those of the other Directors subject to retirement by rotation who have been longest in office since their last re-election or appointment and so that as between persons who became or were last re-elected Directors on the same day those to retire shall (unless they otherwise agree among themselves) be determined by lot. Any Director appointed pursuant to Article 86(2) or Article 86(3) shall not be taken into account in determining which particular Directors or the number of Directors who are to retire by rotation.

88. No person other than a Director retiring at the meeting shall, unless recommended by the Directors for election, be eligible for election as a Director at any general meeting unless a Notice signed by a Member (other than the person to be proposed) duly qualified to attend and vote at the meeting for which such notice is given of his intention to propose such person for election and also a Notice signed by the person to be proposed of his willingness to be elected shall have been lodged at the head office or at the Registration Office provided that the minimum length of the period, during which such Notice(s) are given, shall be at least seven (7) days and that the period for lodgment of such Notice(s) shall commence no earlier than the day after the dispatch of the notice of the general meeting appointed for such election and end no later than seven (7) days prior to the date of such general meeting.

DISQUALIFICATION OF DIRECTORS

89. The office of a Director shall be vacated if the Director:

(1) resigns his office by notice in writing delivered to the Company at the Office or tendered at a meeting of the Board;

(2) becomes of unsound mind or dies;

(3) without special leave of absence from the Board, is absent from meetings of the Board for six consecutive months and the Board resolves that his office be vacated; or

(4) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors;

(5) is prohibited by law from being a Director; or

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(6) ceases to be a Director by virtue of any provision of the Statutes or is removed from office pursuant to these Articles.

EXECUTIVE DIRECTORS

90. The Board may from time to time appoint any one or more of its body to be a managing director, joint managing director or deputy managing director or to hold any other employment or executive office with the Company for such period (subject to their continuance as Directors) and upon such terms as the Board may determine and the Board may revoke or terminate any of such appointments. Any such revocation or termination as aforesaid shall be without prejudice to any claim for damages that such Director may have against the Company or the Company may have against such Director. A Director appointed to an office under this Article shall be subject to the same provisions as to removal as the other Directors of the Company, and he shall (subject to the provisions of any contract between him and the Company) ipso facto and immediately cease to hold such office if he shall cease to hold the office of Director for any cause.

91. Notwithstanding Articles 96, 97, 98 and 99, an executive director appointed to an office under Article 90 hereof shall receive such remuneration (whether by way of salary, commission, participation in profits or otherwise or by all or any of those modes) and such other benefits (including pension and/or gratuity and/or other benefits on retirement) and allowances as the Board may from time to time determine, and either in addition to or in lieu of his remuneration as a Director.

ALTERNATE DIRECTORS

92. Any Director may at any time by Notice delivered to the Office or head office or at a meeting of the Directors appoint any person (including another Director) to be his alternate Director. Any person so appointed shall have all the rights and powers of the Director or Directors for whom such person is appointed in the alternative provided that such person shall not be counted more than once in determining whether or not a quorum is present. An alternate Director may be removed at any time by the body which appointed him and, subject thereto, the office of alternate Director shall continue until the happening of any event which, if we were a Director, would cause him to vacate such office or if his appointer ceases for any reason to be a Director. Any appointment or removal of an alternate Director shall be effected by Notice signed by the appointor and delivered to the Office or head office or tendered at a meeting of the Board. An alternate Director may also be a Director in his own right and may act as alternate to more than one Director. An alternate Director shall, if his appointor so requests, be entitled to receive notices of meetings of the Board or of committees of the Board to the same extent as, but in lieu of, the Director appointing him and shall be entitled to such extent to attend and vote as a Director at any such meeting at which the Director appointing him is not personally present and generally at such meeting to exercise and discharge all the functions, powers and duties of his appointor as a Director and for the purposes of the proceedings at such meeting the provisions of these Articles shall apply as if he were a Director save that as an alternate for more than one Director his voting rights shall be cumulative.

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93. An alternate Director shall only be a Director for the purposes of the Law and shall only be subject to the provisions of the Law insofar as they relate to the duties and obligations of a Director when performing the functions of the Director for whom he is appointed in the alternative and shall alone be responsible to the Company for his acts and defaults and shall not be deemed to be the agent of or for the Director appointing him. An alternate Director shall be entitled to contract and be interested in and benefit from contracts or arrangements or transactions and to be repaid expenses and to be indemnified by the Company to the same extent mutatis mutandis as if he were a Director but he shall not be entitled to receive from the Company any fee in his capacity as an alternate Director except only such part, if any, of the remuneration otherwise payable to his appointor as such appointor may by Notice to the Company from time to time direct.

94. Every person acting as an alternate Director shall have one vote for each Director for whom he acts as alternate (in addition to his own vote if he is also a Director). If his appointor is for the time being not available or unable to act, the signature of an alternate Director to any resolution in writing of the Board or a committee of the Board of which his appointor is a member shall, unless the notice of his appointment provides to the contrary, be as effective as the signature of his appointor.

95. An alternate Director shall ipso facto cease to be an alternate Director if his appointor ceases for any reason to be a Director, however, such alternate Director or any other person may be re-appointed by the Directors to serve as an alternate Director PROVIDED always that, if at any meeting any Director retires but is re-elected at the same meeting, any appointment of such alternate Director pursuant to these Articles which was in force immediately before his retirement shall remain in force as though he had not retired.

DIRECTORS’ FEES AND EXPENSES

96. The Directors shall receive such remuneration as the Board may from time to time determine. Each Director shall be entitled to be repaid or prepaid all traveling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Board or committees of the board or generalmeetings or separate meetings of any class of shares or of debenture of the Company or otherwise in connection with the discharge of his duties as a Director.

97. Each Director shall be entitled to be repaid or prepaid all travelling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Board or committees of the Board or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of his duties as a Director.

98. Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for by or pursuant to any other Article.

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99. The Board shall obtain the approval of the Company in general meeting before making any payment to any Director or past Director of the Company by way of compensation for loss of office, or as consideration for or in connection with his retirement from office (not being payment to which the Director is contractually entitled).

DIRECTORS’ INTERESTS

100. A Director may:

(a) hold any other office or place of profit with the Company (except that of Auditor) in conjunction with his office of Director for such period and upon such terms as the Board may determine. Any remuneration (whether by way of salary, commission, participation in profits or otherwise) paid to any Director in respect of any such other office or place of profit shall be in addition to any remuneration provided for by or pursuant to any other Article;

(b) act by himself or his firm in a professional capacity for the Company (otherwise than as Auditor) and he or his firm may be remunerated for professional services as if he were not a Director;

(c) continue to be or become a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or member of any other company promoted by the Company or in which the Company may be interested as a vendor, shareholder or otherwise and (unless otherwise agreed) no such Director shall be accountable for any remuneration, profits or other benefits received by him as a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or member of or from his interests in any such other company. Subject as otherwise provided by these Articles the Directors may exercise or cause to be exercised the voting powers conferred by the shares in any other company held or owned by the Company, or exercisable by them as Directors of such other company in such manner in all respects as they think fit (including the exercise thereof in favour of any resolution appointing themselves or any of them directors, managing directors, joint managing directors, deputy managing directors, executive directors, managers or other officers of such company) or voting or providing for the payment of remuneration to the director, managing director, joint managing director, deputy managing director, executive director, manager or other officers of such other company and any Director may vote in favour of the exercise of such voting rights in manner aforesaid notwithstanding that he may be, or about to be, appointed a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer of such a company, and that as such he is or may become interested in the exercise of such voting rights in manner aforesaid.

Notwithstanding the foregoing, no “Independent Director” as defined in NASD Rules or in Rule 10A-3 under the Exchange Act, and with respect of whom the Board has determined constitutes an “Independent Director” for purposes of compliance with applicable

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law or the Company’s listing requirements, shall without the consent of the Audit Committee take any of the foregoing actions or any other action that would reasonably be likely to affect such Director’s status as an “Independent Director” of the Company.

101. Subject to the Law and to these Articles, no Director or proposed or intending Director shall be disqualified by his office from contracting with the Company, either with regard to his tenure of any office or place of profit or as vendor, purchaser or in any other manner whatever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company or the Members for any remuneration, profit or other benefits realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relationship thereby established provided that such Director shall disclose the nature of his interest in any contract or arrangement in which he is interested in accordance with Article 102 herein. Any such transaction that would reasonably be likely to affect a Director’s status as an “Independent Director”, or that would constitute a “related party transaction” as defined by Item 7.N of Form 20F promulgated by the SEC, shall require the approval of the Audit Committee.

102. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered, if he knows his interest then exists, or in any other case at the first meeting of the Board after he knows that he is or has become so interested. For the purposes of this Article, a general Notice to the Board by a Director to the effect that:

(a) he is a member or officer of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the Notice be made with that company or firm; or

(b) he is to be regarded as interested in any contract or arrangement which may after the date of the Notice be made with a specified person who is connected with him;

shall be deemed to be a sufficient declaration of interest under this Article in relation to any such contract or arrangement, provided that no such Notice shall be effective unless either it is given at a meeting of the Board or the Director takes reasonable steps to secure that it is brought up and read at the next Board meeting after it is given.

103. Following a declaration being made pursuant to the last preceding two Articles, subject to any separate requirement for Audit Committee approval under applicable law or the listing rules of the Company’s Designated Stock Exchange, and unless disqualified by the chairman of the relevant Board meeting, a Director may vote in respect of any contract or proposed contract or arrangement in which such Director is interested and may be counted in the quorum at such meeting.

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GENERAL POWERS OF THE DIRECTORS

104. (1) The business of the Company shall be managed and conducted by the Board, which may pay all expenses incurred in forming and registering the Company and may exercise all powers of the Company (whether relating to the management of the business of the Company or otherwise) which are not by the Statutes or by these Articles required to be exercised by the Company in general meeting, subject nevertheless to the provisions of the Statutes and of these Articles and to such regulations being not inconsistent with such provisions, as may be prescribed by the Company in general meeting, but no regulations made by the Company in general meeting shall invalidate any prior act of the Board which would have been valid if such regulations had not been made. The general powers given by this Article shall not be limited or restricted by any special authority or power given to the Board by any other Article.

(2) Any person contracting or dealing with the Company in the ordinary course of business shall be entitled to rely on any written or oral contract or agreement or deed, document or instrument entered into or executed as the case may be by any two of the Directors acting jointly on behalf of the Company and the same shall be deemed to be validly entered into or executed by the Company as the case may be and shall, subject to any rule of law, be binding on the Company.

(3) Without prejudice to the general powers conferred by these Articles it is hereby expressly declared that the Board shall have the following powers:

(a) To give to any person the right or option of requiring at a future date that an allotment shall be made to him of any share at par or at such premium as may be agreed.

(b) To give to any Directors, officers or employees of the Company an interest in any particular business or transaction or participation in the profits thereof or in the general profits of the Company either in addition to or in substitution for a salary or other remuneration.

(c) To resolve that the Company be deregistered in the Cayman Islands and continued in a named jurisdiction outside the Cayman Islands subject to the provisions of the Law.

105. The Board may establish any regional or local boards or agencies for managing any of the affairs of the Company in any place, and may appoint any persons to be members of such local boards, or any managers or agents, and may fix their remuneration (either by way of salary or by commission or by conferring the right to participation in the profits of the Company or by a combination of two or more of these modes) and pay the working expenses of any staff employed by them upon the business of the Company. The Board may delegate to any regional or local board, manager or agent any of the powers, authorities and discretions vested in or exercisable by the Board (other than its powers to make calls and forfeit shares), with power to sub-delegate, and may authorise the members of any of them to fill any vacancies therein and to act notwithstanding vacancies. Any such appointment or delegation may be made upon such terms and subject to such conditions as the Board may think fit, and the Board may remove any person appointed as aforesaid, and may revoke or vary such delegation, but no person dealing in good faith and without notice of any such revocation or variation shall be affected thereby.

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106. The Board may by power of attorney appoint any company, firm or person or any fluctuating body of persons, whether nominated directly or indirectly by the Board, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Board under these Articles) and for such period and subject to such conditions as it may think fit, and any such power of attorney may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Board may think fit, and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him. Such attorney or attorneys may, if so authorised under the Seal of the Company, execute any deed or instrument under their personal seal with the same effect as the affixation of the Company’s Seal.

107. The Board may entrust to and confer upon a managing director, joint managing director, deputy managing director, an executive director or any Director any of the powers exercisable by it upon such terms and conditions and with such restrictions as it thinks fit, and either collaterally with, or to the exclusion of, its own powers, and may from time to time revoke or vary all or any of such powers but no person dealing in good faith and without notice of such revocation or variation shall be affected thereby.

108. All cheques, promissory notes, drafts, bills of exchange and other instruments, whether negotiable or transferable or not, and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed, as the case may be, in such manner as the Board shall from time to time by resolution determine. The Company’s banking accounts shall be kept with such banker or bankers as the Board shall from time to time determine.

109. (1) The Board may establish or concur or join with other companies (being subsidiary companies of the Company or companies with which it is associated in business) in establishing and making contributions out of the Company’s moneys to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or ex-Director who may hold or have held any executive office or any office of profit under the Company or any of its subsidiary companies) and ex-employees of the Company and their dependants or any class or classes of such person.

(2) The Board may pay, enter into agreements to pay or make grants of revocable or irrevocable pensions or other benefits to employees and ex-employees and their dependants, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex-employees or their dependants are or may become entitled under any such scheme or fund as mentioned in the last preceding paragraph. Any such pension or benefit may, as the Board considers desirable, be granted to an employee either before and in anticipation of or upon or at any time after his actual retirement, and may be subject or not subject to any terms or conditions as the Board may determine.

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BORROWING POWERS

110. The Board may exercise all the powers of the Company to raise or borrow money and to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and, subject to the Law, to issue debentures, bonds and other securities, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

111. Debentures, bonds and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

112. Any debentures, bonds or other securities may be issued at a discount (other than shares), premium or otherwise and with any special privileges as to redemption, surrender, drawings, allotment of shares, attending and voting at general meetings of the Company, appointment of Directors and otherwise.

113. (1) Where any uncalled capital of the Company is charged, all persons taking any subsequent charge thereon shall take the same subject to such prior charge, and shall not be entitled, by notice to the Members or otherwise, to obtain priority over such prior charge.

(2) The Board shall cause a proper register to be kept, in accordance with the provisions of the Law, of all charges specifically affecting the property of the Company and of any series of debentures issued by the Company and shall duly comply with the requirements of the Law in regard to the registration of charges and debentures therein specified and otherwise.

PROCEEDINGS OF THE DIRECTORS

114. The Board may meet for the despatch of business, adjourn and otherwise regulate its meetings as it considers appropriate. Questions arising at any meeting shall be determined by a majority of votes. In the case of any equality of votes the chairman of the meeting shall have an additional or casting vote.

115. A meeting of the Board may be convened by the Secretary on request of a Director or by any Director. The Secretary shall convene a meeting of the Board of which notice may be given in writing or by telephone or in such other manner as the Board may from time to time determine whenever he shall be required so to do by the president or chairman, as the case may be, or any Director.

116. (1) The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be a majority of the Directors. An alternate Director shall be counted in a quorum in the case of the absence of a Director for whom he is the alternate provided that he shall not be counted more than once for the purpose of determining whether or not a quorum is present.

(2) Directors may participate in any meeting of the Board by means of a conference telephone or other communications equipment through which all persons participating in the meeting can communicate with each other simultaneously and instantaneously and, for the purpose of counting a quorum, such participation shall constitute presence at a meeting as if those participating were present in person.

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(3) Any Director who ceases to be a Director at a Board meeting may continue to be present and to act as a Director and be counted in the quorum until the termination of such Board meeting if no other Director objects and if otherwise a quorum of Directors would not be present.

117. The continuing Directors or a sole continuing Director may act notwithstanding any vacancy in the Board but, if and so long as the number of Directors is reduced below the minimum number fixed by or in accordance with these Articles, the continuing Directors or Director, notwithstanding that the number of Directors is below the number fixed by or in accordance with these Articles as the quorum or that there is only one continuing Director, may act for the purpose of filling vacancies in the Board or of summoning general meetings of the Company but not for any other purpose.

118. The Chairman of the Board shall be the chairman of all meetings of the Board. If the Chairman of the Board is not present at any meeting within five (5) minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting.

119. A meeting of the Board at which a quorum is present shall be competent to exercise all the powers, authorities and discretions for the time being vested in or exercisable by the Board.

120. (1) The Board may delegate any of its powers, authorities and discretions to committees (including, without limitation, the Audit Committee), consisting of such Director or Directors and other persons as it thinks fit, and they may, from time to time, revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations which may be imposed on it by the Board.

(2) All acts done by any such committee in conformity with such regulations, and in fulfilment of the purposes for which it was appointed, but not otherwise, shall have like force and effect as if done by the Board, and the Board (or if the Board delegates such power, the committee) shall have power to remunerate the members of any such committee, and charge such remuneration to the current expenses of the Company.

121. The meetings and proceedings of any committee consisting of two or more members shall be governed by the provisions contained in these Articles for regulating the meetings and proceedings of the Board so far as the same are applicable and are not superseded by any regulations imposed by the Board under the last preceding Article, indicating, without limitation, any committee charter adopted by the Board for purposes or in respect of any such committee.

122. A resolution in writing signed by all the Directors except such as are temporarily unable to act through ill-health or disability shall (provided that such number is sufficient to constitute a quorum and further provided that a copy of such resolution has been

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given or the contents thereof communicated to all the Directors for the time being entitled to receive notices of Board meetings in the same manner as notices of meetings are required to be given by these Articles) be as valid and effectual as if a resolution had been passed at a meeting of the Board duly convened and held. Such resolution may be contained in one document or in several documents in like form each signed by one or more of the Directors and for this purpose a facsimile signature of a Director shall be treated as valid.

123. All acts bona fide done by the Board or by any committee or by any person acting as a Director or members of a committee, shall, notwithstanding that it is afterwards discovered that there was some defect in the appointment of any member of the Board or such committee or person acting as aforesaid or that they or any of them were disqualified or had vacated office, be as valid as if every such person had been duly appointed and was qualified and had continued to be a Director or member of such committee.

AUDIT COMMITTEE

124. Without prejudice to the freedom of the Directors to establish any other committees, for so long as the shares of the Company (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Board shall establish and maintain an Audit Committee as a committee of the Board, the composition and responsibilities of which shall comply with the NASD Rules and the rules and regulations of the SEC.

125. (1) The Board shall adopt a formal written audit committee charter and review and assess the adequacy of the formal written charter on an annual basis.

(2) The Audit Committee shall meet at least once every financial quarter, or more frequently as circumstances dictate.

126. For so long as the shares of the Company (or depositary receipts therefor) are listed or quoted on the Designated Stock Exchange, the Company shall conduct an appropriate review of all related party transactions on an ongoing basis and shall utilize the Audit Committee for the review and approval of potential conflicts of interest. Specially, the Audit Committee shall approve any transaction or transactions between the Company and any f the following parties: (i) any shareholder owning an interest in the voting power of the Company or any subsidiary of the Company that gives such shareholder significant influence over the Company or any subsidiary of the Company, (ii) any director or executive officer of the Company or any subsidiary of the Company and any relative of such director or executive officer, (iii) any person in which a substantial interest in the voting power of the Company is owned, directly or indirectly, by any person described in (i) or (ii) or over which such a person is able to exercise significant influence, and (iv) any affiliate (other than a subsidiary) of the Company.

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OFFICERS

127. (1) The officers of the Company shall consist of the Chairman of the Board, the Directors and Secretary and such additional officers (who may or may not be Directors) as the Board may from time to time determine, all of whom shall be deemed to be officers for the purposes of the Law and these Articles.

(2) The Directors shall, as soon as may be after each appointment or election of Directors, elect amongst the Directors a chairman and if more than one Director is proposed for this office, the election to such office shall take place in such manner as the Directors may determine.

(3) The officers shall receive such remuneration as the Directors may from time to time determine.

128. (1) The Secretary and additional officers, if any, shall be appointed by the Board and shall hold office on such terms and for such period as the Board may determine. If thought fit, two or more persons may be appointed as joint Secretaries. The Board may also appoint from time to time on such terms as it thinks fit one or more assistant or deputy Secretaries.

(2) The Secretary shall attend all meetings of the Members and shall keep correct minutes of such meetings and enter the same in the proper books provided for the purpose. He shall perform such other duties as are prescribed by the Law or these Articles or as may be prescribed by the Board.

129. The officers of the Company shall have such powers and perform such duties in the management, business and affairs of the Company as may be delegated to them by the Directors from time to time.

130. A provision of the Law or of these Articles requiring or authorising a thing to be done by or to a Director and the Secretary shall not be satisfied by its being done by or to the same person acting both as Director and as or in place of the Secretary.

REGISTER OF DIRECTORS AND OFFICERS

131. The Company shall cause to be kept in one or more books at its Office a Register of Directors and Officers in which there shall be entered the full names and addresses of the Directors and Officers and such other particulars as required by the Law or as the Directors may determine. The Company shall send to the Registrar of Companies in the Cayman Islands a copy of such register, and shall from time to time notify to the said Registrar of any change that takes place in relation to such Directors and Officers as required by the Law.

MINUTES

132. (1) The Board shall cause minutes to be duly entered in books provided for the purpose:

(a) of all elections and appointments of officers;

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(b) of the names of the Directors present at each meeting of the Directors and of any committee of the Directors;

(c) of all resolutions and proceedings of each general meeting of the Members, meetings of the Board and meetings of committees of the Board and where there are managers, of all proceedings of meetings of the managers.

(2) Minutes shall be kept by the Secretary at the Office.

SEAL

133. (1) The Company shall have one or more Seals, as the Board may determine. For the purpose of sealing documents creating or evidencing securities issued by the Company, the Company may have a securities seal which is a facsimile of the Seal of the Company with the addition of the word “Securities” on its face or in such other form as the Board may approve. The Board shall provide for the custody of each Seal and no Seal shall be used without the authority of the Board or of a committee of the Board authorised by the Board in that behalf. Subject as otherwise provided in these Articles, any instrument to which a Seal is affixed shall be signed autographically by one Director and the Secretary or by two Directors or by such other person (including a Director) or persons as the Board may appoint, either generally or in any particular case, save that as regards any certificates for shares or debentures or other securities of the Company the Board may by resolution determine that such signatures or either of them shall be dispensed with or affixed by some method or system of mechanical signature. Every instrument executed in manner provided by this Article shall be deemed to be sealed and executed with the authority of the Board previously given.

(2) Where the Company has a Seal for use abroad, the Board may by writing under the Seal appoint any agent or committee abroad to be the duly authorised agent of the Company for the purpose of affixing and using such Seal and the Board may impose restrictions on the use thereof as may be thought fit. Wherever in these Articles reference is made to the Seal, the reference shall, when and so far as may be applicable, be deemed to include any such other Seal as aforesaid.

AUTHENTICATION OF DOCUMENTS

134. Any Director or the Secretary or any person appointed by the Board for the purpose may authenticate any documents affecting the constitution of the Company and any resolution passed by the Company or the Board or any committee, and any books, records, documents and accounts relating to the business of the Company, and to certify copies thereof or extracts therefrom as true copies or extracts, and if any books, records, documents or accounts are elsewhere than at the Office or the head office the local manager or other officer of the Company having the custody thereof shall be deemed to be a person so appointed by the Board. A document purporting to be a copy of a resolution, or an extract from the minutes of a meeting, of the Company or of the Board or any committee which is so certified shall be conclusive evidence in favour of all persons dealing with the Company upon the faith thereof that such resolution has been duly passed or, as the case may be, that such minutes or extract is a true and accurate record of proceedings at a duly constituted meeting.

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DESTRUCTION OF DOCUMENTS

135. (1) The Company shall be entitled to destroy the following documents at the following times:

(a) any share certificate which has been cancelled at any time after the expiry of one (1) year from the date of such cancellation;

(b) any dividend mandate or any variation or cancellation thereof or any notification of change of name or address at any time after the expiry of two (2) years from the date such mandate variation cancellation or notification was recorded by the Company;

(c) any instrument of transfer of shares which has been registered at any time after the expiry of seven (7) years from the date of registration;

(d) any allotment letters after the expiry of seven (7) years from the date of issue thereof; and

(e) copies of powers of attorney, grants of probate and letters of administration at any time after the expiry of seven (7) years after the account to which the relevant power of attorney, grant of probate or letters of administration related has been closed;

and it shall conclusively be presumed in favour of the Company that every entry in the Register purporting to be made on the basis of any such documents so destroyed was duly and properly made and every share certificate so destroyed was a valid certificate duly and properly cancelled and that every instrument of transfer so destroyed was a valid and effective instrument duly and properly registered and that every other document destroyed hereunder was a valid and effective document in accordance with the recorded particulars thereof in the books or records of the Company. Provided always that: (1) the foregoing provisions of this Article shall apply only to the destruction of a document in good faith and without express notice to the Company that the preservation of such document was relevant to a claim; (2) nothing contained in this Article shall be construed as imposing upon the Company any liability in respect of the destruction of any such document earlier than as aforesaid or in any case where the conditions of proviso (1) above are not fulfilled; and (3) references in this Article to the destruction of any document include references to its disposal in any manner.

(2) Notwithstanding any provision contained in these Articles, the Directors may, if permitted by applicable law, authorise the destruction of documents set out in sub-paragraphs (a) to (e) of paragraph (1) of this Article and any other documents in relation to share registration which have been microfilmed or electronically stored by the Company or by the share registrar on its behalf provided always that this Article shall apply only to the destruction of a document in good faith and without express notice to the Company and its share registrar that the preservation of such document was relevant to a claim.

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DIVIDENDS AND OTHER PAYMENTS

136. Subject to the Law, the Board may from time to time declare dividends in any currency to be paid to the Members.

137. Dividends may be declared and paid out of the profits of the Company, realised or unrealised, or from any reserve set aside from profits which the Directors determine is no longer needed. The Board may also declare and pay dividends out of share premium account or any other fund or account which can be authorised for this purpose in accordance with the Law.

138. Except in so far as the rights attaching to, or the terms of issue of, any share otherwise provide:

(a) all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, but no amount paid up on a share in advance of calls shall be treated for the purposes of this Article as paid up on the share; and

(b) all dividends shall be apportioned and paid pro rata according to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid.

139. The Board may from time to time pay to the Members such interim dividends as appear to the Board to be justified by the profits of the Company and in particular (but without prejudice to the generality of the foregoing) if at any time the share capital of the Company is divided into different classes, the Board may pay such interim dividends in respect of those shares in the capital of the Company which confer on the holders thereof deferred or non-preferential rights as well as in respect of those shares which confer on the holders thereof preferential rights with regard to dividend and provided that the Board acts bona fide the Board shall not incur any responsibility to the holders of shares conferring any preference for any damage that they may suffer by reason of the payment of an interim dividend on any shares having deferred or non-preferential rights and may also pay any fixed dividend which is payable on any shares of the Company half-yearly or on any other dates, whenever such profits, in the opinion of the Board, justifies such payment.

140. The Board may deduct from any dividend or other moneys payable to a Member by the Company on or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

141. No dividend or other moneys payable by the Company on or in respect of any share shall bear interest against the Company.

142. Any dividend, interest or other sum payable in cash to the holder of shares may be paid by cheque or warrant sent through the post addressed to the holder at his registered address or, in the case of joint holders, addressed to the holder whose name stands first in the Register in respect of the shares at his address as appearing in the Register or addressed to such person and at such address as the holder or joint holders may in writing direct. Every such cheque or warrant shall, unless the holder or joint holders otherwise direct, be made payable to the order of the holder or, in the case of joint holders, to the order of the holder whose name

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stands first on the Register in respect of such shares, and shall be sent at his or their risk and payment of the cheque or warrant by the bank on which it is drawn shall constitute a good discharge to the Company notwithstanding that it may subsequently appear that the same has been stolen or that any endorsement thereon has been forged. Any one of two or more joint holders may give effectual receipts for any dividends or other moneys payable or property distributable in respect of the shares held by such joint holders.

143. All dividends or bonuses unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed. Any dividend or bonuses unclaimed after a period of six (6) years from the date of declaration shall be forfeited and shall revert to the Company. The payment by the Board of any unclaimed dividend or other sums payable on or in respect of a share into a separate account shall not constitute the Company a trustee in respect thereof.

144. Whenever the Board has resolved that a dividend be paid or declared, the Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind and in particular of paid up shares, debentures or warrants to subscribe securities of the Company or any other company, or in any one or more of such ways, and where any difficulty arises in regard to the distribution the Board may settle the same as it thinks expedient, and in particular may issue certificates in respect of fractions of shares, disregard fractional entitlements or round the same up or down, and may fix the value for distribution of such specific assets, or any part thereof, and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Board and may appoint any person to sign any requisite instruments of transfer and other documents on behalf of the persons entitled to the dividend, and such appointment shall be effective and binding on the Members. The Board may resolve that no such assets shall be made available to Members with registered addresses in any particular territory or territories where, in the absence of a registration statement or other special formalities, such distribution of assets would or might, in the opinion of the Board, be unlawful or impracticable and in such event the only entitlement of the Members aforesaid shall be to receive cash payments as aforesaid. Members affected as a result of the foregoing sentence shall not be or be deemed to be a separate class of Members for any purpose whatsoever.

145. (1) Whenever the Board has resolved that a dividend be paid or declared on any class of the share capital of the Company, the Board may further resolve either:

(a) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the Members entitled thereto will be entitled to elect to receive such dividend (or part thereof if the Board so determines) in cash in lieu of such allotment. In such case, the following provisions shall apply:

(i) the basis of any such allotment shall be determined by the Board;

(ii) the Board, after determining the basis of allotment, shall give not less than ten (10) days’ Notice to the holders of the relevant shares of the right of election accorded to them and shall send with such notice forms of election and specify the procedure to be followed and the place at which and the latest date and time by which duly completed forms of election must be lodged in order to be effective;

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(iii) the right of election may be exercised in respect of the whole or part of that portion of the dividend in respect of which the right of election has been accorded; and

(iv) the dividend (or that part of the dividend to be satisfied by the allotment of shares as aforesaid) shall not be payable in cash on shares in respect whereof the cash election has not been duly exercised (“the non-elected shares”) and in satisfaction thereof shares of the relevant class shall be allotted credited as fully paid up to the holders of the non-elected shares on the basis of allotment determined as aforesaid and for such purpose the Board shall capitalise and apply out of any part of the undivided profits of the Company (including profits carried and standing to the credit of any reserves or other special account, share premium account, capital redemption reserve other than the Subscription Rights Reserve) as the Board may determine, such sum as may be required to pay up in full the appropriate number of shares of the relevant class for allotment and distribution to and amongst the holders of the non-elected shares on such basis; or

(b) that the Members entitled to such dividend shall be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the Board may think fit. In such case, the following provisions shall apply:

(i) the basis of any such allotment shall be determined by the Board;

(ii) the Board, after determining the basis of allotment, shall give not less than ten (10) days’ Notice to the holders of the relevant shares of the right of election accorded to them and shall send with such notice forms of election and specify the procedure to be followed and the place at which and the latest date and time by which duly completed forms of election must be lodged in order to be effective;

(iii) the right of election may be exercised in respect of the whole or part of that portion of the dividend in respect of which the right of election has been accorded; and

(iv) the dividend (or that part of the dividend in respect of which a right of election has been accorded) shall not be payable in cash on shares in respect whereof the share election has been duly exercised (“the elected shares”) and in lieu thereof shares of the relevant class shall be allotted credited as fully paid up to the holders of the elected shares on the basis of allotment determined as aforesaid and for such purpose the Board shall capitalise and apply out of any part of the undivided profits of the Company (including profits carried and standing to the credit of any reserves or other special account, share premium account, capital

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redemption reserve other than the Subscription Rights Reserve) as the Board may determine, such sum as may be required to pay up in full the appropriate number of shares of the relevant class for allotment and distribution to and amongst the holders of the elected shares on such basis.

(2)   (a) The shares allotted pursuant to the provisions of paragraph (1) of this Article shall rank pari passu in all respects with shares of the same class (if any) then in issue save only as regards participation in the relevant dividend or in any other distributions, bonuses or rights paid, made, declared or announced prior to or contemporaneously with the payment or declaration of the relevant dividend unless, contemporaneously with the announcement by the Board of their proposal to apply the provisions of sub-paragraph (a) or (b) of paragraph (2) of this Article in relation to the relevant dividend or contemporaneously with their announcement of the distribution, bonus or rights in question, the Board shall specify that the shares to be allotted pursuant to the provisions of paragraph (1) of this Article shall rank for participation in such distribution, bonus or rights.

(b) The Board may do all acts and things considered necessary or expedient to give effect to any capitalisation pursuant to the provisions of paragraph (1) of this Article, with full power to the Board to make such provisions as it thinks fit in the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are aggregated and sold and the net proceeds distributed to those entitled, or are disregarded or rounded up or down or whereby the benefit of fractional entitlements accrues to the Company rather than to the Members concerned). The Board may authorise any person to enter into on behalf of all Members interested, an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made pursuant to such authority shall be effective and binding on all concerned.

(3) The Company may upon the recommendation of the Board by ordinary resolution resolve in respect of any one particular dividend of the Company that notwithstanding the provisions of paragraph (1) of this Article a dividend may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to shareholders to elect to receive such dividend in cash in lieu of such allotment.

(4) The Board may on any occasion determine that rights of election and the allotment of shares under paragraph (1) of this Article shall not be made available or made to any shareholders with registered addresses in any territory where, in the absence of a registration statement or other special formalities, the circulation of an offer of such rights of election or the allotment of shares would or might, in the opinion of the Board, be unlawful or impracticable, and in such event the provisions aforesaid shall be read and construed subject to such determination. Members affected as a result of the foregoing sentence shall not be or be deemed to be a separate class of Members for any purpose whatsoever.

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(5) Any resolution declaring a dividend on shares of any class, whether a resolution of the Company in general meeting or a resolution of the Board, may specify that the same shall be payable or distributable to the persons registered as the holders of such shares at the close of business on a particular date, notwithstanding that it may be a date prior to that on which the resolution is passed, and thereupon the dividend shall be payable or distributable to them in accordance with their respective holdings so registered, but without prejudice to the rights inter se in respect of such dividend of transferors and transferees of any such shares. The provisions of this Article shall mutatis mutandis apply to bonuses, capitalisation issues, distributions of realised capital profits or offers or grants made by the Company to the Members.

RESERVES

146. (1) The Board shall establish an account to be called the share premium account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any share in the Company. Unless otherwise provided by the provisions of these Articles, the Board may apply the share premium account in any manner permitted by the Law. The Company shall at all times comply with the provisions of the Law in relation to the share premium account.

(2) Before recommending any dividend, the Board may set aside out of the profits of the Company such sums as it determines as reserves which shall, at the discretion of the Board, be applicable for any purpose to which the profits of the Company may be properly applied and pending such application may, also at such discretion, either be employed in the business of the Company or be invested in such investments as the Board may from time to time think fit and so that it shall not be necessary to keep any investments constituting the reserve or reserves separate or distinct from any other investments of the Company. The Board may also without placing the same to reserve carry forward any profits which it may think prudent not to distribute.

CAPITALISATION

147. The Company may, upon the recommendation of the Board, at any time and from time to time pass an ordinary resolution to the effect that it is desirable to capitalise all or any part of any amount for the time being standing to the credit of any reserve or fund (including a share premium account and capital redemption reserve and the profit and loss account) whether or not the same is available for distribution and accordingly that such amount be set free for distribution among the Members or any class of Members who would be entitled thereto if it were distributed by way of dividend and in the same proportions, on the footing that the same is not paid in cash but is applied either in or towards paying up the amounts for the time being unpaid on any shares in the Company held by such Members respectively or in paying up in full unissued shares, debentures or other obligations of the Company, to be allotted and distributed credited as fully paid up among such Members, or partly in one way and partly in the other, and the Board shall give effect to such resolution provided that, for the purposes of this Article, a share premium account and any capital redemption reserve or fund representing unrealised profits, may be applied only in paying up in full unissued shares of the Company to be allotted to such Members credited as fully paid.

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148. The Board may settle, as it considers appropriate, any difficulty arising in regard to any distribution under the last preceding Article and in particular may issue certificates in respect of fractions of shares or authorise any person to sell and transfer any fractions or may resolve that the distribution should be as nearly as may be practicable in the correct proportion but not exactly so or may ignore fractions altogether, and may determine that cash payments shall be made to any Members in order to adjust the rights of all parties, as may seem expedient to the Board. The Board may appoint any person to sign on behalf of the persons entitled to participate in the distribution any contract necessary or desirable for giving effect thereto and such appointment shall be effective and binding upon the Members.

SUBSCRIPTION RIGHTS RESERVE

149. The following provisions shall have effect to the extent that they are not prohibited by and are in compliance with the Law:

(1) If, so long as any of the rights attached to any warrants issued by the Company to subscribe for shares of the Company shall remain exercisable, the Company does any act or engages in any transaction which, as a result of any adjustments to the subscription price in accordance with the provisions of the conditions of the warrants, would reduce the subscription price to below the par value of a share, then the following provisions shall apply:

(a) as from the date of such act or transaction the Company shall establish and thereafter (subject as provided in this Article) maintain in accordance with the provisions of this Article a reserve (the “Subscription Rights Reserve”) the amount of which shall at no time be less than the sum which for the time being would be required to be capitalised and applied in paying up in full the nominal amount of the additional shares required to be issued and allotted credited as fully paid pursuant to sub-paragraph (c) below on the exercise in full of all the subscription rights outstanding and shall apply the Subscription Rights Reserve in paying up such additional shares in full as and when the same are allotted;

(b) the Subscription Rights Reserve shall not be used for any purpose other than that specified above unless all other reserves of the Company (other than share premium account) have been extinguished and will then only be used to make good losses of the Company if and so far as is required by law;

(c) upon the exercise of all or any of the subscription rights represented by any warrant, the relevant subscription rights shall be exercisable in respect of a nominal amount of shares equal to the amount in cash which the holder of such warrant is required to pay on exercise of the subscription rights represented thereby (or, as the case may be the relevant portion thereof in the event of a partial exercise of the subscription rights) and, in addition, there shall be allotted in respect of such subscription rights to the exercising warrantholder, credited as fully paid, such additional nominal amount of shares as is equal to the difference between:

(i) the said amount in cash which the holder of such warrant is required to pay on exercise of the subscription rights represented thereby (or, as the case may be, the relevant portion thereof in the event of a partial exercise of the subscription rights); and

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(ii) the nominal amount of shares in respect of which such subscription rights would have been exercisable having regard to the provisions of the conditions of the warrants, had it been possible for such subscription rights to represent the right to subscribe for shares at less than par and immediately upon such exercise so much of the sum standing to the credit of the Subscription Rights Reserve as is required to pay up in full such additional nominal amount of shares shall be capitalised and applied in paying up in full such additional nominal amount of shares which shall forthwith be allotted credited as fully paid to the exercising warrantholders; and

(d) if, upon the exercise of the subscription rights represented by any warrant, the amount standing to the credit of the Subscription Rights Reserve is not sufficient to pay up in full such additional nominal amount of shares equal to such difference as aforesaid to which the exercising warrantholder is entitled, the Board shall apply any profits or reserves then or thereafter becoming available (including, to the extent permitted by law, share premium account) for such purpose until such additional nominal amount of shares is paid up and allotted as aforesaid and until then no dividend or other distribution shall be paid or made on the fully paid shares of the Company then in issue. Pending such payment and allotment, the exercising warrantholder shall be issued by the Company with a certificate evidencing his right to the allotment of such additional nominal amount of shares. The rights represented by any such certificate shall be in registered form and shall be transferable in whole or in part in units of one share in the like manner as the shares for the time being are transferable, and the Company shall make such arrangements in relation to the maintenance of a register therefor and other matters in relation thereto as the Board may think fit and adequate particulars thereof shall be made known to each relevant exercising warrantholder upon the issue of such certificate.

(2) Shares allotted pursuant to the provisions of this Article shall rank pari passu in all respects with the other shares allotted on the relevant exercise of the subscription rights represented by the warrant concerned. Notwithstanding anything contained in paragraph (1) of this Article, no fraction of any share shall be allotted on exercise of the subscription rights.

(3) The provision of this Article as to the establishment and maintenance of the Subscription Rights Reserve shall not be altered or added to in any way which would vary or abrogate, or which would have the effect of varying or abrogating the provisions for the benefit of any warrantholder or class of warrantholders under this Article without the sanction of a special resolution of such warrantholders or class of warrantholders.

(4) A certificate or report by the auditors for the time being of the Company as to whether or not the Subscription Rights Reserve is required to be established and maintained and if so the amount thereof so required to be established and maintained, as to the purposes for

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which the Subscription Rights Reserve has been used, as to the extent to which it has been used to make good losses of the Company, as to the additional nominal amount of shares required to be allotted to exercising warrantholders credited as fully paid, and as to any other matter concerning the Subscription Rights Reserve shall (in the absence of manifest error) be conclusive and binding upon the Company and all warrantholders and shareholders.

ACCOUNTING RECORDS

150. The Board shall cause true accounts to be kept of the sums of money received and expended by the Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of the Company and of all other matters required by the Law or necessary to give a true and fair view of the Company’s affairs and to explain its transactions.

151. The accounting records shall be kept at the Office or, at such other place or places as the Board decides and shall always be open to inspection by the Directors. No Member (other than a Director) shall have any right of inspecting any accounting record or book or document of the Company except as conferred by law or authorised by the Board or the Company in general meeting.

152. Subject to Article 153, a printed copy of the Directors’ report, accompanied by the balance sheet and profit and loss account, including every document required by law to be annexed thereto, made up to the end of the applicable financial year and containing a summary of the assets and liabilities of the Company under convenient heads and a statement of income and expenditure, together with a copy of the Auditors’ report, shall be sent to each person entitled thereto at least ten (10) days before the date of the general meeting and laid before the Company at the annual general meeting held in accordance with Article 56 provided that this Article shall not require a copy of those documents to be sent to any person whose address the Company is not aware or to more than one of the joint holders of any shares or debentures.

153. Subject to due compliance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, and to obtaining all necessary consents, if any, required thereunder, the requirements of Article 152 shall be deemed satisfied in relation to any person by sending to the person in any manner not prohibited by the Statutes, a summary financial statement derived from the Company’s annual accounts and the directors’ report which shall be in the form and containing the information required by applicable laws and regulations, provided that any person who is otherwise entitled to the annual financial statements of the Company and the directors’ report thereon may, if he so requires by notice in writing served on the Company, demand that the Company sends to him, in addition to a summary financial statement, a complete printed copy of the Company’s annual financial statement and the directors’ report thereon.

154. The requirement to send to a person referred to in Article 152 the documents referred to in that article or a summary financial report in accordance with Article 153 shall be deemed satisfied where, in accordance with all applicable Statutes, rules and regulations, including, without limitation, the rules of the Designated Stock Exchange, the Company publishes copies of the documents referred to in Article 152 and, if applicable, a summary financial report complying with Article 153, on the Company’s computer network or in any

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other permitted manner (including by sending any form of electronic communication), and that person has agreed or is deemed to have agreed to treat the publication or receipt of such documents in such manner as discharging the Company’s obligation to send to him a copy of such documents.

AUDIT

155. Subject to applicable law and rules of the Designated Stock Exchange:

(1) the Directors shall appoint an auditor to audit the accounts of the Company and such auditor shall hold office until the Directors appoint another auditor. Such auditor may be a Member but no Director or officer or employee of the Company shall, during his continuance in office, be eligible to act as an auditor of the Company.

(2) The Members may, at any general meeting convened and held in accordance with these Articles, by special resolution remove the Auditor at any time before the expiration of his term of office and shall by ordinary resolution at that meeting appoint another Auditor in his stead for the remainder of his term.

156. Subject to the Law the accounts of the Company shall be audited at least once in every year.

157. The remuneration of the Auditor shall be fixed by the Company in general meeting or in such manner as the Members may determine.

158. If the office of auditor becomes vacant by the resignation or death of the Auditor, or by his becoming incapable of acting by reason of illness or other disability at a time when his services are required, the Directors shall fill the vacancy and determine the remuneration of such Auditor.

159. The Auditor shall at all reasonable times have access to all books kept by the Company and to all accounts and vouchers relating thereto; and he may call on the Directors or officers of the Company for any information in their possession relating to the books or affairs of the Company.

160. The statement of income and expenditure and the balance sheet provided for by these Articles shall be examined by the Auditor and compared by him with the books, accounts and vouchers relating thereto; and he shall make a written report thereon stating whether such statement and balance sheet are drawn up so as to present fairly the financial position of the Company and the results of its operations for the period under review and, in case information shall have been called for from Directors or officers of the Company, whether the same has been furnished and has been satisfactory. The financial statements of the Company shall be audited by the Auditor in accordance with generally accepted auditing standards. The Auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the Auditor shall be submitted to the Members in general meeting. The generally accepted auditing standards referred to herein may be those of a country or jurisdiction other than the Cayman Islands. If so, the financial statements and the report of the Auditor should disclose this act and name such country or jurisdiction.

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NOTICES

161. Any Notice or document, whether or not, to be given or issued under these Articles from the Company to a Member shall be in writing or by cable, telex or facsimile transmission message or other form of electronic transmission or communication and any such Notice and document may be served or delivered by the Company on or to any Member either personally or by sending it through the post in a prepaid envelope addressed to such Member at his registered address as appearing in the Register or at any other address supplied by him to the Company for the purpose or, as the case may be, by transmitting it to any such address or transmitting it to any telex or facsimile transmission number or electronic number or address or website supplied by him to the Company for the giving of Notice to him or which the person transmitting the notice reasonably and bona fide believes at the relevant time will result in the Notice being duly received by the Member or may also be served by advertisement in appropriate newspapers in accordance with the requirements of the Designated Stock Exchange or, to the extent permitted by the applicable laws, by placing it on the Company’s website and giving to the member a notice stating that the notice or other document is available there (a “notice of availability”). The notice of availability may be given to the Member by any of the means set out above. In the case of joint holders of a share all notices shall be given to that one of the joint holders whose name stands first in the Register and notice so given shall be deemed a sufficient service on or delivery to all the joint holders.

162. Any Notice or other document:

(a) if served or delivered by post, shall where appropriate be sent by airmail and shall be deemed to have been served or delivered on the day following that on which the envelope containing the same, properly prepaid and addressed, is put into the post; in proving such service or delivery it shall be sufficient to prove that the envelope or wrapper containing the notice or document was properly addressed and put into the post and a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board that the envelope or wrapper containing the notice or other document was so addressed and put into the post shall be conclusive evidence thereof;

(b) if sent by electronic communication, shall be deemed to be given on the day on which it is transmitted from the server of the Company or its agent. A notice placed on the Company’s website is deemed given by the Company to a Member on the day following that on which a notice of availability is deemed served on the Member;

(c) if served or delivered in any other manner contemplated by these Articles, shall be deemed to have been served or delivered at the time of personal service or delivery or, as the case may be, at the time of the relevant despatch or transmission; and in proving such service or delivery a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board as to the act and time of such service, delivery, despatch or transmission shall be conclusive evidence thereof; and

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(d) may be given to a Member in the English language or such other language as may be approved by the Directors, subject to due compliance with all applicable Statutes, rules and regulations.

163. (1) Any Notice or other document delivered or sent by post to or left at the registered address of any Member in pursuance of these Articles shall, notwithstanding that such Member is then dead or bankrupt or that any other event has occurred, and whether or not the Company has notice of the death or bankruptcy or other event, be deemed to have been duly served or delivered in respect of any share registered in the name of such Member as sole or joint holder unless his name shall, at the time of the service or delivery of the notice or document, have been removed from the Register as the holder of the share, and such service or delivery shall for all purposes be deemed a sufficient service or delivery of such Notice or document on all persons interested (whether jointly with or as claiming through or under him) in the share.

(2) A notice may be given by the Company to the person entitled to a share in consequence of the death, mental disorder or bankruptcy of a Member by sending it through the post in a prepaid letter, envelope or wrapper addressed to him by name, or by the title of representative of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, supplied for the purpose by the person claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if the death, mental disorder or bankruptcy had not occurred.

(3) Any person who by operation of law, transfer or other means whatsoever shall become entitled to any share shall be bound by every notice in respect of such share which prior to his name and address being entered on the Register shall have been duly given to the person from whom he derives his title to such share.

SIGNATURES

164. For the purposes of these Articles, a cable or telex or facsimile or electronic transmission message purporting to come from a holder of shares or, as the case may be, a Director, or, in the case of a corporation which is a holder of shares from a director or the secretary thereof or a duly appointed attorney or duly authorised representative thereof for it and on its behalf, shall in the absence of express evidence to the contrary available to the person relying thereon at the relevant time be deemed to be a document or instrument in writing signed by such holder or Director in the terms in which it is received.

WINDING UP

165. (1) The Board shall have power in the name and on behalf of the Company to present a petition to the court for the Company to be wound up.

(2) A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution.

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166. (1) Subject to any special rights, privileges or restrictions as to the distribution of available surplus assets on liquidation for the time being attached to any class or classes of shares (i) if the Company shall be wound up and the assets available for distribution amongst the Members of the Company shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed pari passu amongst such members in proportion to the amount paid up on the shares held by them respectively and (ii) if the Company shall be wound up and the assets available for distribution amongst the Members as such shall be insufficient to repay the whole of the paid-up capital such assets shall be distributed so that, a nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up on the shares held by them respectively.

(2) If the Company shall be wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Law, divide among the Members in specie or kind the whole or any part of the assets of the Company and whether or not the assets shall consist of properties of one kind or shall consist of properties to be divided as aforesaid of different kinds, and may for such purpose set such value as he deems fair upon any one or more class or classes of property and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of the Members as the liquidator with the like authority shall think fit, and the liquidation of the Company may be closed and the Company dissolved, but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

INDEMNITY

167. (1) The Directors, Secretary and other officers for the time being of the Company and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company and everyone of them, and everyone of their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, in their respective offices or trusts; and none of them shall be answerable for the acts, receipts, neglects or defaults of the other or others of them or for joining in any receipts for the sake of conformity, or for any bankers or other persons with whom any moneys or effects belonging to the Company shall or may be lodged or deposited for safe custody, or for insufficiency or deficiency of any security upon which any moneys of or belonging to the Company shall be placed out on or invested, or for any other loss, misfortune or damage which may happen in the execution of their respective offices or trusts, or in relation thereto; PROVIDED THAT this indemnity shall not extend to any matter in respect of any fraud or dishonesty which may attach to any of said persons.

(2) Each Member agrees to waive any claim or right of action he might have, whether individually or by or in the right of the Company, against any Director on account of

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any action taken by such Director, or the failure of such Director to take any action in the performance of his duties with or for the Company; PROVIDED THAT such waiver shall not extend to any matter in respect of any fraud or dishonesty which may attach to such Director.

AMENDMENT TO MEMORANDUM AND ARTICLES OF ASSOCIATION

AND NAME OF COMPANY

168. No Article shall be rescinded, altered or amended and no new Article shall be made until the same has been approved by a special resolution of the Members. A special resolution shall be required to alter the provisions of the Memorandum of Association or to change the name of the Company.

INFORMATION

169. No Member shall be entitled to require discovery of or any information respecting any detail of the Company’s trading or any matter which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Directors it will be inexpedient in the interests of the members of the Company to communicate to the public.

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EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form F-1/A of our report dated November 16, 2009, except for Notes 22(d),(e),(f),(g),(h), which are as of January 27, 2010, relating to the consolidated financial statements of IFM Investments Limited, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/    PricewaterhouseCoopers Zhong Tian CPAs Limited Company

Beijing, the People’s Republic of China

January 27, 2010