SCHEDULE 1—CONDENSED FINANCIAL STATEMENTS OF THE COMPANY

Balance Sheets
(In thousands, except for shares)


	As of December 31,
	2009			2010			2010
	RMB			RMB			US$
ASSETS:
*Current assets:*
Cash and cash equivalents		43,490			109,393			16,575
Other receivables		3,057			2,034			308
Amounts due from subsidiaries		1,011,289			1,539,092			233,196

Total current assets		1,057,836			1,650,519			250,079
*Non-current assets:*
Investment in subsidiaries		947,610			1,436,221			217,609

Total assets		2,005,446			3,086,740			467,688


LIABILITIES AND SHAREHOLDERS’ EQUITY:
*Current liabilities:*
Other payables		10,030			12,557			1,903
Amounts due to subsidiaries		3,608			13,199			2,000

Total liabilities		13,638			25,756			3,903
Ordinary shares (Authorized shares:10,000,000,000 at US$0.001 each; issued and outstanding shares: 912,497,726 and 1,002,977,326 as of December 31, 2009 and 2010, respectively)		7,036			7,649			1,159
Additional paid-in capital		1,604,774			2,261,849			342,704
Statutory reserves		103,877			136,681			20,709
Retained earnings		348,663			738,165			111,843
Accumulated other comprehensive loss		(72,542	)		(83,360	)		(12,630	)

Total shareholders’ equity		1,991,808			3,060,984			463,785

Total liabilities and shareholders’ equity		2,005,446			3,086,740			467,688

Statements of Equity and Comprehensive Income (Loss)
(In thousands, except for shares)


													(Accumulated			Accumulated
	Share Capital						Additional						deficit)			other
	Number of						Paid-in			Statutory			retained			comprehensive (loss)						Comprehensive
	Share			Amounts			Capital			Reserves			earnings			income			Total			(loss) income
				RMB			RMB			RMB			RMB			RMB			RMB			RMB
Balance as of January 1, 2008		912,497,726			7,036			1,621,064			47,903			(87,941	)		(21,150	)		1,566,912			132,387

Share-based compensation		—			—			45,659			—			—			—			45,659
Net income		—			—			—			—			191,737			—			191,737			191,737
Provision for statutory reserves		—			—			—			23,334			(23,334	)		—			—
Foreign currency translation		—			—			—			—			—			(52,660	)		(52,660	)		(52,660	)

Balance as of December 31, 2008		912,497,726			7,036			1,666,723			71,237			80,462			(73,810	)		1,751,648			139,077

Share-based compensation		—			—			6,609			—			—			—			6,609
Net income		—			—			—			—			300,841			—			300,841			300,841
Dividends		—			—			(68,558	)		—			—			—			(68,558	)
Provision for statutory reserves		—			—			—			32,640			(32,640	)		—			—
Foreign currency translation		—			—			—			—			—			1,268			1,268			1,268

Balance as of December 31, 2009		912,497,726			7,036			1,604,774			103,877			348,663			(72,542	)		1,991,808			302,109
Issuance of ordinary shares upon follow-on offering		92,000,000			623			743,144			—			—			—			743,767
Exercise of share options		5,100,780			34			10,041			—			—			—			10,075
Repurchase of ordinary shares		(6,621,180	)		(44	)		(37,243	)		—			—			—			(37,287	)
Share-based compensation		—			—			22,211			—			—			—			22,211
Net income		—			—			—						422,308			—			422,308			422,308
Dividends		—			—			(80,985	)		—			—			—			(80,985	)
Provision for statutory reserves		—			—			—			32,806			(32,806	)		—			—
Foreign currency translation		—			—			—			—			—			(10,818	)		(10,818	)		(10,818	)
Others		—			—			(93	)		(2	)		—			—			(95	)


Balance as of December 31, 2010		1,002,977,326			7,649			2,261,849			136,681			738,165			(83,360	)		3,060,984			411,490

Balance as of December 31, 2010 in US$					1,159			342,704			20,709			111,843			(12,630	)		463,785			62,347

Statements of Cash Flows
(In thousands)


	Year Ended December 31,
	2008			2009			2010			2010
	RMB			RMB			RMB			US$
OPERATING ACTIVITIES
Net income		191,737			300,841			422,308			63,986
Adjustments to reconcile net income to net cash generated from operating activities:
Equity in earnings of subsidiaries		(238,405	)		(318,694	)		(448,563	)		(67,964	)
Compensation expenses associated with stock options		45,659			6,609			22,211			3,365
Changes in operating assets and liabilities:
Other receivables		2,004			(459	)		1,023			155
Other payables		8,564			(2,547	)		2,527			383

Net cash generated from (used in) operating activities		9,559			(14,250	)		(494	)		(75	)

Cash flows from investing activities
Increase in investment in subsidiaries		(36,989	)		(5,653	)		(40,143	)		(6,082	)
Advances to subsidiaries		(664,893	)		(198,132	)		(518,212	)		(78,517	)

Net cash used in investing activities		(701,882	)		(203,785	)		(558,355	)		(84,599	)

Cash flows from financing activities:
Proceeds from share issuances		—			—			743,767			112,692
Proceeds on exercise of stock options		—			—			10,075			1,527
Share repurchase		—			—			(37,287	)		(5,650	)
Dividends paid		—			(68,558	)		(80,985	)		(12,270	)

Net cash generated from (used in) financing activities		—			(68,558	)		635,570			96,299

Net increase (decrease) in cash and cash equivalents		(692,323	)		(286,593	)		76,721			11,625
Cash and cash equivalents at beginning of year		1,073,798			328,815			43,490			6,588
Effect of exchange rate changes on cash and cash equivalents		(52,660	)		1,268			(10,818	)		(1,638	)

Cash and cash equivalents at end of year		328,815			43,490			109,393			16,575

Note to Schedule 1

(In thousands, except for shares)

Schedule 1 has been provided pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, which require condensed financial statements as to the financial position, changes in financial position and results of operations of a parent company as if the same dates and for the same periods for which audited consolidated financial statements have been presented when the restricted net assets of the consolidated and unconsolidated subsidiaries (including variable interest entities) together exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. As of December 31, 2010, RMB1,490,552 of the restricted capital and reserves are not available for distribution, and as such, the condensed financial statements of the Company has been presented for the years ended December 31, 2009 and 2010.

CISG undertook a separate restructuring in anticipation of an initial public offering involving a holding company (the “Company”) that was incorporated in the Cayman Islands on April 10, 2007. The Company became the ultimate holding company upon completion of a 10,000-for-1 share exchange with the existing shareholders of CISG on July 31, 2007. The exchange was accounted for as a reverse merger on the basis that CISG was the accounting acquirer.