BUSINESS

OVERVIEW

We are the leading residential property developer in Province, according to the Real Estate Top 10 Research Team ( )(1) based on a number of factors including scale, profitability and growth rate(2). Having engaged in property development activities since the early 1990s, our Directors believe that our focus on residential property development in Henan Province, the most populous province in China, pursuant to our Provincial Strategy, has enabled us to capture the opportunities presented by the province’s economic growth. As of March 31, 2008, we had property projects in various stages of development in 19 cities across Henan Province, including 16 prefecture-level cities ( ) and three county-level cities ( ). Pursuant to our Provincial Strategy, we first identify a target city in Henan Province for development, taking into account market conditions, geographical characteristics and other relevant factors, and then establish a project company to operate the development of our project in that city.

Under the leadership of our experienced management team headed by our chairman and a founder of our Group, Mr Wu, a prominent real estate entrepreneur in China, we have established one of the best-known brands in the Henan property market. Mr Wu has won the “Most Influential Person in the China Real Estate Industry for the Last 15 Years” award ( ) granted by the China Real Estate Association ( ) in 2005 and the “Most Respected Entrepreneur in Henan Province in 2005” ( ) award granted by Henan Newspapers Group ( ).

In 2008, we ranked 39th, moving up from 41st in 2007, among the “2008 China Top 100 Real Estate Developers”, determined based on a number of factors(2), and ranked eighth among these real estate developers in terms of risk management ability ( ) according to the Top 100 China Real Estate Developers Research Report ( ) published in March 2008 by the China Real Estate Top 10 Research Team. In 2007, we ranked first among the “Top 10 Real Estate Enterprises by Brand Value in Midwestern China in 2007” (2007 Top

(1) China Real Estate Top 10 Research Team is a research team jointly established in 2003 by the Enterprise Research Institute of the Development Research Center of the State Council ( ), the Real Estate Research Institute of Tsinghua University ( ) and the China Index Academy ( ), which are Independent Third Parties. In 2006, the China Real Estate Association ( ), also an Independent Third Party, joined the China Real Estate Top 10 Research Team. China Real Estate Top 10 Research Team mainly consists of 27 core members. According to the Top 100 China Real Estate Enterprises Research Report, the China Real Estate Top 10 Research Team has conducted research on the Top 100 Real Estate Enterprises in the PRC since 2004. Its research is regarded as an important indicator of the market position of property developers in the PRC and is used by major international financial institutions. Based on the standing of the China Real Estate Top 10 Research Team in the real estate industry in the PRC, our Directors believe China Real Estate Top 10 Research Team’s research to be reliable. Our Directors further confirm that the Top 100 China Real Estate Enterprises Research Report was not commissioned by our Company.

(2) We were evaluated based on a composite of indices including a scale index (total assets, net assets, operating income, amount of investment, GFA under construction and GFA completed), a profitability index (net profit, return on assets and return on equity), a solvency index (current ratio and liability ratio), a tax compliance index (amount of tax paid), a growth index (growth rate of sales amount, business income growth rate, net profit growth rate and amount of land reserves) and operation efficiency index.

121 BUSINESS

10) according to the 2007 China Real Estate Enterprises Brand Value Research Report (2007 ) published in September 2007 by the China Real Estate Top 10 Research Team. In addition, we have won numerous awards for our property projects. In 2004, our Forest Peninsula () Project was presented with the “Asian Habitation Model Project Award” ( ) by a consortium of committees including the Asian Real Estate Society ( ) and the Asian Habitat Society ( )(3). In the same year, two villas designed in our U-Town (Zhengzhou) Project were granted the “China Outstanding Floor Plan” award ( ) by the Housing Industry Association of the All-China Federation of Industry and Commerce ( ) and China Real Estate Newspaper Group ( ).

In December 2006, CapitaLand, a leading property developer in Asia, made a strategic investment in Joy Ascend, which at the time was the holding company of our Group, and acquired additional shares in Joy Ascend from Joy Bright, as a result of which CapitaLand, through its indirect wholly owned subsidiary, held approximately 29.75% of Joy Ascend’s then issued share capital. In August 2007, CapitaLand made a further equity investment in Joy Ascend and held approximately 36.14% of our issued share capital in aggregate immediately prior to the Global Offering. CapitaLand will indirectly hold approximately 27.1% of our issued share capital upon completion of the Global Offering (assuming the Over-allotment Option, the Pre-IPO Share Options and any options which may be granted under the Share Option Scheme are not exercised).

For almost 15 years, we have successfully developed residential properties in Henan Province, in particular targeting customers in the mid- to high-end market. Our Directors believe that our success is attributable to our understanding of the residential property market in Henan Province, the leadership of our experienced management team headed by Mr Wu, and our commitment to high-quality design and development and customer service. Many of our residential property developments are integrated residential complexes offering a combination of product types, such as villas, townhouses, and low-rise and high-rise apartment buildings, and we seek to enhance our customers’ living experience through the inclusion of amenities such as clubhouses, retail units and landscaped gardens in most of our property developments.

As of March 31, 2008, we had a total of 43 property projects in Henan Province in various stages of development, including an aggregate GFA of approximately 2,821,336 sq.m. of completed property developments, an aggregate planned GFA of approximately 755,462 sq.m. under development and an aggregate planned GFA of approximately 4,047,071 sq.m. (for which we have obtained the land use rights certificates) held for future development. Our Directors believe that our current land reserves for which we have land use rights certificates, with an aggregate planned GFA of approximately 4,802,533 sq.m., will be sufficient to meet our development needs for approximately the next three to four years. Further, our Directors believe that, based on our current development plans, we can make use of our properties under development for approximately the next one year. As of March 31, 2008, we had also entered into land use rights grant contracts or land use rights transfer agreements in respect of certain parcels of land with an aggregate planned GFA of approximately 2,017,258 sq.m. for which we had not yet obtained the land use rights certificates.

(3) The Asian Habitat Society is a non-governmental and non-profitable academic organization which aims to promote international and regional cooperation among Asian countries in the field of habitat construction, and improve the theory and practice research of habitats in Asia. It is an Independent Third Party.

122 BUSINESS

For the years ended December 31, 2005, 2006 and 2007, our turnover was RMB1,096.0 million, RMB1,261.3 million and RMB1,821.7 million, respectively. Over the same periods, our net profit attributable to equity holders of our Company was RMB55.2 million, RMB141.0 million and RMB165.0 million, respectively.

We intend to continue to focus on the development of residential properties in Henan Province and, leveraging on our brand name and management expertise, to capitalize on future growth in demand for high quality residential properties.

OUR COMPETITIVE STRENGTHS

We have a leading position in, and a strategic focus on, the residential property market in Henan Province

We are the leading residential property developer in Henan Province according to the China Real Estate Top 10 Research Team based on a number of factors including scale, profitability and growth rate and also ranked 39th among the “2008 China Top 100 Real Estate Developers” according to the Top 100 China Real Estate Enterprises Research Report ( ) published by the China Real Estate Top 10 Research Team. We commenced our residential property development activities in Zhengzhou, the capital city of Henan Province in 1993. Leveraging our experience in Zhengzhou’s residential property market, we have expanded our operations to a total of 19 cities across Henan Province, since adopting a focused Provincial Strategy in 2002. From 2004 to 2007, our annual total completed GFA increased from approximately 53,704 sq.m. to approximately 842,796 sq.m. with a CAGR of approximately 150%. From 2005 to 2006, our revenue from the sales of properties increased from RMB1,090.8 million to RMB1,250.4 million and reached RMB1,663.0 million in 2007.

Our Directors believe our Provincial Strategy, pursuant to which we focus on the development of residential properties in Henan Province, positions us well to capitalize on the ongoing fast economic growth and the urbanization trend in Henan Province, the most populous province in the PRC. Our Directors believe that our market leadership, reputation and strategic focus in Henan Province have enabled us to obtain land in prime locations in Henan Province for future development. Please refer to the section headed “History, Development and Group Structure — Our History and Development” in this prospectus for details of our Provincial Strategy.

We have strong brand recognition in Henan Province supported by quality products and services

Our Directors believe we have established “ ”(jian ye) as a well-known brand in the residential property market in Henan Province by focusing on delivering high quality products and services to our customers. We ranked first among the “Top 10 Real Estate Enterprises by Brand Value in Midwestern China in 2007” according to the China Real Estate Top 10 Research Team.

We have received numerous awards recognizing the quality of our property developments. In 2004, our Forest Peninsula (Zhengzhou) Project was awarded the “Asian Habitation Model Project Award” by a consortium of committees including the Asian Real Estate Society and the Asian Habitat

123 BUSINESS

Society. In the same year, two villas designed in our U-Town (Zhengzhou) Project were awarded the “China Outstanding Floor Plan” award by the Housing Industry Association of the All-China Federation of Industry and Commerce and China Real Estate Newspaper Group. The quality of construction of towers in our Green Garden () and our Home Universe (Zhengzhou) projects were recognized with awards in the “Henan Construction Project ‘Zhongzhou Cup’” ( ) by the Henan Province Construction Department ( ) in 2006. Our Directors believe that our high quality products have helped us to achieve high brand recognition in the residential property market in Henan Province. Our Directors believe that the quality and reputation of our property developments have enabled us to price some of our property developments at a premium to other property developments in similar locations.

As a key part of our marketing strategy, we sponsor the only national major league soccer team in Henan Province — Henan Construction Football Club Company Limited ( ) (the “Construction Football Club”) which is an Independent Third Party. Our Directors believe that our association with the Construction Football Club has enhanced our brand recognition in Henan Province and elsewhere in China.

We provide membership services to our customers through our Jianye Club ( ). As of March 31, 2008, our Jianye Club had approximately 34,622 members in Henan Province. Our Jianye Club members can enjoy an array of services, such as dining reservations, delivery services and ticketing services, provided by participating merchants. Our Directors believe that these measures help build goodwill and loyalty to our brand.

We have introduced CapitaLand as our strategic investor and have strong relationships with other strategic business partners

In December 2006, CapitaLand, a leading property developer in Asia, made a strategic investment in Joy Ascend, which at the time was the holding company of our Group, and acquired additional shares in Joy Ascend from Joy Bright, as a result of which, CapitaLand, through its indirect wholly owned subsidiary, held approximately 29.75% of Joy Ascend’s then issued share capital. In August 2007, CapitaLand made a further equity investment in Joy Ascend and indirectly held approximately 36.14% of our issued share capital in aggregate immediately prior to the Global Offering. CapitaLand will indirectly hold approximately 27.1% of our issued share capital upon completion of the Global Offering (assuming the Over-allotment Option, the Pre-IPO Share Options and any options which may be granted under the Share Option Scheme are not exercised). Our Directors believe CapitaLand’s strategic investment in us demonstrates its confidence and commitment to our Company. Since CapitaLand’s investment, our Directors believe we have benefited, and will continue to benefit, from the knowledge and expertise of CapitaLand in the real estate industry.

We have entered into long-term framework agreements with reputable design firms, construction companies and building material suppliers. We have also maintained a good business relationship with a national first grade property management company and are seen as a creditworthy and important customer by a number of major commercial banks in the PRC. In 2006, we entered into a strategic cooperation agreement with the Henan branch of Bank of China Limited ( ) in respect of the provision of mortgages. Our Directors believe that

124 BUSINESS our strong relationships with our strategic business partners allow us to benefit from lower construction costs, increase efficiency through familiarity with our operating methods, and ensure high quality property management services. Our Directors also believe that our stable collaborative relationship with these business partners will enhance our growth prospects as we continue to implement our Provincial Strategy.

We have sufficient land reserves in strategic locations in Henan Province to support our future development

As of March 31, 2008, we had an aggregate planned GFA under development of approximately 755,462 sq.m. and an aggregate planned GFA held for future development of approximately 4,047,071 sq.m., for which we obtained the land use rights certificates. Our Directors believe that our current land reserves will be sufficient for our development needs for approximately the next three to four years and will provide a base for our future growth. As of March 31, 2008, we had also entered into land use rights grant contracts or land use rights transfer agreements in respect of certain parcels of land with an aggregate planned GFA of approximately 2,017,258 sq.m. for which we had not yet obtained the land use rights certificates of this land. Most of our land reserves are strategically located in town centers, with convenient transportation access.

We have benefited from incorporating into our development projects various design features to enhance our customers’ living environment

Our Directors believe that our almost 15 years of experience in property development in Henan Province has given us a solid understanding of and insight into customer preferences and trends in the province. We have developed strong capabilities in simultaneously managing a number of property projects and also in the development of large-scale projects. Our product research and development department works closely with our sales and marketing center and external design partners to develop high quality residential developments, which incorporate design features based on varying themes and concepts such as “greenery”, “forest” and “lakeside” themes, with the aim of enhancing the ambience of our projects. After we have successfully tested the new product lines in one city, we introduce similar products, tailored to the respective local market tastes, to other target markets in Henan Province. Our Directors believe that the design features we build into our projects, such as the streams and sidewalks featured in Forest Peninsula (Zhengzhou), the lakes featured in Gentlest Lake and the green gardens featured in our Green Garden (), can enhance the appeal of our residential properties to customers in the mid- to high-end markets. Furthermore, by adopting the same branding for projects developed in different cities in Henan Province, we seek to leverage the brand recognition of our flagship projects in our key markets such as in Zhengzhou City and City. As of March 31, 2008, our principal product lines, “Forest Peninsula” and “Green Garden”, were deployed in 11 cities and six cities, respectively (including completed property developments, properties under development and properties held for future development). These projects have been well received by our markets.

Our Directors believe that this business model enables us to better distinguish our properties from those of our competitors, enhance efficiency in design and development, save costs in procurement of materials and services and accelerate project development cycles ( ) while maintaining the quality of our projects.

125 BUSINESS

We have a highly effective management structure and an experienced management team

We adopt a flat and centralized management structure. It enables our management team to make decisions quickly and efficiently which, our Directors believe, leads to effective and cost efficient project management. In addition, we use a centralized procurement system which our Directors believe enhances our bargaining power with our suppliers and contractors, thereby reducing our construction costs and benefiting our customers, which in turn contributes to increasing customer satisfaction.

Mr Wu, our chairman and a founder of our Group, has extensive experience in property development in Henan Province and is a prominent real estate entrepreneur in China. He has won numerous awards in recognition of his significant contribution to the real estate industry in China. Please refer to the section headed “Directors, Senior Management and Employees” in this prospectus for details of Mr Wu’s awards and recognition. Most of our senior management team has extensive industry knowledge, management skills and operating experience. Most of them have bachelor’s or higher degrees and the specialized skills, knowledge or the necessary qualifications required by the post.

We offer training for our employees and motivate them with performance-based bonuses and other incentives. We have also conditionally adopted a Pre-IPO Share Option Scheme and Share Option Scheme for our senior management and employees. Please refer to the sections headed “Pre- IPO Share Option Scheme” and “Share Option Scheme” under “Statutory and General Information” in Appendix VII to this prospectus.

OUR STRATEGIES

We intend to maintain our leading position in the residential property market in Henan Province by continuing to implement our Provincial Strategy in Henan Province, and enhancing our overall competitiveness and market share with the aim of achieving sustainable, stable and profitable growth. When suitable opportunities arise, we may selectively enter into other provinces in China. We intend to achieve our overall objectives by pursuing the following strategies:

Further strengthen our leading position in the residential property market in Henan Province

We plan to further strengthen our leading position in the residential property market in Henan Province and continue to build our brand recognition.

According to the China Statistical Yearbook 2007, Henan Province is the most populous province in China, with a total population of approximately 98.2 million as of the end of 2006 according to the Henan Statistical Yearbook 2007(1) and the average per capita disposable income in Henan Province increased from RMB6,245 in 2002 to RMB9,810 in 2006. While in percentage terms,

(1) The total population in Henan Province was approximately 93.9 million as of the end of 2006 according to the China Statistical Yearbook 2007.

126 BUSINESS

Henan Province currently has a greater rural population than some other provinces, most notably provinces on China’s eastern coast which have seen a greater level of industrialization, our Directors believe that the PRC Government’s urbanization policy will contribute to an increase in Henan Province’s urban population in the next few years. With this trend towards urbanization in Henan Province, our Directors believe we are likely to see greater demand in urban centers for the type of projects that we develop. To capitalize on the economic development and urbanization in Henan Province, we intend to continue to focus on developing medium- to large-scale residential communities in major cities in the province which we perceive to have high-growth potential.

When suitable opportunities arise, we may also selectively expand our operations to develop residential properties targeting customers in mid- to high-end markets in other provinces in China, leveraging our experience and reputation in Henan Province.

Expand our land reserves while preserving capital sufficiency

We intend to continue to expand our land reserves for new property development. At the same time, we intend to closely monitor and control our capital sufficiency with the aim of ensuring sustainable growth. We plan to continue our disciplined approach to land acquisitions, making decisions on land acquisitions based on thorough research and analysis, taking into consideration important factors such as a potential project’s expected return profile and the future growth prospects of the project location. In addition, we also seek to make selective investments in the form of joint ventures and/or acquisition of companies with desirable land reserves should suitable opportunities arise.

Further improve our operational efficiency and profitability

We aim to further improve our operational efficiency and profitability in order to enhance our competitiveness and achieve sustainable, stable and profitable growth.

Š Continue to implement a business model that enhances design and build cost efficiencies:

We will continue to deploy a business model of developing properties using similar designs and construction materials across different project sites. We have developed what we consider to be a cost effective “winning formula” from both the customers’ and our own point of view, by adopting principal product lines such as Forest Peninsula and Green Garden, which we introduce in different cities in Henan Province. Developing projects in this way promotes greater efficiency in design and development and savings in procurement of materials and services, and accelerates project development cycles. It also helps us to achieve consistency in the quality and image of our developments, which we consider to be important to our brand positioning and marketing.

127 BUSINESS

Š Further strengthen our collaboration with business partners and continue to benefit from the increasing scale of our operations:

We have entered into long-term framework agreements with reputable design firms, construction companies and building material suppliers.

The cost of building materials constitutes a significant portion of the total construction costs of our projects. We seek to benefit from the increasing scale of our operations by continuing to establish strategic relationships with major suppliers and negotiating bulk purchase discounts for certain construction materials. Through these strategic relationships, we intend to increase our control over construction quality and construction progress, and gain more effective control of overall development costs.

Further enhance our brand recognition in Henan Province

We plan to further enhance the recognition of our “ ”(jian ye) brand in Henan Province by continuing to provide high quality living environments and comprehensive customer services to our customers.

Our Directors believe our brand name and reputation in the market also depend on the quality of our products. We will continue to leverage our past experience and expertise in developing high quality residential properties targeting the mid- to high-end market.

We provide membership services to our Jianye Club members who are our existing and prospective customers through various channels such as our call center and internet forum. As of March 31, 2008, our Jianye Club had 34,622 members. We distribute a free monthly newsletter, “Jianye Lifestyle”, to our Jianye Club members and carry out regular customer satisfaction surveys. Further, we have a customer relationship management system which receives feedback from customers and thus provides a platform for our analysis of customers’ needs and preferences. We intend to expand our customer services through our Jianye Club and organize events to promote neighborhood relations and foster communications with our end-buyers. We also intend to enlist more participating merchants to expand our client database and offer more discounts and special privileges to our Jianye Club members.

Our Directors believe that by providing value-added services and products to our existing and prospective customers, we will be able to further enhance our brand recognition and to build goodwill and brand loyalty.

128 BUSINESS

OVERVIEW OF OUR PROPERTY DEVELOPMENTS

As of March 31, 2008, we had a total of 43 property projects in various stages of development, all of which are located in Henan Province. We classify our property projects, for which we have obtained the relevant land use rights certificates, into the following three categories:

Š Completed property developments. A development is considered “completed” when a joint inspection report ( ) (the “completion certificate”) is signed by our project company, the contractors, the design firms, the surveying company and the supervisory company of the relevant development.

Š Properties under development. A property is considered as being “under development” immediately following the issuance of a permit for commencement of construction work but prior to the issuance of the completion certificate.

Š Properties held for future development. A property is considered as being “held for future development” when we have obtained land use rights certificates but have not yet received the permit for commencement of construction work.

Our property projects are developed in multiple phases and each phase may be in a different stage of development. As of March 31, 2008, our completed property developments had a total GFA of approximately 2,821,336 sq.m. Our properties under development and properties held for future development had a total planned GFA of approximately 755,462 sq.m. and 4,047,071 sq.m., respectively. Please refer to the section headed “Risk Factors — Risks Relating to the Property Sector in the PRC — The regulatory measures adopted from time to time by the PRC Government to curtail the overheating of, and foreign investment in, the PRC property market could slow down the property industry’s growth or cause the property market to decline”. As confirmed by our PRC legal adviser, all of our properties under development were approved by the relevant government authorities and have obtained permits for commencement of construction prior to or after the promulgation of Opinion No. 165, Circular No. 37, Circular No. 26 and Notice No. 17 referred to in that section.

The site area information for an entire project is based on either the relevant land use rights certificates, land use rights grant contracts or tender documents, depending on which documents are available. The total GFA of a project comprises saleable GFA and non-saleable GFA. Total GFA also represents the sum of the total completed GFA, total planned GFA under development and total planned GFA held for future development. Total completed GFA refers to the total GFA of our completed property developments. Total saleable GFA refers to (i) total saleable GFA completed for completed property developments and (ii) planned saleable GFA for both properties under development and properties held for future development. Saleable GFA refers to (i) the internal floor areas, exclusive of non-saleable GFA (which represents the GFA of a property which is not for sale, including certain ancillary facilities such as car parking spaces, clubhouses and schools), allocated to the residential units and other properties that we develop for sale, (ii) GFA that is held for investment only (including office buildings for rent and retail units) and (iii) “fixed asset” areas (including hotel and serviced apartments). With respect to the items (ii) & (iii) above, we hold these properties as investments to earn rental income and/or for capital appreciation. However, we have the discretion to sell such properties if our Directors believe sales will generate more economic value than retaining them. Nevertheless, there is no assurance that the fair values or any surplus thereof of our investment

129 BUSINESS properties can be realized at the same amounts, or at all. Please refer to the section headed “Risk Factors — Risks Relating to our Business — Changes in the fair values of our investment properties are unrealized, and any surplus may not be realized at the same amount, or at all” in this prospectus for details.

A property is considered sold when revenue is recognized from the sale or pre-sale of the property upon the later of the completion of the property and the signing of the sale contract. A property is pre-sold when we have executed the pre-sale contract but have not yet received the completion certificate. The property is delivered to the customer upon, among other things, (i) full payment by the customer, and (ii) the property being completed, inspected and accepted as qualified and the completion certificate being received. The figures for completed GFA that appear in this prospectus are based on figures provided in the relevant government documents. The following information that appears in this prospectus is based on our internal records and estimates: (a) figures for planned GFA under development, planned GFA for future development, GFA sold, GFA pre-sold, saleable GFA and non-saleable GFA and (b) information regarding total development costs incurred (including land costs, construction costs and capitalized finance costs) and estimated future development costs (including land costs, construction costs and capitalized finance costs), planned construction period and number of units. The actual figures and construction schedules may differ from our current estimates in the future. The information setting out the construction period for the completed phases of our projects in this prospectus is based on relevant government documents or our own internal records.

We include in this prospectus the project names which we have used, or intend to use, to market our properties. Some of the names for property developments may be different from the names registered with the relevant authorities, and are subject to approval by the relevant authorities and may be subject to change. Certain of our project names contain “Square”, “Luxurious House”, “SOHO” and “Peninsula”. Our PRC legal adviser has confirmed that “Square” and “Luxurious House” are not distinctive and cannot be registered as a trade mark in the PRC. “SOHO” and “Peninsula”, though registered by other companies as trade marks in the PRC, were not used by us as trade marks but only as part of our project names. Our Group has been using “Forest Peninsula” in our project names which we have registered as a trade mark. Our PRC legal adviser has further confirmed that our project names comply with PRC laws and regulations and it is not likely that we will be considered as infringing the intellectual property rights of these companies for the following reasons: (i) our Group did not use the words “SOHO” and “Peninsula” as trademarks but only used these terms as part of our project names; (ii) “Jianye” is a well-known brand in Henan Province and the use of these words for our project names does not create confusion with the “Jianye” brand to the public; and (iii) our Directors have confirmed that no disputes or claims have been brought against us for any infringement of intellectual property rights of others in relation to our project names.

130 BUSINESS to us Interest attributable ——— 100 100 100 403.3 96.68 project further costs to Estimated complete the development (12) (12) (12) (13) 7.4 72.3 100 58.719.9 84.326.341.0 73.210.8 100 96.2 150.1 100 75.3 100 100 62.334.4 100 56.4 107.7 201.3 368.1 100 100 100 costs 337.0 763.2292.6 100 265.1123.1 100 143.9 100 106.5 incurred Development (6) (6) (6) (6) (6) (6) (6) (6) (6) (3) (6) (6) (6) (6) date Actual/ Estimated completion — March 2000—— December 1999 March 2003 — — — GFA Total planned for future for future Properties development development (7) (8) (9) (4)(5) GFA Total sold saleable sold/pre- Total saleable GFA under development development ——— ——— ——— Properties under Total planned GFA under development (7) (8) (9) GFA Total saleable completed (2) developments Total GFA Completed property completed GFA Total (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (RMB millions) (RMB millions) (%) planned Total GFA/ (1) use Use/Planned residential, retailhotel 90,778residential —residential, retail 96,845residential, 30,000 retail — 44,829residential 82,208 67,041residential 44,829 66,189 — 67,041residential, retail 40,982 164,200 — 14,637 63,647 70,000 100,000 — 13,649 — — — — — — 65,865 — — — — — — — — June 40,636 2008 — — 90,778 55,934 — June — 2011 — — — — December 2005 December — 218.0 2007 — 30,000 June 2010 — 91.3 185.4 — — 164,200 0.2 December 100,000 70,000 2012 June December 2009 2010 — — 100 100 100 residentialresidential, retailresidential, 303,904 retail 31,000residential, 123,469 303,904 retail 247,127 114,298 123,469 112,953 — — — — — — — — 102,619 — — — September 2005 — — 265.4 31,000 114,298 August 2012 August 2010 — 100 residential, retail 44,908residential 44,908 44,908 325,092 325,092residential, retail 293,763 40,922residential, retailresidential 74,800 —residentialresidential — 39,333 — 49,772 — — 58,185 — — — — — — — — — —residential, — —retail, SOHO — — — 40,922 183,500 September 2010 — 74,800 — — December 2009 — — 39,333 — December — 2009 49,772 58,185 December 2008 December 2009 — 24.0 — 82.0 — 183,500 100 December 2010 residential, retailresidential, 107,271 retailresidential 105,835 107,271residential, 105,835 retail 93,484 95,833 38,021residential, retail 34,436residential, retail 83,548 —residential, retail — 34,436 83,818 —residential 83,548 42,253 34,341residential, 83,818 67,860retail, 42,253 furnished —63,118 —apartments, 41,243 — 71,000 —office, hotel — 93,484 — 89,437 — — — 266,997 — — 45,709 — — May 2007 — — 27,229 30,261 — February 2008 — 58,643 221,288 53,119 38,057 — 164,011 — — — 337.6 December 32,993 — 2007 352.8 December 2006 — 38,021 December 2007 November 2008 December — — 2006 177.7 253.2 — June 2010 — 239.3 35.3 188.6 — — 71,000 100 — 100 December — 143.1 2008 — 100 100 53.4 100 100 100 177.1 100 ...... Property developments ...... The following tables set forth the information of our completed property developments, properties under development, and properties for future Forest Peninsula (Luoyang) Gentlest Lake Jianye Champagne Garden Zhengzhou Xiangsheng Garden Forest Peninsula (Shangjie) Jianye One City (Luoyang) Phase III Phase IV Phases I and II Phase III Phase I Phase II Phase III Phase IV Phase II Jianye City Garden (Zhengzhou) Home Universe (Zhengzhou) Jianye One City (Zhengzhou) Jianye Square Phase I Jinshui Garden (Zhengzhou) Jianye Code International Garden (Zhengzhou) (Zhengzhou) Phase I Phase II Forest Peninsula (Zhengzhou) Phase I Phase II Phase III Phase IV U-Town (Zhengzhou) Phase I Phase II Phase III Phase IV Landmark (Zhengzhou) 13. 14. 6. 7. 8. 4. 5. 9. 10. 11. 12. 15. 1. 2. 3. Luoyang City development as of March 31, 2008 for which we have obtained the relevant land use rights certificates: Zhengzhou City

131 BUSINESS to us Interest attributable further costs to complete Estimated the project development 8.29.18.8 68.6 103.1 80.6 50 50 50 36.9 148.8 100 39.4 224.6 50 14.8 140.8 100 16.6 53.7 100 Development costs incurred (3) (6) (6) (6) (6) (6) (6) (6) Actual/Estimated completion date GFA Total planned for future for future Properties development development (4)(5) pre- sold/ GFA Total sold saleable Total saleable GFA under development development Properties under Total planned GFA under development GFA Total saleable completed (2) developments Total GFA Completed property completed GFA/ GFA Total Total (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (RMB millions) (RMB millions) (%) planned (1) use Use/Planned residential, retailresidential 65,381residentialresidential 43,205 72,515 43,205residential 42,113 46,000 —residential 22,176 — 32,961 — 115,272 22,124 — — — 30,845residential, retail — — 67,713 —residential, 67,713 retail — — — 59,208 — — 62,269residential, 59,208 retail June 2008 40,468 — 59,208 —residential 40,468 — — — — 40,414residential — — 48,397 — 79.6 — — — — 72,515 — — 90,897residential, retail 42,113 —residential, December retail 46,000 60,326 2008 64,953 — June 2009 40,218 — — 64,953 November 4.6 2010 32,961 — 40,218 57,963 —residential — 115,272 57,701 June 16.8 2011 residential, 35,451 retail — December 40,214 48,397 2009 June 41,000 2005 — 50 35,105 — June — — 48,395 2007 35,105 102.2 — — 12,706 32,851 February 2008 100.1 — — — 50 — — 40,819 — 80.3 28,785 57.4 December 2008 — — — — — — — 33.9 December 90,897 2006 — December 2007 — 30,815 100 August 2009 145.5 100 — — 45.3 83.8 100 November 2006 41,000 — June 100 2009 — 57.5 100 100 — 100 residential, retailresidential, retail 88,837 92,706 88,837 58,653residential, retail 85,537residential, retail 54,000 51,893residential, 109,085 retail 54,000 83,064 — 34,053 — 52,203 — 30,566 — — 66,094 — — 109,085 85,537 — 104,059 — — December 2008 13,242 — 42,368 December 2007 161.0 — — — September 2008 143.9 November 2007 — 36.2 94.6 83,064 99.9 — December 2009 100 150.7 — 100 100 100 ...... () (Phase I) (Zhumadian) (Phase II) (Zhumadian) (Phase III) (Zhumadian) (Phase IV) (Zhumadian) (Phase V) Forest Peninsula (Xinyang) Xinyang Nanwan Yanwei Xinyang Nanwan Fish Zhumadian Project Project Green Garden () Forest Peninsula Forest Peninsula () Property developments Island Project Phase I Phase II Phase III Phase IV Farm Project Green Garden Forest Peninsula Forest Peninsula Forest Peninsula Forest Peninsula Palladio Luxurious House Main Lake Phase I Phase II () Phase I Phase II Phase I Phase II Phase III 18. 19. 20. 21. 22. 23. 16. 17. Xinyang City Zhumadian City Xuchang City Sanmenxia City Pingdingshan City Jiaozuo City

132 BUSINESS to us Interest attributable further costs to complete Estimated the project development 8.7 102.0 100 74.7 175.1 100 21.913.0 232.4 144.1 100 100 36.5 190.2 100 Development costs incurred (3) (6) (6) (6) (6) (6) Actual/ Estimated completion date GFA Total planned for future for future Properties development development (4)(5) pre- sold/ GFA Total sold saleable Total saleable GFA under development development — — 62,052 — December 2003 87.5 — 100 Properties under Total planned GFA under development (10) GFA Total saleable completed (2) developments Total GFA Completed property completed GFA Total (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (RMB millions) (RMB millions) (%) planned Total GFA/ (1) use Use/Planned residential, retail 53,704residential 53,704residential, retail 49,697residential 29,347 35,456residentialresidential, 29,347 retail 35,456 — 49,622 29,347 23,299 35,456 40,132residential 23,299residential —residential — 23,299 — — —residential 75,061 — 49,697 39,046 128,170residential, 75,061 — retail — — 76,200 — 64,239 73,114 — — — — 23,145 64,239 30,438 — — November — 2004 62,052 — — — — 16,181 — — — 63.5 March 2006 — August 2007 — — — — — — December 56,560 — 2007 — 49,622 49.8 56.0 — — 40,132 December 2009 — — 35.5 December 2008 January — 2008 100 — — — — 128,170 39,046 10.5 — April December 100.2 2011 2008 76,200 100 March 100 2012 57.5 100 19.5 — 100 43.5 100 100 residential, retailresidential, retail 79,862SOHO, retail 28,420 79,862 26,739residential, 76,921 retail —residential 15,443 75,282residential, retail 106,100 15,443 75,282 — — 58,110 72,731 11,296 — 28,420 — — 11,296 — 28,418 — 71,125 7,075 16,656 — — — — — 58,110 — October 66,936 2007 December 2008 October 2008 53,613 — 27,077 — 88.8 112.4 December 2007 19.2 — — 106,100 September 2008 135.0 10.2 — December 2009 24.3 67.4 100 100 — 100 53.4 100 100 residential, retail 26,775retail 26,775residential, retail 111,267 22,158 26,010 — — 26,010 26,010 — — — — 22,022 — — — November 2006 — — 90.7 111,267 — June 2009 November 2006 — 102.0 100 — 100 ...... Property developments Green Garden Jianye City (Puyang) Forest Peninsula Sweet-Scented Osmanthus Forest Peninsula () Landmark (Jiyuan) Forest Peninsula () Lakeside Square Sanmenxia SOHO (Shangqiu) Phases I and II Phase V . Jianye Green Garden (Puyang) (Shangqiu) Garden Phase I Phase II Phase III Phase IV Phase III Phase IV Phases I and II Phase III Phase I Phase II Phases III and IV (Sanmenxia) (Sanmenxia) . . 27. 30. 31 28. 29. 32. 33. 34. 25. 26. Forest Peninsula 24. Shangqiu City Puyang City Jiyuan City Luohe City

133 BUSINESS to us Interest attributable —— 100 100 — 100 1,585.9 60 the project development costs to complete Estimated further (12) (12) (13) (12) 90.147.562.837.146.2 424.6 223.7 296.0 174.3 217.4 51 27.2 51 51 51 51 211.3 60 35.035.0— 222.7 224.0 60 60 45.9 60 214.5 Development costs incurred (6) (6) (6) (6) (6) (6) (6) (3) (6) (6) (6) date Actual/ Estimated completion — September 2005— March 2006 — — GFA Total planned for future for future Properties development development (10) (11) (4)(5) pre- sold/ GFA Total sold saleable Total saleable GFA under development development ———— — 52,254 Properties under Total planned GFA under development (10) (11) GFA Total saleable completed (2) developments Total GFA Completed property completed GFA Total Total GFA / (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (sq.m.) (RMB millions) (RMB millions) (%) planned (1) use Use/Planned residential, retailresidential, retail 110,000residential, retail 140,000residential, retail 80,000 — 95,594 — —residential, retail — —residential 68,202 —residential, retail — 68,202 — 97,074 — 72,153 — 66,659residential 72,153 — — — 68,482 — — 54,634 — — — 54,634 — — — — — 52,254 — — 110,000 63,444 — 140,000 Decemberresidential, — 2010 retail December 2011 130,928 80,000 66,827 95,594 December 2012 — — December 2013 — June 2005 — — May 2007 —residential, retail 850,000 97,074 97.2 May 2010 — — 128.5 — — — — — — 100 130,928 May 2012 100 — — 850,000 May 2013 residential, retail 18,888residential, retail 18,888 56,300 18,888 56,300residential, retail 130,930 55,606 — — — — 52,337 — — — December 2006 — 102.8 130,930 December 2011 — 100 residential, retailresidential, retail 208,000 40,272 — — — — 208,000 187,200 — — — — — December 2008 40,272 96.1 December 2009 137.9 60 residential 142,105 — — — — — 142,105 December 2009 residential, retail 183,582 — — 183,582 168,903 — — October 2008 241.9 84.5 100 . . . Training Center 5,432 5,432 — — — — — May 1999 — ...... Golden Zhongmou Guihua House Zhengkai Jianye Dahong City Luohe Songshan Road Phase II Phase III Phase IV Phase V . Jianye Green Garden (Xinxiang) Phase I Phase II Dragon Project . Green Garden (Nanyang) Phase VIII St. Andrews Project . Taohua Island (Nanyang) Construction Forest Peninsula Phase VII Garden Phase I Phase II Project Phase I 36 37. 38 43. 39 40. 41. 42. 35. Capital Garden Staff Training Center Property developments Xinxiang City Nanyang City Zhongmou County City Kaifeng City TotalOther Projects (1)(2) Please refer to the section The headed total “—Description completed of GFA Our in Property the Projects” above below table for and details in of this other prospectus uses does of not each include project. the GFA of properties that are not intended for sale. 7,623,869 2,821,336 2,561,526 755,462 663,331 4,047,071

134 BUSINESS urious House does not include retail units put option, the purchasers have the right to property market in Henan Province has been ancial statements in the accountants’ report in er details. t. Andrews Project, respectively. . Record Period. sell the properties backAppendix to IA to us this three prospectus. years Please refer after to they the purchased sections headed the “— properties. Properties Used Revenue by from Us” the and “Financial sale Information” of in these this prospectus retail for units furth was not recognized in our fin with an aggregate saleable GFA of approximately 33,898 sq.m. which were sold to purchasers under a lease-backprosperous arrangement with with a a strong demand put for option. properties. Under the (14) Please refer to the section headed “Financial Information” in this prospectus for the sales contribution of each of our projects during the Track (3)(4) Represents the completion date of The the total whole phase. saleable Certain GFA properties sold within the for phase U-Town may (Zhengzhou) have Phases been or I may & be II, completed Home before that Universe date. (Zhengzhou), Forest Peninsula (Luoyang) Phase III and Palladio Lux (5) In respect of the unsold units of our projects, our Directors consider that there is no impairment problem in connection with such properties as the (6)(7)(8) The planned(9) construction period represents All our the current(10) saleable estimate units only. in The All phase actual the I(11) construction saleable of period units this may in project All be this were the different project(12) sold, saleable from were All other units our sold, the than in current other saleable two this estimate than units residential project(13) eight in units were All residential this which sold, the units project were other saleable which were unsold than units were sold as 17 in unsold as of Accurate residential this as of March development units project of March 31, costs which were March 31, 2008. for were sold, 31, 2008. this unsold other 2008. The project as than development are of one costs not March retail include available. 31, unit the 2008. which costs was of unsold acquisition as of of interests March in 31, the 2008. project companies developing Jianye One City ( Luoyang) and Zhongmou S

135 BUSINESS

Property titles

Land Use Rights Certificates

We have obtained land use rights certificates for all our completed properties, properties under development and properties held for future development.

In addition, we have interests under land use rights grant contracts in parcels of land for which we had not obtained land use rights certificates as of March 31, 2008. In accordance with industry practice and pursuant to the relevant land use rights grant contracts, we may pay the relevant land premium for these parcels of land in instalments. Our PRC legal adviser has advised us that the land use rights grant contracts of the parcels of land for which we had not obtained land use rights certificates are legal and valid and, after paying the outstanding land premiums, there will be no material legal impediments for us to obtain land use rights certificates for these parcels of land. No value has been assigned to these parcels of land in the property valuation report included in Appendix IV to this prospectus. Our PRC legal adviser has also confirmed that there is no illegal use of the properties in which our Group has interests but which we do not have the relevant land use rights certificates.

Based on our current project plans, the said parcels of land will offer a combination of product types, including townhouses, low-rise, mid-rise and high-rise apartment buildings. We were granted the land use rights to these parcels of land through public tender, auction or listing-for-sale. Under these processes, conditions including the plot ratio, greenery ratio and density of the planned project and the height of the buildings in the project would be announced by the local land bureau. Since we were granted the land use rights to these parcels of land and had satisfied the conditions set forth by the relevant land bureaux, our PRC legal adviser has advised us that, although our planned use of these parcels of land are subject to approvals by the relevant planning and construction authorities in accordance with the Circular of the General Office of the State Council on Forwarding the Opinions of the Ministry of Construction and other Departments on Stabilizing Property Prices (Guo Ban Fa [2005] No. 26) ( ) and the Urgent Notice of the MLR on Further Tightening of Land Administration (Guo Tu Zi Dian Fa [2006] No. 17) ( ), there is no material impediment for us to obtain the relevant permits and approvals.

136 BUSINESS

Details of these parcels of land are set forth in the table below.

Estimated date of Estimated Actual/ obtaining date of Assumed Property land use Total Land settling the Interest attributable valuation rights planned premium Outstanding land attributable capital report Planned project Location certificate (1) GFA (2) incurred commitment premium to us value number (sq.m.) (RMB ’000) (RMB ’000) (%) (RMB ’000) Jianye Maple Garden (Zhengzhou) ...... Zhengzhou June 2008 82,190 18,129 — — 100 128,500(3) 76 U-Town (Zhengzhou) Phase V ...... Zhengzhou June 2008 106,766 80,100 — — 100 331,500(3) 79 Kaifeng Water System Development June 2008 to June 2007 to Project(5) ...... Kaifeng June 2010(5) 1,024,950 146,556 1,277,763 June 2010(5) 80 1,147,920(3) 78 A parcel of land (No.2007-22) in Kaifeng Zhengkai Forest Peninsula .... Kaifeng June 2008 620,481 63,777 118,673 June 2008 60 333,780(4) 80 A parcel of land (No.2007-23) in Kaifeng Zhengkai Forest Peninsula .... Kaifeng August 2008 164,710 15,000 43,014 August 2008 60 116,640(4) 80 A parcel of land in Xinxiang Golden Dragon Project ..... Xinxiang August 2008 18,161 — 3,959 August 2008 60 6,420(4) 77

(1) Dates are based solely on our internal estimates.

(2) The planned GFA figures shown in this column are calculated based on our current designs and, include saleable GFA, non-saleable GFA as well as rentable GFA and hotel GFA, as applicable.

(3) The amount shown is the actual value assigned to the relevant parcel of land in the property valuation report in Appendix IV to this prospectus. Since we had settled the land premium for these parcels of land as of March 31, 2008, our PRC legal adviser has advised us that there is no legal impediment for us to obtain the relevant land use rights certificates and Savills has therefore assigned value to these parcels of land in their property valuation report.

(4) Save as set forth in Note (3) above, as of March 31, 2008, we had not settled the land premium and had not obtained the land use rights for the land listed above and no value has been assigned to such properties in the property valuation report in Appendix IV to this prospectus. Had we obtained all the relevant land use right certificates, the amounts shown would have been the capital value which Savills would have attributed to our interest in the projects as of March 31, 2008.

(5) We have entered into an investment agreement with the People’s Government of Kaifeng City ( ) to develop the Kaifeng Water System Development Project which is part of the government’s city reconstruction project. The city reconstruction project involves the construction of a water system by the government. We intend to develop the Kaifeng Water System Development Project in the peripheral area of the water system. Based on our project plans, this project is expected to comprise approximately 7,000 residential units, with an aggregate planned GFA of approximately 790,000 sq.m., and 2,400 retail units with an aggregate planned GFA of approximately 235,000 sq.m. Construction of this project is expected to commence in June 2008 and is expected to be completed in June 2014. Kaifeng Water System Development Project involves 34 parcels of land. We expect to obtain the first land use rights certificate in June 2008 and the last land use rights certificate in June 2010. As of March 31, 2008, we had settled land premium of RMB146.6 million for the first land use rights certificate with a site area of approximately 82,800 sq.m. and a planned GFA of approximately 107,640 sq.m. and we expect to settle the land premium for the last land use rights certificate with a site area of approximately 252,500 sq.m. and a planned GFA of approximately 328,250 sq.m. in June 2010.

137 BUSINESS

Building Ownership Certificates

Our Group has a number of completed properties in respect of which either (i) we have not obtained the relevant building ownership certificates but have obtained building ownership registration reports ( ), or (ii) we have obtained neither the building ownership certificates nor the building ownership registration reports. These properties include part of our completed properties in Forest Peninsula (Zhengzhou), U-Town, Forest Peninsula (Luoyang), Gentlest Lake, Forest Peninsula (Jiaozuo), Forest Peninsula (Xinyang), Forest Peninsula (Pingdingshan), Forest Peninsula (Luohe), Green Garden (Sanmenxia), Sanmenxia SOHO, Jianye Green Garden (Xinxiang) and Main Lake. However, completed construction works certified reports have been obtained for all of our Group’s completed properties.

Our properties without building ownership certificates fall into three different categories. These properties are generally (i) unsold or recently sold properties in the cities of Pingdingshan, Luohe, Xinxiang and Sanmenxia; (ii) properties in cities other than the four cities listed in (i) for which we have obtained the building ownership registration reports; or (iii) newly completed buildings. We are in the process of applying for the relevant building ownership certificates or building ownership registration reports in accordance with the legal requirements in the relevant cities. Reasons for the lack of the relevant building ownership certificates or building ownership registration reports for the properties in the above three categories are set forth below:

Š In the cities of Pingdingshan, Luohe, Xinxiang and Sanmenxia in Henan Province, the local government authorities normally only require a property developer to assist its customers to apply for a building ownership certificate upon the signing of the sale contract and obtaining the completed construction works certified reports. Therefore, for the properties that we developed in these cities which either have not yet been completed or sold, we are not able to assist our customers to apply for a building ownership certificate as the local government authorities will not process such application. For recently sold properties, we are in the process of applying for the building ownership certificates.

Š In other cities in Henan Province, a property developer is required to obtain a building ownership registration report ( ) for all of the completed properties in a building and to assist its customers to obtain a building ownership certificate when a property is sold. Our PRC legal adviser has confirmed that the building ownership registration report is evidence of the complete ownership of the relevant properties and the property owner has the right to occupy and sell the property. For the area that is an ancillary part of a property, such as basement and loft spaces, there is no legal requirement to obtain a separate building ownership certificate. In addition, in respect of properties under development, there is no legal requirement for a property developer to obtain building ownership certificates. In relation to unsold properties and recently sold properties in these cities in Henan Province, we are in the process of applying for the building ownership registration reports and the relevant building ownership certificates, respectively.

Š Substantially all of our completed properties without building ownership certificates or building ownership registration reports were completed in 2007 with a significant proportion completed in the fourth quarter of 2007 and, based on our previous experience,

138 BUSINESS

it normally takes a minimum of three months (depending on the practice of the local authorities) to complete the procedures for obtaining the building ownership certificates or building ownership registration reports for a property. Thus, the lack of building ownership certificates and building ownership registration reports for certain of our completed properties is primarily a procedural matter due to the time lag between completion of the properties and the issue of building ownership documentation by the regulatory authorities.

We have obtained the land use rights certificates with respect to these completed properties without building ownership certificates or building ownership registration reports and have also obtained all the other permits or approvals for developing and completing these properties as well as the completed construction works certified reports. We have also obtained the pre-sale permits from the local real estate administration authorities in accordance with PRC laws and regulations in order to pre-sell these properties. A building ownership certificate or a building ownership registration report is not necessary for the pre-sale of our properties.

Our PRC legal adviser has confirmed that, for our properties without the building ownership certificates or building ownership registration reports: (a) their construction complied with the overall governmental planning requirements of the sites upon which they are erected; (b) they had all been legally constructed and completed in accordance with all requisite governmental construction permits or equivalent documents; and (c) we have obtained the requisite completed construction works certified reports. In light of the above, our PRC legal adviser is of the opinion that we have already become, and currently are, the sole owner of these properties, the complete ownership of which is acknowledged and protected under PRC law and we have the right to occupy and sell these properties. Further, our PRC legal adviser has confirmed that there is no legal impediment for us to obtain the outstanding building ownership certificates or building ownership registration reports and our Directors have confirmed that our Group has not historically experienced any material difficulty in obtaining the building ownership certificates or building ownership registration reports for our completed properties. Further, our Directors have confirmed that the lack of building ownership certificates and building ownership registration reports for the properties in question would not have a material adverse effect on the operation of, and is therefore not crucial to, our Group’s business.

Our PRC legal adviser has confirmed that there is no illegal use of the properties without building ownership certificates or building ownership registration reports involving our Group.

Each of our Controlling Shareholders has agreed to provide an indemnity in favor of our Group in respect of any liabilities, damages, fines, penalties, costs, losses or expenses which may be imposed or levied by the PRC Government authorities for any failure of our Group to obtain a land use rights certificate or building ownership certificate in connection with any of our properties as required under PRC laws and regulations.

139 BUSINESS

DESCRIPTION OF OUR PROPERTY PROJECTS

Our property projects are located in 19 cities across Henan Province, including 16 prefecture- level cities and three county-level cities. The following maps show the location of our property projects in Henan Province.

Project Locations in Henan Province

1 Forest Peninsula (Zhengzhou) 12 Forest Peninsula (Shangjie) 24 Sanmenxia SOHO 38 Green Garden (Nanyang) 2 U-Town (Zhengzhou) 13 Forest Peninsula (Luoyang) 25 Lakeside Square (Sanmenxia) 39 Taohua Island (Nanyang) 3 Landmark (Zhengzhou) 14 Gentlest Lake 26 Forest Peninsula (Sanmenxia) 40 Guihua House Construction 4 Jianye Square 15 Jianye One City (Luoyang) 27 Green Garden (Shangqiu) 41 Kaifeng Zhengkai Forest Peninsula 5 Jinshui Garden (Zhengzhou) 16 Forest Peninsula (Pingdingshan) 28 Forest Peninsula (Shangqiu) 42 Jianye Dahong City Garden 6 Jianye City Garden (Zhengzhou) 17 Forest Peninsula (Jiaozuo) 29 Sweet-Scented Osmanthus Garden 43 Zhongmou St. Andrews Project 7 Home Universe (Zhengzhou) 18 Forest Peninsula (Xinyang) 30 Jianye City (Puyang) 8 Jianye One City (Zhengzhou) 19 Xinyang Nanwan Yanwei Island 31 Jianye Green Garden (Puyang) 9 Jianye Code International Garden Project 32 Forest Peninsula (Jiyuan) (Zhengzhou) 20 Xinyang Nanwan Fish Farm 33 Landmark (Jiyuan) 10 Jianye Champagne Garden Project 34 Forest Peninsula (Luohe) (Zhengzhou) 21 Zhumadian Project 35 Luohe Songshan Road Project 11 Zhengzhou Xiangsheng 22 Xuchang Project 36 Jianye Green Garden (Xinxiang) Garden 23 Green Garden (Sanmenxia) 37 Xinxiang Golden Dragon Project

Key Product Lines

We have developed two principal product lines, “Forest Peninsula” and “Green Garden”, which were deployed in 11 cities and six cities, respectively (including completed property developments, properties under development and properties held for future development) as of March 31, 2008. We have incorporated various themes including “forest” and “lakeside” themes in our Forest Peninsula projects and “greenery” themes in our Green Garden projects. Our Forest Peninsula projects target customers in the high-end market, featuring streams, lakes, causeways, sidewalks and/or various species of tree, so as to create a modern and sophisticated ambience. Our Green Garden projects target customers in the mid-end market, featuring green gardens to create a natural ambience. Our Forest Peninsula projects usually consist of villas, townhouses, low-rise apartment buildings, mid-rise apartment buildings, retail units and ancillary facilities, while our Green Garden projects mainly consist of low-rise apartment buildings, mid-rise apartment buildings and ancillary facilities. As of March 31, 2008 we had 18 projects in various stages of development (including completed property developments, properties under development and properties held for future development) which fall within these two product lines, representing approximately 41.9% of our total number of property

140 BUSINESS project developments. The GFA per unit for Forest Peninsula projects varies from approximately 75 sq.m. to approximately 200 sq.m., while that for Green Garden projects varies from approximately 85 sq.m. to approximately 150 sq.m. The average selling price for Forest Peninsula projects for the Track Record Period was approximately RMB3,415 per sq.m., while that for Green Garden projects was approximately RMB2,289 per sq.m. For the years ended December 31, 2005, 2006 and 2007, the revenue attributable to our Forest Peninsula series projects accounted for approximately 52.0%, 46.8% and 66.2%, respectively, of our Group’s revenue, while that of Green Garden projects accounted for approximately 22.1%, 9.4% and 3.1% respectively, of our Group’s revenue. For the years ended December 31, 2005, 2006 and 2007, the aggregate sold GFA attributable to Forest Peninsula projects accounted for approximately 40.9%, 60.4% and 67.1%, respectively, of our Group’s aggregate sold GFA, while that of Green Garden projects accounted for approximately 36.0%, 14.4% and 4.1%, respectively, of our Group’s aggregate sold GFA. Considering the proportion of our revenue and sold GFA attributable to, the number of projects within, and market response to, these two project lines, our Directors are of the view that our strategy of developing product lines is effective and these two product lines have been successful.

Most of the properties developed by our Group are residential complexes consisting of villas, townhouses, low-rise apartment buildings, mid-rise apartment buildings, high-rise apartment buildings and retail units. Villas and townhouses comprised approximately 0.2% and 9.0% of the total GFA of our completed properties, respectively. Although villas and townhouses only comprise a small portion of our Group’s completed properties and we do not anticipate that they will be a major product category that we will develop in the future based on our current development plans, we deliver other products which target customers in the mid- to high-end market, based on the quality of the design and materials used for their construction and also the surrounding environment and services which we provide to our customers. As confirmed by our PRC legal adviser, in respect of the villas and townhouses completed and currently under development by our Group and those for which our Group has obtained relevant planning approvals, our Group has obtained the relevant approvals for the development of these villas and townhouses in compliance with the relevant PRC laws and regulations including the Circular of the General Office of the State Council on Forwarding the Opinions of the Ministry of Construction and other Departments on Stabilizing Property Prices (Guo Ban Fa [2005] No.26) ( ) and the Urgent Notice of the MLR on Further Tightening of Land Administration (Guo Tu Zi Dian Fa [2006] No. 17) ( ). In addition, our Group has adopted internal policies to ensure that our future property developments will comply with PRC laws and regulations including but not limited to the above opinions and notice. We provide our staff regular training to maintain their knowledge of laws and regulations in relation to the real estate sector. The strategy and research department under our investment and development center is responsible for monitoring and reporting on new developments in real estate related regulations and policies in the PRC and approving project plans to ensure that the project plans comply with PRC laws and regulations.

Our Group’s focus is on the development of residential properties. Most of our retail units, especially the retail units in Palladio Luxurious House of Xuchang Project, Phase I of Sweet-Scented Osmanthus Garden, Forest Peninsula (Jiyuan) and Phase I of Forest Peninsula (Luohe), have been developed to complement our residential properties. These retail units are relatively small in terms of GFA and comprise only a small portion of the total GFA of our projects. Therefore, our Group has

141 BUSINESS adopted a strategy of launching sales of the retail units after a large proportion of the residential properties in the project have been sold or pre-sold, which our Directors believe facilitates the sales of the retail units. In light of the above, our Directors believe that the low percentage of saleable GFA of retail units sold in these projects would not affect our Group’s results of operations and liquidity position.

A brief description of our 43 property projects as of March 31, 2008 is set forth below:

Zhengzhou City ( )

Forest Peninsula (Zhengzhou) ( )

Forest Peninsula (Zhengzhou) is located at the intersection of Tianming Road and Dongfeng Road in Zhengzhou City. It occupies a total site area of approximately 157,736 sq.m. It is being developed by CCRE Henan, our wholly owned subsidiary. In 2004, Forest Peninsula (Zhengzhou) was awarded the “Asian Habitation Model Project Award” by a consortium of committees including the Asian Real Estate Society and the Asian Habitat Society.

We are developing Forest Peninsula (Zhengzhou) in four phases. As of March 31, 2008, construction of phases I, II and III had been completed and phase IV was held for future development. The project consists of villas, townhouses, low-rise apartment buildings, mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including car parking spaces, a clubhouse, a kindergarten and an art gallery.

142 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... August 2004(1) to May 2007 Total development costs incurred (RMB million) ...... 352.8 Total completed GFA (sq.m.) ...... 107,271

Residential Retail Total completed saleable GFA (sq.m.) ...... 87,528 5,956 Total saleable GFA sold (sq.m.) ...... 87,528 5,956 Percentage of saleable GFA sold (%) ...... 100% 100% Total number of units ...... 505 15

(1) We commenced construction of Forest Peninsula (Zhengzhou) Phase I prior to obtaining the permit for commencement of construction work, which was not in strict compliance with PRC laws and regulations. Our PRC legal adviser has advised us that our project company may be subject to fines between 1% and 2% of the consideration payable under the relevant construction contracts. However, since this project has passed a joint inspection by the contractors, the design firms, the surveying company and the supervisory company and we have already obtained the completed construction work certified report for this project, our PRC legal adviser has advised us that there is no foreseeable risk that we would be subject to a penalty or fine due to the lack of the permit for commencement of construction work for this project at the time of commencement of its construction. In addition, since we have sold all the units in this project, our Directors confirm that the lack of the permit for commencement of construction work for this project does not materially affect our operations or business. Each of our Controlling Shareholders has agreed to provide an indemnity in favor of our Group in respect of any liabilities, damages, fines, penalties, costs, losses or expenses which may be imposed or levied by the PRC Government authorities for the failure by our Group to obtain the permit for commencement of construction work before commencing the construction of this project. Our Directors also confirm that our Group has adopted measures to ensure compliance with this requirement in the future. Please refer to the section headed “Risk Factors — Risks Relating to Our Business — We may fail to obtain, or experience material delays in obtaining, necessary government approvals for any property development”.

Phase II

Construction period ...... October 2006 to February 2008 Total development costs incurred (RMB million) ...... 337.6 Total completed GFA (sq.m.) ...... 105,835

Residential Retail Total completed saleable GFA (sq.m.) ...... 94,127 1,706 Total saleable GFA sold (sq.m.) ...... 87,731 1,706 Percentage of saleable GFA sold (%) ...... 93% 100% Total number of units ...... 550 9

143 BUSINESS

Phase III

Construction period ...... December 2006 to December 2007 Development costs incurred (RMB million) ...... 177.7 Total completed GFA (sq.m.) ...... 34,436

Residential Total completed saleable GFA (sq.m.) ...... 34,341 Total saleable GFA sold (sq.m.) ...... 30,261 Percentage of saleable GFA sold (%) ...... 88% Total number of units ...... 107

Phase IV

Planned construction period ...... May2008 to November 2008 Development costs incurred (RMB million) ...... 35.3 Estimated further development costs to complete the project (RMB million) ...... 143.1 Total planned GFA for future development (sq.m.) ...... 38,021

U-Town (Zhengzhou) ( )

U-Town (Zhengzhou) is located at Dongfeng East Road South in Zhengdongxin of Zhengzhou City. It occupies a total site area of approximately 210,040 sq.m. It is being developed by CCRE New Town, our wholly owned subsidiary. In 2004, two villa designs in U-Town (Zhengzhou) were awarded the “China’s Outstanding Floor Plan” award by the Housing Industry Association of the All-China Federation of Industry and Commerce and the China Real Estate Newspaper Group.

We are developing U-Town (Zhengzhou) in four phases. As of March 31, 2008, construction of phases I, II and III had been completed and phase IV was held for future development. The project consists of townhouses, low-rise apartment buildings, retail units and ancillary facilities including car parking spaces, clubhouses and a kindergarten.

144 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... August 2004 to December 2006 Total development costs incurred (RMB million) ...... 253.2 Total completed GFA (sq.m.) ...... 83,548

Residential Retail Total completed saleable GFA (sq.m.) ...... 62,600 5,260 Total saleable GFA sold (sq.m.)(1) ...... 57,522 1,121 Percentage of saleable GFA sold (%) ...... 92% 21% Total number of units ...... 249 19

(1) The total saleable GFA sold does not include retail units with an aggregate saleable GFA of approximately 4,212 sq.m. which were sold to purchasers under lease-back arrangements with a put option save for retail units sold under such arrangement for which the relevant put options had expired as of March 31, 2008. Under the put option, the purchasers have the right to sell the properties to us within three years beginning from two or three months after the date of completion of the pre-sold properties. Revenue from the sale of these retail units was not recognized in our financial statements in the accountants’ report in Appendix IA to this prospectus. Please refer to the sections headed “— Properties Used by Us” and “Financial Information” in this prospectus for further details.

Phase II

Construction period ...... December 2005 to December 2007 Total development costs incurred (RMB million) ...... 239.3 Total completed GFA (sq.m.) ...... 83,818

Residential Retail Total completed saleable GFA (sq.m.) ...... 41,746 21,372 Total saleable GFA sold (sq.m.)(1) ...... 41,089 12,030 Percentage of saleable GFA sold (%) ...... 98% 56% Total number of units ...... 196 100

(1) The total saleable GFA sold does not include retail units with an aggregate saleable GFA of approximately 5,309 sq.m. which were sold to purchasers under lease-back arrangements with a put option. Under the put option, the purchasers have the right to sell the properties to us within three years beginning from two or three months after the date of completion of the pre-sold properties. Revenue from the sale of these retail units was not recognized in our financial statements in the accountant’s report in Appendix IA to this prospectus. Please refer to the sections headed “— Properties Used by Us” and “Financial Information” in this prospectus for further details.

Phase III

Construction period ...... May2006 to December 2006 Total development costs incurred (RMB million) ...... 188.6 Total completed GFA (sq.m.) ...... 42,253

Residential Retail Total completed saleable GFA (sq.m.) ...... 39,550 1,693 Total saleable GFA sold (sq.m.) ...... 38,057 — Percentage of saleable GFA sold (%) ...... 96% — Total number of units ...... 112 1

145 BUSINESS

Phase IV

Planned construction period ...... May2008 to December 2008 Development costs incurred (RMB million) ...... 53.4 Estimated further development costs to complete the project (RMB million) ...... 177.1 Total planned GFA for future development (sq.m.) ...... 71,000

Landmark (Zhengzhou) ( )

Landmark (Zhengzhou) is located at the intersection of Zhengbian Road and Zhongzhou Avenue in Zhengzhou City. It occupies a total site area of approximately 42,642 sq.m. It is being developed by CCRE China, our wholly owned subsidiary.

As of March 31, 2008, Landmark (Zhengzhou) was partly completed and partly under development. Based on our project plans, the project will consist of high-rise apartment buildings, furnished apartments, an office building, retail units, a hotel which is expected to be managed based on four-star rating standards and ancillary facilities including car parking spaces. Please refer to “— Hotel Development” in this prospectus for further details of this planned hotel.

On May 1, 2008, we entered into a legally binding framework agreement with Farsighted International Limited (“Farsighted International”), in which CapitaLand indirectly holds a 30% interest, pursuant to which we agreed to sell retail units with an aggregate planned GFA of approximately 54,164 sq.m., together with 260 car parking spaces to one or more project companies to be established by Farsighted International in China. For further details, please refer to the section headed “Connected Transactions — An Existing One-off Connected Transaction between an associate of CapitaLand and Us” in this prospectus.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... January 2007 to June 2010 Development costs incurred (RMB million) ...... 337.0 Estimated further development costs to complete the project (RMB million) ...... 763.2 Total completed GFA (sq.m.) ...... 45,709 Total planned GFA under development (sq.m.) ...... 221,288

Furnished Residential Retail apartments Hotel Office Total completed saleable GFA (sq.m.) ...... — 27,229 — — — Total saleable/hotel GFA under development (sq.m.) ...... 61,834 62,297 27,288 31,412 12,592 Total saleable GFA sold and pre-sold (sq.m.) ...... 25,122 2,496(1) 5,375 — — Percentage of saleable GFA sold and pre-sold (%) ...... 41% 3% 20% — — Planned total number of units ...... 607 885 720 310 86

(1) The total saleable retail GFA sold and pre-sold does not include the GFA sold to Farsighted International which is approximately 54,164 sq.m.

146 BUSINESS

Jianye Square ( )

Jianye Square is located at the east sector of Weisi Road in of Zhengzhou City. It occupies a total site area of approximately 24,978 sq.m. It is being developed by CCRE China, our wholly owned subsidiary.

We are developing Jianye Square in two phases. As of March 31, 2008, phase I had been completed and phase II was held for future development. Based on our project plans, the project will consist of high-rise apartment buildings and retail units.

The total GFA of phase I of this project is approximately 44,908 sq.m. As of March 31, 2008, we had disposed of all of the saleable units in phase I of this project, other than two residential units which were unsold.

Details of phase II of our project as of March 31, 2008 are as follows:

Phase II

Planned construction period ...... June 2010 to August 2012 Development costs incurred (RMB million) ...... 7.4 Estimated further development costs to complete the project (RMB million) ...... 72.3 Total planned GFA for future development (sq.m.) ...... 31,000

Jinshui Garden (Zhengzhou) ( )

Jinshui Garden (Zhengzhou) is located at the east sector of Weisi Road in Jinshui District of Zhengzhou City. It occupies a total site area of approximately 120,900 sq.m. It was developed by CCRE China, our wholly owned subsidiary. Jinshui Garden (Zhengzhou) was our first property project and was the first large-scale residential community in terms of GFA developed in Henan Province according to the Zhengzhou Real Estate Bureau. The project earned the reputation of the “Most Influential Project (Residential) of Central China Real Estate Market Within 10 Years” ( ) awarded by Henan TV ( ) and Henan People’s Radio ( ) in 2005.

As of March 31, 2008, construction of Jinshui Garden (Zhengzhou) had been completed. The project consists of villas, high-rise apartment buildings, low-rise apartment buildings and ancillary facilities including basement spaces and a kindergarten.

The total GFA of this project is approximately 325,092 sq.m. As of March 31, 2008, we had disposed of all of the saleable units in this project, other than eight residential units.

147 BUSINESS

Jianye City Garden (Zhengzhou) ( )

Jianye City Garden (Zhengzhou) is located at Jianye Road in Jinshui District of Zhengzhou City. It occupies a total site area of approximately 187,061 sq.m. It was developed by CCRE China, our wholly owned subsidiary.

As of March 31, 2008, construction of Jianye City Garden (Zhengzhou) had been completed. The project consists of mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including a high school, a clubhouse and basement spaces.

The total GFA of this project is approximately 303,904 sq.m. As of March 31, 2008, all of the saleable units of this project were sold, other than 17 residential units.

Home Universe (Zhengzhou) ( )

Home Universe (Zhengzhou) is located at No. 90 Jianye Road in Jinshui District of Zhengzhou City. It occupies a total site area of approximately 46,336 sq.m. It was developed by CCRE China, our wholly owned subsidiary. In 2006, two towers of Home Universe (Zhengzhou) received the “Henan Construction Project ‘Zhongzhou Cup’— Henan Province High Quality Construction Work” ( ) award granted by the Henan Province Construction Department.

As of March 31, 2008, construction of Home Universe (Zhengzhou) had been completed. The project consists of low-rise apartment buildings, mid-rise apartment buildings, retail units and ancillary facilities including car parking spaces and basement spaces.

148 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Construction period ...... May2003 to September 2005 Total development costs incurred (RMB million) ...... 265.4 Total completed GFA (sq.m.) ...... 123,469

Residential Retail Total completed saleable GFA (sq.m.) ...... 94,383 18,570 Total saleable GFA sold (sq.m.)(1) ...... 93,569 9,050 Percentage of saleable GFA sold (%) ...... 99% 49% Total number of units ...... 486 56

(1) The total saleable GFA sold does not include retail units with an aggregate saleable GFA of approximately 8,973 sq.m. which were sold to purchasers under lease-back arrangements with a put option save for retail units sold under such arrangement for which the relevant put options had expired as of March 31, 2008. Under the put option, the purchasers have the right to sell the properties to us within three years beginning from two or three months after the date of completion of the pre-sold properties. Revenue from the sale of these retail units was not recognized in our financial statements in the accountants’ report in Appendix IA to this prospectus. Please refer to the sections headed “— Properties Used by Us” and “Financial Information” in this prospectus for further details.

Jianye One City (Zhengzhou) ( )

Jianye One City (Zhengzhou) is located at the east of Nanyang Road and the west of Fengle Road of Zhengzhou City. It occupies a total site area of approximately 42,450 sq.m. It is being developed by CCRE Henan, our wholly owned subsidiary.

As of March 31, 2008, Jianye One City (Zhengzhou) was held for future development. Based on our project plans, the project will consist of mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including car parking spaces.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... October 2008 to August 2010 Development costs incurred (RMB million) ...... 292.6 Estimated further development costs to complete the project (RMB million) ...... 265.1 Total planned GFA for future development (sq.m.) ...... 114,298

Jianye Code International Garden (Zhengzhou) ( )

Jianye Code International Garden (Zhengzhou) is located at the east of Songshan Road and the north of Mianfang Road of Zhengzhou City. It occupies a total site area of approximately 13,769 sq.m. It is being developed by CCRE Henan, our wholly owned subsidiary.

As of March 31, 2008, Jianye Code International Garden (Zhengzhou) was held for future development. Based on our project plans, the project will consist of high-rise apartment buildings, retail units and ancillary facilities including car parking spaces.

149 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... November 2008 to September 2010 Development costs incurred (RMB million)...... 58.7 Estimated further development costs to complete the project (RMB million) ...... 84.3 Total planned GFA for future development (sq.m.) ...... 40,922

Jianye Champagne Garden (Zhengzhou) ( )

Jianye Champagne Garden (Zhengzhou) is located at the east sector of Huozhan Street of Zhengzhou City. It occupies a total site area of approximately 29,911 sq.m. It is being developed by CCRE Henan, our wholly owned subsidiary.

As of March 31, 2008, Jianye Champagne Garden (Zhengzhou) was held for future development. Based on our project plans, the project will consist of mid-rise apartment buildings and retail units.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... April 2008 to December 2009 Development costs incurred (RMB million) ...... 123.1 Estimated further development costs to complete the project (RMB million) ...... 143.9 Total planned GFA for future development (sq.m.) ...... 74,800

Zhengzhou Xiangsheng Garden ( )

Zhengzhou Xiangsheng Garden is located at the east of Dongfeng East Road and the south of Xiangsheng Street in Zhengzhou City. It occupies a total site area of approximately 13,333 sq.m. It is being developed by CCRE Henan, our wholly owned subsidiary.

As of March 31, 2008, Zhengzhou Xiangsheng Garden was held for future development. Based on our project plans, the project will consist of mid-rise apartment buildings and ancillary facilities including basement spaces.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... September 2008 to December 2009 Development costs incurred (RMB million) ...... 19.9 Estimated further development costs to complete the project (RMB million) ...... 73.2 Total planned GFA for future development (sq.m.) ...... 39,333

150 BUSINESS

Forest Peninsula (Shangjie) ( ) Forest Peninsula (Shangjie) is located at the north of Xuchang Road and the west of Jinhua Road in Zhengzhou City. It occupies a total site area of approximately 118,959 sq.m. It is being developed by CCRE Henan, our wholly owned subsidiary.

We plan to develop Forest Peninsula (Shangjie) in four phases. As of March 31, 2008, all phases are held for future development. Based on our project plans, the project will consist of low-rise apartment buildings, mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including car parking spaces and a hotel which is to be developed and managed by CCRE Hotel Management, our wholly owned subsidiary.

Details of our project as of March 31, 2008 are as follows:

Phases I to IV

Phase I Phase II Phase III Phase IV Planned construction period ...... May2008 August 2008 June 2009 November 2008 to December 2008 to December 2009 to June 2011 to June 2010 Development costs incurred (RMB million) . . . 24.0 26.3 41.0 10.8 Estimated further development costs to complete the project (RMB million) ...... 82.0 96.2 150.1 75.3 Total planned GFA for future development (sq.m.) ...... 49,772 58,185 90,778 30,000

Luoyang City ( ) Forest Peninsula (Luoyang) ( )

Forest Peninsula (Luoyang) is located at the north-east sector of the intersection of Beiyuan Yi Road and Yingcai Road in Luonan New District of Luoyang City. It occupies a total site area of approximately 80,557 sq.m. It is being developed by CCRE Luoyang, our wholly owned subsidiary.

151 BUSINESS

We are developing Forest Peninsula (Luoyang) in three phases. As of March 31, 2008, construction of phases I and II had been completed and phase III was partly completed and partly under development. The project comprises villas, mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including car parking spaces and a clubhouse.

Details of our project as of March 31, 2008 are as follows:

Phases I and II

Construction period ...... December 2004 to December 2005 Total development costs incurred (RMB million) ...... 91.3 Total completed GFA (sq.m.) ...... 44,829

Residential Total completed saleable GFA (sq.m.) ...... 40,982 Total saleable GFA sold (sq.m.) ...... 40,636 Percentage of saleable GFA sold (%) ...... 99% Total number of units ...... 136

Phase III

Planned construction period ...... March 2006 to June 2008 Development costs incurred (RMB million) ...... 218.0 Estimated further development costs to complete the project (RMB million) ...... 0.2 Total completed GFA (sq.m.) ...... 82,208 Total planned GFA under development (sq.m.) ...... 14,637

Residential Retail Total completed saleable GFA (sq.m.) ...... 55,514 10,675 Total saleable GFA under development (sq.m.) ...... 11,498 2,151 Total saleable GFA sold and pre-sold (sq.m.)(1) ...... 65,101 764 Percentage of saleable GFA sold and pre-sold (%) ...... 97% 6% Planned total number of units ...... 405 69

(1) The total saleable GFA sold does not include retail units with an aggregate saleable GFA of approximately 2,536 sq.m. which were sold and pre-sold to purchasers under lease-back arrangements with a put option. Under the put option, the purchasers have the right to sell the properties to us within three years beginning from two to three months after the date of sale or completion of the properties, as applicable. Revenue from the sale of these retail units was not recognized in our financial statements in the accountants’ report in Appendix IA to this prospectus. Please refer to the sections headed “— Properties Used by Us” and “Financial Information” in this prospectus for further details.

Gentlest Lake ( )

Gentlest Lake is located at the north of Nanyuan Yi Road in Luonan New District of Luoyang City. It occupies a total site area of approximately 193,973 sq.m. It is being developed by CCRE Luoyang, our wholly owned subsidiary.

152 BUSINESS

We are developing Gentlest Lake in four phases. As of March 31, 2008, construction of phase I had been completed and phases II, III and IV were held for future development. The project will comprise villas, low-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including basement spaces.

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... November 2006 to December 2007 Total development costs incurred (RMB million) ...... 185.4 Total completed GFA (sq.m.) ...... 67,041

Residential Retail Total completed saleable GFA (sq.m.) ...... 58,778 4,869 Total saleable GFA sold (sq.m.) ...... 55,934 — Percentage of saleable GFA sold (%) ...... 95% — Total number of units ...... 182 21

Phase II

Planned construction period ...... April 2008 to December 2009 Development costs incurred (RMB million) ...... 62.3 Estimated further development costs to complete the project (RMB million) ..... 107.7 Total planned GFA for future development (sq.m.) ...... 70,000

Phase III

Planned construction period ...... November 2008 to June 2010 Development costs incurred (RMB million) ...... 34.4 Estimated further development costs to complete the project (RMB million) ..... 201.3 Total planned GFA for future development (sq.m.) ...... 100,000

Phase IV

Planned construction period ...... September 2009 to December 2012 Development costs incurred (RMB million) ...... 56.4 Estimated further development costs to complete the project (RMB million) ..... 368.1 Total planned GFA for future development (sq.m.) ...... 164,200

Jianye One City (Luoyang) ( )

Jianye One City (Luoyang) is located at No. 6 Road in Luoyang City. It occupies a total site area of approximately 44,281 sq.m. It is being developed by CCRE Sun Town, a subsidiary which is 96.68% owned by us and 3.32% owned by an Independent Third Party.

153 BUSINESS

As of March 31, 2008, Jianye One City (Luoyang) was held for future development. Based on our project plans, the project will consist of high-rise apartment buildings, SOHO (small office / home office) units, retail units and ancillary facilities including car parking spaces and basement spaces.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... August 2008 to December 2010 Development costs incurred (RMB million) ...... 106.5 Estimated further development costs to complete the project (RMB million) ...... 403.3 Total planned GFA for future development (sq.m.) ...... 183,500

Pingdingshan City ( )

Forest Peninsula (Pingdingshan) ( )

Forest Peninsula (Pingdingshan) is located at the south sector of Jing’er Road in Xincheng District of Pingdingshan City. It occupies a total site area of approximately 129,028 sq.m. It is being developed by CCRE Pingdingshan, our wholly owned subsidiary.

We are developing Forest Peninsula (Pingdingshan) in two phases. As of March 31, 2008, construction of phase I had been completed and phase II was partly completed and partly under development. The project consists of low-rise apartment buildings, mid-rise apartment buildings, retail units and ancillary facilities including car parking spaces, a clubhouse and a kindergarten.

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... September 2005 to December 2007 Total development costs incurred (RMB million) ...... 143.9 Total completed GFA (sq.m.) ...... 88,837

154 BUSINESS

Residential Retail Total completed saleable GFA (sq.m.) ...... 80,206 5,331 Total saleable GFA sold (sq.m.) ...... 80,206 5,331 Percentage of saleable GFA sold (%) ...... 100% 100% Total number of units ...... 405 43

Phase II

Planned construction period ...... October 2006 to December 2008 Development costs incurred (RMB million) ...... 161.0 Estimated further development costs to complete the project (RMB million) ...... 36.2 Total completed GFA (sq.m.) ...... 58,653 Total planned GFA under development (sq.m.) ...... 34,053

Residential Retail Total completed saleable GFA (sq.m.) ...... 51,893 — Total saleable GFA under development (sq.m.) ...... 16,779 13,787 Total saleable GFA sold and pre-sold (sq.m.) ...... 65,967 127 Percentage of saleable GFA sold and pre-sold (%) ...... 96% 9% Planned total number of units ...... 522 7

Jiaozuo City ( ) Forest Peninsula (Jiaozuo) ( ) Forest Peninsula (Jiaozuo) is located at the north of Longyuan Road in Shanyang District of Jiaozuo City. It occupies a total site area of approximately 123,261 sq.m. It is being developed by CCRE Jiaozuo, our wholly owned subsidiary.

We are developing Forest Peninsula (Jiaozuo) in three phases. As of March 31, 2008, construction of phase I had been completed, phase II was under development and phase III was held for future development. The project consists of low-rise apartment buildings, mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including basement spaces.

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... November 2006 to November 2007 Development costs incurred (RMB million) ...... 99.9 Total completed GFA (sq.m.) ...... 54,000

Residential Retail Total completed saleable GFA (sq.m.) ...... 47,465 4,738 Total saleable GFA sold (sq.m.) ...... 41,000 1,368 Percentage of saleable GFA sold (%) ...... 86% 29% Total number of units ...... 262 21

155 BUSINESS

Phase II

Planned construction period ...... September 2007 to September 2008 Development costs incurred (RMB million) ...... 94.6 Estimated further development costs to complete the project (RMB million) ...... 150.7 Total planned GFA under development (sq.m.) ...... 109,085

Residential Retail Total saleable GFA under development (sq.m.) ...... 99,380 4,679 Total saleable GFA pre-sold (sq.m.) ...... 13,242 — Percentage of saleable GFA pre-sold (%) ...... 13% — Planned total number of units ...... 763 18

Phase III

Planned construction period ...... April 2008 to December 2009 Development costs incurred (RMB million) ...... 36.9 Estimated further development costs to complete the project (RMB million) ...... 148.8 Total planned GFA for future development (sq.m.) ...... 83,064

Xinyang City ( )

Forest Peninsula (Xinyang) ( )

Forest Peninsula (Xinyang) is located at No. 182 Nanwan Street of Nanwan Administration District in Xinyang City. It occupies a total site area of approximately 147,841 sq.m. It is being developed by CCRE Xinyang, a subsidiary which is 50% owned by us and 50% owned by an Independent Third Party.

We are developing Forest Peninsula (Xinyang) in four phases. As of March 31, 2008, phase I was partly completed and partly under development and phases II, III and IV were held for future development. The project consists of villas, low-rise apartment buildings, mid-rise apartment buildings and retail units.

Details of our project as of March 31, 2008 are as follows:

Phase I

Planned construction period ...... July 2007 to June 2008 Development costs incurred (RMB million) ...... 79.6 Estimated further development costs to complete the project (RMB million) ...... 4.6 Total completed GFA (sq.m.) ...... 43,205 Total planned GFA under development (sq.m.) ...... 22,176

Residential Retail Total completed saleable GFA (sq.m.) ...... 43,048 157 Total saleable GFA under development (sq.m.) ...... 19,473 2,651 Total saleable GFA sold and pre-sold (sq.m.) ...... 30,688 157 Percentage of saleable GFA sold and pre-sold (%) ...... 49% 6% Planned total number of units ...... 464 22

156 BUSINESS

Phase II

Planned construction period ...... April 2008 to December 2008 Development costs incurred (RMB million) ...... 16.8 Estimated further development costs to complete the project (RMB million) ...... 102.2 Total planned GFA for future development (sq.m.) ...... 72,515

Phase III

Planned construction period ...... November 2008 to June 2009 Development costs incurred (RMB million) ...... 8.2 Estimated further development costs to complete the project (RMB million) ...... 68.6 Total planned GFA for future development (sq.m.) ...... 42,113

Phase IV

Planned construction period ...... March 2009 to November 2010 Development costs incurred (RMB million) ...... 9.1 Estimated further development costs to complete the project (RMB million) ...... 103.1 Total planned GFA for future development (sq.m.) ...... 46,000

Xinyang Nanwan Yanwei Island Project ( )

Xinyang Nanwan Yanwei Island Project is located at the Xianshan Village of Nanwan Administration District in Xinyang City. It occupies a total site area of approximately 27,467 sq.m. It is being developed by CCRE Xinyang, a subsidiary which is 50% owned by us and 50% owned by an Independent Third Party.

As of March 31, 2008, Xinyang Nanwan Yanwei Island Project was held for future development. Based on our project plans, the project will consist of low-rise apartment buildings.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... June 2010 to June 2011 Development costs incurred (RMB million) ...... 8.8 Estimated further development costs to complete the project (RMB million) ...... 80.6 Total planned GFA for future development (sq.m.) ...... 32,961

Xinyang Nanwan Fish Farm Project ( )

Xinyang Nanwan Fish Farm Project is located at Shangba Road of Nanwan Administration District in Xinyang City. It occupies a total site area of approximately 88,671 sq.m. It is being developed by CCRE Xinyang, a subsidiary 50% owned by us and 50% owned by an Independent Third Party.

As of March 31, 2008, Xinyang Nanwan Fish Farm Project was held for future development. Based on our project plans, the project will consist of townhouses and low-rise apartment buildings.

157 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... October 2008 to December 2009 Development costs incurred (RMB million) ...... 39.4 Estimated further development costs to complete the project (RMB million) ...... 224.6 Total planned GFA for future development (sq.m.) ...... 115,272

Zhumadian City ( )

Zhumadian Project ( )

Zhumadian Project is located at the east of Jinshan Road and the north side of Huaihe Avenue in Zhumadian City. It occupies a total site area of approximately 226,274 sq.m. It is being developed by CCRE Zhumadian, our wholly owned subsidiary.

We are developing Zhumadian Project in five phases — Green Garden (Zhumadian) (Phase I) and Forest Peninsula (Zhumadian) (Phases II to V). As of March 31, 2008, Green Garden (Zhumadian) (Phase I) and Forest Peninsula (Zhumadian) (Phases II and III) had been completed, Forest Peninsula (Zhumadian) (Phase IV) was under development and Forest Peninsula (Zhumadian) (Phase V) was held for future development. The project consists of villas, low-rise apartment buildings, mid-rise apartment buildings, retail units and ancillary facilities including a clubhouse, a kindergarten and a swimming pool complex.

Details of our project as of March 31, 2008 are as follows:

Green Garden (Zhumadian) (Phase I)

Construction period ...... February 2004 to June 2005 Total development costs incurred (RMB million) ...... 100.1 Total completed GFA (sq.m.) ...... 67,713

Residential Retail Total completed saleable GFA (sq.m.) ...... 57,375 4,894 Total saleable GFA sold (sq.m.) ...... 57,375 2,951 Percentage of saleable GFA sold (%) ...... 100% 60% Total number of units ...... 351 47

Forest Peninsula (Zhumadian) Phase II

Construction period ...... February 2006 to June 2007 Total development costs incurred (RMB million) ...... 80.3 Total completed GFA (sq.m.) ...... 59,208

Residential Retail Total completed saleable GFA (sq.m.) ...... 57,453 1,755 Total saleable GFA sold (sq.m.) ...... 57,211 752 Percentage of saleable GFA sold (%) ...... 99% 43% Total number of units ...... 390 31

158 BUSINESS

Forest Peninsula (Zhumadian) Phase III

Construction period ...... March 2007 to February 2008 Total development costs incurred (RMB million) ...... 57.4 Total completed GFA (sq.m.) ...... 40,468

Residential Retail Total completed saleable GFA (sq.m.) ...... 38,950 1,464 Total saleable GFA sold (sq.m.) ...... 38,750 1,464 Percentage of saleable GFA sold (%) ...... 99% 100% Total number of units ...... 318 18

Forest Peninsula (Zhumadian) Phase IV

Planned construction period ...... November 2007 to December 2008 Development costs incurred (RMB million) ...... 33.9 Estimated further development costs to complete the project (RMB million) . . 45.3 Total planned GFA under development (sq.m.) ...... 48,397

Residential Total saleable GFA under development (sq.m.) ...... 48,395 Total saleable GFA pre-sold (sq.m.) ...... 12,706 Percentage of saleable GFA pre-sold (%) ...... 26% Planned total number of units ...... 132

Forest Peninsula (Zhumadian) Phase V

Planned construction period ...... June 2008 to August 2009 Development costs incurred (RMB million) ...... 14.8 Estimated further development costs to complete the project (RMB million) . . 140.8 Total planned GFA for future development (sq.m.) ...... 90,897

159 BUSINESS

Xuchang City ( )

Xuchang Project ( )

Xuchang Project is located at the intersection of Jian’an Avenue and Weiwen Road in Xuchang City. It occupies a total site area of approximately 41,374 sq.m. It was developed by CCRE Xuchang, our wholly owned subsidiary.

We are developing Xuchang Project in two phases — Palladio Luxurious House and Main Lake. As of March 31, 2008, construction of Palladio Luxurious House and Main Lake had been completed. The project consists of mid-rise apartment buildings, retail units and ancillary facilities including basement spaces and a clubhouse.

Details of our project as of March 31, 2008 are as follows:

Palladio Luxurious House

Construction period ...... September 2004 to December 2006 Total development costs incurred (RMB million) ...... 145.5 Total completed GFA (sq.m.) ...... 64,953

Residential Retail Total completed saleable GFA (sq.m.) ...... 46,857 10,844 Total saleable GFA sold (sq.m.)(1) ...... 39,065 1,754 Percentage of saleable GFA sold (%) ...... 83% 16% Total number of units ...... 222 61

(1) The total saleable GFA sold does not include retail units with an aggregate saleable GFA of approximately 3,713 sq.m. which were sold and pre-sold to the purchasers with lease-back arrangements with a put option. Under the put option, the purchasers have the right to sell the properties to us within three years beginning from two or three months after the date of sale or completion of the properties, as applicable. Revenue from the sale of these retail units was not recognized in our financial statements in the accountants’ report in Appendix IA to this prospectus. Please refer to the sections headed “— Properties Used by Us” and “Financial Information” in this prospectus for further details.

160 BUSINESS

Main Lake

Construction period ...... December 2006 to December 2007 Development costs incurred (RMB million) ...... 83.8 Total completed GFA (sq.m.) ...... 40,218

Residential Retail Total completed saleable GFA (sq.m.) ...... 26,612 8,839 Total saleable GFA sold (sq.m.) ...... 21,713 7,072 Percentage of saleable GFA sold (%) ...... 82% 80% Total number of units ...... 217 63

Sanmenxia City ( )

Green Garden (Sanmenxia) ( )

Green Garden (Sanmenxia) is located at the intersection of Shanzhou Road and Qinhan Road in Sanmenxia City. It occupies a total site area of approximately 73,585 sq.m. It is being developed by CCRE Sanmenxia, our wholly owned subsidiary.

We are developing Green Garden (Sanmenxia) in two phases. As of March 31, 2008, construction of phase I had been completed and phase II was held for future development. The project consists of villas, low-rise apartment buildings, retail units and ancillary facilities including a swimming pool complex and a clubhouse.

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... November 2003 to November 2006 Total development costs incurred (RMB million) ...... 57.5 Total completed GFA (sq.m.) ...... 35,105

Residential Total completed saleable GFA (sq.m.) ...... 32,851 Total saleable GFA sold (sq.m.) ...... 30,815 Percentage of saleable GFA sold (%) ...... 94% Total number of units ...... 188

Phase II

Planned construction period ...... May2008 to June 2009 Development costs incurred (RMB million) ...... 16.6 Estimated further development costs to complete the project (RMB million) ...... 53.7 Total planned GFA for future development (sq.m.) ...... 41,000

161 BUSINESS

Sanmenxia SOHO ( )

Sanmenxia SOHO is located at the intersection of Liufeng Road and Huanghe Road in Sanmenxia City. It occupies a total site area of approximately 12,285 sq.m. It was developed by CCRE Sanmenxia, our wholly owned subsidiary.

As of March 31, 2008, construction of Sanmenxia SOHO had been completed. The project consists of mid-rise apartment buildings and retail units.

Details of our project as of March 31, 2008 are as follows:

Construction period ...... October 2005 to November 2006 Total development costs incurred (RMB million) ...... 90.7 Total completed GFA (sq.m.) ...... 26,775

Residential Retail Total completed saleable GFA (sq.m.) ...... 9,794 12,364 Total saleable GFA sold (sq.m.) ...... 9,794 12,228 Percentage of saleable GFA sold (%) ...... 100% 99% Total number of units ...... 177 176

Lakeside Square (Sanmenxia) ( )

Lakeside Square (Sanmenxia) is located at the south of Huanghe Road Middle Section in Sanmenxia City. It occupies a total site area of approximately 14,834 sq.m. It was developed by CCRE Sanmenxia, our wholly owned subsidiary.

As of March 31, 2008, construction of Lakeside Square (Sanmenxia) had been completed. The project consists of an underground shopping center.

Details of our project as of March 31, 2008 are as follows:

Construction period ...... December 2005 to November 2006 Total development costs incurred (RMB million) ...... 102.0 Total completed GFA (sq.m.) ...... 26,010

Retail Total completed saleable GFA (sq.m.) ...... 26,010

Forest Peninsula (Sanmenxia) ( )

Forest Peninsula (Sanmenxia) is located at the east of Gantang Road and the west of Shangguan Road in Sanmenxia City. It occupies a total site area of approximately 47,154 sq.m. It is being developed by CCRE Sanmenxia, our wholly owned subsidiary.

162 BUSINESS

As of March 31, 2008, Forest Peninsula (Sanmenxia) was held for future development. Based on our project plans, the project will consist of mid-rise apartment buildings, retail units and ancillary facilities including car parking spaces.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... May2008 to June 2009 Development costs incurred (RMB million) ...... 74.7 Estimated further development costs to complete the project (RMB million) ...... 175.1 Total planned GFA for future development (sq.m.) ...... 111,267

Shangqiu City ( )

Green Garden (Shangqiu) ( )

Green Garden (Shangqiu) is located at the east sector of Wenhua Road in Shangqiu City. It occupies a total site area of approximately 44,551 sq.m. It was developed by CCRE Shangqiu, our wholly owned subsidiary. In 2006, one tower of Green Garden (Shangqiu) received the silver award of the “Henan Construction Project ‘Zhongzhou Cup’ — Consumer Satisfactory Construction Work” ( ) granted by the Henan Province Construction Department.

As of March 31, 2008, construction of Green Garden (Shangqiu) had been completed. The project consists of low-rise apartment buildings, retail units and ancillary facilities including a clubhouse and a kindergarten.

Details of our project as of March 31, 2008 are as follows:

Construction period ...... March 2003 to November 2004 Total development costs incurred (RMB million) ...... 63.5 Total completed GFA (sq.m.) ...... 53,704

Residential Retail Total completed saleable GFA (sq.m.) ...... 46,998 2,699 Total saleable GFA sold (sq.m.) ...... 46,998 2,699 Percentage of saleable GFA sold (%) ...... 100% 100% Total number of units ...... 306 16

Forest Peninsula (Shangqiu) ( )

Forest Peninsula (Shangqiu) is located at the east sector of the Wenhua Road in Shangqiu City. It occupies a total site area of approximately 40,141 sq.m. It was developed by CCRE Shangqiu, our wholly owned subsidiary.

As of March 31, 2008, construction of Forest Peninsula (Shangqiu) had been completed. The project consists of villas.

163 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Construction period ...... May2005 to March 2006 Total development costs incurred (RMB million) ...... 49.8 Total completed GFA (sq.m.) ...... 29,347

Residential Total completed saleable GFA (sq.m.) ...... 29,347 Total saleable GFA sold (sq.m.) ...... 23,145 Percentage of saleable GFA sold (%) ...... 79% Total number of units ...... 112

Sweet-Scented Osmanthus Garden ( )

Sweet-Scented Osmanthus Garden is located at the east sector of Road in Shangqiu City. It occupies a total site area of approximately 92,387 sq.m. It is being developed by CCRE Shangqiu, our wholly owned subsidiary.

We are developing Sweet-Scented Osmanthus Garden in four phases. As of March 31, 2008, construction of phases I and II had been completed and phases III and IV were held for future development. The project consists of low-rise apartment buildings, mid-rise apartment buildings, high- rise apartment buildings, retail units and ancillary facilities including car parking spaces.

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... September 2006 to August 2007 Total development costs incurred (RMB million) ...... 56.0 Total completed GFA (sq.m.) ...... 35,456

Residential Retail Total completed saleable GFA (sq.m.) ...... 31,989 3,467 Total saleable GFA sold (sq.m.) ...... 30,178 260 Percentage of saleable GFA sold (%) ...... 94% 8% Total number of units ...... 278 11

Phase II

Construction period ...... July 2007 to December 2007 Development costs incurred (RMB million) ...... 35.5 Total completed GFA (sq.m.) ...... 23,299

Residential Total completed saleable GFA (sq.m.) ...... 23,299 Total saleable GFA sold (sq.m.) ...... 16,181 Percentage of saleable GFA sold (%) ...... 69% Total number of units ...... 158

164 BUSINESS

Phase III

Planned construction period ...... April 2008 to December 2008 Development costs incurred (RMB million) ...... 10.5 Estimated further development costs to complete the project (RMB million) ...... 57.5 Total planned GFA for future development (sq.m.) ...... 40,132

Phase IV

Planned construction period ...... July 2008 to December 2009 Development costs incurred (RMB million) ...... 8.7 Estimated further development costs to complete the project (RMB million) ...... 102.0 Total planned GFA for future development (sq.m.) ...... 49,622

Puyang City ( )

Jianye City (Puyang) ( )

Jianye City (Puyang) is located at Jiefang Avenue North Section Road West in . It occupies a total site area of approximately 219,883 sq.m. It is being developed by CCRE Puyang, our wholly owned subsidiary.

We are developing Jianye City (Puyang) in five phases. As of March 31, 2008, construction of phases I and II had been completed and phases III to V were held for future development. The project consists of villas, low-rise apartment buildings, mid-rise apartment buildings and ancillary facilities including a clubhouse and car parking spaces.

Details of our project as of March 31, 2008 are as follows:

Phases I and II

Construction period ...... January 2007 to January 2008 Total development costs incurred (RMB million) ...... 100.2 Total completed GFA (sq.m.) ...... 75,061

Residential Total completed saleable GFA (sq.m.) ...... 73,114 Total saleable GFA sold (sq.m.) ...... 56,560 Percentage of saleable GFA sold (%) ...... 77% Total number of units ...... 492

165 BUSINESS

Phases III to V

Phase III Phase IV Phase V Planned construction period ...... April 2008 September 2009 September 2010 to to December 2008 to April 2011 March 2012 Development costs incurred (RMB million) ...... 19.5 21.9 13.0 Estimated further development costs to complete the project (RMB million) ...... 43.5 232.4 144.1 Total planned GFA for future development (sq.m.) ...... 39,046 128,170 76,200

Jianye Green Garden (Puyang) ( )

Jianye Green Garden (Puyang) is located at Renqiu Road West Section in Hualong District of Puyang City. It occupies a total site area of approximately 41,511 sq.m. It was developed by CCRE Puyang, our wholly owned subsidiary.

As of March 31, 2008, construction of Jianye Green Garden (Puyang) had been completed. The project consists of low-rise apartment buildings, retail units and ancillary facilities including a kindergarten.

Details of our project as of March 31, 2008 are as follows:

Construction period ...... March 2003 to December 2003 Total development costs incurred (RMB million) ...... 87.5 Total completed GFA (sq.m.) ...... 64,239

All the saleable units of this project had been sold as of March 31, 2008.

Jiyuan City ( )

Forest Peninsula (Jiyuan) ( )

Forest Peninsula (Jiyuan) is located at No. 2 Qinyuan Bei Road in Jiyuan City. It occupies a total site area of approximately 95,100 sq.m. It is being developed by CCRE Jiyuan, our wholly owned subsidiary.

We are developing Forest Peninsula (Jiyuan) in three phases. As of March 31, 2008, phases I and II had been completed and phase III was under development. The project consists of villas, townhouses, low-rise apartment buildings, retail units and ancillary facilities including a clubhouse and a kindergarten.

166 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Phases I and II

Construction period ...... September 2005 to October 2007 Total development costs incurred (RMB million) ...... 112.4 Total completed GFA (sq.m.) ...... 79,862

Residential Retail Total completed saleable GFA (sq.m.) ...... 70,080 6,841 Total saleable GFA sold (sq.m.) ...... 68,593 2,532 Percentage of saleable GFA sold (%) ...... 98% 37% Total number of units ...... 367 55

Phase III

Planned construction period ...... August 2007 to October 2008 Development costs incurred (RMB million) ...... 19.2 Estimated further development costs to complete the project (RMB million) ...... 24.3 Total planned GFA under development (sq.m.) ...... 28,420

Residential Retail Total saleable GFA under development (sq.m.) ...... 28,264 154 Total saleable GFA pre-sold (sq.m.) ...... 16,656 — Percentage of saleable GFA pre-sold (%) ...... 59% — Planned total number of units ...... 183 1

Landmark (Jiyuan) ( )

Landmark (Jiyuan) is a residential project located at the north of Xuanhua Street in Jiyuan City, which is a prime shopping area. It occupies a total site area of approximately 19,658 sq.m. It is being developed by CCRE Jiyuan, our wholly owned subsidiary.

As of March 31, 2008, Landmark (Jiyuan) was partly completed and partly under development. Based on our project plans, the project will consist of SOHO (small office/home office) units and retail units.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... January 2007 to December 2008 Development costs incurred (RMB million) ...... 88.8 Estimated further development costs to complete the project (RMB million) ...... 10.2 Total completed GFA (sq.m.) ...... 15,443 Total planned GFA under development (sq.m.) ...... 11,296

SOHO Units Retail Total completed saleable GFA (sq.m.) ...... — 15,443 Total saleable GFA under development (sq.m.) ...... 8,992 2,304 Total saleable GFA sold and pre-sold (sq.m.) ...... — 7,075 Percentage of saleable GFA sold and pre-sold (%) ...... — 40% Planned total number of units ...... 170 301

167 BUSINESS

Luohe City ( )

Forest Peninsula (Luohe) ( )

Forest Peninsula (Luohe) is located at the intersection of Songshan Road and Huaihe Road in Luohe City. It occupies a total site area of approximately 115,140 sq.m. It is being developed by CCRE Luohe, our wholly owned subsidiary.

We are developing Forest Peninsula (Luohe) in four phases. As of March 31, 2008, construction of phase I had been completed, phase II was under development and phases III and IV were held for future development. The project consists of townhouses, low-rise apartment buildings, mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including car-parking spaces.

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... July 2006 to December 2007 Total development costs incurred (RMB million) ...... 135.0 Total completed GFA (sq.m.) ...... 75,282

Residential Retail Total completed saleable GFA (sq.m.) ...... 67,017 5,714 Total saleable GFA sold (sq.m.) ...... 66,050 886 Percentage of saleable GFA sold (%) ...... 98% 16% Total number of units ...... 621 14

Phase II

Planned construction period ...... September 2007 to September 2008 Total development costs incurred (RMB million) ...... 67.4 Estimated further development costs to complete the project (RMB million) ...... 53.4 Total planned GFA under development (sq.m.) ...... 58,110

Residential Total saleable GFA under development (sq.m.) ...... 53,613 Total saleable GFA pre-sold (sq.m.) ...... 27,077 Percentage of saleable GFA pre-sold (%) ...... 51% Planned total number of units ...... 383

Phases III and IV

Planned construction period ...... June 2008 to December 2009 Development costs incurred (RMB million) ...... 36.5 Estimated further development costs to complete the project (RMB million) ...... 190.2 Total planned GFA for future development (sq.m.) ...... 106,100

168 BUSINESS

Luohe Songshan Road Project ( )

Luohe Songshan Road Project is located at the west of Songshan Road and the east of Qishan Road in Luohe City. It occupies a total site area of approximately 224,516 sq.m. It is being developed by CCRE Changjian, a subsidiary which is 51% owned by us and 49% owned by an Independent Third Party.

We plan to develop Luohe Songshan Road Project in five phases. As of March 31, 2008, all phases were held for future development. Based on our project plans, the project will consist of mid- rise apartment buildings, high-rise apartment buildings and retail units.

Details of our project as of March 31, 2008 are as follows:

Phases I to V

Phase I Phase II Phase III Phase IV Phase V Planned construction June 2008 January 2009 January 2010 January 2011 January 2012 period ...... to December 2009 to December 2010 to December 2011 to December 2012 to December 2013 Development costs incurred (RMB million) ...... 90.1 47.5 62.8 37.1 46.2 Estimated further development costs to complete the project (RMB million) ...... 424.6 223.7 296.0 174.3 217.4 Total planned GFA for future development (sq.m.) ...... 142,105 110,000 140,000 80,000 95,594

Xinxiang City ( )

Jianye Green Garden (Xinxiang) ( )

Jianye Green Garden (Xinxiang) is located at No. 21 Jiefang Road of the Development Zone of Xinxiang City. It occupies a total site area of approximately 101,677 sq.m. It was developed by CCRE Xinxiang, our wholly owned subsidiary.

We developed Jianye Green Garden (Xinxiang) in two phases which had been completed as of March 31, 2008. The project consists of low-rise apartment buildings, mid-rise apartment buildings, retail units and ancillary facilities including car parking spaces and a kindergarten.

169 BUSINESS

Details of our project as of March 31, 2008 are as follows:

Phase I

Construction period ...... July 2003 to June 2005 Total development costs incurred (RMB million) ...... 97.2 Total completed GFA (sq.m.) ...... 68,202

Residential Retail Total completed saleable GFA (sq.m.) ...... 58,933 7,726 Total saleable GFA sold (sq.m.) ...... 58,933 4,511 Percentage of saleable GFA sold (%) ...... 100% 58% Total number of units ...... 370 41

Phase II

Construction period ...... November 2004 to May 2007 Total development costs incurred (RMB million) ...... 128.5 Total completed GFA (sq.m.) ...... 72,153

Residential Total completed saleable GFA (sq.m.) ...... 68,482 Total saleable GFA sold (sq.m.) ...... 66,827 Percentage of saleable GFA sold (%) ...... 98% Total number of units ...... 370

Xinxiang Golden Dragon Project ( )

Xinxiang Golden Dragon Project is located at the north of Nanerhuan and the west of Fenghua Street in the Development Zone of Xinxiang City. It occupies a total site area of approximately 49,609 sq.m. It is being developed by CCRE Golden Dragon, a subsidiary which is 60% owned by us and 40% owned by an Independent Third Party.

As of March 31, 2008, Xinxiang Golden Dragon Project was held for future development. Based on our project plans, the project will consist of villas, high-rise apartment buildings, retail units and ancillary facilities including car parking spaces.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... June 2008 to May 2010 Development costs incurred (RMB million) ...... 27.2 Estimated further development costs to complete the project ...... 211.3 Total planned GFA for future development (sq.m.) ...... 97,074

170 BUSINESS

Nanyang City ( )

Green Garden (Nanyang) ( )

Green Garden (Nanyang) is located at the east of Hanhuaguan in Nanyang City. It occupies a total site area of approximately 48,008 sq.m. It was developed by CCRE Nanyang, our wholly owned subsidiary.

As of March 31, 2008, construction of Green Garden (Nanyang) had been completed. The project consists of low-rise apartment buildings and ancillary facilities including a clubhouse and a kindergarten.

The total GFA of this project is approximately 54,634 sq.m. All the saleable units of this project had been sold as of March 31, 2008.

171 BUSINESS

Taohua Island (Nanyang) ( )

Taohua Island (Nanyang) is located at the north side of the intersection of Funiu Road and Changjiang Road of Nanyang City. It occupies a total site area of approximately 22,667 sq.m. It was developed by CCRE Nanyang, our wholly owned subsidiary.

As of March 31, 2008, construction of Taohua Island (Nanyang) had been completed. The project consists of villas and retail units.

The total GFA of this project is approximately 18,888 sq.m. As of March 31, 2008, all of the saleable units of this project were sold, other than one retail unit.

Anyang City ( ) Guihua House Construction ( )

Guihua House Construction is located at No. 32 Huanghe Avenue in the Development Zone of Anyang City. It occupies a total site area of approximately 60,554 sq.m. It was developed by CCRE Anyang, our wholly owned subsidiary.

172 BUSINESS

As of March 31, 2008, construction of Guihua House Construction had been completed. The project consists of villas, low-rise apartment buildings, retail units and ancillary facilities including a clubhouse.

Details of our project as of March 31, 2008 are as follows:

Construction period ...... December 2004 to December 2006 Total development costs incurred (RMB million) ...... 102.8 Total completed GFA (sq.m.) ...... 56,300

Residential Retail Total completed saleable GFA (sq.m.) ...... 52,337 3,269 Total saleable GFA sold (sq.m.) ...... 52,337 — Percentage of saleable GFA sold (%) ...... 100% — Total number of units ...... 271 1

Kaifeng City ( )

Kaifeng Zhengkai Forest Peninsula ( )

Kaifeng Zhengkai Forest Peninsula is located at the north of Hanxing Road in Kaifeng City. It occupies a total site area of approximately 458,013 sq.m. We plan to develop Kaifeng Zhengkai Forest Peninsula in eight phases. Phases I to VI will be developed by CCRE Forest Peninsula, a subsidiary which is 60% owned by us and 40% owned by Kaifeng Dahong Real Estate Development Company Limited ( ), which is also a minority shareholder of CCRE Dahong. CCRE Dahong is a subsidiary which is 60% owned by us and 40% owned by the same minority shareholder. Phases VII and VIII are being developed by CCRE Dahong.

As of March 31, 2008, we had successfully tendered for parcels of land for the development of Phases I to VI but had not obtained the relevant land use rights certificates; whereas we had obtained the land use rights certificates for Phases VII and VIII which were held for future development. Based on our project plans, the project will consist of villas, low-rise apartment buildings, mid-rise apartment buildings, high-rise apartment buildings, retail units and ancillary facilities including car parking spaces and basement spaces.

Details of our project as of March 31, 2008 are as follows:

Phase VII

Planned construction period ...... February 2010 to December 2011 Development costs incurred (RMB million) ...... 35.0 Estimated further development costs to complete the project (RMB million) ...... 222.7 Total planned GFA for future development (sq.m.) ...... 130,930

173 BUSINESS

Phase VIII

Planned construction period ...... May2010 to May 2012 Development costs incurred (RMB million) ...... 35.0 Estimated further development costs to complete the project (RMB million) .... 224.0 Total planned GFA for future development (sq.m.) ...... 130,928

Jianye Dahong City Garden ( )

Jianye Dahong City Garden is located at the intersection of Huanghe Avenue and Jinyao Road in Kaifeng City. It occupies a total site area of approximately 151,824 sq.m. on a parcel of allocated land. It is being developed by CCRE Dahong, a subsidiary which is 60% owned by us and 40% owned by an Independent Third Party.

We have been engaged by the Housing System Reform Commission Office of Kaifeng City ( ) to develop Jianye Dahong City Garden Project for economic housing ( ). We are developing Jianye Dahong City Garden in two phases. As of March 31, 2008, phase I was under development and phase II was held for future development. Based on our project plans, the project will consist of low-rise apartment buildings, retail units and ancillary facilities including car parking spaces.

Details of our project as of March 31, 2008 are as follows:

Phase I

Planned construction period ...... November 2007(1) to December 2008 Development costs incurred (RMB million) ...... 96.1 Estimated further development costs to complete the project (RMB million) .... 137.9 Total planned GFA under development (sq.m.) ...... 208,000

Residential Retail Total saleable GFA under development (sq.m.) ...... 158,080 29,120 Total saleable GFA pre-sold (sq.m.) ...... — — Percentage of saleable GFA pre-sold (%) ...... — — Planned total number of units ...... 1,882 480

(1) Our Group was requested by the People’s Government of Kaifeng City to commence construction of the project before obtaining the permit for commencement of construction work. A project company commencing construction of a project without such permit may be subject to fines between 1% and 2% of the consideration payable under the relevant construction contracts. However, our PRC legal adviser has advised us that, based on the confirmation provided by the Kaifeng City Construction Committee ( ), which is the Kaifeng City government authority which issues the permit for commencement of construction work, the development of Jianye Dahong City Garden Project does not materially violate PRC laws and regulations in relation to the construction and administration of

174 BUSINESS

properties. Each of our Controlling Shareholders has agreed to provide an indemnity in favor of our Group in respect of any liabilities, damages, fines, penalties, costs, losses or expenses which may be imposed or levied by the PRC Government authorities for the failure of our Group to obtain the permit for commencement of construction work before commencing the construction work in connection with any of their own properties as required under PRC laws and regulations. Please refer to the section headed “Risk Factors — Risks Relating to Our Business — We have limited interests in the allocated land for the Jianye Dahong City Garden Project and may generate less revenue from the development of the project than if the project were otherwise developed on granted land”. We subsequently obtained the permit for commencement of construction work in April 2008.

Phase II

Planned construction period ...... December 2008 to December 2009 Development costs incurred (RMB million) ...... — Estimated further development costs to complete the project (RMB million) .... 45.9 Total planned GFA for future development (sq.m.) ...... 40,272

Zhongmou County ( )

Zhongmou St. Andrews Project ( )

Zhongmou St. Andrews Project is located at the Yanming Lake tourism zone in Zhongmou County. It occupies a total site area of approximately 836,000 sq.m. It is being developed by CCRE St. Andrews, a subsidiary which is 60% owned by us and 40% owned by an Independent Third Party.

As of March 31, 2008, Zhongmou St. Andrews Project was held for future development. Based on our project plans, the project will consist of townhouses, low-rise apartment buildings and retail units.

Details of our project as of March 31, 2008 are as follows:

Planned construction period ...... May2009 to May 2013 Development costs incurred (RMB million) ...... 214.5 Estimated further development costs to complete the project (RMB million) . . . 1,585.9 Total planned GFA for future development (sq.m.) ...... 850,000

OTHER PROJECTS

Capital Garden ( )

We have been engaged by the Department of Land and Resources of Henan Province ( ) in 2007 to manage the development of Capital Garden in Zhengzhou on behalf of the Department of Land and Resources of Henan Province.

175 BUSINESS

Capital Garden is located at Dongfeng East Road of Zhengzhou City. The development of this project is being conducted by CCRE Henan, our wholly owned subsidiary, for the Department of Land and Resources of Henan Province. As of March 31, 2008, Capital Garden was under development with an aggregate site area of approximately 74,568 sq.m. and an aggregate planned GFA of approximately 183,582 sq.m. We commenced construction of Capital Garden in November 2007 and expect to complete the construction in October 2008 based on our current project plans. We are developing Capital Garden under a contract with the Department of Land and Resources of Henan Province primarily for sale at a fixed rate of return to purchasers designated by the Department of Land and Resources of Henan Province, including its employees. A small portion of the units may be sold to the general public. The contract sum is expected to be approximately RMB335.1 million which is calculated based on the total costs incurred in developing the project (including the costs for land acquisition and construction costs) plus a premium calculated as a percentage of the total costs, representing our fee for managing the development of the project. Through our cooperation with the Department of Land and Resources of Henan Province in respect of the development of this public project, our Directors believe we can further our relationship with the local government. For 2007, the turnover from this contract amounted to approximately RMB141.0 million. This project is not treated as our Group’s project and it is not included in the property valuation report in Appendix IV to this prospectus.

For accounting purposes, our revenue from this project is regarded as revenue arising from a construction contract in the accountants’ report in Appendix IA to this prospectus.

Huayang Square (Luoyang) ( )

On May 11, 2007, we entered into a cooperation development and equity interest transfer agreement (the “Cooperation Agreement”) with Asiaworld Development, Artstar Investments and Luoyang Zhongya. On February 24, 2008, we entered into a supplemental agreement to the Cooperation Agreement (together with the Cooperation Agreement, collectively the “Cooperation Agreements”). At the date of the Cooperation Agreements, Asiaworld Development held a 100% equity interest in Luoyang Zhongya, which was engaged in the development of a residential and commercial property project known as Huayang Square (Luoyang). Pursuant to the Cooperation Agreements, Asiaworld Development has agreed to establish a new company in Hong Kong, namely Country Star, and transfer its entire equity interest in Luoyang Zhongya to the new company (the “Luoyang Zhongya Transfer”) before March 31, 2008. Asiaworld Development has further agreed that it will sell its entire interest in Country Star to Artstar Investments (the “Country Star Acquisition”), which is 65% owned by us, 20% owned by an Independent Third Party and 15% owned by a company wholly owned by one of the directors of Artstar Investments, at a consideration of RMB350.0 million. Artstar Investments is required to fully pay the consideration on or before June 30, 2008 and the completion of the Country Star Acquisition is scheduled to take place on June 30, 2008 according to the terms of the Cooperation Agreements. Each of Asiaworld Development, Country Star and Luoyang Zhongya is an Independent Third Party.

The Country Star Acquisition is conditional on (i) the completion of the Luoyang Zhongya Transfer; (ii) the passing of board resolutions of Country Star approving the appointment of persons designated by Artstar Investments to be the directors of Country Star and Luoyang Zhongya,

176 BUSINESS respectively; and (iii) the full payment of the consideration by Artstar Investments to Asiaworld Development. As of the Latest Practicable Date, Country Star had been incorporated, and Asiaworld Development had transferred its entire equity interest in Luoyang Zhongya to Country Star. Pursuant to the Cooperation Agreement, Luoyang Zhongya has set up a management division which is responsible for the development of the Huayang Square (Luoyang) Project, including but not limited to exploration for cultural relics, geotechnical investigation, site planning, design, construction, supervision, inspection, sales and marketing and the construction of leisure facilities. Luoyang Zhongya had appointed an officer, who was designated by Artstar Investment, to be in charge of the management division. Artstar Investments and CCRE China have also agreed to provide funds to Luoyang Zhongya for developing Huayang Square (Luoyang).

Pursuant to a shareholders’ agreement relating to Artstar Investments, we are required to pay 80% of the total consideration, i.e., RMB280 million, for the Country Star Acquisition. As of the Latest Practicable Date, our Group had paid, in aggregate, RMB80 million to Asiaworld Development as part of the total consideration for the Country Star Acquisition. We intend to use approximately 14% of the net proceeds of the Global Offering, or HK$218.0 million, to finance the Country Star Acquisition. Pursuant to the Cooperation Agreements, if the Cooperation Agreements are terminated by our failure to make timely payment of any part of the consideration, we will have to forfeit the consideration which we have already paid to Asiaworld Development. Pursuant to a shareholders’ agreement relating to Artstar Investments between its two other shareholders and us, we are obliged to bear 80% of the total investments in the project while one of the other two shareholders, who holds a 20% interest in Artstar Investments, is obliged to bear the remaining 20% of the total investments by Artstar Investments in Huayang Square (Luoyang). The remaining shareholder is a manager of this project and it was agreed between the parties that he is not obliged to contribute capital to the project. We are entitled to 65% of the profits and dividends of Artstar Investments based on our shareholding in Artstar Investments.

After completion of the Country Star Acquisition, Country Star and Luoyang Zhongya will become wholly owned subsidiaries of Artstar Investments. Our Company will therefore have a 65% indirect interest in Country Star and Luoyang Zhongya. For further details, please refer to the sections headed “Risk Factors — Risks Relating To Our Business — Our acquisition of new project companies may not be completed within the time currently expected or at all”, “History, Development and Group Structure — Recent Developments — Acquisition of Country Star” and “Financial Information — Recent Developments” in this prospectus.

Huayang Square (Luoyang) is located at the intersection of Jiudu Road and Yan’an Road in Luoyang City. Luoyang Zhongya holds the land use rights certificates for parcels of land in Huayang Square (Luoyang) with an aggregate site area of approximately 290,171 sq.m. and an aggregate planned GFA of approximately 966,945 sq.m. As of March 31, 2008, Huayang Square (Luoyang) was held for future development. Luoyang Zhongya commenced construction of this project in April 2008 and expects to complete the construction in May 2012. The estimated total development cost of the project (excluding the costs of land acquisition) is approximately RMB2,401 million. Pursuant to the Cooperation Agreements, Artstar Investment and Luoyang Zhongya agreed that Huayang Square (Luoyang) will include an office building and two apartment buildings with an aggregate GFA of approximately 30,002 sq.m. When these properties comply with all the conditions for pre-sale, they shall be pre-sold to a third-party company or a number of third-party companies designated by Asiaworld Development at a consideration which shall be the sum of the land premium of RMB58.5

177 BUSINESS million, the actual amount of fees paid to the government authorities, the actual construction costs and any relevant tax payable. In April 2008, a pre-sale permit in respect of certain units in this project was issued to Luoyang Zhongya.

PROPERTY DEVELOPMENT

Although the nature and sequence of specific planning and execution activities vary between projects, we have summarized below the core elements of our typical project development process for our properties. We adopt a systematic operational approach beginning with planning, design and construction to pre-sale, sale and after-sales services. Our property development process can be summarized in the table below:

Site selection Financing, project Construction work, and land planning and procurement and acquisition Certificates, permits and licenses design quality control Pre-sale and sales After-sales services

• site identification • land use rights certificate • financing • construction • pre-sale permit • mortgage and / evaluation / • construction land • in-depth contractor application registration selection planning permit market selection • sales and sales assistance • feasibility study • construction work analysis and • construction management • handling of • environmental planning permit project supervision • delivery of complaints impact • permit for positioning properties • establishment assessment commencement of • masterplan and • public tender, construction work design, management auction or • pre-sale permit construction of customer listing-for-sale design and database and execution of drawings land use rights grant contract or land use rights transfer agreement • payment of land premium/transfer consideration

Site Selection

Site selection is a fundamental step in our property development process. Our investment and development center is responsible for identifying and evaluating sites for prospective property development. When selecting sites for our development projects, we usually apply one or more of the following criteria:

Š geographical location of the development sites, for example, surrounding environment and amenities, proximity and accessibility to city centers or business districts;

Š property market conditions in the vicinity of the development site;

Š local urban planning and specifications;

Š infrastructure available or to be made available by the local government;

Š estimated cost, investment and financial return;

Š government’s special requirements for the development of the relevant site; and

Š applicable zoning regulations and preferential government policies.

178 BUSINESS

Our investment and development center works closely with our sales and marketing center to assess the overall market positioning of a site and the sales potential in the market. Once we plan to acquire a piece of land, we prepare a feasibility report for approval by our strategic and investment committee on behalf of the Board.

Land acquisition

Prior to July 2002, land use rights could be obtained through a land use rights grant contract executed between the property development enterprise and the local government authority. Since July 1, 2002, the Rules Regarding the Grant of State-Owned Land Use Rights by Way of Tender, Auction or Listing-for-sale ( ) issued by the MLR require that land use rights for industrial, commercial, tourism or entertainment use or for commodity property development in China be granted by the PRC Government through public tender, auction or listing-for-sale. On September 28, 2007, the MLR issued the Regulations on the Grant of State-owned Land Use Rights for Construction through Public Tender, Auction and Listing-for-sale ( ), effective November 1, 2007, which provide that land for industrial, commercial, tourism or entertainment use or for commodity housing development shall be granted by means of public tender, auction or listing-for-sale; no land use rights certificates shall be issued before the land premium has been fully paid up in accordance with the land use rights grant contract and the land use rights certificates shall not be issued separately according to the proportion of the payment of the land premium. Our PRC legal adviser has advised us that the regulations do not prohibit us from paying the land premium by instalments if such arrangement is stipulated under the relevant land use rights grant contract.

As of March 31, 2008, we had obtained land use rights for 43 property projects with an aggregate completed and aggregate planned GFA of approximately 7,623,869 sq.m. We obtained the land use rights of seven parcels of land prior to July 1, 2002 through land use rights grant contracts entered into with the Henan Bureau of Land and Resources. After July 1, 2002, we acquired the land use rights of 32 parcels of land through public tender, auction or listing-for-sale and one parcel of allocated land. Grantees of land use rights pursuant to public tender, auction or listing-for-sale may dispose of the land use rights granted to them in private sales, subject to the terms and conditions of the relevant land use rights grant contracts and the relevant laws and regulations. Therefore, to the extent permitted by law, we may choose to acquire land in the secondary market through negotiated transfers in addition to acquiring land by way of public tender, auction or listing-for-sale processes. We acquired the land use rights of three parcels of land by acquiring companies which already possessed land use rights. When opportunities arise, we will also consider obtaining land use rights from third parties through co-development arrangements to increase our land reserves.

As of March 31, 2008, we had land with a planned aggregate GFA of approximately 755,462 sq.m. under development and an aggregate planned GFA of approximately 4,047,071 sq.m. held for future development for which we had obtained the relevant land use rights certificates. In addition, as of March 31, 2008, we had entered into land use rights grant contracts or land use rights transfer agreements in respect of land for five projects with an aggregate planned GFA of approximately 2,017,258 sq.m. for which we have applied, or are in the process of applying, for land use rights certificates.

179 BUSINESS

Certificates, permits and licenses

Once we have obtained the rights to develop a parcel of land, we begin applying for the various permits and licenses that we need in order to begin construction and sale of our properties. If the land use right is acquired by way of grant, the land use rights grant contract will be a pre-condition to applications for the following certificates, permits and licenses:

Š land use rights certificate ( ). A certification of the right of a party to use a parcel of land;

Š construction land planning permit ( ). A permit authorizing a developer to begin the surveying, planning and design of a parcel of land;

Š construction work planning permit ( ). A certificate indicating government approval for a developer’s overall planning and design of the project and allowing a developer to apply for a work commencement permit;

Š permit for commencement of construction work ( ). A permit required for commencement of construction; and

Š pre-sale permit ( ). A permit authorizing a developer to start the pre-sale of properties under development.

A property developer is allowed to commence construction of a property development upon obtaining the permit for commencement of construction work which will only be issued after the land use rights certificate, the construction land planning permit and the construction work planning permit (together with the permit for commencement of construction work, collectively known as the “four certificates”) are obtained. Save as disclosed in this prospectus, as of the Latest Practicable Date, we had obtained all the “four certificates” for our properties under development taking into account their respective stages of development at such date.

Financing

Our property developments are principally financed by pre-sale and sale proceeds, bank loans, internal funding and shareholders’ equity contributions. During the Track Record Period, we also financed some of our property developments using trust arrangements and lease-back arrangements with a put option. Please refer to the sections headed “— Properties Used by Us” and “Financial Information” in this prospectus for further information on these arrangements. As of December 31, 2007, our outstanding bank borrowings amounted to approximately RMB1,249.3 million. Our Directors believe that we have maintained good business relationships with major commercial banks in China. In 2002, we were recognized as an “AAA Credit Level Customer” ( ) by the Henan branch of the Agricultural Bank of China ( ) and were recognized as a “Henan Head Office Key Customer” ( ) by China Construction Bank Corporation ( ). In 2006, we entered into a strategic cooperation agreement with the Henan branch of Bank of China Limited ( ) pursuant to which, among other things, they will display the promotion materials of our newly launched property projects within their branch network and assist in the marketing of our properties and we will provide support for the bank’s

180 BUSINESS promotion of its housing mortgage services to purchasers of our properties. In 2006, we were also recognized as an “Excellent Credit Customer in the Banking Industry in Henan Province” ( ) by the Henan Bank Association ( ).

Government authorities in China have issued various regulations to govern the financing of development projects:

Š On June 5, 2003, the PBOC published the Notice of the PBOC on Further Strengthening the Management of Loans for Property Business (Yin Fa [2003] No. 121) ( ), which prohibits commercial banks from advancing loans to fund the payment of land premiums and imposes restrictions on the development of luxury residential properties. As a result, property developers may use only their own funds to pay land premiums. Pursuant to the Guideline for Commercial Banks on Risk Management of Real Estate Loans (Yin Jian Fa [2004] No. 57) ( ), issued by the CBRC on September 2, 2004, any property developer applying for a property development loan must itself fund from its own working capital at least 35% of the project capital required for the development. Commercial banks are not permitted to grant any loan for a project which has not obtained the “four certificates”.

Š On March 16, 2005, the PBOC published the Notice of the PBOC on the Adjustment of Commercial Bank Housing Credit Policies and the Interest Rate of Excess Reserve Deposits (Yin Fa [2005] No. 61) ( ), which states that in the cities and areas where the price of housing increases rapidly, the minimum down payment when securing a mortgage on a residential property would, from March 17, 2005, increase from 20% to 30% of the purchase price. Commercial banks can independently determine the percentage of the minimum down payment in accordance with the appreciation in real estate prices in different cities or areas announced by the relevant governmental departments in the PRC.

Š On May 24, 2006, the General Office of the State Council issued the Circular of the General Office of the State Council on Forwarding the Opinions of the Ministry of Construction and other Departments on Adjusting the Housing Supply Structures and Stabilizing Property Prices (Guo Ban Fa [2006] No. 37) ( ). On September 27, 2007, the PBOC and the CBRC issued the Notice of the PBOC and the CBRC on Strengthening the Administration of Commercial Real Estate Credit Loans (Yin Fa [2007] No. 359) ( ). These circular and notice provide that commercial banks are not permitted to provide loans to a property developer whose total capital fund is less than 35% of the total investment amount in an intended development project. From June 1, 2006 and with respect to property mortgages, down payments shall be a minimum of 30% of the purchase price. Down payments of 20% will still be applicable with respect to purchases of housing for buyers’ own accommodation with a GFA of less than 90 sq.m.

181 BUSINESS

Loans obtained from a commercial bank must be used solely for property developments in the bank’s local region.

Š On July 11, 2006, the Ministry of Construction, MOFCOM, the NDRC, the PBOC, the SAIC and SAFE jointly issued the Opinions of the Ministry of Construction, MOFCOM, the NDRC, the PBOC, the SAIC and SAFE on Regulating the Access and Management of Foreign Capital in the Real Estate Market (Jian Zhu Fang [2006] No. 171) ( ), which provides that real estate development enterprises owned at least in part by a foreign investor will not be allowed to obtain a loan in or outside the PRC if they have not fully paid up their registered capital, or have failed to obtain a land use rights certificate, or have less than 35% of the project capital required for a development. Furthermore, SAFE departments are not permitted to approve any registration of overseas loans that have been made to such foreign-invested real estate development enterprises.

Š On July 22, 2006, the CBRC promulgated a Notice of the CBRC on Further Strengthening the Administration of Real Estate Credit (Yin Jian Fa [2006] No. 54) ( ). The notice requires (i) improving a credit risk classification system for all types of real estate loans; (ii) prohibiting financial institutions from providing loans to disqualified real estate developers whose own capital is less than 35% of the total capital required for the projects (not including affordable housing), or who have not obtained the “four certificates”; (iii) setting the loan term appropriately, and not allowing the provision of working capital loans in the name of real estate development loans; (iv) strictly restricting new loans for those developers who hoard land or housing and disturb market order; (v) preventing developers from obtaining loans by project split-up or rolling-ahead development strategies; and (vi) enhancing management after providing loans. All financial institutions shall provide loans strictly in accordance with the real estate project progress and strengthen overall supervision of the whole process of loan utilization by developers.

Š On July 10, 2007, SAFE issued the Notice of the General Department of the State Administration of Foreign Exchange on the Publication of the List of the First Batch of Foreign-Funded Real Estate Projects Having Passed the Procedures for Registering with MOFCOM (Hui Zong Fa [2007] No. 130) ( ( )). The notice stipulates, among other things, (i) that branches of SAFE will no longer process foreign debt registration or approval of foreign exchange settlement for foreign debt for foreign- invested real estate enterprises that have obtained an approval certificate from a competent commerce authority and registered with MOFCOM on or after June 1, 2007 and (ii) that branches of SAFE will no longer process foreign exchange registration (including registration of alteration) or sale and purchase of foreign exchange under capital account for foreign-invested real estate enterprises that obtained approval certificates from the local government’s commerce department on or after June 1, 2007 but did not register with MOFCOM. This notice restricts the ability of foreign-invested real estate enterprises to raise funds offshore either through offshore borrowings or through offshore equity funding. Our PRC legal adviser has confirmed that as the investment by CapitaLand does not constitute a foreign debt, and we had carried out all necessary procedures with relevant

182 BUSINESS

regulatory authorities, the notice did not have any impact on the investment by CapitaLand. Our PRC legal adviser has further confirmed that under the notice, our PRC subsidiaries could legally use the proceeds from the Global Offering injected by way of capital contribution to finance our land acquisitions or property developments. However, we cannot assure you that we will be able to obtain in a timely manner all relevant necessary approval certificates or registrations for all our operating subsidiaries in the PRC to comply with PRC laws and regulations. Pursuant to the PRC Company Law and the Law of PRC on Foreign Invested Enterprises ( ), a foreign invested enterprise should apply for registration with the relevant administrative bureau of industry and commerce in respect of an increase or transfer of its registered capital. The time required for submitting and processing the registration is not stipulated in these laws or by SAFE or MOFCOM. Based on our historical experience in respect of increase in registered capital of our PRC subsidiary, the time required for processing the registration is approximately 45 business days. Our PRC legal adviser has confirmed that there is no material legal impediment for our PRC subsidiaries to apply for the relevant registrations.

Š On August 30, 2007 the Standing Committee of the NPC promulgated the revised PRC Urban Real Estate Administration Law ( ) which took effect on the same day. The law stipulates that the State, for public benefit, can take back State-owned land and/or the premises owned by enterprises or individuals, built on State- owned land. The local PRC Government will provide the enterprises or individuals with compensation for the return of the State-owned land and/or the demolition of their premises. However, in the event that any land planned to be used or used for our projects is so reclaimed, we may not recover the full amount of our acquisition cost for the parcel of land or any amount expended for the development of the site or the construction of the premises. In such event, our land reserves would be reduced and our business, financial condition and results of operations would be materially and adversely affected.

Š On September 27, 2007, the PBOC and the CBRC issued the Notice of the PBOC and the CBRC on Strengthening the Administration of Commercial Real Estate Credit Loans (Yin Fa [2007] No. 359) ( ) which further emphasizes the existing policies on commercial property loans and provides, among other things, that:

(i) loans obtained from commercial banks must be used solely to fund property developments in the bank’s local region; and

(ii) purchasers who purchase additional properties subsequent to the purchase of a residential property with a mortgage loan should pay at least 40% of the purchase price as down payment with a loan interest rate of not less than 1.1 times the benchmark lending rate published by the PBOC for the purchase of additional properties; whereas first-time purchasers who purchase property with a GFA of 90 sq.m. or less are required to make a down payment of at least 20% of the purchase price while first-time purchasers who purchase property with a GFA more than 90 sq.m. are required to make a down payment of at least 30% of the purchase price.

183 BUSINESS

On December 5, 2007, the PBOC and CBRC jointly issued the Supplementary Notice of the PBOC and CBRC on Strengthening the Administration of Commercial Real Estate Credit Loans (Yin Fa [2007] No. 452) ( ), which clarifies that the number of times a purchaser has obtained property mortgage loans should be calculated on a family basis, including the borrowers and their spouse and minor children.

In addition, the PRC Government has recently implemented a number of measures to prevent the PRC economy from overheating. Among these measures are policy initiatives issued by the PRC Government on May 24, 2006 to use taxation, bank credit and land policies to regulate housing demand. The PBOC has, on a number of occasions, effected increases in the Renminbi reserve requirement ratio of commercial banks since July 2006 as a result of which the Renminbi reserve requirement ratio has increased from 7.5% in July 5, 2006 to 16.5%, effective May 20, 2008. The Renminbi reserve requirement ratio refers to the amount that banks must set aside when they lend. Such decision of the PBOC will limit the amount commercial banks have available for lending and our ability to obtain financing from commercial banks may be materially and adversely affected.

Project planning and design

Our product research and development department is responsible for the research and development of our property projects, for implementing systematic procedures ( ) for our property development and for the standardization ( ) of our products. This department provides standardized procedures for the design and construction of our projects with the aim of producing consistently high quality products. Our Directors believe that systematization and standardization of our projects also help to control cost, quality and timing of our projects.

Our product design department is responsible for monitoring the progress and quality of the architectural design and interior design of our property developments. Our product design department also works closely with our construction management department and sales and marketing center and generally considers their recommendations regarding product mix, project locations and market conditions.

We outsource the design work for our projects to third party design firms and a real estate consultant to help design various aspects of our projects, including master planning, architectural design, landscape design and interior design. In recent years we have engaged local and international design firms to design the masterplans for our projects. We have also entered into strategic cooperation agreements with reputable design firms to ensure priority service in the design of the construction plans for our projects.

Construction work, procurement and quality control

We do not maintain an in-house construction team. Our construction work is outsourced to third party construction companies, which are selected through a tender process for each property project. We generally hire more than one contractor for each of our projects. The construction

184 BUSINESS companies are selected by our tender and procurement department which considers, among other things, the reputation of the contractors and the price quoted by the contractors. We conduct detailed due diligence work on the contractors during the bidding process before offering construction contracts to them. We typically examine their track record, industry reputation, qualification certificates, management and quality control systems and other information that are required as part of the bidding process to evaluate the suitability of the contractors who submit a bid for our construction contracts. As of March 31, 2008, we engaged 30 contractors, all being Independent Third Parties, on an individual project basis for the construction of our property developments. These contractors typically have had relationships of one to three years with our Group.

Our standard construction contracts typically provide for an agreed price payable by us based on the reference prices of the relevant materials, equipment and components announced by the local PRC Government authority quarterly, which may be adjusted at completion of the construction according to the then latest reference prices. We may also need to pay additional amounts to the contractors in excess of the agreed cost in certain circumstances, such as costs resulting from changes in designs during construction. Equipment and construction materials needed for our construction work are generally procured by our contractors except for specified materials, including elevators, windows, doors and water pipes which are centrally procured through our tender and procurement department. These contractors may, at their option, employ sub-contractors to assist in providing the services, but the contractors remain responsible to us for any act or negligence of sub-contractors. The construction contracts contain warranties from the contractors in respect of the quality and timely completion of the construction. In the event of any delay or poor quality of work, the contractor may be required to pay pre-agreed damages under the construction contract. We require our contractors to comply with PRC laws and regulations on quality of construction projects, as well as our own standards and specifications stipulated in the construction contracts. The contractors are also subject to our quality control procedures, including examination of materials and supplies, on-site inspection and production of progress reports.

Our construction supervision department is responsible for overseeing the quality and progress of the construction work. As of March 31, 2008, approximately 133 of the 166 employees in our construction supervision department are professionally qualified architects or engineers. Our Group also engages independent supervisory companies to conduct quality and safety control checks on all projects. In an effort to ensure the quality of the services rendered by the contractors, our construction contracts generally provide for progressive payments throughout the construction process and we generally retain 5% of the total construction costs for a pre-agreed period of time after the construction is completed to secure any claim we may have due to any potential construction defects. Upon the expiry of the two-year retention period, the balance of the retention amount is paid to the contractor. We have not experienced any circumstances where the retention amount was less than the amount we needed to pay to rectify construction defects during the Track Record Period. We did not have any disputes with any of our major contractors during the Track Record Period which, individually or in the aggregate, had or would have a material adverse effect on our business and results of operations.

Under PRC law, construction companies bear the primary civil liability for personal injuries, accidents and deaths arising out of their construction work if such personal injuries, accidents and death are caused by the construction companies. The owner of the property under construction may also bear liability supplementary to the liability of the construction company if the latter is not able to fully compensate the injured. The owner of the property under construction may also bear civil liability

185 BUSINESS for personal injuries, accidents and death if such injuries are the fault of such owner. Since we have taken the above steps to prevent construction accidents and personal injuries, our PRC legal adviser has advised us that we will generally be able to defend ourselves as the property owner if a personal injury claim is brought against us. To date, we have not experienced any destruction of or damage to our property developments nor have any personal injury-related claims been brought against us and no material personal injury incident has occurred on our project sites during the Track Record Period. We are not responsible for any labor problems of our contractors. As to our risk in relation to environmental, social and safety problems due to non-compliance with PRC laws by the contractors, we may be held responsible for such problems but our construction contracts provide that we may seek indemnification from the contractors for any resulting damages. To help ensure construction safety on our Group’s project sites and the compliance with PRC laws and regulations, including environmental, social and safety regulations, we have provided a set of standards and specifications in our construction contracts for construction workers to comply with during the construction process. We also engage independent supervisory companies to conduct quality and safety control checks on our projects.

For the three years ended December 31, 2005, 2006 and 2007, purchases attributable to our single largest supplier, excluding purchases of land, amounted to approximately 7.2%, 4.6% and 10.4%, respectively, of our total purchases in each period and purchases, excluding purchases of land, attributable to our five largest suppliers amounted to approximately 24.8%, 14.3% and 31.5%, respectively, of our total purchases in each period. As of the Latest Practicable Date, none of our Directors, their associates or any of our Shareholders holding more than 5% of our issued share capital had any interest in our five largest suppliers.

Pre-sale

We aim to pre-sell properties before the completion of their construction. Under the Administrative Measures on the Pre-sale of Urban Commercial Housing ( ) (the “Pre-Sale Measures”) and the PRC Urban Real Estate Administration Law ( ), as amended in 2004 and 2007, respectively, we must comply with the following conditions before the pre-sale of a particular property can commence:

Š the land premium must have been fully paid and the relevant land use rights certificates must have been obtained;

Š the construction work planning permit and the permit for commencement of construction must have been obtained;

Š the funds contributed to the development of the property development where property units are pre-sold must not be less than 25% of the total amount invested in the project and the progress, the expected completion date and the delivery date of the construction work must have been confirmed; and

Š pre-sale permits must have been obtained from the county-level construction bureau or real estate administration authority.

186 BUSINESS

In addition, according to the Rules Governing the Administration of Urban Property Development Operations in Henan Province (Yu Ren Chang [2002] No. 12) ( ) as amended in 2005, more than half of the construction of the project has to be completed and the progress of construction and delivery date have to be ascertained before we can obtain a pre-sale permit for our projects in Henan Province.

Pursuant to the Pre-Sale Measures, before the completion of a pre-sold property project, the proceeds from pre-sales must be used only for the construction of the relevant pre-sold property project. The Zhengzhou City Housing Authority has passed a local rule which further requires that pre- sale proceeds for a given pre-sold project be deposited in an escrow account set up for such project. We do not set up specific escrow accounts for each of our pre-sold property projects in Zhengzhou City and therefore are not in full compliance with the local measures. However, no penalties for non- compliance with this rule have been specified by the rule and the Zhengzhou City Housing Authority has confirmed to us in writing that this rule has not been enforced since its implementation and that no penalties against any entity, including the Group, have been imposed for non-compliance. Our PRC legal adviser has advised us that there is no material legal risk that a penalty will be imposed on us by any government authority in the PRC as a result of the above-mentioned non-compliance.

Please refer to the section headed “Summary of PRC Laws Relating to the Property Sector — Legal Supervision Relating to the Property Sector in the PRC — Transfer and Sale of Property — Sale of commodity properties” in Appendix VI to this prospectus for further information on the regulations relating to pre-sales.

Certain of our properties have been sold or pre-sold under lease-back arrangements with put options. Our PRC legal adviser has confirmed that pre-sale of properties under lease-back arrangements was not in full compliance with the PRC regulations, and the relevant subsidiaries may be subject to a maximum penalty of RMB30,000. Please refer to the section headed “— Properties Used by Us” for further details.

Sales and marketing

We handle sales through our own sales and marketing center. Our sales and marketing center is responsible for planning and formulating sales and marketing strategies. It is also responsible for carrying out market research, setting and executing marketing strategy and designing advertisements. We provide our sales and marketing staff training on basic knowledge of real estate, sales and marketing, and laws and regulations in relation to the real estate sector.

We advertise in media such as newspapers and on outdoor advertising boards and also through radio broadcasting. We also set up on-site reception centers at each of our projects to display information relating to the relevant property development. In 2001, we established our Jianye Club with the aim of increasing customer loyalty. As a key part of our marketing strategy, we sponsor the only national major league soccer team in Henan Province — the Construction Football Club, an Independent Third Party, which our Directors believe can enhance our brand recognition in Henan Province and elsewhere in China.

187 BUSINESS

For the years ended December 31, 2005, 2006 and 2007, the percentage of revenue attributable to our largest customer amounted to approximately 0.67%, 0.98% and 7.7% of our total revenue. The percentage of revenue attributable to our five largest customers was less than 30% of our total revenue for the years ended December 31, 2005, 2006 and 2007. As of the Latest Practicable Date, none of our Directors, their associates or any of our shareholders holding more than 5% of our issued share capital had any interest in or was associated with our five largest customers.

On May 1, 2008, we entered into a legally binding framework agreement with Farsighted International Limited (“Farsighted International”), in which CapitaLand holds a 30% interest. Pursuant to the framework agreement, we agreed to sell the first underground floor and the first four floors of the shopping mall of Landmark (Zhengzhou), with an aggregate planned GFA of approximately 54,164 sq.m., together with 260 car parking spaces to one or more project companies to be established by Farsighted International in China at an aggregate consideration of RMB394.3 million (subject to adjustments pursuant to the terms of the framework agreement). Formal pre-sale contracts will be signed after certain conditions are fulfilled, including the receipt of pre-sale permits. For further details, please refer to the section headed “Connected Transactions — An Existing One-off Connected Transaction between an associate of CapitaLand and Us” in this prospectus.

Save as disclosed above, as of the Latest Practicable Date, we had not sold any properties developed by us to institutional investors other than retail users.

Customers’ payment arrangements

Our customers, including those making sold or pre-sale purchases, can pay with mortgage facilities arranged with banks. The mortgage payment terms for properties sold or pre-sold are substantially the same. Currently, purchasers who purchase additional properties subsequent to the purchase of a residential property with a mortgage loan should pay at least 40% of the purchase price as down payment with a loan interest rate of not less than 1.1 times of the basic interest rate published by the PBOC; whereas first-time purchasers who purchase a property with a GFA of 90 sq.m. or less are required to make a down payment of at least 20% of the purchase price. First-time purchasers who purchase a property with a GFA of more than 90 sq.m. are required to make a down payment of at least 30% of the purchase price when executing a sale or pre-sale contract. In each case, a mortgage loan with a maximum term of 30 years for the balance of the purchase price may be available to the purchasers. Purchasers are required to pay the balance of the purchase price within one month following the execution of the sale or pre-sale contract when they purchase properties using mortgage financing.

If our purchasers choose not to finance their purchases with mortgage loan facilities, they are required to pay the purchase price in full at the time of the execution of the pre-sale or sale contract.

In accordance with market practice, we make arrangements with various PRC banks to provide mortgage loans to purchasers of our residential properties. For pre-sold properties, we provide guarantees to banks for the repayment of the mortgage loans granted to our customers. These guarantees are released upon completion of construction and either the delivery of the mortgage registration documents to the relevant banks after the issue of the building ownership certificate or the

188 BUSINESS full settlement of the mortgage loans by our customers, whichever occurs earlier. From our experience, the guarantee periods typically last for six to 12 months after delivery of our properties. In line with industry practice, we do not conduct independent credit checks on our customers but rely on the credit checks conducted by the mortgagee banks. As of December 31, 2007, the outstanding guarantees in respect of the mortgage loans of our customers amounted to RMB1,476.3 million. In the three years ended December 31, 2005, 2006 and 2007, defaults in relation to the mortgage loans taken out by our customers and secured by our guarantees amounted to approximately RMB0.6 million, RMB0.8 million and RMB0.8 million, respectively. We were able to recover all of the default payments from the relevant property owners after the event of default since the proceeds from the re-sale of the defaulted properties exceeded the amount for which we were held liable as guarantor for our customers. During the Track Record Period, we did not experience any losses as a result of claims by banks to enforce the guarantees given by us. Please refer to the section headed “Risk Factors — Risks Relating to Our Business — We guarantee mortgage loans to our customers and may become liable to mortgagee banks if our customers default on their mortgage payments” in this prospectus.

Delivery of properties

Once a property development has passed the requisite government inspections and is ready for delivery, we notify our customers and hand over keys and possession of the properties. Delivery of a property generally takes place within three to six months (depending on the type of the property) after the completion of the property. Our pre-sale or sale contracts provide the time frame for delivery and we are required to make penalty payments to the purchasers for any delay in delivery. Please refer to the section headed “Risk Factors — Risks Relating to Our Business — We face contractual and legal risks relating to the pre-sale of properties, including the risk that property developments are not completed or delivered on time or at all and risks relating to changes in laws and regulations in relation to the pre-sale of properties” in this prospectus.

After-sales services

We endeavour to deliver good quality after-sales services to our customers. We assist our customers in arranging for mortgages by providing information on potential mortgagee banks and the mortgage terms they may offer. We also assist our customers in various title registration procedures relating to their properties and attend to the delivery of the properties to our customers.

Our sales and marketing center provides services such as the processing of sales and CCRE Commercial Properties handles rental enquiries. Our customer service center and customer service executive in each city are responsible for handling any complaints we may receive from our customers and arranging for and supervising the repair and maintenance of our developed properties in a timely manner.

Through our Jianye Club, we provide services to our customers through various channels such as our call center and internet forum. We distribute a free monthly newsletter, “Jianye Lifestyle”, to our Jianye Club members and carry out regular customer satisfaction surveys. Further, we have a customer relationship management system which provides a platform for our analysis of customer needs and preferences.

189 BUSINESS

PROPERTY LEASING

We lease some of our retail units and car parking spaces. Our tenants are primarily individual retailers and home owners. Our retail units are generally leased for terms of one to three years while our car parking spaces are generally leased for a term of one year. However, for anchor tenants taking comparatively large areas or more than one location, or whose presence is expected to attract other tenants, we may consider offering them leases for terms of up to 20 years. As of the Latest Practicable Date, we had entered into two leases in respect of the underground shopping center in Lakeside Square (Sanmenxia) with lease terms of 20 years.

We are responsible for identifying prospective tenants for our retail units and conducting research to enhance the tenant profile and trade mix for each project, in each case on an on-going basis. We engage Jianye Property Management to handle the leasing of car parking spaces in our residential developments.

As of the Latest Practicable Date, we had leased out the entire underground shopping center in our Lakeside Square (Sanmenxia) Project and a clubhouse in our Forest Peninsula (Luoyang) Project. We plan to sell the Lakeside Square (Sanmenxia) Project with the benefit of these leases when a suitable opportunity arises but we plan to continue to hold the clubhouse in the Forest Peninsula (Luoyang) Project for investment purposes. For the years ended December 31, 2005, 2006 and 2007, our revenue generated from rental properties amounted to RMB5.2 million, RMB10.8 million and RMB17.7 million, respectively. We also intend to lease the office spaces in our Landmark (Zhengzhou) Project once the development is completed.

Pursuant to the Measures for Administration of Leases of Property in Urban Areas ( ) promulgated on May 9, 1995, property owners are required to file for registration and obtain property leasing certificates ( ) for leases which they enter into. We have not filed for registration or obtained the property leasing certificates for most of our leases since we were not strictly required by the local government authorities to do the registration or apply for the leasing certificates. Our PRC legal adviser has confirmed that the lack of property leasing certificates will not affect the legality, validity or enforceability of the leases. We may be required by the relevant Government authority to register the leases and may be subject to a fine. As confirmed by our PRC legal adviser, the regulation does not stipulate the amount of fine. As of the Latest Practicable Date, no fine or administrative penalty had been imposed upon us by the PRC Government as a result of the non-registration of our leases. Our PRC legal adviser has also advised us and our Directors believe that the lack of property leasing certificates for our leases would not have a material adverse effect on the operation of our Group’s business. Each of our Controlling Shareholders has agreed to provide an indemnity in favor of our Group in respect of any liabilities, damages, fines, penalties, costs, losses or expenses which may be imposed or levied by the PRC Government authorities for any failure of our Group to register the leases or obtain property leasing certificates as required under the PRC laws in connection with any of the properties leased by our Group. Since property leasing is not the main business of our Group and our turnover generated from rental properties represented less than 1% of the total turnover in 2005 and approximately 1% of our total turnover in 2006 and 2007, our Directors believe that the properties leased without leasing certificates are not crucial to our Group.

190 BUSINESS

We also sub-lease certain retail units that we leased from the owners under lease-back arrangements with a put option, pursuant to which we sold or pre-sold the retail units to the owners and then leased back the units. For further information, please refer to the section headed “— Properties Used by Us” below.

As of March 31, 2008, the types of units retained by us for rental purposes include car parking spaces, retail units, schools and a clubhouse. The total GFA held for rental purposes in respect of retail units, schools and the clubhouse as of that date were approximately 24,742 sq.m., 55,968 sq.m. and 3,847 sq.m., respectively. As of March 31, 2008, we had a total of 241 car parking spaces held for rental purposes.

HOTEL DEVELOPMENT

We plan to develop a hotel in the Landmark (Zhengzhou) Project which we intend will meet the rating standards for a four-star hotel. In September 2007, we signed an operation service agreement with Sheraton Overseas Management Corporation (“SOMC”), a subsidiary of Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) which operates various well-known hotel brand names including Sheraton Hotels and Resorts, Four Points by Sheraton, Le Méridien and Westin Hotels and Resorts. Under the agreement, we will be responsible for developing the hotel and the hotel will be operated and managed by SOMC. Based on our project plans, the hotel is expected to comprise approximately 294 guest rooms with an aggregate planned hotel GFA of approximately 31,412 sq.m.

We have obtained the land use rights certificate for the relevant parcel of land for the development of the hotel. Construction of the hotel is expected to commence in October 2008 and is expected to be completed in around December 2009. We expect to formally open the hotel before March 1, 2010.

Pursuant to the operation service agreement, the term of operation by SOMC will commence from the formal opening of the hotel until December 31 of the 25th year after the opening. The term can be renewed by SOMC for a further five-year period. SOMC will receive a basic operating fee of 2% and 2.25% of the gross operating revenue for the first three years’ of operation and from the fourth year of operation onwards, respectively. SOMC may also receive an incentive fee ranging from 5% to 8% of the gross operating profit based on the gross operating profit of the hotel for the year. In addition, we have entered into a development consultation service agreement with SOMC under which SOMC will also provide consultation services to our Group in respect of the planning, design and construction of the hotel and a centralized service agreement under which we have agreed to adopt SOMC’s proposal in respect of the management of the hotel, including sales and marketing and room booking services. We have also entered into a system license agreement with Sheraton International Inc., an associated company of SOMC, which grants our Group a non-exclusive right to use, inter alia, their brand standards and trade marks.

The estimated total development cost of the hotel project is approximately RMB269.0 million (including the costs of land acquisition and construction costs) and the capital commitment was RMB229.0 million as of March 31, 2008. We intend to finance the development of the Landmark (Zhengzhou) Project, including the development of the hotel, principally by bank loans secured by the pledge of the land on which the project is to be built.

191 BUSINESS

In addition, we plan to develop a hotel in the Forest Peninsula (Shangjie) Project. We have not yet finalized our development plan for this hotel project.

PROPERTY MANAGEMENT SERVICES

We engage a national first grade property management company — Jianye Property Management, a former subsidiary of our Group which we disposed of to an Independent Third Party in 2006 in order to focus on our core business(1) — to provide a high standard of property management and services to customers. The property management services provided to purchasers of our property projects include maintenance and security of the common areas, gardening and landscaping, cleaning, fire protection and dealing with customer complaints.

According to a strategic cooperation agreement between CCRE China and Jianye Property Management dated August 25, 2006, our Group has formed a strategic cooperation relationship with Jianye Property Management. Pursuant to the strategic cooperation agreement, CCRE China granted Jianye Property Management a right to use its “ ”(jian ye) trade name on a royalty-free basis and agreed to provide priority to Jianye Property Management when selecting a property management company through a tender process to provide property management services to our Group’s projects, and Jianye Property Management agreed to set up a department responsible for the business with CCRE China and provide quality staff to deliver good-quality service to our Group’s projects. The typical property management contract entered into by Jianye Property Management and the owners of the properties sets forth the scope and the quality requirements of the property management services and the management fee arrangements. The property management service fee is generally payable on an annual basis by the owners of the properties.

Under current PRC law, owners have the right to engage or dismiss a property management company with the consent of more than half of the owners and the owners in aggregate holding more than 50% of the interest in the total non-communal area of the building. As confirmed by our Directors, Jianye Property Management has never been dismissed by the owners of any of the projects developed by us.

(1) On August 10, 2006, each of CCRE China and CCRE Henan entered into a sale and purchase agreement with an Independent Third Party, pursuant to which CCRE China and CCRE Henan transferred a 10.2% equity interest and a 89.8% equity interest in Jianye Property Management, respectively, to the Independent Third Party at a consideration of RMB510,000 and RMB4.49 million, respectively, which was reached after considering the contribution invested by each of CCRE China and CCRE Henan in the registered capital of Jianye Property Management. After the transaction, the rights and obligations in connection with the transferred equity interests were also transferred to the Independent Third Party. The disposal of Jianye Property Management was done according to normal commercial terms and conditions. As disclosed by the corporate information search conducted by us in the local administrative bureau of industry and commerce, as of the Latest Practicable Date, Jianye Property Management was held by Niu Shiming ( ), another Independent Third Party who is not the purchaser which acquired Jianye Property Management from us in August 2006.

192 BUSINESS

QUALITY CONTROL

Different functional departments are responsible for ensuring the good quality of our properties and services. Our product design department is responsible for monitoring the quality of the architectural design and interior design of our property developments. In addition, as of March 31, 2008, we employed 43 professionals, including architectural and structural designers, construction engineers, electrical engineers and water and heat engineers to carry out the functions of quality control and construction supervision for our project companies. In accordance with PRC regulations, we engage qualified supervisory companies selected through a tender process, which work closely with our construction management department to monitor the quality, progress and costs of the construction work of our property developments. Our customer service center is responsible for dealing with complaints which we may receive from customers. Where relevant, customer feedback is provided to our product design department so that we can refine the designs of our future properties to meet our customers’ tastes and requirements.

We provide our customers with warranties covering the structure and certain fittings and facilities of our property developments in accordance with the relevant regulations. In the event of any construction defects in our properties, we require the contractors to remedy the issues before settling the remaining balance under the construction contracts.

AWARDS AND CERTIFICATES

Set forth below is a summary of the key awards and certificates of our Group or our property developments since 2004:

Date of grant Awards/Certificates Awarding organization March 2008 ...... Thirty-ninth ranking among the 2008 China China Real Estate Top 10 Top 100 Real Estate Developers Research Team March 2008 ...... Eighth ranking among the 2008 China Top 100 China Real Estate Top 10 Real Estate Developers in terms of Risk Research Team Management Ability September 2007 .... First ranking among the Top 10 Real Estate China Real Estate Top 10 Enterprises by Brand Value in Midwestern Research Team China in 2007 March 2007 ...... Forty-first ranking among the 2007 China Top China Real Estate Top 10 100 Real Estate Enterprises Research Team February 2007 ..... One of the CCTV Top 10 Best Employers in CCTV and Henan Commercial Henan Province in 2006 Daily December 2006 .... Excellent Credit Customer in Henan Province Henan Bank Association October 2006 ...... Henan Construction Project “Zhongzhou Cup” Construction Department of — Henan Province High Quality Construction Henan Province Work awards granted to towers six and seven of our Home Universe (Zhengzhou) Project

193 BUSINESS

Date of grant Awards/Certificates Awarding organization

October 2006 ...... Henan Construction Project “Zhongzhou Cup” Construction Department of Silver Award — Consumer Satisfactory Henan Province Construction Work granted to tower one of our Green Garden (Shangqiu) Project November 2005 .... The Most Respected Property Brand Enterprise China Leading Media for Real in China in 2005 Estate Advertising Alliance November 2004 .... Asian Habitation Model Project Award Asian Real Estate Society, awarded to our Forest Peninsula (Zhengzhou) Asian Habitat Society and Project World Association of Chinese Architects November 2004 . . The Fastest Growing Development Enterprise China Real Estate Magazine, in China in 2004 China Real Estate Presidential Management Forum 2004 ...... TheChina Outstanding Floor Plan awarded to National Housing Industry two villas designed in our U-Town Association and China Real (Zhengzhou) Project Estate Newspaper Group

PROPERTIES USED BY US

As of March 31, 2008, we owned office spaces at Jianye City Garden (Zhengzhou) which we use as our headquarters in Zhengzhou City, with a total GFA of approximately 9,889 sq.m. In addition, we occupied office spaces with a total GFA of approximately 16,218 sq.m., which we temporarily use as sales centers, in the cities in which we operate. We also leased an office space in Hong Kong with a total GFA of approximately 176 sq.m., which we primarily use for administration purposes, from Construction Housing, a company indirectly wholly owned by Mr Wu. Please refer to the section headed “Connected Transactions” in this prospectus for details of the lease arrangements.

As of March 31, 2008, we also owned a staff training center with a total GFA of approximately 5,432 sq.m. in Zhongmou County.

For more details of the properties used by our Group, please refer to the property valuation report in Appendix IV to this prospectus.

In the past, we leased retail units from 155 purchasers of our retail units under lease-back arrangements with a put option. Pursuant to these arrangements we sold or pre-sold the retail units to the purchasers and then leased back the units from them. All of the 155 purchasers are individuals and none of them is a connected person to our Group. As of the Latest Practicable Date, 25 of the lease- back arrangements with a put option had expired and seven purchasers had waived their rights to put the retail units back to us. Under these arrangements, we agreed to lease back the relevant properties at a specified rent for a specified period of time, typically three years beginning from two or three months after the date of sale or date of completion of the pre-sold properties, as applicable, following which the owners retained an option to sell the relevant properties back to us at the same amount as the purchase price they paid for the relevant properties or, in certain cases, at a premium of 10% to the

194 BUSINESS purchase price. The specified annual rent paid by us to the relevant owners ranges from 7% to 8% of the relevant purchase price paid by the owners when they bought the properties from us. The revenue which the relevant owners will receive from us under the lease-back arrangements consists of the rent specified in the contracts and a premium of 10% of the purchase price (if the owner is entitled to the premium and chooses to sell the relevant properties back to our Group pursuant to the terms of the relevant contract). Our Directors believe that such arrangements could facilitate the sales of our retail units while the purchasers could benefit from a guaranteed profit by leasing or selling back the properties to us. The retail units under these lease-back arrangements with a put option comprised an aggregate GFA of approximately 24,742 sq.m. as of March 31, 2008. As of March 31, 2008, we sub- leased 34 retail units with an aggregate GFA of approximately 8,713 sq.m. to tenants for rental income, representing approximately 35.2% of the total GFA of properties under lease-back arrangements with a put option as of that date, while the remaining leased-back properties were occupied by us or were vacant. The turnover generated from sub-leasing the properties leased back to us was nil, RMB2.6 million and RMB2.2 million for the years ended December 31, 2005, 2006 and 2007, respectively.

As advised by our PRC legal adviser, the pre-sale of properties under lease-back arrangements was not in full compliance with the PRC regulations, and each of our four project companies adopting these arrangements, namely, CCRE New Town, CCRE China, CCRE Luoyang and CCRE Xuchang, may be subject to a maximum penalty of RMB30,000 according to the Measures for Administration of the Sales of Commodity Properties ( ). Our PRC legal adviser has advised us that, under the PRC Civil Law, there is no material legal risk that the lease-back agreements will be regarded as unenforceable as they do not violate the PRC Contract Law ( )or other mandatory PRC legal or regulatory requirements. Our PRC legal adviser has also advised us that such regulations are not strictly implemented in the PRC, and no material administrative penalty was imposed on our Group as a result of our violation of relevant PRC regulations during the Track Record Period. Each of our Controlling Shareholders has agreed to provide an indemnity in favor of our Group in respect of any liabilities, damages, fines, penalties, costs, losses or expenses which might be payable by our Group as a result of the abovementioned non-compliance with relevant PRC regulations. We have sold or pre-sold 155 retail units under lease-back arrangements with a put option since October 2003. The majority of our lease-back arrangements with a put option will expire by August 2008 and all the lease-back arrangements with a put option will expire by October 2010. As of the Latest Practicable Date, 25 of the lease-back arrangements with a put option had expired and seven purchasers had waived their rights to put the retail units back to us. In light of the above, our Directors are of the view that such non-compliance would not have a material adverse impact on our Group’s business and financial condition. If the put options are fully exercised by the purchasers, the total amount payable by us under the put options for the repurchase of the remaining 123 properties is RMB232.7 million. None of the purchasers under these lease-back arrangements with a put option exercised their put option to sell the properties back to our Group during the Track Record Period.

For the years ended December 31, 2005, 2006 and 2007, we sold 24, 227 and 158 retail units, respectively, and the turnover generated from the sale of retail units amounted to RMB37.2 million, RMB140.0 million and RMB137.6 million, respectively. During the same periods, we sold or pre-sold 22, 85 and nil retail units under lease-back arrangements with a put option and the proceeds generated from the sales and pre-sales of retail units pursuant to such arrangements amounted to RMB51.8 million, RMB90.2 million and nil, respectively. We have recorded deferred revenue in our financial statements in respect of the sales and pre-sales of properties under lease-back arrangements with a put option prior to the expiry of the relevant put option.

195 BUSINESS

Our Directors confirm that our Group will not continue the sale or pre-sale of properties developed by us using such lease-back arrangements or put options in the future. Our Directors further confirm that the lease-back arrangement with a put option was only one of the sales methods adopted by our Group during the Track Record Period. Such sales method did not make a significant contribution to our Group’s sales during the Track Record Period. In addition, subsequent to the cessation of sales using the lease-back arrangement with a put option, there has been no material impact on our Group’s sales on account of the cessation. In light of the above, our Directors do not consider that the cessation of sales or pre-sales using lease-back arrangements with a put option represents a change in our business model or that it constitutes a risk to our future business after the Listing.

COMPETITION In recent years, an increasing number of property developers have begun undertaking property development and investment projects in Henan Province and elsewhere in the PRC. Our major competitors include large national and regional property developers, including local property developers that focus on one or more cities in Henan Province. We endeavour to further strengthen our leading position in Henan Province while we may make selective entries into other provinces in China. Our competitors, however, may have a better track record, greater financial, marketing and land resources, broader name recognition and greater economies of scale than us in the cities or markets in which we operate. For more information on competition, please refer to the section headed “Risk Factors — Risks Relating to the Property Sector in the PRC — Intensified competition may materially and adversely affect our business, results of operations and our financial position” in this prospectus.

INSURANCE We maintain assets insurance policies for our properties and assets. We also contribute to social insurance for our employees as required by PRC social security regulations, such as a pension contribution plan, medical insurance plan, unemployment insurance plan and work-related injury insurance plan. We do not, however, in general take out insurance coverage against potential losses or damage with respect to our properties developed for sale before their delivery to customers. Neither do we maintain insurance coverage against liability from tortious acts or other personal injuries on our project sites. Our Directors believe that this practice is consistent with the customary practice in the PRC property development industry. The construction companies are responsible for quality and safety control during the course of the construction and are required to maintain accident insurance for their construction workers pursuant to PRC laws and regulations. In addition, there are certain types of losses that are currently uninsurable in China, such as losses due to earthquake. Business interruption insurance is also currently unavailable in China.

To help ensure construction quality and safety, we provide a set of standards and specifications in the construction contracts for the construction workers to comply with during the construction process. We also engage qualified supervisory companies to oversee the construction process. Under PRC law, construction companies bear the primary civil liability for personal injuries, accidents and death arising out of their construction work where such personal injuries, accidents and deaths are caused by the construction companies. The owner of the property under construction may also bear liability supplementary to the liability of the construction company if the latter is not able to fully compensate the injured. The owner of the property may also bear civil liability for personal injuries,

196 BUSINESS accidents and death if such personal injuries, accidents or death are due to the fault of such owner. Since we have taken the above steps to prevent construction accidents and personal injuries, our PRC legal adviser has advised us that we will generally be able to defend ourselves as the property owner if a personal injury claim is brought against us. To date, we have not experienced any destruction of or damage to our property developments nor have any personal injury-related claims been brought against us and no material personal injury incident has occurred at our project sites.

However, there are risks that we do not have sufficient insurance coverage for losses, damage and liabilities that may arise in our business operations. Please refer to the section headed “Risk Factors — Risks Relating to our Business — We do not have insurance to cover all potential losses and claims” for details in this prospectus.

INTELLECTUAL PROPERTY RIGHTS

As of the Latest Practicable Date, we were the registrant of 24 registered trade marks in the PRC and Hong Kong including our “ ” and “ ” trade marks and we had applied for the registration of 58 trade marks including “ ” (jian ye) in the PRC and Hong Kong under various categories including construction, real estate leasing, real estate management, real estate agency and advertising. We are also the registered owner of the domain name of “jianye.com.cn.”

We have entered into trade mark and trade name licensing agreements with each of the Construction Football Club, Jianye Property Management, Jianye Education and Jianye Entertainment for a period of five years ending December 30, 2011, pursuant to which the licensees are granted the rights to use certain of our trade marks and trade name, including “ ”(jian ye), on a royalty-free basis with a limited scope. The terms of the licensing agreements between our Group and each of Construction Football Club, Jianye Education, Jianye Entertainment and Jianye Property Management are similar.

As a part of our Group’s branding and marketing strategy, since December 2001 our Group has sponsored the Construction Football Club, the only national major league soccer team in Henan Province as of the date of this prospectus. From December 2001 to November 2007, Mr Wu, our Chairman, was also the chairman and a director of the Construction Football Club. Mr Wu took up this position mainly due to the sponsorship provided by us to the Construction Football Club. However, we have no shareholding interest in the Construction Football Club.

Jianye Education operates a high-quality education network in Henan Province, including a primary school, a high school and several kindergartens, focusing on providing education services for residential property projects developed by our Group. Jianye Property Management is a property management company with a first grade qualification certificate and has extensive property management experience. Jianye Entertainment is a wholly owned subsidiary of Jianye Property Management and principally engages in providing ancillary catering and entertainment services to residential regions. Previously, Jianye Education and Jianye Entertainment were owned by Construction Housing, a company controlled by Mr Wu, and Jianye Property Management was a subsidiary of our Company. Mr Wu and our Group subsequently disposed of their interests in those

197 BUSINESS companies to Independent Third Parties in August and September 2006 in order to better focus on our core business of property development and investment. Each of Jianye Education(1), Jianye Entertainment(2) and Jianye Property Management(3) is currently an Independent Third Party.

Our Directors are of the view that it is appropriate to authorize these companies to use certain of our trade marks and trade name on a royalty-free basis and to enhance our brand name in return, while customers will be able to enjoy better ancillary services. Moreover, our Group reserves the right to charge the licensees licensing fees in the future. We have adopted the following measures to monitor the proper use of the authorized trade marks or trade name by the licensees:

Š each of the licensees is subject to contractual obligations relating to the proper use of the trade marks or trade name, including that: (i) it should guarantee the quality of the relevant goods and/or services that the trade marks and/or name are applied to; (ii) it should not change the trade marks and/or trade name without our consent or use the trade marks or trade name beyond the scope authorized; (iii) it should not authorize any other parties to use these trade marks and/or trade name without our authorization; and (iv) it should notify us about transactions relating to its material assets, shareholding reorganization and/ or any material changes relating to its business qualification;

(1) Immediately prior to its disposal in August 2006, Jianye Education was 90% owned by Construction Housing, which was ultimately held by Mr Wu and a former holding company of CCRE China, and 10% owned by CCRE China. In August 2006, we decided to dispose of our interests in Jianye Education to Independent Third Parties in order to focus on our core business. In September 2006, Construction Housing sold its 90% shareholding in Jianye Education to Meihua Yuezhang Investments Company Limited ( ), an Independent Third Party, while CCRE China sold its 10% shareholding in Jianye Education to the Construction Football Club, also an Independent Third Party. Since then, Jianye Education became an Independent Third Party. As disclosed by the corporate information search conducted by us in the local administrative bureau of industry and commerce, as of January 31, 2008, Jianye Education was wholly owned by Shanghai Meihua Yuezhang Investments Company Limited ( ), an Independent Third Party.

(2) Immediately prior to its disposal, Jianye Property Management was 10.2% owned by CCRE China and 89.8% owned by CCRE Henan. We decided to dispose of the property management business to an Independent Third Party in order to focus on our core business. In August 2006, each of CCRE China and CCRE Henan sold its equity interests in Jianye Property Management to an Independent Third Party. Since then, Jianye Property Management became an Independent Third Party. As disclosed by the corporate information search conducted by us in the local administrative bureau of industry and commerce, as of January 31, 2008, Jianye Property Management was wholly owned by Niu Shiming ( ), a PRC individual and an Independent Third Party, who is not the purchaser acquired Jianye Property Management from us in August 2006.

(3) Immediately prior to its disposal, Jianye Entertainment was 90% owned by Construction Housing, which was ultimately held by Mr Wu and a former holding company of CCRE China, and 10% owned by CCRE China. In September 2006, we decided to dispose of our interests in Jianye Entertainment to Independent Third Parties in order to focus on our core business. In September 2006, each of Construction Housing and CCRE China sold its interests in Jianye Entertainment to Jianye Property Management. Since then, Jianye Entertainment became an Independent Third Party. As disclosed by the corporate information search conducted by us in the local administrative bureau of industry and commerce, as of January 31, 2008, Jianye Entertainment was wholly owned by Jianye Property Management, an Independent Third Party.

198 BUSINESS

Š we have the right to monitor the use of the trade marks and/or trade name by each of the licensees. On the occurrence of any of the following events, we have the right to require the relevant licensee to rectify the situation immediately and if the licensees refuse to do so, we have the right to terminate the trade mark and trade name licensing agreement with such licensee:

Š the licensee exceeds the limit of the authorized scope or changes the trade marks or trade name without our consent;

Š any material defect in the quality of the goods and/or services which the licensee provides using the authorized trade marks or trade name;

Š the licensee agrees to authorize any third party to use the authorized trade marks or trade name without our consent;

Š other events which would have a material adverse effect on the reputation of the authorized trade marks or trade name; and

Š we monitor the proper use of the authorized trade marks or trade name by the licensees through day-to-day supervision.

As of the Latest Practicable Date, we were not aware of (i) any abuse of the use of the authorized trade marks and trade name; (ii) any material violations, infringements or unauthorized use of our trade marks or trade name and (iii) any infringement of any third parties’ intellectual property rights through our use of the trade name and trade marks. For details of our trade marks and other intellectual property rights, please refer to the section headed “Statutory and General Information — Further Information about the Business of our Group — Intellectual property rights of our Group” in Appendix VII to this prospectus.

ENVIRONMENTAL MATTERS

We are subject to PRC national environmental laws and regulations as well as environmental regulations promulgated by local governments from time to time. These include the Environmental Protection Law ( ), the Prevention and Control of Noise Pollution Law ( ), the Environmental Impact Assessment Law ( ) and the Administrative Regulations on Environmental Protection for Development Projects ( ). Pursuant to these laws and regulations, each property development is required to undergo environmental assessments. Depending on the impact of the project on the environment, an environmental impact assessment report, an environmental impact analysis table or an environmental impact registration form (each an “environmental impact assessment document”) have to be submitted by a property developer before the relevant authorities will grant a permit for commencement of construction work on the property development. In addition, upon completion of the property development, the relevant environmental authorities will also inspect the property to ensure compliance with the applicable environmental standards and regulations before the property can be delivered to the purchasers.

199 BUSINESS

For our Forest Peninsula (Jiaozuo) and Green Garden (Zhumadian) (Phase II) Projects, we submitted all relevant environmental impact assessment documents to the local authorities before commencement of construction. For all of our other projects we did not do so as we were not required to submit the environmental impact assessment reports after consulting with the local environmental authorities prior to the commencement of construction of these projects. As advised by our PRC legal adviser, the construction of these projects is not in full compliance the environmental regulations and may be suspended by the environmental authorities. If remedial procedures are not carried out within a limited period, the project companies may be subject to a fine of between RMB50,000 and RMB200,000 and the officers of the property developer and the construction company appointed to carry out the project may be subject to an administrative penalty. As advised by our PRC legal adviser, the relevant regulation does not stipulate the type or amount of the administrative penalty. Nevertheless, we have submitted supplemental environmental impact assessment documents for our Green Garden (Nanyang) and Taohua Island (Nanyang) Projects and the project companies of all our remaining projects have obtained certificates of compliance with the environmental laws issued by the local environmental authorities. Our PRC legal adviser has confirmed that since such environmental laws and regulations have not been strictly implemented in Henan Province, approvals for project proposals by planning authorities and other follow-up governmental approvals or permits could also be obtained without the approval of the environmental impact assessment documents. Further, as we have already taken remedial actions by submitting supplemental environmental impact assessment documents and obtaining certificates of compliance with the environmental laws issued by the local environmental authorities, our PRC legal adviser is of the opinion that the operation of the relevant subsidiaries should not be materially affected. Our PRC legal adviser has confirmed that during the Track Record Period, save as disclosed above, there was no material violation of relevant environmental rules and regulations by our Group, no material environmental pollution incidents involving our Group, no material administrative penalty imposed on our Group as a result of violation of environmental rules and regulations and no penalty payable in connection with our failure to submit the environmental impact assessment documents before the commencement of construction of our projects.

Each of our Controlling Shareholders has agreed to indemnify and keep us indemnified against all liabilities, damages, costs, losses, or expenses which may be imposed or levied by the PRC Government authorities on our Group as a result of the non-compliance with the environmental regulations. Our Directors confirm that, as of the Latest Practicable Date, save as disclosed above, none of the PRC subsidiaries had breached any applicable PRC environmental laws and regulations in any material respect and there are no existing material legal proceedings, claims or disputes relating to environmental matters pending or threatened against any member of our Group.

We will strictly comply with PRC environmental laws and regulations, and further strengthen our management and supervision systems in respect of environmental protection. We intend to strengthen our control of the construction process and a supervisory system was formulated by a team of officers experienced in pre-construction work of property development and environmental matters to manage and examine the procedures and activities that may give rise to environmental issues such as noise, water and air pollution in order to ensure environmental compliance.

200 BUSINESS

For the years ended December 31, 2005, 2006 and 2007, we spent an aggregate of RMB15,000, RMB38,000 and RMB1,111,000, respectively, on environmental compliance including fees for conducting environmental inspections and engaging qualified third parties to prepare the environmental impact assessment documents.

LEGAL PROCEEDINGS From time to time, we have been involved in legal proceedings or other disputes in the ordinary course of our business, which are primarily disputes with our customers over payment of amounts overdue. As of the Latest Practicable Date, there were no material outstanding claims or lawsuits involving our Group with any parties, including our contractors, and as far as we are aware, no such material claims or lawsuits are pending.

As of the Latest Practicable Date, third party claims against us primarily consisted of disputes relating to guarantee contracts with mortgagee banks. The amount of outstanding claims brought against us as of that date totalled approximately RMB1.6 million. As of the Latest Practicable Date, our claims against third parties primarily consisted of disputes against purchasers who defaulted to pay mortgage loans that were guaranteed by us. The amount of our claims brought against third parties as of that date totalled approximately RMB0.3 million. Our Directors believe that the ultimate outcome of the legal proceedings will not, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or cash flow. Each of our Controlling Shareholders has agreed to indemnify and keep our Company indemnified against all liabilities, damages, costs, losses, or expenses resulting from these legal proceedings.

We are not aware of any other material legal proceedings, claims or disputes currently existing or pending against us that may have a material adverse impact on our business or our results of operations.

COMPLIANCE Permits, Approvals or Certificates As confirmed by our PRC legal adviser, during the Track Record Period, we held all the necessary certificates, permits and licenses for the operation of our business in the PRC. Save as disclosed in the section headed “— Description of Our Property Projects” above, all of our land has been obtained and developed in compliance with PRC laws and regulations and we have not received any warning nor has any penalty been imposed on us nor have we experienced any forfeiture of possession of our Group’s land by the PRC Government. During the Track Record Period, our Group was able to meet the completion time as stated in the pre-sale contracts and had not been required to pay any damages or subject to termination of any pre-sale contracts by our customers. Certain of our recently established subsidiaries, namely CCRE Changjian, CCRE St. Andrews, CCRE Forest Peninsula, CCRE Yuzhou and CCRE are in the process of applying or preparing their application for the qualification certificates and are expected to obtain the qualification certificates by June 2008. In addition, 12 of our other project companies are in the process of applying for the annual renewal of their qualification certificates in the ordinary course of their business. We have not in the past experienced any difficulties in obtaining such certificates. Our PRC legal adviser has advised us that there is no legal impediment for us to obtain or renew the relevant qualification certificates. Save

201 BUSINESS as disclosed above, each of our subsidiaries engaged in property development holds a valid qualification certificate for conducting its business in compliance with PRC laws and regulations including the Provisions on Administration of Qualification of Real Estate Developers ( ). During the Track Record Period, save for the pre-sales entered into under lease-back arrangements as disclosed in this prospectus and the absence of escrow accounts for projects in Zhengzhou City, we have complied with all PRC laws and regulations relating to the pre- sale of our properties under development.

We have completed property development on parcels of land that we obtained prior to July 1, 2002 through land use rights grant contracts. Therefore, we do not anticipate any risk of forfeiture of these parcels of land by the PRC Government.

Tax

The EIT and LAT of certain of our subsidiaries had been collected based on the authorized taxation method during the Track Record Period. Please refer to the section headed “Financial Information” for further details. According to the PRC Tax Administration Law ( ) amended and adopted by the Standing Committee of the ninth session of the NPC on April 28, 2001, the tax authorities have the right to adopt the authorized taxation method ( ) in any of the following situations:

Š the taxpayer is not required to maintain books of accounts pursuant to the relevant laws and regulations;

Š the taxpayer has failed to maintain a book of accounts as required by the relevant laws and regulations;

Š the taxpayer has destroyed the book of accounts or refuses to provide tax information;

Š the accounts of the taxpayer are not well prepared or the cost information, proof of income or expenses are inadequate for auditing;

Š the taxpayer has failed to submit the tax return to the tax authority on time and failed to submit the tax return upon further request from the tax authority; and

Š the taxable income submitted by the taxpayer is unusually low and the taxpayer cannot provide a justifiable reason.

However, under the Provisional Measures for Authorized Taxation Method of Real Estate Enterprise Income Tax in Henan Province (Yu Di Shui Fa [2004] No. 89) ( ) promulgated by the Henan Province Local Taxation Bureau ( ) on March 18, 2004, EIT levied on real estate enterprises in Henan Province would generally be collected by the authorized taxation method. As an alternative, EIT levied on real estate enterprises in Henan Province may be calculated using the “audited taxation method” ( ). Real estate enterprises can select the method of tax calculation they adopt, subject to the approval of the local tax authorities. In considering whether to approve an application to use the audited taxation method, the local tax authorities will take into account primarily four prescribed

202 BUSINESS factors: whether the real estate enterprise has systematic operational procedures in place, whether it has a proper financial system, whether it maintains accurate audited accounts and whether it has made timely tax payments. Based on the internal control assessment work conducted by our internal control adviser and the PRC legal due diligence with regards to our Group’s payment of PRC taxes performed by our PRC legal adviser, our Directors conclude that our Group has fulfilled the four prescribed factors. Under the Notice on Strengthening the Administration of Land Appreciation Tax (Yu Di Shui Han [2004] No. 125) ( ) promulgated by the Henan Province Local Taxation Bureau on June 16, 2004, the amount of LAT payable in Henan Province can be calculated based on the authorized taxation method instead of the audited taxation method if a property developer selects such method of tax collection, subject to approval by the local tax authorities. Property developers can select the method of tax collection they adopt, subject to approval by the local tax authorities. For both EIT and LAT, the local tax authorities will determine on a case-by-case basis and have the sole discretion as to which tax calculation method should be adopted, taking into account the specific circumstances of the area.

During the whole or part of the Track Record Period, the EIT and LAT of some of our subsidiaries were collected by the authorized taxation method as the respective subsidiaries have not applied for the adoption of audited taxation method for payment of EIT and have applied for the adoption of the authorized taxation method for payment of LAT because the EIT or LAT liabilities for the relevant subsidiaries calculated under the authorized taxation method were lower. In 2005, 2006 and 2007, five, five and seven of our subsidiaries used the authorized taxation method to calculate their EIT liabilities, respectively. In 2005, 2006 and 2007, eight, 12 and 16 of our subsidiaries used the authorized taxation method to calculate their LAT liabilities. In the same periods, five, five and seven of our subsidiaries used the authorized taxation method to calculate both their EIT and LAT liabilities, respectively. Our PRC legal adviser has confirmed that since audited financial reports with unqualified audit opinions have been prepared for our Group for the Track Record Period, we have paid our tax liabilities in accordance with the applicable tax laws and regulations during the Track Record Period and no fine or administrative penalty had been imposed on us by the PRC Government in respect of any non-compliance with any tax laws and regulations, the use of the authorized taxation method is not related to improper books and record keeping and these subsidiaries were eligible to be taxed under the authorized taxation method pursuant to the abovementioned measures and notice promulgated by the Henan Province Local Taxation Bureau instead of Article 35 of the PRC Tax Administration Law ( ) which is not relevant in this context. The adoption of authorized taxation method by these subsidiaries was approved by these taxation bureaux at city-and-county- levels.

On December 28, 2006, the State Administration of Taxation issued the Notice of the State Administration of Taxation on the Administration of the Settlement of Land Appreciation Tax of Property Development Enterprises (Guo Shui Fa [2006] No. 187) ( ), effective February 1, 2007. The Henan Province Local Taxation Bureau promulgated the Circular on Forwarding the Notice of the State Administration of Taxation on the Administration of the Settlement of Land Appreciation Tax of Property Development Enterprises (Yu Di Shui Han [2007] No. 16) ( ) on January 30, 2007 to implement the Notice issued by the State Administration of Taxation. Details of the notice and the circular are set forth under the section headed “Summary of

203 BUSINESS

PRC Laws Relating to the Property Sector — Legal Supervision Relating to Property Sector in the PRC — Major Taxes Applicable to Property Developers — Land Appreciation Tax” of Appendix VI to this prospectus. Our PRC legal adviser has confirmed that the notice will not have any material effect on operation of our Group.

The following table sets forth details of the relevant subsidiaries which adopted the authorized taxation method for the calculation of their EIT and LAT liabilities during the Track Record Period and the relevant taxation bureaux which approved the adoption of the authorized taxation method:

Years in the Track Record Period in which authorized taxation method Taxation bureau approving the use of the authorized Subsidiary had been adopted taxation method by our subsidiaries CCRE China ...... EIT :— EIT :— LAT : 2005 to 2007 LAT : The Foreign Tax Administration Branch of the Local Taxation Bureau of Zhengzhou City ( ) CCRE Luoyang ...... EIT :— EIT :— LAT : 2007 LAT : The Foreign Tax Administration Branch of the Local Taxation Bureau of Luoyang City ( ) CCRE Nanyang ...... EIT :— EIT :— LAT : 2006 to 2007 LAT : The Foreign Tax Administration Branch of the Local Taxation Bureau of Nanyang City ( ) CCRE Anyang ...... EIT :— EIT :— LAT : 2005 to 2007 LAT : The Foreign Tax Administration Branch of the Local Taxation Bureau of Anyang City ( ) CCRE Xuchang ...... EIT :— EIT :— LAT : 2005 to 2007 LAT : The Bureau directly under the leadership of the Local Taxation Bureau of Xuchang City ( ) CCRE Zhumadian ...... EIT :— EIT :— LAT : 2006 to 2007 LAT : The Bureau directly under the leadership of the Local Taxation Bureau of Zhumadian City, Henan Province ( ) CCRE Jiyuan ...... EIT : 2005 EIT : The Urban State Taxation Bureau of Jiyuan City ( ) LAT : 2005 to 2006 LAT : The Installation and Real Estate Industry Tax Administration Branch of the Local Taxation Bureau of Jiyuan City ( ) CCRE Henan ...... EIT : 2005 to 2007 EIT : The Jinshui District Local Taxation Bureau of Zhengzhou City, Henan Province ( ) LAT : 2005 to 2007 LAT : The Jinshui District Local Taxation Bureau of Zhengzhou City, Henan Province ( )

204 BUSINESS

Years in the Track Record Period in which authorized taxation method Taxation bureau approving the use of the authorized Subsidiary had been adopted taxation method by our subsidiaries CCRE New Town ...... EIT : 2005 to 2007 EIT : The Zhengdongxin District Branch of the State Taxation Bureau of Zhengzhou City ( ) LAT : 2005 to 2007 LAT : The Zhengdongxin District Local Taxation Bureau of Zhengzhou City ( ) CCRE Puyang ...... EIT : 2005 to 2007 EIT : The Hualong District Local Taxation Bureau of Puyang City ( ) LAT : 2005 to 2007 LAT : The Hualong District Local Taxation Bureau of Puyang City ( ) CCRE Xinxiang ...... EIT : 2005 to 2007 EIT : The Development Zone Local Taxation Bureau of Xinxiang City, Henan Province ( ) LAT : 2005 to 2007 LAT : The Development Zone Local Taxation Bureau of Xinxiang City, Henan Province ( ) CCRE Luohe ...... EIT :— EIT :— LAT : 2006 to 2007 LAT : The Bureau directly under the leadership of the Local Taxation Bureau of Luohe City, Henan Province ( ) CCRE Jiaozuo ...... EIT : 2006 to 2007 EIT : The Shanyang District State Taxation Bureau of Jiaozuo City ( ) LAT : 2006 to 2007 LAT : The Shanyang District Local Taxation Bureau of Jiaozuo City ( ) CCRE Xinyang ...... EIT : 2007 EIT : The Shihe District State Taxation Bureau of Xinyang City, Henan Province ( ) LAT : 2007 LAT : The Shihe District Local Taxation Bureau of Xinyang City, Henan Province ( ) CCRE Zhongyuan ...... EIT : 2007 EIT : The Jinshui District State Taxation Bureau of Zhengzhou City ( ) LAT : 2007 LAT : The Sub-Bureau directly under the leadership of the Local Taxation Bureau of Henan Province ( ) CCRE Dahong ...... EIT :— EIT :— LAT : 2007 LAT : The Jinming District Local Taxation Bureau of Kaifeng City ( ) CCRE Changjian ...... EIT :— EIT :— LAT : 2007 LAT : The Bureau directly under the leadership of the Local Taxation Bureau of Luohe City, Henan Province ( )

205 BUSINESS

Our PRC legal adviser has advised us that, under the PRC tax administration system, local tax authorities are authorized to promulgate local implementation rules according to the authority granted to them by the relevant tax laws taking into account the specific circumstances of the area. The local tax regulations promulgated by the local tax authorities of Henan Province have a general application and administrative enforceability in Henan Province. Further, according to the Detailed Rules for the Implementation of the Law of the PRC on the Administration of Tax Collection ( ), local tax authorities are authorized to adopt suitable tax calculation methods for the area provided that such tax calculation methods could enhance the timeliness and convenience of tax payment, lower the tax collection costs and/or increase the tax collectible from tax payers. Therefore, our PRC legal adviser has confirmed that the relevant local tax regulations in Henan Province are legal and valid and do not contravene the national tax laws of the PRC; and the taxation bureaux at city-and-county levels are competent to approve the adoption of the authorized taxation method and the adoption of the authorized taxation method was duly approved by the relevant tax authorities. In light of the above and based on the confirmation provided by the relevant tax authorities, our PRC legal adviser has advised us that the adoption of authorized taxation method for EIT and LAT in Henan Province complies with PRC laws and regulations, including the national tax laws, and is legal and valid. Our PRC legal adviser has further confirmed that there is no legal risk that the adoption of the authorized taxation method for EIT or LAT in Henan Province will be regarded as not complying with the national tax laws and regulations in the PRC so there is no legal nor financial risk in respect of the members of our management team; but it is possible that the authorized taxation method will be abolished in the future. Should the EIT imposed on these PRC subsidiaries have been calculated according to the audited taxation method during the Track Record Period, we estimate that the EIT liability of our Group would have been increased by approximately RMB6.8 million, RMB23.8 million and RMB30.5 million for the years ended December 31, 2005, 2006 and 2007, respectively. Should the LAT imposed on these PRC subsidiaries have been calculated according to the audited taxation method during the Track Record Period, we estimate that the additional charge for LAT to our Group would have been approximately RMB6.4 million, RMB39.1 million and RMB43.9 million for the years ended December 31, 2005, 2006 and 2007, respectively.

As confirmed by our PRC legal adviser, our subsidiaries will not be retrospectively required to pay additional EIT or LAT calculated according to the audited taxation method or regarded as having evaded tax and our Group has not violated the applicable tax laws and regulations, including the rules and regulations for filing and settlement of tax, during the Track Record Period. In any event, each of our Controlling Shareholders has agreed to indemnify our Company in respect of any additional EIT or LAT imposed on our Group resulting from the adoption of the authorized taxation method for the calculation of our EIT and LAT liability. For the possible risks to our Group in the future, please refer to the sections headed “Risk Factors — Risks Relating to our Business — The relevant PRC tax authorities may challenge the basis on which we calculate our EIT obligations” and “Risk Factors — Risks Relating to our Business — The relevant PRC tax authorities may challenge the basis on which we calculate our LAT obligations” in this prospectus.

A new PRC Enterprise Income Tax Law (the “Enterprise Income Tax Law”) was enacted by the NPC on March 16, 2007, effective January 1, 2008. The Enterprise Income Tax Law only provides for adjustments in tax rates and tax privilege and therefore does not have an impact on our EIT taxation method. Our PRC legal adviser has confirmed that we are in compliance with the Enterprise Income Tax Law.

206 BUSINESS

LABOR AND SAFETY

In respect of social responsibility, in particular, labor health, safety, insurance, accidents, relevant laws and regulations mainly include the Labor Law of the People’s Republic of China ( ), the Labor Contract Law of the PRC ( ), Interim Regulation on the Collection and Payment of Social Insurance Premiums ( ), Regulation on Work-Related Injury Insurance ( ), Safety Production Law of the People’s Republic of China ( ), Regulations on the Reporting, Investigation and Disposition of Work Safety Accidents ( ), Administrative Regulations on the Work Safety of Construction Projects ( ), the Regulations on the Management of the Housing Provident Fund ( ) and Regulations on the Management of Housing Provident Fund in Henan Province ( ). The aforementioned laws and regulations set forth relevant provisions on working hours, work safety, rest and vacation, wages, health and safety, social insurance and welfare for employees of our Group. We have purchased insurance for our employees according to PRC laws and regulations and we are planning to increase insurance coverage for our employees to include commercial accident insurance. Our PRC legal adviser has confirmed that, during the Track Record Period, there was no material violation of currently applicable PRC labor and safety regulations nor were there any material employee safety issues involving our Group. Our human resources department is responsible for dealing with employees’ safety and security matters. We are planning to further strengthen and improve our systems and management in respect of labor and safety in all respects in order to reduce potential future risks in this regard.

207